A recent research report¹, looking at the reasons for New Zealand’s relatively poor economic performance, has some fascinating theories as to why we have paradoxically lagged behind other developed nations despite many structural advantages. It also raise questions about whether aiming for “productivity” parity with Australia is the right goal for New Zealand.

The report, authored by Professor Philip McCann, observes that New Zealand has struggled to compete on the OECD ladder since the economic reforms of the mid-1980s, despite its notable status as a free economy. In fact GDP per capita has been eroding steadily for over 40 years, a trend that shows little sign of abating. Few now doubt that this reduction in income has increasingly serious implications in regards to the affordabiity of the lifestyle currently enjoyed by New Zealanders.

In a world where human and financial capital are highly mobile, McCann theorises that economic geography, rather than macro-economic settings, constrains New Zealand from achieving its full economic potential. McCann says that focusing on a “productivity” gap with Australia is entirely the wrong approach, when in fact we should be looking at how we can leverage regional advantages. Only through regional cooperation can we hope to position for better growth.

He says that New Zealand has been constrained in adapting fully to the era of globalisation because of its small scale and distance to global markets. He also observes that worldwide economic growth is now being concentrated within larger cities and hyper connected regions. Such regions attract creative people and are increasingly associated with knowledge-based, high value economic activities, according to work by other researchers.

Because of the intense competition for talent and capital from power-house “global cities” on the Pacific Rim such as Shanghai, Singapore and Sydney, second tier cities (like Auckland or Adelaide for example) have no choice but to actively strengthen the existing web of interrelationships that bind them together on a sub-regional basis, suggests Professor McCann. Unfortunately, enormous reductions in capital flows during the recession have only added urgency to addressing the challenge of regionalisation.

The World Bank reported² that from a peak of $296 billion (U.S. dollars) in foreign direct investment (FDI) into Asia during 2007, the figure had dropped to around $88 billion in 2009 as European and American institutions reviewed their investment strategies. Despite a forecast investment rebound to about $120 billion in 2010, the refinancing needs of the region have been estimated in the order of $200 billion per annum, leaving a substantial deficit to be covered by borrowing. This situation is likely to have considerable flow-on effects to neighbouring countries and trading partner nations across the Asia-Pacific rim.

So where does this leave New Zealand? A 2009 survey by Financial Times subsidiary publication FDI Magazine placed both Auckland and Wellington in the top ten of 133 Asia-Pacific cities in terms of quality of lifestyle. Auckland also surpassed many others by ranking an impressive number 10 with its FDI attraction strategy. But New Zealand cities ranked poorly in terms of infrastructure, education and the ability to create jobs through foreign investment or by leveraging technology and intellectual property. So whilst we can attract people for lifestyle reasons, our conversion rate is somewhat less impressive in respect of wealth creation.

MacDiarmid Institute physicist Shaun Hendy has been looking at patent data from the OECD. His study3 showed that Australia was well ahead of New Zealand on numbers of patents filed per capita, but that this was to be expected because data also suggested that larger cities produced more patents anyway. However he found that individual inventor productivity did not increase markedly with city size. This suggests that there are quite likely other influences such as quality of educational institutions, existence of research networks and availability of funding. Interestingly, the role of social effects and “knowledge spillover” on science researcher productivity has yet to be fully explored in this context.

Might the government’s well intentioned but controversial efforts to bridge the perceived “productivity gap” with Australia possibly be aiming at the wrong set of goal posts? Unless we fully acknowledge the importance of attracting and connecting people and capital on a regional basis we risk having to compete in isolation with much more powerful players throughout Asia-Pacific. A joint Australia-New Zealand investment showcase planned for March seems like the perfect opportunity to demonstrate a commitment to regional cooperation. But the government will have to ensure that the talk is followed up with decisive and timely actions as well as a leadership vision.

Bibliography:

1. McCann, Philip. (2009). Economic geography, globalisation and New Zealand’s productivity paradox. Motu Research Group Public PolicyPaper
2. Seward, J. (2009). Would a regional fund help get Asia through the financial crisis? World Bank weblog – East Asia and Pacific on the Rise.
3. http://sciblogs.co.nz/a-measure-of-science/2009/12/16/the-productivity-of-inventors-in-cities/

A bullet point summary of the McCann report can be found here:

http://www.motu.org.nz/files/docs/McCann_seminar_slides.pdf

Photo Credit: Luke Appleby

ION is kindly supported by EGL, Revera and iWantMyName.

