According to NZTech Chief Executive Graeme Muller, the substantial $323.9 million earnings of the country’s game developers in the last financial year is indicative of the boom in the nation’s tech sector.
New Zealand’s interactive media and game developers made $121 million more in the current fiscal year. Interactive games grew $120 million-plus during the pandemic period. Video game developers. earned $323.9 million in the year to 1 April 2020, an increase of $121 million in one year alone.
The industry gained by being able to continue production during restrictions as well as skyrocketing demand as people globally had to stay at home, many of whom played digital and online games. Interestingly, 96% of domestic creators’ income came from overseas audiences.
The figures come from the annual New Zealand Game Developers Industry Survey of 42 interactive, gaming, virtual reality, augmented reality and education tech companies.
New Zealand Game Developers Association Chairperson Chelsea Rapp said, “The games industry has proven itself particularly resilient during the COVID-19 pandemic, both here in New Zealand and around the world. We are uniquely positioned to contribute to our economic recovery with weightless digital exports, but that growth will depend heavily on our ability to support young and emerging enterprises.”
Graeme was of the opinion that gaming development exemplifies the continued growth and success of the whole domestic tech industry. New Zealand tech firms have been incredibly resilient in the face of the COVID-19 pandemic that has severely impacted most sectors. Technology seems to have been fairly immune to devastation that COVID wreaked on other industries and has been a significant economic contributor.
Last year, the tech sector employed 114,000 people, was the country’s third-largest export and contributed 8% of the GDP. The country’s 200 largest tech exporters last year generated overseas sales of $9.4 billion with annual sales growing at 8.3% to $12.7billion.
He said that New Zealand exports in sectors like the game developers have been growing exponentially. National IT companies have been working to assist companies in other sectors with digital transformation. With this growth and the rising demand, there is a new wave of high growth companies raising funds to expand globally.
“In the past couple of weeks, we have seen two great New Zealand tech firms each raise more than $20 million dollars to support their continued development,” he confirmed.
The ten largest studios earned 95% of the sector’s revenue and are 11 years old on average. However, 75% of studios employ five people or less and the Game Developers Association is concerned about the lack of support to grow these firms to take advantage of the export opportunity.
Despite the survey being conducted in the middle of New Zealand’s second COVID lockdown, 49% of studios surveyed predicted significant growth (10% or more) this coming year. Only 17% of studios predict any decline in sales.
None the less, the sector is facing challenges. Tech firms are constrained to recruit the highly skilled specialist needed for their rapidly expanding teams. NZTech has asked cabinet ministers to urgently consider allowing more rapid entry of targeted candidates with these critical advanced digital skills.
Though stay-at-home directives and other restrictions have created an increased demand and opportunity, travel restrictions have made it harder to make publishing deals and secure funding. The top four challenges studios reported facing were a shortage of experienced staff, COVID related travel restrictions, attracting early-stage funding and attracting investment for expansion.
Last year’s Interactive Aotearoa report by the Game Developers Association recommended that the Government create an interactive innovation fund and industry development plan to grow the pipeline of new interactive firms. The Government is currently consulting on the Digital Technologies Industry Transformation Plan and the Screen Sector Strategy 2030, which these could be part of.
According to Cert NZ’s most recent quarterly report, cybersecurity incidents have reached a record high. For the quarter July 1 to September 30, the cybersecurity agency logged over 2,600 incident reports from individuals and businesses. This is the highest number to date and reflects a 33% increase over the previous quarter.
Cert NZ’s Director Rob Pope was of the opinion that the figures were not unexpected, in the light of the recent flurry of distributed denial of service (DDoS) attacks, ransomware and online scams. DDoS attacks are primarily volumetric in nature; in essence, they aim to overload websites by directing traffic to them to overwhelm their capacity.
OpenGov Asia had reported in late October that New Zeland had seen a surge of increasingly sophisticated malware attacks that are affecting everyday New Zealanders as well as large organisations. The malware campaign was being spread through attachments or links in emails was affecting New Zealanders. The attacks at the time had been predicted to cause widespread disruption and loss of revenue and data.
Not surprising then, the most common incidents that were reported were cyberattacks dispersed by email. Emotet, the virus reported above, was responsible for almost a third (34%) of the malware incident increase on the previous quarter.
