According to the recently released Technology Investment Network (TIN 100) Report 2011, New Zealand ICT and hi tech companies surpassed the $7 billion revenue mark in 2011. This reaffirms our status as the second biggest exporter behind dairy.

The release of the TIN 100 report and the material that it contains is refreshing and comes as somewhat of a relief considering that the New Zealand Institute released a report just days before stating that New Zealand is well below the OECD average in terms of business innovation.

Innovation, i.e. ideas, creativity, initiative and entrepreneurism combined with investment, research and development and the right people should produce a range of budding businesses that can in turn, export their goods and services and bring wealth into our country.

The ICT and hi-tech industry should be leading business innovation and the TIN 100 reports that many technology businesses are doing just that.

By far the strongest company in the report is Fisher and Paykel with its Healthcare and Appliances businesses.

Datacom, with revenues of over $700m this year, features as the second most profitable company and also as the company with the highest growth in revenue.

What I find really interesting is that a range of other lesser known and smaller companies, which rely on innovative products and services, are growing very quickly. The report covered 100 emerging companies this year. In the right environment and with a bit of luck thrown in, this stock of promising companies could become the Fisher and Paykels in years to come.

The report indicates that the industry has capitalised on growth opportunities, with particular expansion in Asia and Australia. Australia revenues alone were up by 10 per cent.

The ICT and hi-tech industry’s ability to scale is a key factor in this growth. While we continue to reap the rewards from our traditional export earners, there is no other industry that has the opportunity to scale and accelerate its export growth in the way the hi-tech and ICT sector can.

Key to growing innovative businesses is a good level of investment in research and development.

It is also a sign of a healthy industry as it means that there is money in the bank to invest in future growth. The report shows that TIN 100 companies increased their spend on R&D by 15 per cent and that employment in R&D-related jobs grew by 16 per cent for all 200 companies covered by the report.

It is also imperative that we gain the support of angel investors and other related groups so that funding continues for companies.

Other results show that 30 per cent of TIN 100 companies reached revenues of over $50m for the first time and that companies with revenues between $50 and $100m grew by 15 per cent during the year. Additionally, IT services and support outperformed other market sectors, with revenues growing by 11 per cent.

Worth noting is the progress that has been made on the Government’s ultra-fast broadband initiative.

Improved networking will play a key support role for the technology industry moving forward.

NZICT has been a supporter of the broadband initiative since its inception. I look forward to seeing how improved infrastructure can assist with the growth of our industry including other sectors.

By Candace Kinser, CEO of NZICT

© iStart Technology in Business www.iStart.co.nz

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12/02/08_ex_m

Candace Kinser, CEO of NZICT

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