NZ's fastest-growing technology exports get a boost from Covid-19

Tuesday, 20 October 2020

Covid-19 travel restrictions have levelled the playing field for Kiwi tech companies as companies around the world were forced to communicate online.

New Zealand’s tech industry has been growing faster than ever before and profitability grew three-fold between 2018 and 2019, according to the Ministry of Business, Innovation and Employment (MBIE).

Last month NZTech chief executive Graeme Muller said New Zealand's tech sector was on track to become the country’s biggest export industry, worth $16 billion by 2030.

“The 200 largest exporters alone had $8.7b in overseas sales in 2019 and this is growing at close to $1b a year, every year,” Muller said.

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Technology commentator Paul Brislen said tech companies struggled to raise money in New Zealand as investors typically put money into residential property and land.

Technology commentator Paul Brislen says New Zealand’s tech industry has the potential of becoming better than Silicon Valley.

“It’s a real drag for the industry. That’s why we’ve seen so many New Zealand tech companies, including Xero and Rocket Lab, going offshore,” he said.

Brislen said New Zealand’s tech industry had the potential to become better than Silicon Valley.

“Silicon Valley has its own problems. I think New Zealand can learn from them and we can absolutely be better than that.”

Here are New Zealand’ top technology exports:

Fintech

MBIE 2019 tech industry data revealed the top 200 Kiwi tech export companies had experienced an increase of $705m in revenue over five years.

NZ’s top fintech exports included Pushpay, Xero, Invenco, Vend and DataTorque, MBIE’s report said.

Brislen said fintech companies enabling people to have greater control over the finances have grown in popularity in recent years.

Healthtech

Brislen said health tech had also experienced strong growth, with everything from innovations like artificial skin to technology enabling iPhones to check eye health.

A report by Technology Investment Network (TIN) revealed healthtech companies generated $1.9b in revenue last year, and were growing at a rate of about 9 per cent.

Global exports of healthcare technology accounted for $1.6b, or 87.5 per cent of revenue.

The average sector wage of $85,000 was more than 40 per cent higher than the New Zealand average.

The government committed to investing $11.4m into the agritech sector.

IT

Between April 2019 and May 2020, IT services exports exceeded $4 billion, with key markets in the United States, Australia and Europe, MBIE data shows.

Brislen said working from home due to Covid-19 restrictions had propelled businesses to take on cloud computing.

“There’s been a mad rush from companies to move everything they do on to the cloud so everyone can work remotely.”

The gaming industry earnt $203.4 million during the 2019 financial year.

Agritech

Brislen said New Zealand’s agritech industry had made strides in recent years, but there was still a lot of room for automation in the industry.

“Agriculture is essential to New Zealand’s economy so it definitely needs to be a bigger focus in terms of technology. We’ve never really automated a lot of it, but we are starting to see world-class innovation, from health monitoring prototypes for sheep to self-milking cowsheds.”

This year the government committed to investing $11.4m into the agritech sector.

A report from Agritech NZ earlier this year also recommended the government looked at opportunities for the sector in a post-Covid-19 economy.

It recommended that the government and agriculture industry work together to develop a trans-Tasman agritech strategy and encourage the take-up of agritech.

Last year $97.3m was spent on R&D by the top 20 New Zealand agritech companies, according to the TIN Agritech Insights 2020 Report.

Gaming

Brislen said the gaming industry had become another popular tech export.

“Local software developers are really getting stuck into it. There are new games popping up so often, it’s hard to keep track.”

The industry earnt $203.4 million during the 2019 financial year, double what it made in 2017, according to the latest NZ Game Developers Industry Survey.

This article was commissioned in response to a commercial partnership with Vocus. We have produced it independently, to the same standards applied to the rest of our journalism. Read more about our partnership content here.