Earlier in September, a wave of cyberattacks exposed worrying vulnerabilities in some of New Zealand’s key institutions. Most notably, for six days, the nation’s stock exchange – where tens of millions of dollars in shares are traded each working day – was laid low by the attacks.
Based on the reporting, the estimated financial loss was at $6.4m which is almost double the average quarterly loss of was $3.6m that is based on the last 14 quarters. The finance and insurance sector accounted for 60% of reports about incidents affecting organisations.
Of all the Incidents that were reported that had a financial loss component, thirteen were over $100,000. There were five incidents that involved the unauthorised transfer of money as a result of businesses having their email accounts compromised. Two related to “a new job or business opportunity” and the remaining related to scams including cryptocurrency, investment, fake lottery or prizes, and romance scams.
Pope said that these incidents ought to serve as a wakeup call for Kiwis to tighten up their online security. He encouraged New Zealanders to update their operating systems and software, ensure they use long, strong and unique passwords, and install antivirus software.
In the light of the upcoming season, cybersecurity experts have warned people to be especially vigilant and look out for holiday season scams. The Domain Name Commission along with InternetNZ has designed a fake webshop to practically demonstrate how citizens can spot signs of dubious e-commerce. A quick web search along with the terms “scam” or “review” will often go a long way towards alleviating or reaffirming concerns.
Graeme Muller, CEO NZTech, said in a recent publication that the nation has seen increasing cybersecurity threats for people and businesses as ‘bad actors’ attempt to take advantage of the pandemic. Operating within an increasingly digital environment, Kiwis are constantly under threat of cyber attack. Security should be top of mind for businesses, organisations and government. Including security as a pillar of a digital strategy is the best way to ensure peak performance while protecting people.
The country’s new Privacy Act comes into effect on December 1, 2020. Changes include the introduction of a privacy breach notification regime. This means if an organisation experiences a data breach where private information is lost or stolen and believes the breach could result in serious harm, it’s required to notify the Office of the Privacy Commissioner and affected individuals as soon as possible.
On a related note, the annual Cyber Security Summit has been delayed this year but is scheduled to return in February next year. The gathering explores new trends and the importance of cyber literacy across all levels of business.
New Zealand tech companies are experiencing significant growth driven by rising export revenue. Thie trend seems to be due to an increasingly diverse international market that is driving demand for NZ designed and manufactured tech products according to a recent report.
Technology Investment Network (TIN) Report conducts independent market research and collates information from approximately 1000 companies, reporting on the largest 200 (TIN200). The research is collaborative with widespread industry support and participation.
Key sections of the report include analysis of ownership structure, market sector analysis, profiles of the industries fastest-growing companies, economic impact review, analysis of R&D, profiles of promising early-stage companies and a look at which New Zealand regions have the greatest growth in technology.
The report launched earlier in November shows export revenue for the TIN200 companies rose by 10.6% to a total of $9.4B this year. The report reflects, to some extent, the impact that the pandemic has had on the tech sector’s performance in 2020. None the less, the overall TIN200 trend indicates strong growth despite adverse tough economic conditions globally.
With the impact of the pandemic starting to take global effect in the final quarter, total TIN200 revenue reached $12.7B. This is up 8.3% – or $972m – on 2019, but a dip in overall revenue growth, dropping below the $1B recorded last year.
According to the findings, ICT firms show strength yet again, lifting both their TIN200 presence and profitability. With 101 companies now in the TIN200 (up from 94 last year), ICT continues to be the driving force behind the New Zealand tech sector, growing its revenue by 11.4%, comparative to the 8.3% overall growth of the TIN200.
A strong indicator of the promise the group holds, and by extension the sector, is the annual revenues of the companies. In 2015, only 38 tech companies in New Zealand had revenues over $50m; in 2020, this has grown to 56 companies.
Companies with revenue of over $50m accounted for 70% of growth in the TIN200. Able to scale further and explore new market opportunities from a position of strength, these companies are in a good position to grow.
