Tech sector cracks $1 billion in growth

Greg Shanahan, managing director of Technology Investment Network (TIN). One of the major contributors to tech sector growth came from companies in the financial services sector.Photo / Brett Phibbs.

Record growth in New Zealand's technology industry is set to continue

It's been a boom year for New Zealand technology companies, lifting revenue by $1 billion.

Tech companies' revenue increased by 12 per cent in the year to June, according to Technology Investment Network's TIN100 report released last night.

The sector, which includes high-tech manufacturing, ICT and biotechnology, reached combined annual revenue of $9.4b up $1b on the previous year.

Now in its twelfth year, the report was launched by Minister for Science and Innovation Steven Joyce at a cocktail event in Auckland.

"This year's TIN 100 report tells an impressive story of innovation, growth and exporting success in New Zealand's technology sector," Joyce said.

"The collective export revenues of the 200 largest tech companies are up by 13.5 per cent from last year to nearly $7 billion, while the total number of employees has increased by 7.9 per cent in the past year with nearly 3,000 new jobs created. These 200 companies now employ almost 40,000 people."

New Zealand's technology sector is set to crack $10 billion in revenue next year according to TIN managing director Greg Shanahan, who said 2016 had been the best year he had seen in the industry.

"I am surprised at how quickly things are moving, so just the sheer rate of growth at 12 per cent is massive and that's not attributable to one big player," Shanahan said.

"We're also seeing some sector growth emerge like healthcare and while there's the giant of Fisher & Paykel Healthcare, there's also a swathe of companies coming in beneath that from ARANZ Medical to AFT Pharmaceuticals to Orion Health," he said.

"If you just did the numbers on the math you can see that the rate of growth is accelerating and will push well past $10 billion revenue in the next year."

Shanahan said more companies were expanding through acquisition than ever before with the companies included in the report acquiring 31 other businesses in the last year.

He said this was also a result of growing confidence in New Zealand's technology sector.

Technology is New Zealand's third-largest export behind dairy and tourism with exports of $6.87b, up 13.5 per cent from last year.

For full coverage and analysis of the 2016 TIN100 report see The Business on Friday.