Tech sector achievements under-recognised: report
- 23 June, 2011 22:00
The country’s top-100, export-focussed ICT companies earned $4.9 billion last year, but according to the author of a report documenting the sector, most people are unaware of this success.
The TIN 100 is based on questionnaires sent out to the top-performing ICT companies in New Zealand. Its author Greg Shanahan, is the director TIN (Technology Investment Network), a private company which also invests in a medical device start up called Klein Medical.
Shanahan says he began producing the TIN 100 report — which is sponsored by TechNZ and NZTE — seven years ago because he perceived a lack of understanding about the tech sector in the broader commercial sector.
“What I wanted to do was capture some quantative data that said how big the technology export sector was and how it was performing and who were the major players,” he says.
TIN 100 was cited by Minister of Science and Innovation Wayne Mapp when awarding 26 companies that received grants of between $490,000 and $7.2 million over three years, in December.
The threshold for inclusion in TIN100 is revenues of $12 million. While many companies send in the relevant financial information, revenues for others are estimated.
Shanahan says the exports generated by the tech sector are significant, especially compared to dairy sector (around $11 billion), but that most people would have no idea the tech sector was such a large export earner.
The top-20 companies had revenues of $2.4 billion according to the latest TIN 100 report and during the period of the great financial crisis (2008–2010) growth within the top-20 companies averaged out at 30 percent.
“My feeling is the world is up for grabs. The changes in terms of the competitiveness, globalisation, climate change and population growth – all of those things are creating more uncertainty and making it difficult for large multinationals to respond in a timely fashion,” says Shanahan “And so it is creating an opportunity for New Zealand companies who are in the right markets, companies that are able to support those large global trends are doing really well.”
He cites Datacom ($667 million revenue) and Intergen ($27.4 million) as two companies that are providing services that lower the cost of doing business for organisations willing to outsource their IT services.
A striking feature of the TIN100 is that 42 percent are private companies, and a further 14 percent are private with venture capital funding.Shanahan suggests that the owners of private companies tend to adopt a prudent approach and take a long-term view in regards to building the business.
So how can New Zealanders share in the wealth being created by a buoyant tech sector, if successful companies don’t list on the NZX? Shanahan points out that they can work for them - the TIN100 companies employ around 24,000 people.
Questionnaires for the seventh TIN100 report – expected to be released in October – are currently being sent out to companies.
TIN 100 top five companies with revenue for 2010
1. Fisher and Paykel Appliances - $1.6 billion
2. Datacom Group - $667 million
3. Fisher and Paykel Healthcare - $503 million
4. NDA Group - $200 million
5. Tait Radio - $200 million