Our Tech Entrepreneurs Need A Breakthrough

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btvic_logo The state government of Victoria has announced the first investments from a $2 billion fund for the commercialisation of research, science and technology. Breakthrough Victoria will focus on life sciences, agri-food, cleantech and digital technologies in a push to reboot the state’s post-Covid economy. The package includes $100 million for co-funding platform services such as research facilities and commercialisation advisory.

It was with this in mind that I attended the Startup Council roadshow event in Christchurch recently with fire in my belly. For context, the New Zealand government invests a grand total of $2.5 million per annum to support incubation and acceleration across the entire country. In June 2022 the existing successful “founder incubators” were all de-funded by the Ministry of Business, Innovation and Employment (MBIE) and the funding was handed over to an elite collection of service providers outside of the universities. In 2020 funding for “deep tech incubation” was allocated to a group of foreign controlled entities. There is currently no central government funding for incubation within a New Zealand university.

The newly formed Startup Council sprung out of some policy initiatives developed collaboratively during the first lock-down through Global Entrepreneurship Network New Zealand, to which I actively contributed. The self-selected Council is comprised mostly of representatives from the investment community, but also includes a serial technology entrepreneur and an accelerator operator. The Council has direct communication with government Ministers.

That last point is important because for a long time our startup ecosystem did not have a voice in government. Over the years we have been reliant on pleading a case to gatekeepers at MBIE who seem to have little or no global context for decision making. Up until recently, the government focus has been upon kick-starting the venture investment sector. This ignores the issue of curating a pipeline of deal flow however. Translational research does not magically become investment ready without a lot of background support.

Not investing in our startup ecosystem is not just an existential problem for those of us that work with founders. It is also an impediment to progress in meeting our carbon zero commitments. In 2021 around US $1 Trillion in capital poured into funds targeting investment into environment, social and governance (ESG) focused projects and ventures, including cleantech, sustainable food and renewable energy. Areas in which we already have capability. Investment is expected to grow to $4 Trillion per annum, as the global economy decouples from carbon. If New Zealand is to have a chance to participate, we need to be building sound innovation infrastructure right now, especially within universities!

The cold, hard reality is that (up until now at least) the government has not seen the value in supporting a vibrant startup ecosystem. This is despite the fact that our neighbours across Asia-Pacific have literally invested hundreds of millions over decades. If nothing changes and with the world open for business again, it will be no surprise if some of our scientist entrepreneurs and tech startup founders start looking towards the West Island. Or perhaps even further afield.

Paul Spence is a commentator and serial entrepreneur, a previous co-founder of a successful New Zealand based global technology venture, co-founder and director of Creative Forest, principal at GeniusNet Research & Genius ReFi and previously an advisor at ThincLab Canterbury. You can follow Paul on Twitter @GeniusNet or sign up for a free weekly digest of startup, tech and innovation related events co-curated by him through New Zealand Startup Digest.

The Art Of The Sale

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niro1This week I conducted a small experiment. I really want to play my part to reduce emissions, so I’m in the market for a plug-in hybrid electric vehicle (PHEV). I’ve also been doing a couple of papers at our local university for interest recently and have just completed a marketing course at Masters level. So I’m up to speed with marketing tactics and sneaky selling strategies. This is where the fun begins.

I headed into town to work my way around a few car sales yards – just to see how I would be treated as a potential customer. Here’s what I found.

1. KIA – The receptionist introduced me to a very young salesman who looked like he had better things to do. I asked if he could take me out for a short drive and introduce me to the vehicle I was interested in. No, that was not possible. But please sign this $5,000 waiver and feel free to take her out for a spin yourself. I asked a basic question about whether the vehicle had anti-skid. He said he needed to go check on this. Really? Aren’t you selling these vehicles? I was also informed there was a 6 month waiting list. Slightly bemused, I signed my life away. After a 2 minute familiarisation, he left me to it. 5/10

2. Subaru – Bubbly young lady waltzed up to me. Very positive attitude, but admits that Subaru do not offer what I seek and not likely to in the future (they do in the U.S.). Things got better though. She asked if I’d considered a Peugeot. I had not. Her colleague under the same roof looked after the franchise, so she kindly took me over and introduced me to him. 7/10