Collaboration with Start-Up Digest

We are thrilled to announce that our New Zealand biz/tech event listings will be shouted out globally from this month.  TEDxSV social media strategist and Silicon Valley based entrepreneur Chris McCann also runs the highly acclaimed The StartUp Digest and has now included New Zealand event listings within his service offering. It’s more important than ever for New Zealand tech companies to connect offshore and especially in the U.S. market, so if you have an upcoming event or are a technology start-up with a launch announcement – please contact ION about it so we can share.

Don’t forget to sign up for The StartUp Digest to find out about global biz/tech events if you are heading offshore to promote your business.

Webstock – Wellington – 15-19 February

Design, development, mobile, usability, content, community, open data, innovation & inspiration. 5 full-on days. 13 hands-on workshops. 24 kickass international speakers. 24 must-see presentations including Kevin Rose (Digg) and Eric Ries (Lean StartUps guy).

http://www.webstock.org.nz/

Eric Ries Workshop – Webstock – Wellington – 15th February

The Lean Startup: a disciplined approach to imagining, designing, and building new products. Through case studies, exercises, and discussions, Eric Ries will guide entrepreneurs of all stripes through the key areas that determine success for startups: product, engineering, QA, marketing, and business strategy.

http://www.webstock.org.nz/10/programme/workshops.php#ries

NZICT Meeting – Wellington – 16th February

Andy Lark is a director of technology venture capital firm No 8 Ventures and sits on the board of Xero. He also chairs the NZTE technology beachhead in the U.S. market. Andy will speak about a number of themes covering ICT, marketing and communications.

http://www.ict.org.nz/index.php/02022010_wellington-members-meeting/

SKANZ 2010 Conference – Auckland 16-18 February

Reviews recent developments with the Square Kilometre Array, a next generation radio telescope project aimed at probing the universe with a much greater degree of resolution than before. 

http://www.aut.ac.nz/study-at-aut/study-areas/computing–mathematical-sciences/skanz-2010-conference

Accelerate 2010 – Hawkes Bay – 17th February

Interactive one day session for management, founders and investors of high growth New Zealand technology companies. Features ex-pat Kiwi Andy Lark (senior exec at Dell). Good food, wine and music plus workshops covering strategy, marketing and funding. [Sold out - but may consider individual late applications]

http://www.0to60.com/
 

Escalator – Power Pitching – Various venues from 18th February

Interactive workshop where you will learn what investors are looking for in an investor pitch. The course helps you to refine your company “pitch”.

http://angelassociation.trainingplatform.co.nz/courses/1-power-pitching

Mentors Needed for E-Day – Wellington – Tuesday 23 February  

The Lion Foundation Young Enterprise Scheme (YES) needs some mentors for an E-Day. The E-Day will kick off this year’s YES programme in the Wellington region. About 60 student companies are taking part and they need 30 mentors. YES in Wellington is managed by the Wellington Regional Chamber of Commerce.

1.30- 2.45pm. Venue: Lecture Theatre 1, Ground Floor, Rutherford House, Pipitea Campus, Victoria University.

Distiller Event – Dunedin – Thursday 25 February

Technology start-up incubator Distiller is holding a meetup with guest presenters at South Bar, Frederick Street, Dunedin.

http://thedistiller.org/

Activate Networking Event – Wellington – Thursday 25 February

Want to activate your business or idea? Activate’s mission is to find Wellington’s most talented entrepreneurs and give them the skills, know-how and networks to get their dreams off the ground and their businesses humming. Mingle with Wellington’s best and brightest entrepreneurs and hear from some amazing businesses already on the journey.

Venue: Smith the Grocer, Old Bank Arcade  RSVP: By Monday 22 February to: activate [at} growwellington (dot) co [dot) nz

2010 Shanghai Expo Workshop – Wellington – 26 February

The Wellington City Council invites interested parties to attend a workshop on the 2010 Shanghai Expo. The workshop is a chance to learn more about Wellington City Council’s ideas on sending a delegation to the Shanghai Expo – and the potential opportunities for your business. RSVP by 19th Feb.

More details here >>

Damsel’s Den – Wellington – 9th March

Unlimited Potential  and Angel HQ matchmake angel investors with technology geeks and cool startup founders. Special guest Bill Payne, engineer, entrepreneur and technology investor.

http://up.org.nz/damsels-den-201/

Planet 2010 Conference Launchpad – Auckland 12-13 March Telecommunications industry event offering 10 start-up companies the chance to pitch their business ideas to a panel of judges. The winner will receive $70,000 worth of IT, marketing, legal and accounting services.

http://www.planet2010.co.nz/launchpad/

Spark 2010 Launch – Auckland – 18 March

The University of Auckland Business School Entrepreneurship Challenge kicks off with a launch event on 18th March 5.30pm. 

http://www.spark.auckland.ac.nz/

NZBio Conference – Auckland 22-24 March

The annual showcase for New Zealand’s life sciences sector. Attracting innovators, entrepreneurs and investors from across the agriculture, food, health and biofuel industries.

http://www.nzbio2010.co.nz/home

CloudCamp Wellington – 26th March

CloudCamp is an unconference where early adopters of Cloud Computing technologies exchange ideas.

http://www.cloudcamp.org/wellington

Want to add your tech/biz/startup event? Contact us @ Twitter or post a comment below.