Over 4,000 new jobs were created by the group in 2020, an 8% increase from 2019. With this, the total number of NZ tech sector-generated jobs internationally was 55,167 – of which over 50% are employed in New Zealand. These employees earned about $4.5B in wages; another first for the TIN200, with the average wage for a TIN200 employee topping $82,000.
In a COVID-19 socially-distanced world, contactless transactions are the norm, driving mobile and digital solutions. Not surprisingly, Fintech was the fastest-growing sector on the TIN200 for the fifth consecutive year. With a 5-year CAGR of 31%, new entrants and booming demand, much will be expected of the NZ Fintech sector in 2021 and beyond.
Revenue growth from Public Companies in 2020 was exceptionally strong, with the 25 listed companies on the TIN200 representing nearly two-thirds (62%) of the total revenue growth – an impressive growth rate of 20% on last year.
With 120 of the TIN200 companies headquartered in Auckland, New Zealand’s largest city continues to be the powerhouse of the NZ tech sector. The capital region performed well too, with companies in the Wellington region generating over 23% of the TIN200 revenue and registering the fastest growth rate at 10.6%.
The founder and managing director of TIN felt that the TIN200 companies are well-positioned in terms of scale, growing profitability and global spread to absorb the negative impact of COVID-19. The ongoing double-digit export growth with the accompanying increased employment allows the sector to take advantage of the opportunities for growth as a result.
Big Data is a buzz word often used in conjunction with analytics, finance, statistics, or other information technology-related topics. But does it could it have any genuine relevance to the agriculture sector? New Zealand AgResearch senior data scientist, Jeremy Bryant, strongly believes that it does.
The research institute is using big data to explore new ways of working including a multidisciplinary programme called the New Zealand Bioeconomy in the Digital Age (NZBIDA). The programme will harness the power of digital technologies to enable the transformation of New Zealand’s food systems.
The Strategic Science Investment Fund (SSIF) aids strategic investment in research programmes and scientific infrastructure that have long-term beneficial impact on New Zealand’s health, economy, environment, and society. Formed in December 2018, the Ministry of Business, Innovation, and Employment (MBIE) approved a new SSIF platform for AgResearch, the NZBIDA.
The primary deliverable is a proof-of-concept that AgResearch will be both instrumental and necessary in helping transition New Zealand’s pastoral sector to one that is more agile, adaptive, and sustainable. AgResearch is developing up to 22 unique proofs-of-concept to demonstrate how digital technologies will enable this transformation.
“As a country, we recognise that we must transform our whole food production system,” said NZBIDA programme manager and Principal Scientist, Mark Shepherd. “AgResearch believes that digital technologies can help in a number of different and unique ways to achieve the move to high-value foods, diversified landscapes, the need for high-quality products with proven provenance, and much more.”
An objective of the programme is to encourage researchers to “fail fast or find early wins”. Jeremy Bryant explained that they previously had longer horizons for research. However, NZBIDA is about learning and being directed a little bit more by rapid proof of concept findings and using an agile way of working.
They are looking at novel ways to use data whether it be from the farm or a supply chain and figuring out the best way to organise and analyse it with big data technology. While people are familiar with gigabytes and megabytes; big data is getting into the range of peta and exabytes. Huge volumes of data that could extend into the billions or millions of records that need a lot of computing power.
Farm sensors are storing and sending an array of information and new technologies like virtual fencing technology need computing capacity. Big Data has the ability to help make informed decisions and change mindsets based on analytics, trends and information. But while it has enormous potential it comes with its own set of challenges. Key among this is the sheer volume of data.
Bryant said while regular satellite tracking might make it possible to capture numerous images and associated data “pulses”, a farmer would probably only want to see snapshots in time. “Typically, it comes in like a tidal wave and you can’t stop it. You’ve then got to say, okay, we’re getting this information every minute, so, really, I only want to aggregate it for an average for the day. That’s giving me the best insight for what’s happening for that animal at that time, or for the pasture.”
A paper in mid-2019 argues that with the increasing impact of climate change, the next revolution in precision agriculture and agriculture, in general, will be driven by Sustainable Precision Agriculture and Environment which could leverage past technologies combined with Big Data analysis.
Similarly, an article around the same time said that access to insights will make farmers’ lives easier and enable informed decisions, driving the next wave of productivity and sustainability improvements. Agritech companies around the world are taking notice and on-farm tech innovation is moving quickly, particularly as the cost of data capture and analysis reduces.