3. Peugeot – We had a good discussion about European vehicles and the sales chap mentioned that he would have a demonstrator vehicle arriving next month that would fit my needs. He gave me a business card and showed me where to find useful info on their website. At all times he showed an interest in the customer needs and was looking to find a solution for me. Not bad. 8/10

4. Hyundai – I currently drive a Hyundai. It has been a wonderful vehicle with minimal running costs. I also love that Hyundai is sponsoring the Pinnacle Programme that offers scholarship opportunities to high achieving students. The current television campaign is the best ad on tv in my humble opinion. I dearly want to love Hyundai – but they keep disappointing. At last year’s service, the car groomer conspired with a rude receptionist to turn the stereo volume to maximum, resulting in an ear blasting when I turned the key. Funny joke. So it was with some trepidation that I set foot on their car yard. I need not have worried. The salesman completely ignored me whilst having an animated discussion on his mobile phone. 1/10

My point is this. There was a time when sales people knew their products and they knew the art of converting leads into actual sales. As a customer, I want to feel valued and respected, no matter where I am in the pipeline. From walk-in to first sale to post-sale service. Sales people used to build lifelong relationships with customers who would often return for their next purchase. What went wrong? Attention deficit?

I’m not sure if this is a localised cultural problem, but service ethic no longer seems to be part of our business DNA here in New Zealand. I’ve lost count of the number of times I’ve walked into a shop or cafe this year where the young staff were either chatting amongst themselves or texting their friends on phones whilst completely ignoring customers. Since when has this ever been acceptable? It reflects badly on business owners who are failing to train teams in customer service and also failing to monitor performance. At a time when businesses are desperately trying to recover from sales lost during the pandemic – why are sellers failing at that most fundamental task called customer service?

Oh… and I still haven’t found my PHEV. Any suggestions?

Paul Spence is a commentator and serial entrepreneur, a recently exited co-founder of a New Zealand based technology venture, a co-founder and director of Creative Forest, principal at GeniusNet Research and an advisor at ThincLab Canterbury. You can follow Paul on Twitter @GeniusNet or sign up for a free weekly digest of startup, tech and innovation related events curated by him through New Zealand Startup Digest.

Where Talent Wants To Live

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superpro

FFA overall winners SuperPro with advisor Paul Spence.

 

 

 

 

 

 

 

 

 

Over a decade ago MacDiarmid Institute founder, renown physicist and technology entrepreneur the late Professor Sir Paul Callaghan proclaimed that we needed to make New Zealand “the place where talent wants to live”. This week’s result from the Food, Fibre & Agritech Supernode Challenge suggests we have reasons to be optimistic.

During the last few weeks it has been my great pleasure to be mentoring some of the teams involved in the 2022 Food, Fibre and Agritech Supernode Challenge accelerator programme, in my capacity as an advisor with ThincLab Canterbury. The Challenge, supported by ChristchurchNZ, KiwiNet and the Canterbury Mayoral Forum seeks to uncover innovative ideas with commercalisation potential from across research and business. Notably environmental sustainability has been a key theme that we asked applicants to address. 36 applications were whittled down to 24 participating teams, of which 12 finalists were selected.

Canterbury has a long and rich association with agricultural and is home to two universities and numerous land based research institutions. So there is no shortage of talent on offer. It has been an absolute thrill to see our young skilled migrants strongly represented among the participants in this programme. For many of them it has been a steep learning curve stepping out of the research lab and grappling with the fundamentals of business for the first time. But in every case they have grasped the opportunity and run with it.

Challenge overall winners Mahnaz Shaverdi and Associate Professor Ken Morison are food process engineering researchers from the University of Canterbury with big plans for turning plain old pea protein into a more desirable food source. Shaverdi moved from Iran with the aim of studying and raising her young family in New Zealand and Morison is a research engineer who returned to work in the dairy industry after completing his doctorate at Imperial College in London. Commercialisation of their research is timely. Plant-based ingredients are one of the fastest growing food categories globally, as witnessed through the recent investment by Khosla Ventures in Canterbury plant protein processor Leaft Foods.

Some commentators have been worrying lately that our technology startup ecosystem lacks diversity. But at a time when the world needs many bright minds to be working on solving a myriad of social, economic and environmental problems that confront us, it is exciting to know that our skilled migrants are making an increasingly significant contribution. This is a success story that we rarely hear about and that needs to be told more often. I’m sure Sir Paul Callaghan would be encouraged by this progress.

