New Zealand’s top 200 technology companies now have combined revenues of more than $10 billion – and export receipts of $7.3 billion making the sector our third biggest earner of overseas income.

A report prepared by the Technology Investment Network (TIN) released Tuesday night found the technology, high-tech manufacturing and biotechnology sectors now contribute about 10 percent of all New Zealand exports.  The 8.5 percent increase in export revenues in the year came despite currency challenges resulting from a higher Kiwi dollar against all major trading nations.

The top two businesses, Datacom Group and Fisher & Paykel Appliances are billion dollar companies by revenue, with Datacom edging its rival to take top rank this year with $1.15 billion in revenue. 

The rest of the top 10 are Fisher & Paykel Healthcare, Xero Gallagher Group, Orion Health, Douglas Pharmaceuticals, Tait Communications, NDA Group, Temperzone Group and Magic Memories.

Datacom had the largest revenue growth, at $103 million this year ahead of Magic Memories at $89 m and Xero at $88 m, the report said.

TIN managing director Greg Shanahan said it was the first time the Top 200 companies had breached the $10 billion milestone for revenues and the industry was “truly entrenched as a critical part of New Zealand’s economic growth”.

It had put on 4000 jobs over the past year and employed 43,000 people worldwide.

Anouke Alexander of NZ Trade and Enterprise said the tech sector was the fastest growing of those the agency worked with a 13 percent growth rate. “It is an exciting time for technology in New Zealand which is truly integral to building a country and economy that we all aspire to.”

The report shows high-tech manufacturing is the biggest contributor at 60 percent of the Top 200 revenues, ahead of ICT at 35 percent and Biotech at 5 percent, but Biotech had the biggest growth up almost 20 percent to $88 million. 

The growth flowed to companies in all regions. Hamilton recorded the highest regional revenue rise, adding $109 million or a 22 percent rise year on year.

Almost two-thirds of the export growth from these key tech companies came out of North America, where revenues were up 18.8 percent.

Demand for New Zealand tech companies is strong, with four of the biggest technology sales to foreign investors occurring in the past year – Diligent Corporation, Phitek, Compaq Sorting System and Simcro. At the same time foreign direct investment into NZ companies hit $178 million, a record.

The report found the biggest band of companies in the Top 200 – the 90 businesses with revenues greater than $20 million a year – grew at a greater pace than the 110 in the smaller category.

“Larger companies have benefited from greater access to investment and their larger balance sheets have allowed them to maintain aggressive growth strategies, to weather adverse currency shfts and undertake successful mergers and acquisitions.”

The industry’s major markets were New Zealand (26.6 percent), Australia (26.8), North America (23), Europe (12) and then Asia and ‘Other’ on 12 each. While North America sales grew strongly, Australia and European markets rose by just 3.7 and 3.1 percent each.

TIN said its ‘rising star’ companies’ performances were led by Xero, Magic Memories and Compac Sorting.  Rising stars were normally younger companies than the average 22 years for the Top 200 and featured financial services and digital media businesses more prominently than the rest of the table.

Of the 11 companies that entered the Top 200 this year, 10 were from the ICT part of the broader technology sector.

This year the TIN awards featured a ‘Rocket Award’ for the company rising fastest up the rankings – won by Pushpay the five year-old donations company which is targeting the faith sector in the United States. It achieved 227 percent revenue growth year on year and leaped from 108th to 45th on the Top 200.

Victoria Crone, chief executive of one of the sponsors of the report, Callaghan Innovation, said technology was a key for growth in New Zealand’s economy. “Every dollar invested in the tech sector creates three dollars of growth in the New Zealand economy. Doubling or tripling the contribution of dairy or tourism by simply expanding these sectors is simply not practical given their respective demands on land, water and infrastructure.

“By contrast all the tech sector needs to expand is more brains, more ideas and more capital to bring them to market.”

The report says dairy exports reached $12.5 billion, tourism $10.3b the TIN Top 200 tech companies $7.3b meat $6b and forestry $4.7b.

Tech chief executives told the report the biggest challenges facing New Zealand companies were attracting specialised staff, scaling up and maintaining international customers while pursuing new markets.

Tim Murphy is co-editor of Newsroom. He writes about politics, Auckland, and media. Twitter: @tmurphynz

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