Stats NZ figures show booming tech market

Published on the 28/05/2024 | Written by Heather Wright

Stats NZ figures show booming tech market

Software and IT services now 3.7% of GDP despite clouds…

New Zealand’s software and IT services companies posted bumper sales in 2023, with double-digit growth recorded across all categories, pushing total sales of published software and IT services to 3.7 percent of GDP.

The Stats NZ Information and Communication Technology Supply Survey covers sales data from New Zealand businesses involved in producing or supplying software and information technology services.

“There has been no strategic coordination across government.”

It shows total sales of published software and IT services were worth $14.5 billion, a 28 percent increase on the previous – 2021 – results of $11.3 billion.

Published software sales, which were up 33 percent, accounted for $4.9 billion of that, with IT services (up 26 percent) accounting for $9.6 billion.

The vast bulk of that was made in domestic sales according to the Stats NZ figures: Domestic sales, up 28 percent, accounted for $11.4 billion of overall sales, leaving export sales at just $3.1 billion. Export IT services – which includes technical support; design, consulting and development services; and hosting and IT infrastructure – up 21 percent to $1.2 billion, while exports of published software surged ahead, up 34 percent to $1.9 billion.

Unsurprisingly the figures are reversed for domestic sales, where IT services form the bulk, at $8.4 billion.

Stats NZ says the total sales of published software and IT services has increased by $7.1 billion – or 96 percent – since 2017.

The figures covered by Stats NZ are lower than those in the Technology Investment Network reports which include technology across all ICT sectors, including agritech, fintech and healthtech as well as high-tech manufacturing and biotech.

The 2023 Tin report noted total revenue for the TIN200 companies – the top 200 Kiwi technology ‘exporters’ according to revenue – was $17.1 billion, up 11.8 percent on 2022 figures. Of that, $13.2 billion was earned offshore, making technology New Zealand’s second-largest export earner for the third consecutive year.

The latest Stats NZ figures put the latest sales growth ahead of that from the 2021 survey – when Covid lockdowns drove increased demand. Those figures showed overall sales of published software and IT services jumped 17.7 percent, from $9.6 billion in 2019 to $11.3 billion in 2021.

While the latest Stats NZ paint a picture of solid growth for New Zealand’s software and IT services companies, a recent Workforce Development Council has reiterated an ongoing concern for the sector: Skills.

The Workforce Development Council’s (WDC) first workforce development plan for the enabling technologies sector slammed the lack of government investment and tertiary provision in digital technologies training. That investment dropped 40 percent, or $22 million between 2012 and 2022, at a time when New Zealand is forecast to need a further 20,000 workers with advanced technology training by 2030.

The WDC report called out the current education system, saying it is not set up to deliver what the technology industry says it needs – namely more work-based training, internships and digital apprenticeships.

Claire Robinson, Workforce Development Council CEO, says an industry- and government-coordinated, long-term and concerted effort is required to build a flourishing industry, and that starts with the way technology is taught and trained.

“Many well-meaning government agencies have been trying to help by investing in short-term initiatives and pilot programmes, but there has been no strategic coordination across government, and there is no evidence these short-term pilots have improved the number of domestic technology-skilled workers, which only leads to an over-dependence on imported global talent to fix skills shortages,” Robinson says.

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