COVID-19 creating increased global demand for NZ’s digital businesses

Activity is picking up for many Kiwi software and digital businesses as demand increases for digital and cloud-based service offerings, says Callaghan Innovation.

The disruption caused by COVID-19 has created a once-in-a-generation opportunity for Aotearoa New Zealand's digital and software services sector, with many in the sector buoyant about the future and reporting record growth.

"We went into COVID-19 with a strong, innovative digital sector competing well on the world stage, but  the pandemic presented major challenges - especially in funding terms," says Bruce Jarvis, group manager of digital at Callaghan Innovation.

"On the flipside, COVID-19 supercharged global demand for digital services and many of our most innovative companies responded rapidly," he says.

"Our COVID-19 R-D Loan uptake underlined this, with many digital businesses needing the support to speed up their activities to meet demand and seize new opportunities," he says.

"It isencouraging to see them raising investment, hiring and growing. We expect to see some great success stories out of this sector at a time when our economy is hurting."

One such example is Kiwa Digital, an award-winning media tech company that is forecasting double-digit sales growth through the impact of COVID-19 on the media industry. Their VoiceQ software, which automates dialogue replacement in the post-production stage of film and TV shows, is widely used for major studios and video streaming companies like Netflix, Disney, Amazon Prime and Hulu.

"Video streaming services have seen huge demand since COVID-19 hit. Kiwa Digital's Voice-Q software has been in hot demand for the dubbing of foreign-language films and TV series this year," says Steven Renata, CEO of Kiwa Digital.

"2020's number one drama series Money Heist, number one documentary The Last Dance, and four of the current top ten Netflix Originals were localised with VoiceQ.

"Our digital technology is world-class and well respected globally," he says.

"For us, COVID-19 simply sped up a digital trend which was already happening. Where before COVID-19 big businesses were slowly considering using our software, they are now seeing it as a must."

Jarvis says there is a real excitement amongst the 300 founders and CEOs attending this years Southern SaaS, a Callaghan Innovation organised virtual conference for Software-as-a-Service (SaaS) businesses.

"SaaS businesses are Callaghan Innovations fastest-growing customer base, with the agency assisting more than 700 companies across its suite of R-D, commercialisation and innovation services," he says.

"Globally, the sector is very competitive and fast-moving, so our support aims to build the capability and networks local SaaS businesses need for high growth."

According to TradeMe, the median salary for an IT professional in New Zealand is $105,000, almost twice New Zealand's average salary of $62,000. New Zealand's median salary is 35% lower than the US and the digital sector offers the higher salaries needed to boost overall GDP.

"With 47% growth in export sales from digital service companies between 2017 to 2019, and the sectors higher than average salaries, building a strong, growing digital sector is good for the whole of New Zealand," Jarvis says.

"Our focus is on growing this sector. If we had 100 Kiwi SaaS businesses performing as well as the likes of Xero, that would be a real game-changer for New Zealand's economy."