04 June 2004

Funding has been made available to assist the New Zealand Health IT cluster build up the capability of its member companies in an effort to significantly accelerate the growth of the sector, Economic Development Minister, Jim Anderton, said today.

The funding of $500,000 from the Ministry of Economic Development's Sector Initiatives Fund is over a two-year period, paid out as agreed milestones are met.

The health IT business sector is one of New Zealand's best performing high-tech export sectors, with export revenues in excess of $65 million in 2003 out of total revenues in 2003 of about $100 million.

"It is expected that the cluster, which aims to be fully self-supporting within two years, will make a substantial contribution to the commercialisation of New Zealand-developed intellectual property in this area of the IT industry," Jim Anderton said.

A growing area of need for hospitals and health care providers around the world is seamless access to patient records. Hospitals can have upwards of 200 information systems operating, many of which don't 'talk' to each other.

" New Zealand health IT companies have demonstrated they have world-class IT applications to address this problem and can also add value through products that support clinicians' decision-making and provide education for patients," the Progressive leader said.

The growth in the capability of the cluster members will also be important to support the Ministry of Health's goal of having an electronic health record for all New Zealanders, Jim Anderton said.

"If this can be achieved, New Zealand will become a global pioneer in an extremely important area driving efficiencies and costs reductions in the health sector," Jim Anderton said.

The funding will help the cluster move from its current position as primarily a facilitator for its members to a commercially-driven business with a full time chief executive officer and programme manager.

The Health IT cluster estimates that around $12 million of its members' projected $190 million of revenue in 2004 can be attributed to the positive effects of the collaboration occurring within the sector through participation in the industry cluster.

It is estimated that the Health IT Cluster members' combined revenues were on target to rise to around $550 million by 2008 but that the marketing, research and other forms of collaboration being fostered within the cluster will instead propel combined members' revenues to over $910 million by 2008, of which at least $750 million is expected
to come from export sales.

Similarly, employment within the health IT sector is projected to rise from around 1,000 in 2003 to nearly 3,000 by 2008.