Tech sector contributes $16.2b to NZ

Rocket Lab is one of the tech companies in Auckland that contribute $7.8 billion in GDP to the local economy. Photo / File

An industry report shows the tech sector contributes $16.2 billion of New Zealand's gross domestic product and employs 100,000 people.

Released today, the first state of the nation report on the tech sector conducted by New Zealand Technology Industry Association (NZTech) said for every 4 per cent growth in the productivity of the tech sector, the entire New Zealand economy will lift by $2.7 billion and wages will increase by 1.4 per cent.

Nearly 29,000 tech sector firms contribute 8 per cent of the national GDP and exports $6.3 billion of tech goods and services, which equates to 9 per cent of all exports.

NZTech chief executive Graeme Muller said in a statement on the report's release that technology was essential for both the survival and economic growth of rural New Zealand.

While the tech sector contributes $7.8 billion in GDP to the Auckland economy and $2.4 billion to both the Wellington and Christchurch economies, there was little spread to regional New Zealand.

"It can provide opportunities for people to enjoy country lifestyles but work in city jobs. It can enable businesses to find, attract and sell to customers from across the world," Muller said.

The report said many regional areas of New Zealand were too small to make an impact on their own, but with better connections and opportunities resources could be spread with better results.

"The economic case for New Zealand's ongoing investment in fast broadband networks is strong. It presents a big opportunity for regional New Zealand," Muller said.

"Small to medium enterprises that are highly digitally engaged, have higher revenues, 20 per cent faster growth and stronger job growth than firms that are less digitally engaged.

Increased use of ultra-fast broadband (UFB) is expected to deliver an estimated $5.5 billion over the next ten years, the report says.

"Wharf42 in Tauranga is a great example of a firm in regional New Zealand that is supporting the clustering of local tech firms directly with Silicon Valley. In April this year they organised a delegation of 30 New Zealand agritech companies to attend the Silicon Valley AgTech Conference in the US."

The report said if all companies were more extensive users of internet services, the productivity impact on national GDP would be as much as $34 billion a year.

The largest growth opportunities identified in the report from the internet would come from business and government organisations using services to improve productivity.

"We want to see the Government carefully consider the importance of certainty in the telecommunications regulatory framework when looking at how best to regulate ultra-fast broadband (UFB) services from 2020," Muller said.