Although our focus was global from day one, we felt it was now time to turn our attention to home. We had many requests from our friends to establish in the New Zealand market, because of our unique service offering, friendly user interface and great customer support. Finally we just had to say yes and so we now have a dedicated Kiwi site offering fixed prices in New Zealand dollars.

The Kiwi iWantMyName has by far New Zealand’s widest range of domain extensions, many of which are unavailable from other local domain registrars. Examples of exclusive domains include the recently launched .TEL and .ME suffixes plus interesting country code top-level domains from all over the world such as .LI (Liechtenstein), .IO (British Indian Ocean Territory) and .FM (Federal States of Micronesia).

Customers from the existing site can use the same login details to access their accounts across the iWantMyName platform suite. We also offer the same free services on our Kiwi version so that you can hook up your own domain to customise a wide range of great web applications such as GMail, Blogger and Zoho. In the very near future we also plan to add some cool new Kiwi-made services that we really want to support.

We think it is appropriate that the launch of a new product should be celebrated with some special offers. So until the end of February we are offering new .COM, .NET, .ORG and .NAME domains for only $19.90 NZD plus .INFO for $9.90 NZD. We are also able to offer a FREE one year extension if you transfer your existing domains across to iWantMyName NZ. Transfers can be handled from your personal dashboard once you join up. Please note that all domain prices quoted on the Kiwi site are GST exclusive and that we provide full GST invoicing to all our valued customers.

Plug and Play operate a private full service technology incubator at a handful of physical locations on the West Coast. The incubator is deeply embedded in the Silicon Valley entrepreneur ecosystem with linkages to local universities, major corporations, angel investor groups and leading venture capital firms. In less than four years, companies involved with Plug and Play have raised an astounding total of $450 million in capital.

For technology firms that are serious about scaling up, engaging meaningfully in the North American market is a necessity and there is simply no better way to do this than being in the company of peers and mentors. To help firms connect offshore, New Zealand Trade & Enterprise runs an excellent global programme called Beachheads. The North American advisory board is headed by the very able and well connected Bridget Liddell and is a virtual offering rather than a physical incubator. But selection criteria are tight and they won’t look at any company doing less than $5 million revenue per annum.

So where does this leave early stage firms? Going it alone is simply not an option. The U.S. is a huge and complex market with many distinct sub-regions. Without proper advice, attacking the West Coast alone could burn up many years and a wad of capital. But testing the water with the assistance of a locally networked incubator is an affordable commonsense approach for smaller firms. Unfortunately, unlike our friends in Victoria, I don’t expect to see our government making this option available anytime soon. So it will be up to individuals to take the initiative.

Technology firms with global growth ambitions must be looking to engage within Asia-Pacific over the next few years.  Apart from the sheer size of this consumer audience, at least half of global capital market activity springs from the region. New Zealand also occupies a privileged position with its free trade status with China and likely eventual agreement with the U.S. We must find effective ways to plug New Zealand technology firms (of all sizes) into this space now.

The fact that Wellington scored the big gig is very much a testament to the depth and breadth of the local technology community, the emerging potential for the government sector as an open source user and the fact that a number of key companies (including ideegeo) are keen supporters of the open source movement. Consequently you will see the iWantMyName logo (and our QR code stickers) around the halls during the conference, as we are timing the launch of our New Zealand domain registrar site and global affiliate program to capitalise on buzz around the event which runs from 18th to 23rd January.

Running in conjunction with the main conference are a number of “MiniConfs“. Our CTO at ideegeo Lenz Gschwendtner will be involved, speaking at the Multicore and Parallel Computing session on Tuesday 19th January. The programme aims to address the many challenges and opportunities posed by parallel computing especially in regards to open source. Also speaking at this event will be Intel Software Products evangelist James Reinders who as an engineer has been involved with processor development.

Reinders is also an author with notable publications and articles on parallel computing to his credit. For those who cannot make the Wellington Miniconf, there will also be an Auckland event at the Massey University campus on Monday afternoon 18th January. Reinders will be speaking on “Threading Building Blocks” and why Intel settled on an open sourcing model to accelerate its parallel computing initiative.

