Technology third-biggest export

Technology firms have coped with the recession better than most, Ernst & Young partner says

Move over lamb chops with a glass of red, technology was New Zealand's third-biggest export industry last year, outpacing wine and meat exports, a report says.

The Technology Investment Network's 2009 report, sponsored by Ernst and Young, says technology exports last year rose 4 percent to $5.1 billion.

Technology firms also appear to have weathered the recession better than most, with 37 percent reporting a profit compared with 27 percent in other industries.

Ernst and Young partner Ben Willems said tech firms had coped better than others during the recession because they were more comfortable with rapid change.

"They're more able to cope with what the market is throwing at them all the time," he said. "They were the first businesses to wise up (to the recession)."

Technology firms were among the first to cut costs and remodel their businesses in response to the recession, without making the mistake of cutting research and development, he said.

"If there was one lesson that technology companies learned from the dot-com bust, it was not to put your strategic plans on hold."

Last year, New Zealand technology sat behind only dairy and tourism in terms of export revenue, having overtaken meat exports for the first time in 2008.

Willems said the New Zealand tech industry deserved greater recognition for outperforming areas considered more quintessentially Kiwi, such as wine or wool.

"They [tech firms] are beginning to collectivise but the technology space is still a lot more fragmented."

Christchurch has been the key hub for the growing industry, with the report saying 21 of New Zealand's 100 biggest technology firms were based in Canterbury last year.

These include well-established firms, such as Tait Electronics and Dynamic Controls, and firms new to the list: Moffat Ltd, Windflow Ltd, Datasouth, Orthopaedic Synergy and Steelbro New Zealand.

Moffat, which designs and manufactures commercial food service and baking equipment, debuted as New Zealand's ninth biggest technology firm while Windflow Ltd was propelled into 49th place on the list off the back of a 169 per cent revenue increase last year.

"I think it [Christchurch] is well recognised as the tech hub in New Zealand, especially in software."

Willems said Christchurch had benefited in recent years from an influx of world-class technology workers from other countries, sacrificing big pay packets in favour of a better quality South Island lifestyle.

"They've built up a bit of critical mass and that industry has really grown in Christchurch."

Debutant of the top 100 list, information technology firm Datasouth, continuing to grow, working with big clients including PGG Wrightson and Tourism Australia.

The privately owned company designs networks and software, and provides a consultation service. Last year, it won the Core Infrastructure Solution Provider of the year for the second year running at the Microsoft Partner Awards.

Datasouth general manager Craig Gerken said the industry needed to work harder to market itself beyond just potential clients.

"I think the industry as a whole has been pretty poor at promoting itself," he said.

That was leading to a serious skill shortage.

Join the newsletter!


Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags Development ID

Show Comments