Paul Spence is a commentator and serial entrepreneur, a recently exited co-founder of a New Zealand based technology venture, a co-founder and director of Creative Forest, principal at GeniusNet Research and an advisor at ThincLab Canterbury. You can follow Paul on Twitter @GeniusNet or sign up for a free weekly digest of startup, tech and innovation related events curated by him through New Zealand Startup Digest.

Free the 99

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akaroa3 They called it the slap that reverberated around the world. A wealthy and privileged, angry man arrogantly displaying his lack of respect for a long established institution and the faithful community that had blindly supported him. No, I’m not referring to the infamous Oscars night incident, I’m talking about Grant Dalton’s acceptance of an offer from the city of Barcelona to host and fund the 2024 Americas Cup yacht race.

In 2017 a glowingly optimistic report from the Ministry for Business Innovation and Employment (MBIE) estimated that delivery of the Americas Cup event would bring in $600 million to $1 billion in benefits to the New Zealand economy. A more recent post-event report estimated that less than half of the $348 million public investment was returned in economic benefits during the 2021 event. The New Zealand government share of the funding was $133 million.

In fairness nobody forecast that the event would fall amidst a global disease pandemic. It is a testament to local organisers (and the success of the government’s pandemic response) that the event ran at all in fact. It is claimed that 68 million global viewers watched the televised component of the event and almost 39,000 (mostly domestic) visitors provided a much needed boost to the Auckland regional economy. But the taxpayer investment in the event came with no guarantees that Team New Zealand would opt for the 2024 challenge to be held in New Zealand and despite a further $99 million offered by the New Zealand government, hard man Dalton predictably followed the big money elsewhere.

That’s a shame for Auckland. But in light of some commentators complaining about the elitist nature of the sport, perhaps it is not worth throwing more good money after bad. In the meantime, about the same time the report on outcomes of their $133 million stake was being released by MBIE, the Ministry was also taking a decision to actually reduce their $3 million annual investment in the local innovation ecosystem. Founder incubators will be disestablished from June this year and it is already known that some will receive no further government funding.

Founder incubators were once at the heart of the innovation ecosystem, providing a basis for entrepreneur capability building, a channel for investment flows and a pipeline of high tech startups that added long term, high value jobs to our economy. Not as glamorous as yacht races or movies, but creating sustainable value that persisted long after the initial public investment. Last month I explained how our neighbours and competitors across Asia-Pacific have begun to reap the rewards of long term ecosystem investment amounting to hundreds of millions of dollars.

Which brings me back to the $99 million already budgeted for the 2024 Americas Cup investment. Would it not be more valuable to now allocate those funds towards developing our local innovation ecosystem? New Zealand is finally beginning to gain some traction in attracting foreign startup investors and we have a wealth of homegrown entrepreneurial talent ready to take on meaty global problems in areas such as climate, food and health. We need to capitalise on this opportunity as quickly as possible. Surely it is now time to invest in creating sustainable economic opportunities, rather than one off vanity events?

Paul Spence is a commentator and serial entrepreneur, a recently exited co-founder of a New Zealand based technology venture, a co-founder and director of Creative Forest, principal at GeniusNet Research and an advisor at ThincLab. You can follow Paul on Twitter @GeniusNet or sign up for a free weekly digest of startup, tech and innovation related events curated by him through New Zealand Startup Digest.

A Helping Hand Needed For Our Researcher Entrepreneurs

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Hands

Source: Wikimedia Commons

It was fun this week attending the Global Entrepreneurship Network NZ Unconference which was hosted in a completely virtual environment. GEN NZ provides a community setting to engage in discussion and take action around promoting entrepreneurship. This article comprises the basis of my pre-recorded flash talk.

During the two years that I have spent at ThincLab Canterbury, we have supported dozens of (mostly young) entrepreneurs to explore their passions through our pipeline from the wonderful UC Summer Startup programme and we have assisted a number of early stage research based ventures founded by students and academics. This has led to over $10 million in capital being raised and the creation of many new high value jobs for our region. But there is a lot more work to do.

