The funding will be used to build business capability and to facilitate and undertake new collaborative projects to position New Zealand as a leader of innovative health IT.

Cluster Chief Executive Andrea Pettett says Health IT is a vibrant and growing industry in New Zealand and internationally. The increasing New Zealand government support reflects this and the achievements of Cluster Members to date.

"New Zealand has an innovative health system and is leading edge in terms of Health IT. Nearly all our GPs use electronic medical records for example, which is advanced in comparison to most other developed nations. Canada sits at around 15 per cent," says Ms Pettett.

"Generally, the main hurdles for New Zealand companies to overcome are distance from markets, lack of scale and scope, and securing staff with experience. Initiatives such as the Cluster Business Development and Market Forums help overcome these barriers and provide better access to markets, partners and expertise which otherwise may be out of reach for many companies.

"International success in Health IT positively impacts New Zealand's export earnings but it's also important to recognise that our local health system is the first reference point," says Ms Pettett.

"Potential partners and purchasers need to see that we've proven ourselves here first. New Zealanders benefit from more cost-efficient and technologically advanced healthcare derived through our collaborative Health IT projects."

The New Zealand Health IT Cluster currently represents 46 New Zealand-based companies involved in health IT.