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IT vendors in New Zealand have joined forces to form Outsource2NewZealand, which as the name suggests, hopes to attract some of the UK's IT projects to the land that gave us Gollum.

The idea is that UK companies that are interested in outsourcing, but worried about handing their sensitive data to countries with less robust legal systems, will be encouraged to come to New Zealand.

"Our big pitch is that New Zealand is a safe destination," said Jim O'Neill, a spokesman for the IT Association of New Zealand (ITANZ), which is backing the project. "Our legal systems are very much the same, we have a very deregulated economy. We're a good place to send work."

He explains that he is not interested in the bulk, by-rote kind of outsourcing that is going to India. He's after interesting projects, and wants to get involved at an early stage. Outsource2NewZealand is targeting niche areas: R&D, architecture design, and anything that needs testing in live environments.

Indirectly, Gollum and friends are driving the project. Scott Houston, chief technology officer at Weta, the post production house responsible for the special effects in the Lord of the Rings trilogy explains that the extra capacity they have at Weta as a result of the LOTR is sitting quietly at the moment.

"We'll probably be using it later in the year when work on King Kong gets underway, but at the moment we have 1000 dedicated 2.8GHz Xeon processors sitting empty. That's three teraflops of unused computing power, all in one place," he said. "That is the kind of resource that bio-tech or oil and gas firms would certainly be able to get some use from."

Another consideration is that New Zealand will soon have a trade agreement with China, but making use of this would be on a by-request basis. "Outsourcing to China would only be relevant if the customer itself thought there would be specific advantages in having a relationship with China," O'Neill said.

He is also aware that outsourcing is a contoversial subject, and is keen to play down fears of a mass IT exodus to the Southern hemisphere. He says Brits shouldn't worry that their all jobs will be heading South: "We're not that big an economy that we could pose that kind of threat to London," he said.

O'Neill also hopes some of the Kiwis working in London would be attracted back to New Zealand by more exciting projects, and even that Brits would be encouraged to try working in New Zealand. "There are between 2,000 and 4,000 Kiwi IT professionals in the UK. It would be great if we could persuade some of them to come home."

Goals set for the New Zealand industry by a recent IT Taskforce are to have 100 companies with a turnover of NZ$100m ($63.5m) a year by 2012. The current technology market - defined by ITANZ as encompassing hardware, software and services in computing and telecommunications industries - generates more than NZ$11bn ($7bn) in revenues. ITANZ members account for around 85 per cent of this. ®

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