The European Union has recently launched the world’s largest and most ambitious multinational research and innovation programme Horizon Europe, investing almost 100 Billion Euros in “goal oriented research missions”. A special “innovation council” has an additional 10 Billion Euros to “fast track” innovations to market, including investment, incubation and advisory. We don’t have those kind of budgets here of course, but what is notable is that 10% of the public investment purse is focused on addressing downstream commercialisation under this initiative.

Notwithstanding the excellent work of organisations such as KiwiNet and MacDiarmid, there is quite limited support for entrepreneurial researchers here in New Zealand. In a recent article discussing the government review of research, science and innovation, Callaghan Innovation CEO Vic Crone argued that publicly funded research requires better and more commercialisation pathways.” Yet the already microscopic funding pool for incubators (including those connected with universities) was actually reduced this year and many providers have already been excluded from further participation. The pathways are actually receding.

We all understand the need to move our economy towards high value, less polluting industries. We also now know that this will be the biggest economic opportunity of our lifetimes. But research does not spring out of the lab and turn into a business overnight and here’s why…

  1. Our neighbours across Asia-Pacific have collectively invested hundreds of millions of dollars into developing their innovation ecosystems over the last two decades. For example $755 million invested into Advance Queensland. Now founders and investors are enjoying multi-billion dollar exits and reinvesting those winnings into new ventures. New Zealand has abjectly failed to make that investment in the ecosystem.
  2. Our universities and research institutes are well meaning but slow moving corporate elephants whose organisational design impedes innovation rather than accelerating it.
  3. Our academics and researchers are mostly not natural entrepreneurs and they are not incentivised to pursue venture opportunities in an environment where publishing papers is the only perceived way to achieve success and recognition.
  4. Research with commercial potential is not being connected to entrepreneurs and industry downtown who could make a difference.

Let’s find a better way by firstly investing a meaningful amount in developing our innovation ecosystem. Secondly all public funding for science and technology research should include a 10% component towards funding downstream commercialisation support. Finally, if academics and researchers see the value in their work but are unwilling to step up as founder entrepreneurs, then ensure that we match-make those projects with experienced local entrepreneurs and industry partners, so that value created remains onshore.

Paul Spence is a commentator and serial entrepreneur, a recently exited co-founder of a New Zealand based technology venture, a co-founder and director of Creative Forest, principal at GeniusNet Research and an advisor at ThincLab. You can follow Paul on Twitter @GeniusNet or sign up for a free weekly digest of startup, tech and innovation related events curated by him through New Zealand Startup Digest.

Climate Tech A Hot Topic

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Image credit: P. Spence

A recent report commissioned by Callaghan Innovation sheds light on the opportunities to lead in the commercialisation of technologies that mitigate greenhouse gas emissions and it delves deeply into how New Zealand “climate tech” businesses can succeed on the global stage. New Zealand Climate Tech For The World articulates the global context and invites the local innovation ecosystem to rise to the challenge. At 209 pages, it is quite a big read. I summarise some of the key points here.

There are numerous ways of measuring the “innovativeness” of an economy, but levels of venture investment tend to receive an overwhelming level of reportage compared to other indicators. Climate tech sectorial innovation is no exception. The numbers are certainly staggering. The Economist recently reported that $500 Billion in capital was invested into the “transition economy” in 2020 alone. That comes as no surprise because whilst climate tech is a huge economic opportunity driven by a critical set of environmental problems, the capital requirements of the sector are substantial. So indications in the Callaghan report that climate tech innovators in New Zealand have raised only a tiny fraction of the investment funding compared to other comparable “small, advanced economies” must be concerning.

Furthermore, historically most funding has been raised by later stage businesses, with Lanzatech essentially being the only substantive project during the last few years. That company has raised over $400 million in capital to date, in its bid to capture industrial waste gases and reconvert into fuel stock. But Lanzatech has been domiciled in the United States since 2014 because the local investment landscape at the time was not ready. A lot has changed since then. How can New Zealand leverage the vast amounts of global capital currently pouring into this space, retain intellectual property and create value for the local economy?

For starters, the report cites the lack of multi-national companies residing in New Zealand as a brake on raising investment and developing partnerships. So this requires a sustained and intentional global engagement by the innovation community and a strong focus on solving key problems for offshore partners. The report goes on to illuminate the three stages of the entrepreneurial journey – R&D/commercialisation, financing and connection to demand. An assessment is provided on how the New Zealand innovation system is delivering in comparison to other small advanced economies such as Israel, Sweden and Finland. The report illustrates that New Zealand consistently lags behind the others in the commercialisaion of climate tech. Predictably however, we do a lot better when a similar analysis is done on agriculture and food sector innovation, illustrating that there is certainly ability to improve.

