Biotechnology firms say a shortage of venture capital funding is squeezing the sector and preventing it from reaching its full potential.
A new report says the sector is growing - but not as quickly as it could if more investment was found.
Commissioned by the Ministry of Science and Innovation, the report shows New Zealand is creating new bio-tech companies in line with the OECD average.
The chief executive of industry group NZ Bio Peter Bradley says funding for start-up companies is plentiful.
However, he says larger amounts to help companies commercialise new products is becoming harder to find.
The Private Equity and Venture Capital Association says venture capital funds are short of money to invest.
It says the Government could make it easier for managers of KiwiSaver default funds to invest in riskier venture capital investments.
It is also calling on the New Zealand Super Fund to increase its investment in the sector.