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Techweek’17 is here, so just how important is the sector?

Building on the success of the inaugural TechweekAKL last year, Techweek has now gone national, giving other cities and towns across New Zealand the opportunity to celebrate our country’s growing tech sector and the economic benefits it brings.

Auckland Tourism, Events and Economic Development’s (ATEED) partnership with the New Zealand Technology Industry Association (NZTech), who are now managing the event, has enabled Techweek to extend beyond Auckland, bringing together technology and innovation talent from across the country.

It’s an exciting time for tech in New Zealand. The Auckland tech scene is bustling, with over 28,000 tech firms and a labour force of almost 100,000; the tech sector is playing an increasingly important role in the national economy.

Given New Zealand’s well-documented productivity challenge, the ongoing growth of the tech sector will create more and better jobs, as well as support much needed economic diversification. 

Auckland is unquestionably New Zealand’s tech capital and has a vital role to play in the ongoing development of the national tech story.  Home to a third of New Zealand’s population and producing just over a third of its GDP, Auckland accounts for almost half of the national tech sector’s income, employment, GDP and exports. The tech sector is contributing $7.8 billion in GDP to the Auckland economy and providing more than 47,000 jobs. 

Today we stand on the brink of a technological revolution that will further fundamentally alter our human and business behaviours and shape the future function of the global economy.

ATEED’s just-released paper ‘Convergence and Disruption – Auckland’s Tech Opportunity’, provides insights into Auckland’s current tech areas of advantage.

The use of technology by sectors to gain competitive advantage, increase efficiency and improve productivity is key to our nation’s future economic prosperity. Technology is also contributing to our enhanced competitiveness and improved productivity, something which is particularly important for New Zealand given the nature of our current industrial structure and the ongoing importance of the primary sector.

Of the 100 companies profiled in the 2016 TIN100 report, 52 were Auckland-based companies and 67 of the ‘next’ 100 were also Auckland based companies. Combined, that represents 65 percent of New Zealand’s leading tech firms who are based in Auckland. 

Auckland is now home to world leading firms such as Fisher and Paykel Appliances, Compac Sorting and Vista Group. A number of technology stars of the future (as identified by the TIN 100) are also based in Auckland including Vend, PowerbyProxi and Serko Limited.

There is also clear evidence of clustering across the city, particularly in the ICT and software space, where companies are concentrated in central Auckland, close to their customer base and co-located to maximise collaborative benefits. This has been catalysed by the development of GridAKL, the innovation precinct at Wynyard Quarter. There is also evidence of clustering outside the central city at university precincts in Albany and Grafton, and around service hubs such as Ellerslie and Takapuna.

In the high-tech manufacturing sector, clustering occurs primarily in industrial areas such as Penrose and Highbrook, driven by land availability and proximity to transport routes and ports, rather than a need to be close to customers, or co-located for collaborative purposes.

In addition, Auckland’s strong tertiary sector and network of private research organisations provide a consistent pipeline of tech talent and a strong research system.

As New Zealand’s international gateway, Auckland is a natural landing point for international talent and tech entrepreneurs. And as the commercial capital, dominated by sectors such as financial services, which are big adaptors of technology, Auckland is a natural breeding and test ground for innovative technology companies.

Whilst Auckland’s tech sector is a significant contributor to the local economy, its lack of relative scale in international terms, means that in many areas we do not have the deep specialisation required to compete globally. However, there are technology areas which have areas of specialisation, either embedded or niche, which are anchored around world-leading companies.  These are areas which present the greatest opportunity for achieving future growth.

Recent analysis by the global research consultancy, Frost and Sullivan, has identified five clear technology areas in which Auckland has a comparative advantage and where the global market outlook is strong, specifically AR/VR, financial payments, big data, robotics and health IT.

Health IT is identified as the technology area of highest opportunity, anchored around global leader Orion Health. Financial payments and AR/VR are the areas where Auckland has a lower level of competitiveness but has the right mix of ingredients to compete in a growing global market, including a quorum of innovative companies.

Robotics is ranked based on Auckland’s strong research capability whilst big data is seen as an area of opportunity in which Auckland has a combination of research capability and innovative companies.

These tech areas are established or emerging industries in their own right, anchored by globally focused and scalable companies and supported by strong research capability locally. 

With favourable global markets and a strong Auckland offer, these industries are key to Auckland’s future competitiveness and economic growth.

Techweek’17 provides a fantastic opportunity, not only to celebrate New Zealand’s growing tech identity, but also to start building the deeper connections and capabilities that will support our future success and prosperity.

It’s vital that Auckland capitalises on its areas of competiveness by supporting emerging sector maturity, building upon anchor tech companies and research organisations, attracting foreign direct investment; ensuring a talent pipeline, and supporting a buoyant tech community. 

Patrick McVeigh, Auckland Tourism Events and Economic Development’s (ATEED’s) general manger, Business, Innovation and Skills.
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