On a slightly different note, Summer of Code are hosting another tech talk session at lunchtime on Monday 18th January. Aimed at current or aspiring I.T. entrepreneurs, a highly esteemed panel of business experts will talk about their experiences starting-up, investing-in and growing technology businesses. Not to be missed. Registration essential, entry by donation. See you there!

Perhaps the greatest personal satisfaction for me was the huge amount of progress we made with iWantMyName, our first (and by no means last) spin-off project from ideegeo. But during 2009 many establishment organisations simply ran out of good ideas and took short-sighted decisions to make layoffs, rather than use their existing human capital to innovate and prepare for the upturn.

So it was a great source of pride at ideegeo that we not only earned some export dollars this year, but we also added employees and extended our product offering. All this was achieved without needing to raise capital and under the dark clouds of the harshest global economic conditions that most of us have known.

Clearly, recovery from the recession in 2010 will not originate at the hands of tired, greedy old firms that treat their human assets like factory farmed cows. The recovery will come from small, agile, innovative new ventures that can grasp opportunities and quickly add value. The corporate model is dying a slow death as internal divisions, failure to innovate and lack of a sense of responsibility to the community eats away at its heart. 

This fact was illustrated powerfully in 2009 as traditional media corporations struggled to come to terms with the new environment and as morally corrupt financial institutions paid bonuses to managers, even as governments were bailing them out of irrecoverable losses. In short it was a sorry state of affairs for big business and hopefully we will see some better leadership on this front in 2010.

Another major theme for business in 2009 was the coming of age of hosted software. The “cloud” services scene was boosted by aggressive competition from Google, rapid improvements in the scalability and reliability of hardware and an enthusiastic user base. Fortunately, at iWantMyName we were able to leverage this sea change by offering free customisation for our customers across a wide range of popular applications. 2010 looks exciting too as we add more services and scale up through partnerships and organic growth.

All the very best for a safe and enjoyable festive season and thanks for reading @GeniusNet.

Lots of stuff happening early in 2010, so here goes…

LCA2010 and Multicore Computing Miniconf

LCA2010 is a fun and informal technical conference for Linux and open source fans. If you are interested in multicore and parallel computing then come along to the MiniConf at the Linux conference. Registrations close in a few days for the event which kicks off in Wellington on 18th January.

Summer of Code Tech Start-Up Panel

If you are in the Capital for LCA2010, why not take your lunch break at the TechTalks panel session, also on the 18th January. This one hour seminar will feature a number of local speakers closely involved in funding and building new ventures.

Bloggers Predictions to the Fore

Unlimited Potential once again brings you the Bloggers PredICT event from the glittering starlight lounge at the Wellington Chamber. StrICTly tongue-in-cheek this event promises to enrage, enthrall and entertain. See last years players defend the indefensible and this years seers gaze into their murky crystal balls to predict developments on the information technology scene.

Registrations are essential for this 28th January event.

Accelerate 2010 Already A Winner

Rod Drury makes no apologies for the fact that he likes to surround himself with sharp players that operate at the highest levels in business. Accelerate 2010 is a one day event in Hawkes Bay covering marketing, strategy and funding for high growth technology businesses, whilst entertaining guests with the best in Kiwi wine, food and music.

The fact that the event sold out early illustrates just how under-served this market is currently. Entrepreneurs are in need of some inspiration right now! But we hear that organisers are still holding a small number of places, if you can make a good case. Let’s hope 0-to-60 becomes a regular (and larger) event on the technology calendar.

A Decade of New Media

If they can’t squeeze you into Accelerate and you are into digital media marketing and advertising, you might like to head across the Tasman to this special event from the outstanding XMediaLab team. Media2010 looks at building marketing strategies and digital communities around brands.

Ries and Rose Top Stellar Webstock Cast

The February 15-19 event in Wellington is pulling out all the stops to provide a stunning gallery of web design and development superstars. Webstock will feature three days of workshops followed by two days of conference proper. Over twenty international speakers will be involved including famed Silicon Valley start-up advisor Eric Ries, Kevin Rose – founder of Digg, Jessica Jackley, co-founder of Kiva and John Resig, creator of the jQuery.

NZ/Australia Investment Forum

Investment New Zealand and AusTrade are tasked with attracting foreign direct investment into their respective nations. They are jointly facilitating a two day forum in Auckland commencing 10th March, which will provide an overview of opportunities to investors interested in the Australia-New Zealand region. The conference brings together companies seeking investment, corporate and government leaders and academic researchers.

