Grow technology sector to step up economy says expert

Paul Callaghan. Photo / Anthony Phelps

Increasing the size of New Zealand's technology sector would be the best strategy for closing the economic gap between this country and Australia, says Sir Paul Callaghan.

The Victoria University professor of physics - who was named New Zealander of the Year this month - said to do that, the country needed to earn an extra $40 billion a year.

Callaghan said annual revenue per New Zealand employee needed to lift from $120,500 at present to $174,000.

But some Kiwi technology manufacturers earn much more than that. Medical technology firm Fisher & Paykel Healthcare came in at $251,661 for each staff member last year, while Fisher & Paykel Appliances earned $311,490 a job.

Rakon, which manufactures high-tech crystal oscillators, made almost $188,000 a worker last year.

Comparatively, Callaghan said, the tourism industry brought in just $82,800 for each worker across the sector.

"Growing tourism doesn't make you richer, it makes you poorer," he said, while conceding that the industry was a large and important employer.

Callaghan said the dairy industry earned $350,000 a job, but there was little scope for increasing that sector's size. "Although we're blessed by having a wonderful dairy industry, which is profitable, we can't build our future on that, either."

Tech firms, on the other hand, did not take up a lot of space or put pollutants into river systems.


The establishment of a successful tech firm took only one individual with a fantastic idea.

One way of increasing the number of future technology entrepreneurs would be to encourage children to take more of an interest in maths and physics at school, he said, which he did not think was happening enough at present.

Callaghan said his "other beef" was New Zealanders' habit of celebrating the success of Kiwis overseas.

"We're inclined to say 'isn't little Johnny doing well in New York?' or 'isn't little Sarah doing well in London?'

"It's not hard for New Zealanders to do well in New York or London or wherever because we're hard-working and well educated.

"What's really hard is to be world class and based in New Zealand and building up a big global business here."