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From Tech Sector to Digital Nation DIGITAL NATION NEW ZEALAND From Tech Sector to Digital Nation An Analysis of the Impact of the Tech Sector and Technology on the New Zealand Economy References and Definitions All the graphs in this book and the data used to create them can be freely accessed from Figure.NZ, a social enterprise making it easier for everyone to find and use data about New Zealand. This printed report is also available in a digital format, to access the eBOOK please head to the NZTech website, www.nztech.org.nz. 2nd Print Run - August 2016 INTRODUCTION About NZTech NZTech is the voice of the New Zealand technology sector. The New Zealand Technology Industry Association (NZTech) represents over 300 organisations from across the New Zealand technology landscape from start-ups and local tech firms to multinationals, and from ICT to high tech manufacturing. Organisations that are redefining the world we live in. Our goal is to stimulate an environment where technology provides important productivity and economic benefits for New Zealand. From Tech Sector to Digital Nation 01 Contents INTRODUCTION Towards a PART ONE Digital Nation The Tech Sector PAGES PAGES 04-21 22-53 Thank you to all Project Supporters 06 The Tech Sector is large and growing 25 Introduction: NZTech 09 The Tech Sector touches all of New Zealand 29 Foreword: NZTech 10 The Tech Sector is creating jobs 43 Foreword: New Zealand Government 12 The Tech Sector is generating exports 47 Foreword: Microsoft New Zealand 15 The Tech Sector provides the foundation Technology – what is it and why is it important? 17 for all sectors 51 Executive Summary 18 Key Highlights 20 02 INTRODUCTION CONCLUSION PA R T T WO Creating a The Impact Digital Nation PAGES PAGES 54-89 90-108 The Impact of Tech Sector Growth on Growing the Tech Sector 93 the Economy 57 Education 93 The Impact of Technology on other Sectors 61 Government 94 Manufacturing and Retail 62 Exports 95 Rural New Zealand 65 Getting more from technology 95 Government Services 71 Appendices 96 Healthcare 76 Education 83 From Tech Sector to Digital Nation 03 INTRODUCTION Towards a Digital Nation 04 INTRODUCTION 05 From Tech Sector to Digital Nation 05 THANK YOU TO ALL Project Supporters PROJECT PARTNERS ECONOMIC RESEARCHERS DATA PUBLICALLY AVAILABLE AT: sapere research group 06 INTRODUCTION BUSINESS OPTIMAL INTELLIGENCE IT that works for you me te uira te rite From Tech Sector to Digital Nation 07 Graeme Muller Chief Executive, NZTech 08 Introduction INTRODUCTION With the rapidly changing pace of technology, most people are unaware of the exponential impact many technologies are having throughout society. While there is general agreement that technology This study has been designed to define and size is important to the New Zealand economy, until the broader technology sector, the jobs it creates, now there has been little research to confirm this. the export earnings it contributes AND the positive As the voice of the technology sector, NZTech set role that technology plays in other parts of the about finding out just how important it is. Without economy and society as a whole. an answer there is serious risk that as a country With a project of this size and scale, it would not we will miss opportunities for both economic and have been possible without support from a large social growth. number of organisations. In particular, NZTech While growth in tech exports will continue to be would like to thank its key supporters, The Ministry significant for New Zealand’s economy, the social of Business, Innovation & Employment and and economic gains that technology can enable Microsoft New Zealand. NZTech would also like are so vast that we believe more focus should to recognise and thank the many tech firms and be placed on it. This is why our report is titled industry organisations that supported and enabled “Digital Nation New Zealand, from tech sector to this project. digital nation”. The aim of this report is to deepen understanding and discussions about the benefits technology brings and the role that it could play in redefining the New Zealand we live in. NZTech is a not for profit organisation whose purpose is to create a prosperous New Zealand led by a vibrant technology sector. NZTech engaged independent economic consultancy, the New Zealand Institute of Economic Research (NZIER) to analyse the sector and provide input into this report. Given the complexity of the task, another independent economic consultancy, Sapere was engaged to provide a peer review. From Tech Sector to Digital Nation 09 FOREWORD Chair of the Board, NZTech New Zealand’s tech sector is soaring as innovation and global connectedness obviate our small size and relative isolation. New Zealand has 29,000 tech firms with nearly While the tech sector is our fastest growing 100,000 employees contributing $16.2 billion to industry, I would like to see tech, tourism, gross domestic product (GDP) and