Firms in New Zealand's information and communications technology (ICT) sector are pouring money into both expansion and research and development, according to a major report.
Attracting highly-skilled graduates remains a persistent problem for the industry though.
The Government today released the Information and Communications Technology Report, which looks at the health of ICT manufacturing, telecommunications, and information technology services.
It shows that a third of all firms undertook research and development last year - four times the average in other sectors - at an average spend of $1.1 million.
Nearly half of companies in the sector invested in expansion, which was almost twice the national average.
Economic Development Minister Steven Joyce said the ICT sector contributed 5 per cent of the country's GDP. One of the sub-sectors, IT services, had achieved export growth of 10 per cent per annum since 2002, he said.
One of the biggest challenges facing the sector was the international shortage of highly skilled IT professionals, Joyce said.
"Around half of computer system design firms report moderate or severe difficulty in recruiting managers and professionals, and more than half report moderate or severe difficulty in recruiting technicians and associated professionals."
The number of degree graduates with IT specialties is predicted to increase from 1200 in 2011 to between 1600 and 1900 annually by 2014.
"That sort of growth will need to continue in the years ahead," Joyce said.
The ICT report also showed strong job growth and that wages and salaries paid in the sector were twice the New Zealand average.
In the computer system design sub-sector, about extra 1,630 jobs were created last year alone.
Another trend in the industry was increased funding from angel and venture investors.
Firms such as SLI Systems and Optimizer HQ have listed on the local sharemarket this year, and Wynyard Group is set to follow suit later this week.
The government is this year releasing reports on seven sectors - including high-technology manufacturing, construction, petroleum and minerals, tourism, knowledge-intensive services - and today's ICT report is the first.
"These reports by the Ministry of Business, Innovation and Employment provide detailed information about each sector and will be valuable for informing the debate about our economic future," Joyce said.
"They show the change that is occurring in the New Zealand's economy with the emergence of sectors like information technology alongside our traditional export sectors of food and beverage, forestry and tourism."
ICT manufacturing, telecommunications, and information technology services collectively employed 73,392 New Zealanders last year, representing 3.2 per cent of the national workforce.