The report is at pains to point out that other small advanced nations that have successfully launched innovative climate tech industries have done so through a wider process of investing in ecosystems of innovation, rather than backing companies one-by-one. In New Zealand we have a legacy of “picking winners” rather than building capacity across industries. This is slowly beginning to change however. A good example is our government’s recent laudable enthusiasm for promoting an aerospace industry. In fact “sustainable aerospace propulsion” gets a mention as a promising new vertical.

So what other responses are needed to take advantage of the global opportunities in the transition economy? The report suggests a greater emphasis on cross-sector collaboration. A return to nationwide clustering efforts is recommended in order to better utilise knowledge spillover effects. A much stronger focus on researching and growing global demand-side through strategic relationships is also flagged. “New Zealand, as a small, innovative economy that is geographically isolated from much of the world, must use innovation resources efficiently”, say the report authors. Increasing the visibility and attractiveness of the local ecosystem to global players seems instrumental. As a starting point, the report suggests low emissions agriculture (including agritech digitalisation) and geothermal energy as initial focus areas where there is already considerable local expertise. Although these are certainly not the only growth areas.

The report suggests that some technologies are remaining undeveloped in the lab because researchers are being discouraged by too many barriers to success. Obstacles include lack of business knowledge, scarcity of follow-on research funding and time constraints on busy academics.

Paul Spence is an advisor and digital marketing lead at ThincLab Canterbury. This article was originally published on the ThincLab blog.

Coster and Foster Failed Us All

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ronnies I will defend to my last breathe the right for New Zealanders to peacefully protest about issues they feel strongly about. But the mob camped on the lawn in Wellington have now gone too far. It’s bad enough that they have obstructed a public road, shut down a bus station and university campus and harassed innocent passers-by. Now the Police have allowed a vigilante “security” force to impede access of citizens to Parliament grounds, a public venue that belongs to all of us. It’s no joke that the Police, Wellington City Council and the two Andy’s have failed the people of New Zealand.

For a protest group ostensibly “protecting our freedoms”, this is beyond rational. But then there’s nothing rational at all about the melange of bizarre causes being promoted by these sheeple and their conspiracist puppet-masters. Regardless of whether you agree or disagree with vaccine mandates and lockdowns, this is not the way to win hearts and minds. In fact it must only be a matter of time before an organised counter-protest arises, at which point we will indeed see the kind of direct conflict that was hoped to be avoided. No doubt the counter-protestors will be quickly arrested or dispersed, for their own safety of course.

If the disaffected filthy few wish to live like Orwellian farm animals together on the Parliament lawn to promote their cause, let them do so. However the moment that occupation spreads onto the surrounding streets and into peoples’ lives, it becomes domestic terrorism. The “freedom protesters” have ironically made it clear that they actually have no regard for the freedom of those outside of their own circle. Once the initial threat of a Capitol style storming receded, the Police strategy seems to have been to withdraw and allow the lunatics to take over the asylum. An entrenched mob will be very hard to remove at this point.

Police Commissioner Andrew Coster and Mayor Andy Foster are complicit in this mess. Suspending the rule of law in the Molesworth Street precinct was an enormously foolish capitulation that has set back civic society immeasurably. Foster will be gone at this year’s local body election for sure, but Coster continues to enjoy the tacit support of the government, who wish not to be seen being involved in directing the response. But operational mismanagement of the situation has now led to a petition for Andrew Coster’s removal.

Appointed in March 2020, about the same time the pandemic began sweeping across the globe, it was clear from the outset that Coster’s tenure would be challenging. But his arrival signaled quite a shift in strategic direction for the New Zealand Police, with the much lauded “policing by consent” methodology being invoked. Armed patrol units were withdrawn from the streets of Auckland. Within months a young police officer and several civilians had been shot dead as Police lost control of the city to armed gangs. Softly, softly may have once been the motto of a fictional police television series, but that approach is clearly not working.

