New Zealand tech industry shows record growth to eight billion
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The Technology Investment Network tenth annual TIN100 Report released today reveals that New Zealand’s tech export sector’s revenue has increased by 62 percent to a record $8.3 billion over the last ten years.
The report measures the performance of the New Zealand technology export sector.
Greg Shanahan, TIN managing director, says increased confidence across the tech sector with companies more focused on market leadership as a key change in the ten years since the first TIN100 Report was published in 2005.
“New Zealand technology companies are pursuing global domination in a way we would never have imagined or talked about when we produced the first TIN100 Report in 2005,” he says.
“Companies such Orion Health (health software), Xero (online accounting software), F&P Healthcare (medical devices), Weta Digital (digital effects), and Vista Entertainment Solutions (cinema & film industry software), are all good examples of this.
Shanahan says that with ten years of data to look at, it’s clear that the New Zealand tech sector is heading in the right direction. “In 2013-14 we’ve seen TIN100 & 100+ companies grow their combined annual revenues to $8.3B, with $6.1B in exports: cementing technology as New Zeakand’s third largest export sector behind dairy ($14.9B) and international tourism ($10.3B)”.
“Although it was the 17 companies with revenues over $100m that delivered the bulk of the increase, in 2014 we’ve had a record $52m or 8% growth for the smaller tech (TIN100+) companies. ICT continues to perform well, but manufacturing is back in growth mode,” he adds.
IT services growth slowed for the $1.2B revenue TIN100 sector in 2014; but software development companies continued to grow strongly in most markets, increasing total revenue by 15% to $1.3B over the year. For TN100 and 100+ companies this revenue is up +78% on 2010.
Manufacturing also grew in the areas of healthcare, primary sector (Agritech), technology and airport solutions/logistics.
TIN100 Healthcare, a $1.3B export sector, grew by $125m (+ 11%) due to good performances from well-known companies such as F&P Healthcare, Orion Health and AFT Pharmaceuticals.
Shanahan explains “primary sector technology, growing by +10% to revenues of $789m in 2014, is on its way to becoming the fourth NZ$1B TIN100 revenue secondary sector. Six of the 11 companies profiled in this sector have revenues over $50m and three over $100m”.
Rapidly increasing population, rising labour costs, global warming and water shortages are disruptive influences that are increasing demand for innovative primary sector technologies.
“Our largest tech companies are leading the charge in benefitting from a revived US economy,” says Shanahan. “Since 2007 we’ve seen the number of TIN jobs grow from 24,700 to 35,200 in 2014 and the need for skilled employees in this area continues to outstrip supply”.
TIN has identified several key themes for the tech sector over the last decade:
- Increasing interest from global investors e.g. Xero, Vend, AFT Pharmaceuticals
- Confidence to go after number one position in the market
- Confidence to pitch for the big jobs
- Confidence to invest heavily in R & D despite increased currency pressures
- Smaller often provincial manufacturers having confidence to successfully target global markets despite their size.
The TIN100 Report monitors the performance of New Zealand’s 200 (TIN100 and TIN100+) largest technology exporters in the areas of information and communication technology (ICT), high-tech manufacturing and biotechnology. It is produced by the Technology Investment Network. Sponsors include Callaghan Innovation, NZTE, EY, Aon and Lumley.