The New Zealand government is investing $84.7 million in innovative research projects including those focusing on health, climate change, astronomy and the impact of big data on social equality said Research, Science and Innovation Minister Megan Woods.
This year’s Marsden Fund will support 134 new projects including explorations of the connection between heart failure and diabetes, the financial risks of climate change and the complex interplay between Maori settlers and ecosystems through the history of mahinga kai (traditional foods).
The minister said that they have designed the funding so it can address real-world problems, while also giving researchers the freedom to innovate and come up with new ways to solve problems. problems. Health issues like Alzheimer’s and Parkinson’s Disease are wide-ranging problems and require innovative thinking. Healthtech is the biggest secondary technology sector in New Zealand, generating NZ$1.8 billion of revenue and a five-year compound annual growth rate of 10% in 2018. With deep scientific and commercial expertise, New Zealand’s healthtech sector is strong and will continue to contribute world-leading technologies to address the health needs of citizens across the globe.
Research needs to look at these issues from different angles to ensure that the best is being done for the future of the country. She felt that successful applicants were doing significant work in their areas of science that would benefit New Zealand’s long-term future.
Marsden Fund research benefits society as a whole by contributing to the development of researchers with knowledge, skills and ideas. The Fund supports research excellence in science, engineering and maths, social sciences and the humanities. The Marsden Fund was established by the government in 1994 to fund excellent fundamental research. It is a contestable fund administered by the Royal Society of New Zealand on behalf of the Marsden Fund Council. The research is not subject to the government’s socio-economic priorities but is investigator-initiated.
New Zealand has an established and clear data strategy and roadmap for the nation. The strategy and roadmap are intended to provide a shared direction and plan that organisations within and outside government can collectively work towards and align their efforts to generate maximum impact. It acknowledges that there is a need for greater alignment and coordination of effort across the system. The government understands that global data growth enables innovative data uses that are transforming the world and that In New Zealand is uniquely positioned to maximise the value of data
The government agrees that it has a unique role to play in laying the groundwork for the future data system. The roadmap envisages a future where data is regarded as an essential part of New Zealand’s infrastructure and where data use is underpinned by public trust and confidence. As such, greater data use needs to be balanced with the protection of privacy rights and ethical use.
The strategy is designed to unlock the value of data for the benefit of New Zealanders. It will start by directing activity in focus areas to deliver the most impact:
- Focus area 1: Invest in making the right data available at the right time
- Focus area 2. Grow data capability and support good practice
- Focus area 3. Build partnerships within and outside government
- Focus area 4. Implement open and transparent practices
In other data-related developments, the Open Government Information and Data Programme ended in July 2020. However, this did not signal the end of the government’s commitment to open data. Instead, it marked the transition from a time-boxed programme into on-going government-wide coordination of efforts, led by the Government Chief Data Steward.
The programme is a cross-government programme designed to accelerate the release and reuse of open government data to maximise the value of that data.
At the closing of the Open Government Data Programme, Stats NZ commissioned an independent reviewer to produce an Independent review of the Open Data Programme. The report focused on two key things:
- an assessment of the programme’s operation and performance against its expected outcomes
- recommendations based on lessons learnt that may inform the work of future cross-government data programmes.
The closure report is an output from direct comments and feedback from the interviews and analysis from the independent reviewer.
NZTech began its survey of thousands of New Zealanders on 29 September to produce a nationwide digital skills survey. Before COVID, around half of all new tech roles were fulfilled via immigration. With closed borders, it was obvious that what was once a skills shortage could quickly become a catastrophe if not managed well.
With this in mind, the agency wanted to establish a new baseline of the digital skills in the market and identify the areas of emerging critical shortage.
Chief executive Graeme Muller said, “We are surveying the tech sector, large corporate IT teams and the IT departments in government agencies over the next month.
NZTech has completed their digital skills survey and the write up is expected shortly. The survey had a good number of responses, including most of the largest employers in the country. In addition, the team analysed 93,000 LinkedIn profiles and data provided by the Ministry of Education, the Tertiary Education Commission (TEC), Immigration New Zealand and Summer of Tech.
