Top tech performers hit $10b high
Fizzing industry now third-largest source of overseas revenue
New Zealand’s top 200 technology companies have topped $10 billion in combined revenue for the first time as the industry continues to see strong growth, according to a new report.
It comes on the back of soaring growth in the information and communication technology (ICT) sector, which has seen Datacom Group leapfrog the long-standing previously topranked Fisher & Paykel Appliances by revenue.
The 126-page Technology Industry Analysis (TIN) report said technology contributed the equivalent of 10 per cent of all New Zealand exports, making it the country’s third-largest source of overseas revenue.
More than $7b of revenue came from exports, with companies be- coming increasingly focused on the United States market, which the authors of the report said could overtake Australia as our leading technology importer.
“The thirst for US growth is not limited to the TIN200’s leaders. Early stage companies are increasingly seeking a US presence in order to reap the benefits of high volume revenue growth and scalability offered by the market’s 320 million consumers,” the report said.
TIN managing director Greg Shanahan said hitting the $10b mark indicated how entrenched technology exporters had become as a critical part of the country’s economy.
“It’s a sector increasingly characterised in New Zealand by awesome ambition and great execution. Both are unleashed as novel technology creates capability that was once only the domain of large countries and companies.”
The TIN report, which ranks ICT, high-tech manufacturing and biotechnology companies by revenue, said the 200 top companies created 4352 new jobs in the 2017 financial year and employed more than 43,000 staff globally, with an average salary of nearly $84,000.
The ICT primary sector continued to escalate and accounted for 35.2 per cent of tech revenue. The biggest mover in this space this year was Pushpay, a company that processes donations in the US faith sector.
The company operated with a strategy similar to many of the “rising star” Kiwi companies making waves overseas by tailoring and promoting products and services to defined customers with specialised needs.
Biotech generated a $88m rise on the previous year, while the growth rate of high-tech manufacturing fell somewhat to 3.8 per cent from 9.2 per cent in 2016.
“Adverse NZ dollar movements placed pressure on high-tech manufacturing sales this year,” the report said. “However, total revenue for this sector still rose by $216m, driven by strong performances from companies such as Fisher & Paykel Healthcare and NDA Group.”
NDA, headquartered in Hamilton, was one of numerous organisations which saw much of the tech sector’s growth move away from Auckland to other regions.
Hamilton, Wellington and South Island regions led the growth, with companies in those areas rising more than 10 per cent and accounting for 60.5 per cent of total growth among the 200 companies. Hamilton had the fastest reported growth rate at 21.7 per cent, a $109m revenue increase.
For the first time in its 13-year history, the TIN report contains a section on Maori-owned tech companies, which are playing an increasingly important role in the technology economy.
Shanahan said unique characteristics of the Maori tech economy in- cluded its “multi-dimensional desire to lift the wellbeing of its people and its culture and to be guardians of its assets for future generations”.
Waikato Milking Systems was the highest ranked Maori-owned company, in 38th place on the TIN rankings. Also on the list were Straker Translations, Sentient Software Animation Research and, for the first time, healthcare purchasers and provider Whanau Tahi.
Shanahan said such companies could be transformational for the Maori economy.
Lead report writer Deanne Bloom said the results were confirmation of the upward trajectory of the tech sector that had started three years ago and looked set to continue.
“There’s a lot of positive stories here for all tech sectors and all regions,” she said.
“The reason we put the report together is to highlight how people have been successful and cracked markets so that we can share that success and those formulas to others so they can continue that process.”