But the most concerning aspect of Coster’s appointment is that he represents the gentle, smiling face of a new generation of Cabinet appointed leadership within the public service. A leadership group that has become infiltrated by politically correct sycophants quietly “reforming” institutions, infrastructure and instruments of government without the permission of the electorate. Calls for his removal simply echo an increasing level of discomfort over the current direction of our public institutions. “Policing by consent” may be the flavour of the moment, but there’s nothing consensual about the direction our public service is heading in right now.

2021 – A Political Retrospective

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watersThis year has been remarkable if for no other reason than the pandemic has resurfaced some ugly divisions that continue to bubble away behind the easy-going facade of New Zealand society. We are doubtless challenged now more than ever on numerous complex topics, including environment, poverty, crime, health, immigration and race. So the need for change is absolutely genuine. But the manner in which change is now being enacted is both contemptuous and potentially self-defeating.

2021 firmly reminded us of the fragility of the social contract. In an otherwise generally compliant nation, a vocal minority held out against vaccinations and wise public health measures on the basis that their “freedoms” were being threatened. There was of course little discussion by these lost souls about the freedoms of thousands of elderly or unwell who would have very likely lost their lives, had we caved in to the views of the misinformed. I had several respectful but somewhat disturbing conversations with individuals this year invoking thinking from my recent article on why science is more trustworthy than their deranged social media feeds.

At the other end of the political spectrum, hand-wringing social purists doggedly continued to promote the longstanding policy of shutting down any debate that appeared to challenge their well meaning, but at times misguided ideologies. Consequently institutions that had been previously hotbeds of intellectual debate and where ideas were once challenged and tested in open fora, have latterly become hotbeds of conformity and intolerance instead. Nowhere was this more apparent than the embarrassing public skewering of celebrated evolutionary biologist Professor Richard Dawkins, for daring to question why a group of science academics were being villified in a Galilean inquisition by the very body responsible for promoting science discourse in New Zealand.

Of course the danger in shutting down the intellectual debate of good ideas is that bad ideas from across the political spectrum similarly do not receive proper analysis or exposure to the sunlight. This appears to be part of the strategy currently being invoked by the government as it pursues a programme of social reform aimed at centralising control of some of the most important assets and resources in the country. With convenient distractions provided by the public health crisis, our servants in the Capital have quietly set about executing a quite radical socio-political agenda that the majority of voters actually did not yet sign up for.

History has shown however that rapid, ideologically driven reforms are quite often not very successful and ironically may even disenfranchise the intended beneficiaries long term. Unfortunately, many of the idealistic and bright-eyed policy wonks busily designing the new order from Wellington were not even born when we last fundamentally overhauled our economic order and thus have little lived experience to draw upon. Worryingly, much of the reform model is based on a flawed legal premise around the nature of our important responsibilities under the Treaty of Waitangi. The interpretation of this precedent perversely constrains governments to take a narrow, binary and transactional approach in an obviously highly diverse and increasingly complex world.

The other difficulty here is that this reform programme received little exposure at the last election and therefore suffers from what some have termed “democratic deficit”. Worse still, in the absence of a properly informed and curated public debate, the attitude of some of the critics has turned from fearful to venomous with some unpleasant personal attacks containing racial overtones. That is unfortunate and sad. But it also illustrates that sidelining large sections of society is not the way to pursue important social reforms. Instead of stifling open public debate around big ideas, we must encourage it.

Paul Spence is a commentator and serial entrepreneur, a recently exited co-founder of a New Zealand based technology venture, a co-founder and director of Creative Forest, principal at GeniusNet Research and an advisor at ThincLab. You can follow Paul on Twitter @GeniusNet or sign up for a free weekly digest of startup, tech and innovation related events curated by him through New Zealand Startup Digest.

Stop The Grievance Virus

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covidqrThe number of pandemic “experts” seems to be growing by the day. Now with a former Prime Minister wading into the murk, it has opened the floodgates allowing a wave of discontent to infect the nation. But actively demonstrating a partnership approach with business could deliver better outcomes and bring some smart minds to bear on the gnarly problems that confront us.

In recent weeks a number of prominent New Zealanders have been expressing their impatience with the government’s approach to managing the pandemic crisis. Curiously the concern is not so much about the travails of extended lockdowns, but more to do with the impact of travel restrictions as a throttle on economic growth. Unsurprisingly, most of the complainants are absorbed with their own particular business predicaments. But rather than be labelled “whingers” (to their credit) some creative solutions have been proposed by them.