Pending the final document, the agency released some several early insights:
- There are many jobs available – for example, there are currently 505 software developer/engineer roles currently in the market (from only 147 respondents) and they are forecasting an additional 1,050 new jobs in the next two years.
- There is declining local interest in technology courses. Participation and achievement in digital technologies NCEA standards at secondary school have been declining at a compound annual growth rate (CAGR) of 3% over the past five years.
- There are fewer skilled graduates entering the market – domestic students graduating with tertiary computer science or information technology qualifications has been declining at a CAGR of 9% over the past five years, whereas international students are growing at 1%, resulting in a 6% annual decrease in graduates.
- New Zeland become reliant on international imports – over the past five years, 27,057 visas were granted for people entering ICT occupations and 48,000 international students studied computer science or information technology in NZ tertiary institutions.
NZTech’s purpose is to connect, promote and advance tech ecosystems and to help the New Zealand economy grow to create a prosperous digital nation. They connect tech ecosystems, organisations, people and policymakers with each other and to the world.
The agency promotes the importance of technology to the New Zealand public and New Zealand technology to the world. They help advance the foundations for a successful digital nation including digital education, connectivity, cybersecurity, digital access and trade.
Most recently, NZTech (2 Nov) launched a website for the Digital Technology Industry Transformation Plan (ITP). Working with the Ministry of Business, Innovation and Employment (MBIE) and other industry and government partners, NZTech will use the site to make it easy to find out what is happening and how to get involved.
The digital technologies ITP will articulate a long term vision for the sector and an action plan to help move the sector towards that vision. The draft vision for the digital technologies sector is:
“The world looks to Aotearoa New Zealand as a leader in ethical, innovative, inclusive and sustainable digital technologies. These technologies enable our economy to prosper, help our businesses to grow stronger and compete internationally, and contribute to the wellbeing of all New Zealanders.”
The NZ government launched its Industry Strategy in June 2019, outlining its approach to growing strong and innovative industries in the country. In response to the impacts of COVID-19, the Industry Strategy was updated in June 2020.
At the core of the Industry Strategy is the development of Industry Transformation Plans for selected sectors of the economy, where there are opportunities to lift productivity and growth or where a significant transition is required.
New Zeland has seen a recent surge of increasingly sophisticated malware attacks that are affecting everyday New Zealanders as well as large organisations. A malware campaign which is being spread through attachments or links in emails is currently affecting New Zealanders. The attacks have the potential to cause widespread disruption and loss of revenue and data.
CERT NZ has received intelligence from one of its international partners that approximately 800 New Zealanders have been affected by this malware.
If the recipient opens the attachments or links in the email, the malware gains access to their email account and can send emails out to the contact list to keep spreading the malware. Once an entry has been gained into the target computer, the malware steals login details, sends fake invoices to businesses customers, etc. It can even block access to files and demands money to grant access again.
CERT NZ, the government agency which supports organisations and individuals affected by cybersecurity incidents, says the virus, known as Emotet, installs malicious software (malware) onto a computer without the owner knowing. The attack is typically financially motivated and can result in significant financial loss or data loss through ransomware infections.
Ransomware like those affecting the healthcare sector in the United States. Federal agencies have warned that the US healthcare system is facing an “increased and imminent” threat of cybercrime, and that cybercriminals are unleashing a wave of extortion attempts designed to lock up hospital information systems, which could hurt patient care just as nationwide cases of Covid-19 are spiking.
“Computer malware is a common theme that people have to protect against. However, this particular one is quickly and continually evolving globally,” says CERT NZ’s Deputy Director, Declan Ingram.
The tricky thing is these malicious emails often do not come from spam email addresses, which is usually a sign that an email is suspicious, said Ingram.
Recovery from this type of virus is not straightforward. If affected, CERT NZ recommends disconnecting the affected computer from any network immediately and contacting the IT support team.
If systems have been infected by Emotet malware, CERT NZ recommends the following mitigation tasks :
- Isolate the infected computer as soon as possible
- Inspect and clean all computers connected to your network
- Notify everyone in contact lists and advise them not to open any emails that appear to come from you
- Run an anti-virus scan across the device
- Change all your passwords and logins on a non-infected device
- Implement two-factor authentication where possible
In cases of personal device being affected, CERT NZ recommends reporting the matter to them via their online reporting tool. An incident responder will make contact directly, to talk through the various options available.
