Economic Development Minister Steven Joyce says while the country's innovation exports are growing, they are being hampered by a lack of applicable training and qualifications in the tertiary sector.
Mr Joyce delivered the second of the Government's seven high-tech manufacturing reports in Christchurch on Thursday morning.
He told representatives from the technology industry that the sector had grown 11% per year since 2002.
Mr Joyce said medium-to-high technology manufacturing earned about $2.8 billion last year in exports, while the high technology sector, which produces such things as pharmaceuticals and aircraft technology, earned another $1.4 billion.
But he said the Government needs to increase its investment in engineering studies at tertiary institutes, and lift graduate numbers to meet the demand. Mr Joyce said the Government aims to have 500 such graduates per year by 2017.