Growing confidence from investors. A need to attract investment in R & D. A further need to push into Asian markets and increase focus on business-to-consumer products rather than business-to-business.
Those were just some of the takeaways as the Investor’s Guide to the New Zealand Technology Sector was released on Thursday, 8 September at a well-attended event at the Wintergarden Pavilion in Auckland. The 36-page guide, produced by the Technology Investment Network (TIN) and the Ministry of Business, Innovation and Employment (MBIE) in a bid to attract more investment in Kiwi businesses, is chock-full of enough data about the tech sector to satisfy even the most data-obsessed investment wonk.
Economic Development Minister Steven Joyce said at the launch that the tech sector was already far bigger than many Kiwis realised. “The New Zealand tech sector is already effectively New Zealand’s third largest export earner, and it’s growing quickly,” he said. “It accounts for eight percent of our GDP, which is more than $16 billion dollars, and the opportunity for growth is huge.”
While it was “great” that larger companies had experienced success thanks to overseas investment, Joyce said there was a continued need to help promote small-to-medium-sized businesses in an ever-more-competitive global marketplace. “We’ve already seen some great success stories in the sector, such as Weta Digital, Xero, Fisher and Paykel Healthcare, and Vista Group, and there are many other companies out there that have impressive potential,” he said. “We tend to think outside the box.”
About 100,000 Kiwis were currently employed in the tech sector, Joyce said. “It’s an unknown sector of the economy. It fleshes out the New Zealand story.”
Despite solid revenue growth across nearly all sectors, there was still an issue of not enough people overseas knowing about the things happening in the New Zealand economy, Joyce said. “Some of them [investors] still think we’re hobbits.”
Communications Minister Amy Adams also stressed the need for continued investment, as the continued growth of the internet in emerging markets meant the entire world was a potential revenue stream for tech businesses. “New Zealand is a great place to invest with stable markets and good regulatory oversight,” she said. “We also have vast opportunities for growth in the tech sector supported by a new and modern Ultra-Fast Broadband network. Attracting new investment into the sector is a key part of reaching our full potential.”
The scene at the launch event.
Expanding the country’s UFB network was key in offering competitive advantage, Joyce said – particularly in expanding the network to smaller communities outside of major cities like Auckland, Wellington and Christchurch. By doing so, it would allow more businesses – such as in agritech – an opportunity to reach potential investors regardless of where they were based – and also allow those investors to see what Kiwi companies are doing.
As the evening came to a close, Joyce offered some words that many in the tech world in Aotearoa have heard before. “Isolation is in our DNA,” he said. “But we don’t have the same restrictions on us you might find in a bigger country. Nobody in the world is doing what we’re doing.”