producing $6.3 agriculture and many other sectors all growing billion in exports. It's this country’s third biggest concurrently and grabbing global market share. revenue earner. The world doesn't care about our The biggest opportunity for NZ growth is the digital size or location on the map, instead they recognise enablement of the rest of the economy, including our innovation, quality and ease of doing business. the public sector. Isolation now is more about connectivity and The government needs to be bold and proud about bandwidth as opposed to freight distances. In our strategic direction as a digital nation. Our fact, our relative insignificance and neutrality in vision of Digital Nation New Zealand is a unifying geopolitical terms makes us an attractive host platform. We need to include it in our national nation. If we are cohesive as well as small, we can culture and psyche and this requires leadership. then also be both agile and decisive. That would be This research highlights and quantifies the a huge competitive advantage. importance of technology to our economy and the The potential economic and social benefit of New incredible potential we have to harness that. Now’s Zealand as a truly digital nation is almost surreal. the time! Already, in just over a decade, our contributions to GDP growth has been higher than any other OECD country. If we were to fully commit to being a digital nation as a core national strategy, and engage with global partners and investors, we could achieve an astonishing amount in five to 10 years. Ultimately, we will know we have made it as a digital nation when we are recognised for being the world's most tech savvy country, as well as being a beautiful place to visit with and the best source of food and beverage. 10 INTRODUCTION Bennett Medary Chair of the Board, NZTech From Tech Sector to Digital Nation 11 FOREWORD Ministry of Business, Innovation & Employment The purpose of the Ministry of Business, Innovation and Employment is to grow New Zealand for all. The growth of the digital sector, and the transformational impact that this sector can have on the wider economy, will play a critical role in creating a prosperous nation. Digital technologies are transforming virtually Our stable political and regulatory environments, all aspects of New Zealanders’ lives. They are along with our extensive investment in digital changing how we interact with one another and infrastructure, make us one of the best places how we express ourselves, the way we learn, work in the world to do business and develop new and play, and how we access goods and services technologies. We are a highly skilled nation, we – including those delivered by government. have an international reputation as innovators, and Businesses and governments are going digital too. our small but rapidly growing digital technologies And it’s changing the way goods and services are sector shows that we can disrupt and compete in designed and delivered, and how providers engage the global digital market. and build relationships with their customers. The 2015 ‘Business Growth Agenda: Towards We are beginning to see some of the significant 2025 – Building Innovation Chapter’ includes the opportunities that digital technologies are Digital Economy Work Programme as a key focus. creating in areas such as precision health care, Through the Programme, government is driving an e-education, and autonomous vehicles, and as integrated set of cross-agency initiatives to enable government we need to consider what these New Zealand to become a leading digital nation. changes mean for the work that we do. Over This report, produced by NZTech, provides the coming decades, government – along with valuable information to help us better understand the rest of New Zealand – will be transformed the technology sector and the opportunities this irrevocably by digital technologies. sector presents for New Zealand. The report also As a nation, we need to position ourselves to helps to extend discussion beyond the technology make the most of the opportunities that digital sector to the broader social and economic impacts technologies are creating. Our small size gives us that digital technologies are having on our lives. We a unique advantage over larger countries. It means look forward to working with the sector to shape that we can move quickly and purposefully to seize government’s Digital Economy Work Programme the opportunities and manage the challenges of to enable a successful digital future for our nation. our changing digital world. 12 INTRODUCTION David Smol Chief Executive, Ministry of Business, Innovation and Employment From Tech Sector to Digital Nation 13 B. Sheers Barrie Sheers Chief Executive, Microsoft New Zealand 14 FOREWORD Microsoft New Zealand INTRODUCTION There is no doubt that we are all seeing and feeling the ever growing importance and impact of digital technologies in the lives of New Zealanders.
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