NZSA: Software export figures too low

New Zealand's software exports could be worth as much as $500 million a year, according to the New Zealand Software Association (NZSA). Although Statistics New Zealand puts the figure at only $122 million, NZSA executive director Linley Hughes believes its methodology is too conservative. "Statistics' numbers are quite restrictive. They don't include things like multimedia or services and support. There's a lot missing from that number,"

New Zealand’s software exports could be worth as much as $500 million a year, according to the New Zealand Software Association (NZSA).

Although Statistics New Zealand puts the figure at only $122 million, NZSA executive director Linley Hughes believes its methodology is too conservative.

“Statistics’ numbers are quite restrictive. They don’t include things like multimedia or services and support. There’s a lot missing from that number,” says Hughes.

“IBM alone employs 300-odd people in New Zealand and is worth hundreds of millions of dollars by itself. The industry as a whole must be worth more than Statistics believes.”

NZSA strategist Allan Morton also believes the export value to be higher, and wants to promote New Zealand as a world centre for software developers.

“Of all the OECD countries, there are maybe 10 that have the potential to be major software exporters. New Zealand is one of them.” He sees the lack of an infrastructure to facilitate this as being a major stumbling block.

“Israel has gone to some effort to put a good infrastructure in place and it’s now got 70 companies listed on the Nasdaq exchange,” says Morton. He believes New Zealand needs to recognise the potential of software as a major export earner before we can sell ourselves overseas.

Morton believes New Zealand needs to do four things:

• See how big the New Zealand industry is.

• Get on the political radar.

• Understand what our members need in terms of assistance.

• Survey our competitors to find out what has worked for them and what has failed.

Morton has added his voice to the growing chorus calling for an IT council to further promote the industry at the highest levels.

“We need a super body which sits up there with the Manufacturers’ Association and Federated Farmers promoting IT,” says Morton, who feels that IT is vital to the future of New Zealand’s standard of living.

The NZSA has joined with Tradenz to release a “capability package” of marketing information about the New Zealand software industry. It’s the first time a package promoting New Zealand software has been released and the NZSA hopes it will raise the profile of our software industry both at home and overseas.

For IDC’s Graham Penn the issue is one of defining the parameters for any projection of software exports.

“Should we include software ‘exported’ to a branch office overseas? Do the numbers include customising existing software for a client? What about situations like IBM’s ICMS project, where IBM New Zealand is the head office for a worldwide project but any earnings may be recorded by IBM in the US instead of here? These issues must be addressed to reach a realistic total.”

IDC is currently in the middle of a project that will, among other things, assess software exports of New Zealand’s major developers. Those figures should help those who wish to promote New Zealand as a software power house.

The information package will be made available to all trade commission offices around the world and to leading businesses here in New Zealand.

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