Tech sector storms through $7 billion ceiling

By Idealog, October 31, 2011 @ 9:15 am

New Zealand's biggest tech exporters have proved a beacon of hope, racking up more than $7 billion in revenue this year, despite a glum performance in 2010 and a gloomy worldwide economic outlook.

Greg Shanahan, publisher of the annual TIN100 report, said TIN100 companies recorded a 5 percent increase in revenue, passing the $7 billion mark for the first time.

The TIN 100 report monitors key data from New Zealand's largest 100 technology exporters and 100 emerging companies in the areas of ICT, high-tech manufacturing and biotechnology.

The sector is now our second biggest exporter behind dairy, and Shanahan said the the growth in the scale of technology businesses was particularly encouraging.

“Thirty percent of TIN100 companies have revenues of over NZ$50 million for the first time. The group of companies with revenues between $50 and $100 million also grew by 15 percent during the year.

“This is evidence of a maturing sector increasingly defined by larger, more capable companies.”

The result would have been 7 percent if not for the currency effects on US markets, he said.

According to Shanahan, while Asia is a growing market, Australia is where the current volume is.

The report shows TIN100 chief executives are focusing on growth and profitability – R&D spending grew by 15 percent over the year and employment in R&D jobs grew by 16 percent for all 200 companies. 

Shanahan said New Zealand companies had developed technology solutions to create efficiencies not available through scale earlier than those in other countries as a function of our smaller economy.

“This, plus a lean approach to overheads, means that TIN100 companies are highly competitive in delivering cost saving solutions to their customers internationally. This is particularly the case in Australia where the currency has moved in our favour.”

The rebound was distributed right across the country with strong performances in the biotech, manufacturing and IT sectors.

IT services and support delivered the strongest dollar growth with revenues growing 11 percent, followed by healthcare. Other strong market performers were production machinery/materials handling equipment suppliers and financial services solutions.

The biggest impact can be attributed to Auckland companies, whose revenues grew by 3 percent following a 1 percent decline in 2010. 

Auckland's 10 companies to watch include Temperzone, Rakon, Argenta and Orion Health.

This is the seventh annual TIN 100 report, produced in association with Industrial Research Ltd with sponsorship from NZTE  and MSI.

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