“If anyone is concerned that either they or their business may be affected and is unsure what to do, reach out to us here at CERT NZ and we can assist you on what to do next,” says Mr Ingram.
CERT NZ has issued an alert on its website with information on what to do if you have been affected and how you can best protect yourself from a virus like this.
Earlier in June this year, Cert NZ cautioned people of businesses compromised through remote access systems – software that allows staff to access the business’ network remotely. Attackers were using this software to gain access to business networks, extract sensitive data, and encrypt files and then demand payment for the data.
A cloud-first strategy directs organisations to deliver applications and services from a cloud computing platform first before considering any on-premise alternatives.
While several considerations – like the threat of a data breach or data loss – could cause concern from using the cloud in sensitive industries, such as finance, the growing consensus is that a cloud-first approach has considerable advantages and in many cases is more secure for organisations than trying to protect their own infrastructure.
The New Zealand government Cloud-First requires its agencies to use public cloud services and to accelerate their adoption of public cloud services, in a balanced way, so they can drive digital transformation. This includes:
- enhancing customer experiences
- streamlining operations
- creating new delivery models
With massive investments made into digital infrastructure by major global software companies, hyperscale cloud providers are keen to make their services available in New Zealand. These developments could prove to be a ‘game-changer’ for the nation’s digital transformation journey. Hyperscale cloud and sophisticated infrastructure would have a significant impact on digital maturity and accelerate the use of cloud in government.
To support and guide these developments, the Digital Public Service (DPS) branch at the Department of Internal Affairs (DIA) is working collaboratively with partner functional leads to chalk out a detailed strategy to update policy and system settings for cloud technology. This will include new guidance for the use of cloud by government agencies.
Developing an all-of-government Cloud Centre of Excellence
The New Zealand government cloud programme supports public service agencies to accelerate the use and benefits of cloud in line with government’s policy.
Under the Cloud-First policy, government organisations are required to use public cloud services as the go-to strategy. They are required to adopt these services individually for the various services and offerings on hand after assessing all possible issues. The Cloud First policy requires government organisations to:
- adopt public cloud services in preference to traditional IT systems
- make adoption decisions on a case-by-case basis following a risk assessment
- only store data classified as RESTRICTED or below in a cloud service, whether it is hosted onshore or offshore
The focus for the 2 years will be to establish an all-of-government Cloud Centre of Excellence, that would support agencies to successfully execute well-designed and governed cloud migrations. Currently, the Digital Public Service branch is working actively with agencies to assist them with their cloud adoption planning and to facilitate collaboration on common cloud-related challenges.
Cloud programme partnerships
The programme will also specifically explore engaging with cloud providers to refresh and continually improve New Zealand’s access to cloud services. Where necessary, public service policies will be adjusted suitably and will a range of agreed ‘Lighthouse’ innovation partnerships will be progressed.
These partnerships, early in their lifecycle, are in the areas of education, environment, business and land. The overseeing agencies will determine how best to couple hyperscale cloud with advanced technologies to deliver solutions that would have significant national impact.
To build further capability and capacity for these initiatives the DPS branch will be recruiting key positions for the programme.
The DPS also encourages digital innovation through its Digital Government Partnership Innovation Fund (DGP). The fund is a $5 million contestable fund that invests in digital and data innovation. It provides an opportunity for government organisations to collaborate and invest in early-stage, cross-agency pilots and prototypes. It’s administered by the Digital Public Service (DPS) branch at the Department of Internal Affairs.
Any proposed initiative under the fund should also demonstrate innovation (the fund is not for business-as-usual), cross-agency collaboration, benefits to the public service or sector that will support transformation and must align with relevant standards, such as the NZ Government Digital Service Design Standard.
The Digital Public Service (DPS) branch at the Department of Internal Affairs is also engaging with a selection of government organisations this month to get feedback on the current and future states of digital standards maintenance and development.
This work will result in an implementation plan and roadmap for standards which will be released to all public sector organisations for consultation in early December 2020.