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NEW ZEALAND VENTURE INVESTMENT FUND "The New Zealand Venture Investment Fund (VIF), established in 2001, is designed to accelerate the development of the venture capital market in New Zealand. Through VIF the government is investing NZ$100 million over three years in innovative New Zealand businesses. The VIF program will invest this capital through a series of individual investment funds (VIF Seed Funds) selected by VIF and operated by private sector fund managers. These funds will include venture capital raised from the private sector as well as the government's investment contribution. The VIF investment program targets are: • Seed stage investment which is funding to enable the development, testing and preparation of a product or service for commercialization. • Start-up investment which is funding to enable a business enterprise to begin trading. • Early-stage investment which provides capital for initial manufacturing and marketing where the business is still cash flow negative." 10 |
"ICT is an integral component of every sector of the New Zealand economy (as an "enabler") and is also a sector in its own right. It currently accounts for approximately 2% of the workforce and generates in the order of 4.3% of New Zealand's GDP.
New Zealand has a target of growing the economy to return its per capita income to the top half of the OECD. This report assumes that the economic imperatives of this objective are well understood by now. The Taskforce has reviewed the activities that underpin the contribution of ICT to the economy, assessed its potential for growth and, drawing on its collective experience, has developed a growth target for the ICT sector that it believes is achievable.
The Taskforce recommends that key stakeholders in the ICT sector set their sights on a goal whereby 100 more ICT companies are grown over the period up to 2012 through an annual sales level of $100 million per company6. The target can also be identified with growing the ICT sector's contribution to reach a level of 10% of GDP by 2012 (up from 4.3% now). This will require other forms of commitment for the wider ICT community, such as from those stakeholders responsible for the supply of ICT talent and skills.
The segmented contribution of the telecommunications, wholesale and other products and services groups have been used as the basis for setting the target and are shown in Figure 1." 4
Figure 1. Current & Target ICT Contribution to GDP
STATISTICS
GDP
"New Zealand's information and communications technology (ICT) sector has been growing rapidly over the past decade. At 10.2 per cent, New Zealand currently has the world's highest ICT spend as a percentage of GDP (followed by the US at 9 per cent). ICT subsectors include telecommunications, IT hardware, IT software, IT services, Internet services and wireless technologies. Some of these subsectors are less likely to hold opportunities for New Zealand. An example is IT hardware - not an attractive segment today from a global perspective, and one which, in general, does not fit with New Zealand. For example, semiconductor manufacturing is unlikely to be a significant opportunity for New Zealand. Some parts of the wireless technology subsector, on the other hand, do offer more potential for New Zealand. There is already a small but active wireless industry involving local and foreign companies such as Talon Technologies, Ericsson-Synergy and Vodafone." 5
Figure 2. Research and Development
ICT Contributions to GDP
"It is estimated that there are currently 7,544 ICT firms 6 with annual sales of less than $5 million and 171 with sales above. The industry is highly concentrated; 84 companies with annual sales that exceed $20 million generate approximately 75% of the sector's contribution to GDP and 64% is generated by 16 companies with annual sales that exceed $100 million. In recognition of the "SME" composition of New Zealand business, it is envisaged that the growth from the current level of contribution needed to reach the target will be largely achieved by an increase in the number of companies that operate at above $20 million of annual sales." 4
"Many of these companies are existing and some will be start-ups. Some of this contribution is expected to arise from the New Zealand-based activities of the multinationals that currently comprise approximately half of the 16 companies that have a turnover exceeding $100 million per annum. Telecom New Zealand is the single largest contributor and accounts for over 2.2% of GDP." 7
"Forecast levels of ICT employment in 2012 are 125,000 compared with the current level of approximately 41,000. Export income from the ICT sector in 2001 was $0.9 billionS and if the growth target is achieved should be in the order of $16 billion by 2012." 8
Figure 3. ICT Scorecard
Foundation for Research & Development
"In general terms R&D involves a degree of technical risk and uncertainly of outcome. Risk and innovation are judged relative to the each applicant and need not be an absolute advance for the industry. The project should advance the commercial entities technical capability. Preference is given to proposals which develop a platform capability from which many new product or services may grow.
• s Technical Assessment Projects (feasibility)• s Grants for Private Sector Research and Development• s Technology for Business Growth (TBG)• s Project Assessment Guide" 9
Figure 4. The Foundation's Investment Programs
