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Kiwi software isn’t a big earner—yet—but the stats tell a promising story

Kiwi software isn’t a big earner—yet—but the stats tell a promising story

Jason Smith

[Metrics]

Idea-rich computer software occupies the territory where creative industries meet with information technology. As a driver of the imagination economy, computer software is cutting-edge, innovative and clever. It’s the lightest and brightest commodity we have.

Computer software has both a domestic market and an export market. New Zealand’s software industry spans a group of ten high-performing ‘creative’ sub-sectors, which include architecture, computer services, publishing, television, film, fashion design, music and advertising. It also goes to work every day in agriculture and engineering—you could say it’s everywhere. Growing at about four percent annually, total sales of published software in New Zealand is expected to reach NZ$900 million in 2007–08.

Before the cheering begins, let’s be clear here: we’re not earning big bikkies for our bits and bytes. The software sales data from our Commonwealth cousins shows that Pakistan’s Software Export Board estimates its industry to be worth US$2.8 billion, and India’s software revenues are expected to grow by 30 percent to exceed US$36.9 billion in 2007–08. Add in computer services and that figure hits US$50 billion—gigabytes and terabytes of difference in scale.

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Sources: Statistics New Zealand; Software New Zealand; Pakistan Software Export Board; Nasscom; Australian Government, Department of Broadband, Communications and the Digital Economy

New Zealand’s issues of scale have long been overcome by exports of commodities—think kauri gum, lamb or butter. The tyranny of distance from markets for those pre-digital products brings many challenges and innovation solutions, but for computer software there’s a whole new platform for access to global markets: software can be weightlessly traded over the Internet. While New Zealand’s lamentable Internet upload speeds are a limiting factor, there’s very real growth in export of computer software.

Export sales of New Zealand-published software increased 30.8 percent in 2006, to reach NZ$84 million. This puts it about on par with the growth rate of exports for Indian software, but it’s about half the rate of growth for Pakistan, which has a 2007–08 export target of 61 percent growth to US$162 million. Australian software exports are comparable, worth AU$225.6 million in 2006.

Where are we in this mash-up? Most importantly, that 30.8 percent export growth is almost eight times the total New Zealand software sector growth ‘bitrate’ of four percent. We are increasingly selling more of our brightest commodity in this dark age of peak oil. Smart, weightless and wired.