Building confidence: Waikato tech sector humming along in the fast lane

TIN managing director Greg Shanahan. Photo / File

Visitors to Hamilton hi-tech zone, the Waikato Innovation Park, have been known to ask if someone there is keeping bees because of the hum.

It's the sound of business positivity and helps explain why Hamilton has for the past two years been cited as the country's fastest growing technology city in the prestigious annual TIN (Technology Investment Network) reports.

The 2019 TIN Report will be launched late this month and Waikato's technology sector is crossing fingers for a treble.

TIN managing director Greg Shanahan's giving nothing away of course, but says he will be addressing the Waikato tech community for the first time next month to discuss the report.

His visit will coincide with the launch of the Digital Waikato 2025 Strategy, a programme of work developed by the region's tech cluster CultivateIT in collaboration with industry, schools, tertiary institutes and the local technology sector.

The strategy will be embedded in the Waikato regional economic development plan produced by local economic development agency Te Waka.

"We're the only place in the country that embeds a digital strategy in our economic development plan," said CultivateIT operations manager Jannat Maqbool.

Waikato Innovation Park's latest build - $14m offices for tech companies.

Based at the Waikato Innovation Park along with Te Waka, CultivateIT is one of only two tech clusters in the country - the other is in Christchurch, she said. But only Waikato's cluster is funded by the regional economic development agency.

Clearly, the Waikato is serious about technology.

The 2018 TIN Report said the Hamilton sector showed annual growth of 16.3 per cent or $119 million, and revenue of $854m last year. It beat out north Auckland, which posted 16.1 per cent growth of $154m on the previous year with revenue of $1.1 billion. Otago was third with 13.1 per cent growth.

Hamilton also led the pack in the 2017 TIN report with 21.7 per cent year-on-year growth.

As a dairy heartland, Waikato has long been a leader in agri-technology, home to trailblazers like Gallagher Group, LIC and Simcro.

But today's tenants at the Waikato Innovation Park offer a smorgasbord of technologies to the world.

The fast-growing park, where a $14m building will start rising next month for new tech occupants, last year recorded revenue of $563m among its 58 tenants.

They employ more than 1600 staff at the park and overseas, and 67 per cent are exporting, mostly to North America and Europe. The annual tenant survey in December showed 40 per cent wanted more space. Most companies at the park have fewer than 50 staff and 62 per cent reported growth during 2018.

Park chief executive Stuart Gordon said 98 per cent of tenants responded to the survey, a signpost to the secret of the park's success which he attributes to its atmosphere of community and collaboration.

The 17ha rural-outlook park is beside the Ruakura Research Centre and a short hop from Waikato University, which has strong computer science and engineering credentials.

Opened in 2004 to cluster businesses to help drive Waikato economic growth, the park was owned by the Hamilton City Council until 2017 when it was sold to private investor Neil Foster after the council decided it wasn't the right backer to achieve the master development plan.

That plan will require around $100m investment over its 25 year life and calls for 16 buildings in total, Gordon said. So far there are five.

Waikato Innovation Park chief executive Stuart Gordon. Photo/Supplied.

The average annual growth of companies in the park is 14 per cent. Those involved in information technology were growing at about 32 per cent a year, Gordon said.
He and Maqbool attribute the growing success of the local tech sector to its close association with Waikato University and Wintec and because the region offers entrepreneurs and their staff an opportunity for a balanced lifestyle.

"There's a lot of talent in the region," said Maqbool.

Sector confidence was manifesting itself through increased investment in research and development.

"We just get on with things. We have some great success stories, we have a great talent pool and we take risks with things that make sense. We look globally, and Waikato University is very well-connected globally. We also have a connection with business."

Solutions provider LayerX Group has been at the park 10 years. The company has three core capability operations to help businesses improve productivity.

It has invested between $8m and $10m in R&D, said co-owner Bruce Trevarthen who founded LayerX with his wife Doesjka.

With 45 per cent of their business in Auckland, it was the logical place to be based, but Trevarthen, a Hamiltonian, chose to come home when the couple sold a business in Wellington.

"The park was one of our best decisions because of the collaboration and like-minded innovative people and the support of the park as well. We have been able to move offices (within it) as we've grown.

"It's vibrant in every sense of the word. Not only is it not a concrete jungle - it's borderline rural - but conversations in the park are always ones of optimism and positivity."

LayerX employs 12 fulltime staff, hiring three this year. Like most technology companies it struggles to get appropriate expertise.

TIN's Greg Shanahan said an issue that particularly affects provincial tech sectors is access to funding.

Waikato Innovation Park. Photo / Supplied

"The vast majority of investment capital is going into companies in Auckland. There needs to be greater transparency across the country and exposure in particular to international investors who are starting to play such a big part in investment growth in the tech sector."

Technology was increasingly an important economic contributor to provincial growth, he said.

"It's a good news story for New Zealand. We are at the point of saying we think in the next few years the tech sector will challenge dairying and tourism as our major source of foreign income."

BUILDING CONFIDENCE