GROWING EXPORT SUCCESS
Increasing the number of globally successful New Zealand Digital Technologies exporters, with a focus on the intellectual property producing business models of Software-as-a-Service and Interactive Media.
The Exports Steering Group is led by NZTE and Callaghan Innovation.
Its emphasis so far has been identifying how the SaaS sub-sector can achieve accelerated growth. A number of actions consistent with its pillars of Community, Capability and Cohesion have been identified. The discovery stage of the community work is well progressed, with a focal point being the connection of SaaS business leaders, designed to encourage shared learnings on how they can speed up the growth of their companies.
MBIE is also working with the New Zealand Game Developers Association to identify initiatives that will support the growth of Interactive Media companies, including a proposed Interactive Industry Development Programme to develop early stage creative IP and talent.
Initial work completed includes seventy interviews with business leaders in the SaaS sub-sector to help develop the actions for the Exports workstream. These interviews with local entrepreneurs and international SaaS leaders suggested a transformative growth rate requires addressing Community and Capability. In support, we also need Cohesion provided by relevant government agencies (e.g. Callaghan Innovation, NZTE, Immigration NZ).
To complement this process, modelling was undertaken using data provided by the sector and vetted by Stats NZ. Key assumptions and projections include:
- Current revenue and job growth is running at 14 per cent and 16 per cent, respectively.
- Historical growth translates into revenues growing from $2.2 billion to $9 billion by 2030 and 57,000 jobs up from the current 13,000.
These estimates will be reviewed to inform the final ITP. NZTE and Callaghan Innovation, as the Government’s Crown entities tasked with supporting New Zealand businesses to export and innovate, have developed a plan of action around the Community pillar. The Community responds to the barrier that SaaS founders are often unable to learn from those that have gone before them and are therefore often repeating missteps on their journeys to become successful exporters. The goal is to build an active community of 500 companies and 5,000 individuals by 2023, creating a connected environment around content, forums and other resources that facilitate learning, shared ideas and advice.
Callaghan Innovation has completed the discovery phase for the Community work which addresses the scope of the programme, how it will operate, what and who will need support and details of what success will look like. The goal is to integrate the Community and Capability work into a holistic programme.
SaaS growth – Establishing a new Community for SaaS companies
The work on Community leverages the knowledge and experience of those in the sector, using member data and insights to attract like minded people who can learn from one another and increase collective knowledge. It will have many activities (e.g. a website, networking events) designed to promote connection, common content and a sense of belonging.
MBIE has provided funding to Callaghan to enable the development stage of the SaaS Community. This includes the appointment of a dedicated project team within Callaghan and an interim Steering Group (comprising experienced SaaS leaders), the creation of a national database of SaaS companies and contacts and the fleshing out of a financially sustainable 3-year implementation plan.
The SaaS Community will work with existing events such as Southern SaaS and Techweek to ensure SaaS founders and leaders can share in a co-ordinated source of guidance and networking benefits.
SaaS growth – Capability and Cohesion
The Capability work seeks to address the skills and experience needed to drive scale, growth and international commercial success for SaaS businesses. These skills include:
- SaaS/Cloud-specific technical skillsets, which due to the nature of the industry, evolve faster than academia’s ability to deliver training
- Management skills and experience, including knowledge of how to build an international SaaS business at scale, quickly
- Founder and manager “soft skills”, including the skills to recruit or develop the right talent or their own businesses.
There are two main development pathways are the role of immigration in accessing targeted overseas talent (which will support upskilling of New Zealand staff, and will be involved in the Community noted above) and a potential SaaS Tech School that provides a way to scale the training by practitioners in the skills sets needed. Though some will be sourced locally, the major of these practitioners will be highly skilled migrants.
The Cohesion work will involve work with relevant government agencies to adopt the modern tools used by business to solve problems and move away from a siloed (individual agency) approach. It will also promote and improve transparency of government support by creating a “One Customer Pathway” across the export lifecycle.
Interactive Media – Investment ecosystem
Working with the New Zealand Game Developers Association, MBIE appointed Nordicity and Jason Della Rocca to complete a report on the gaps and opportunities in the existing investment ecosystem within New Zealand for small and medium-sized interactive game development studios.45 The work:
- identifies where in the business (studio) and project (game) development cycle, investment gaps and opportunities exist and their approximate size (e.g. number of studios, dollar value)
- identifies any barriers for both New Zealand and international investors to invest in New Zealand’s game development sector
- describes options, including the potential costs and benefits and any scope to scale or pilot opportunities
Interactive Industry Development Programme
The Interactive Aotearoa report was published in 2019 by the New Zealand Game Developers Association. The report highlighted a gap in early-stage start-up or development funding to foster investment-ready projects in the Interactive Media or game development sector.
In recognition of the growth potential of this sector, consideration is being given to a contestable fund to support early-stage, New Zealand-based studios to develop original intellectual property. This would support the development of a pipeline of small and medium sized studios, and also fill the gap in start-up support for game development studios which do not qualify for R&D or screen sector support. A case for this new fund will be advanced as part of the draft ITP process.
We are also assessing the potential impact of Australia’s recent announcement of a new 30 per cent tax credit regime for gaming companies, which will apply at a federal level from July 2022. This sits alongside some existing State level incentives of 10 per cent.