NZ tech sector bouyed by double digit growthOctober 24 - 11am
New Zealand’s technology export sector is being buoyed by double digit (16.5%) growth from a swarm of TIN100 ICT companies growing on both sides of the Tasman; a general recovery in the US market; and increased investment in R&D and staffing.
Those are some of the key findings of the ninth annual TIN100 Report, an analysis of the performance of the top 100 New Zealand-founded high-tech companies, which was released today.
According to the findings, TIN100 companies increased their combined revenue by 3.7% to $7.26 billion. during the past year, with export revenues increaseing by 3.0% to $5.3 billion.
The next 100 companies (TIN100+) ranked by revenue grew by 9% to $640m.
TIN100 Report publisher Greg Shanahan says that in 2013, growth was dominated by ICT companies, whose revenues grew strongly on both sides of the Tasman and from a smaller base in the US.
“The single biggest contributor to TIN100 growth was the $122m growth of IT Services and Support companies,” he says. “These companies contributed nearly half of the total $260m growth for TIN100 companies.”
Shanahan claims software development sectors, General Software, Healthcare, Financial Sector and Digital Media, all grew in excess of 20%.
In addition, the report shows that mobile solutions, Cloud Computing and Software as a Service are creating new growth and profit opportunities that are being readily adopted by TIN100 Companies.
Despite being adversely impacted by unfavourable NZ$/A$ movements, and a slowing Australian economy, High Tech Manufacturing also enjoyed growth in North America as the economy there showed signs of strengthening.
But Shanahan believes the challenge of the NZ$ now appreciating against our two largest export market currencies, the A$ and US$, is transforming the TIN100 in a number of ways.
Those sectors like ICT that are less affected by currency are showing the strongest growth. Successful companies are investing more heavily in R&D and sales and marketing (up by 10% and 5% respectively on 2012) and focused on attracting and retaining talent (the second most important CEO issue).
High-tech manufacturers who have invested in new products and who have broad global exposure have been more resilient. Moving to recurring revenue streams such as Software as a Service or consumables are proving critical contributors to profitability.
Importantly, the majority of the top 10 companies by revenue growth on both the TIN100 and the TIN100+ had received or were receiving business innovation support via government R&D funding, indicating a greater awareness of the value of innovating through research and development.
“You only have to glance through this report to see that New Zealand is full of businesses with ground-breaking ideas which, with the right support, have the potential to deliver global success,” says Mary Quin, CEO, Callaghan Innovation.
“Many of them have been nurtured through government R&D funding, research and technical services or venture capital, or a combination of those, all of which we are actively working to make simpler for businesses to access.”
The 2013 TIN100 Report, launched 23 October at a gala dinner in Auckland, 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.