Kiwi to Organise Regional CloudCamps

Canterbury based technology entrepreneur and blogger Ben Kepes has recently been appointed CloudCamp organiser for the Australia/New Zealand region. CloudCamp is a rapidly growing movement that provides events for I.T. professionals and vendors interested in the business of providing “cloud based” computing services. We hear that a major regional event is planned for Sydney on the 4th of March.

W2W Goes Nationwide in 2010

Unlimited Potential’s annual technology showcase is aimed at cultivating the entrepreneurial ecosystem for emerging tech ventures. Included in this year’s stellar speaker line-up was Read Write Web founder Richard MacManus, McDiarmid Young Scientist of the Year John Watt and Ben Young author, entrepreneur and social media guru.

The event revolves around pitches from local tech entrepreneurs and presentations from the cutting edge of ICT research and then promoting those pitches to a global audience through a video channel with the help of KEA.

In 2010 W2W will be opened up to selected tech companies from throughout New Zealand. Watch this space.

ION Spotlight – Amberdms

Amberdms is an open source billing software solution provider aiming at professionals and small enterprises that need to take care of billing, time-keeping and client invoicing. The company, which also does software development and Linux consulting was recently featured in this detailed article.

Got an enterprising Kiwi tech story to share? I want your name! ION Spotlight is kindly supported by iWantMyName New Zealand’s most innovative global domain registrar.

About 18 months ago I was involved in some consulting at Bookhabit, working on building their user community. It was a great experience and a good lead in to my next project, which was of course, starting up ideegeo and then launching our domain registrar software platform iWantMyName. Perhaps the most useful lesson from that experience was observing just how much hard work is needed to to gain traction with a start-up business.

On that basis I’m tremendously pleased for Clare Tanner and her partners at Webfund, who I know put in a lot of hours to build their business. I’m also pleased to hear from Webfund that the company remains strongly committed to supporting the Wellington technology scene and that they are keen to work with Clare and others on future projects as they look to reinvest.

But, last week I was reading the painful story of a New Zealand biotech start-up that flushed tens of millions of dollars down the drain through mismanagement and bad luck. Why aren’t we playing to our strengths? The set-up cost for a web technology venture is a fraction of that for biotech and the innovation wavelength on the Web is a lot shorter. We can spread the risk by funding 50 Bookhabits for every single biotech punt. That is why ICT specifically needs to be back on the national economic development agenda.

For many years we’ve been hearing about the intellectual property that remains “locked up” within the Crown Research Institues (CRI) and universities. But precious little work has been done to actually identify and illuminate such material. Gluckman alludes to a dysfunctional national research environment in his report that pits researchers against one another and discourages collaboration.

But the pathway to real transformation will most likely arise from creating better business models early in the innovation process. That requires change agents with the skills to identify and extract marketable technologies and build sufficient value that will attract investment. It also requires strong linkages into the capital and consumer markets of the Northern Hemisphere, without which we cannot rapidly scale new technologies.

Intuitively these seem like very sensible ideas, so why do we appear to struggle to enact them? Until we recognise that building social capital is a critical part of the technology innovation and commercialisation process, it is likely that we will continue to fall short. Teens and online game junkies have highly resourced virtual spaces to connect and collaborate, surely we can do the same for scientists, entrepreneurs and investors.

W2W is all about strengthening the entrepreneurial ecosystem for emerging tech firms by facilitating conversations between ICT researchers, business entrepreneurs and technology investors. The event focuses on specially chosen emerging ventures that have the potential to scale globally.

Entrepreneur presenters included Dan Lee, who discussed Beetil an I.T. management and compliance SaaS product and Jody Bullen from Yonix who provide software for business analysts. Both Lee and Bullen are recently arrived skilled migrants, underlining the importance of migrants to the regional economy. John Mitchell showed off Learning Source, a great tool that helps manage and administer training programmes, and Ben Nolan demonstrated the impressive capabilities of digital rendering software Indigorenderer.

Keynote speaker for the event was local hero Richard MacManus, founder of ReadWriteWeb, and one of the world’s most influential tech bloggers. Richard spoke about how he operates a virtual business. Other speakers included entrepreneur and author Ben Young and John Watt nanotechnology researcher and New Zealand Young Scientist of the Year.

Support for W2W’09 by Wellington City Council, Grow Wellington, UK Trade & Investment, Summer of Code, CafeNet, VicLink and iWantMyName was greatly appreciated. If you would like to support W2W 2010, please contact Unlimited Potential co-chair and W2W event project manager Paul Spence:  paul [at} up [dot) org (dot} nz