In 2020 our government urgently cobbled together an interim response to keep us safe. Controlling foreign arrivals, managing quarantine and rolling out the largest vaccination programme in our nation’s history have been huge, imperfect undertakings delivered under extraordinary and rapidly evolving circumstances. Without these initiatives, I am absolutely certain that several vulnerable members of my immediate family would not have made it through the last 18 months.

One only needs to look at the data from offshore to understand the dire situation we find ourselves in. But perhaps the most telling data point is that investing in snuffing out the virus does indeed result in a quicker and stronger economic rebound, at least in the medium term. Placing our trust in a benevolent State has paid off so far, but patience is waning as purveyors of a wide variety of grievances across the political spectrum become ever more vocal. So openly demonstrating a willingness to have business as part of the conversation would be reassuring to the public, whilst bringing a greater diversity of thinking to the top table. None of this should obviate the need to carefully balance social and economic considerations, of course.

Putting aside the fact that I find sports analogies rather tedious, some of the ideas for getting New Zealand business moving again have actually been good ones. We have a wealth of technical and management expertise in our business community and there are homemade solutions available for improving almost every aspect of the crisis response. I believe where the difficulty lies is that there is a public perception at least of a lack of engagement between government and business. That may not be entirely fair, but in politics perception matters.

Early in the crisis, the government appointed former Air New Zealand CEO Rob Fyfe as a liaison person between the government and business. That was a good move, but very little has been heard since. The Cabinet wisely considers advice from the pandemic technical advisory group who are respected clinicians and academics. But from time to time self appointed media darlings from scientific fields outside of epidemiology have an annoying habit of confusing the public by contradicting the actual expert viewpoints. So we have to be discerning about where we get information. Similarly we should not simply cave in to loud voices from the business sector who manage to get their views published.

Preserving life is paramount. But at present, it’s not clear what the exit strategy will be. There is a strong sense that the business community has not been fully enrolled as a partner in this process. I might add that this includes a wholesale failure to engage the talent sitting in our research institutions and technology incubators. What is clear however is that we will have no choice but to open up again in 2022, because the present approach is economically unsustainable in the long term. Elimination may already be nonviable and everyone (including business) need to deal with the reality of the new normal. The best piece of advice anyone can follow right now – get ready, get vaccinated!

Paul Spence is a commentator and serial entrepreneur, a recently exited co-founder of a New Zealand based technology venture, a co-founder and director of Creative Forest, principal at GeniusNet Research and an advisor at ThincLab. You can follow Paul on Twitter @GeniusNet or sign up for a free weekly digest of startup, tech and innovation related events curated by him through New Zealand Startup Digest.

Frontier Firms Follow-On Funding Favoured

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frontier-firms

The recently published New Zealand Productivity Commission Report on the economic contribution of “frontier firms” predictably rated only a passing mention in local media. However recommendations in the publication could have far reaching impacts if implemented. But is the government listening?

Frontier firms are described as the most productive, profitable and innovative in an economy and generally have scale and global reach. But the report says that New Zealand’s frontier firms lag behind their global peers in terms of productivity. The OECD defines productivity as the ratio of economic output compared to inputs. Nations with highly productive frontier firms have greater competitiveness because of more efficient use of resources such as labour and capital. These nations also benefit from secondary “innovation and knowledge diffusion” within their economies.

Chairperson of the Commission Ganesh Nana, in an interview with Radio New Zealand says New Zealand is already well behind other small developed economies in the OECD in terms of productivity and the gap is growing every year. He says part of the reason is because we do not have many so-called frontier firms to which smaller innovation based companies can anchor. One of the key findings of the report is that the government must invest in developing a deeper innovation ecosystem, including supporting more commercialisation of research, science and technology.

But will the government take on board this message? Many of us currently working within the New Zealand innovation ecosystem have lobbied in the past for vastly increased resourcing and for setting greater aspirations as a nation. But such pleas have largely fallen upon deaf ears over the years. There are sadly also actors within our ecosystem that are philosophically opposed to any kind of government investment on the basis that only wealthy and well-connected players should be allowed in the game. This is despite the fact that our neighbours (and competitors) in places like Australia, South Korea and Singapore identified the value many years ago and have literally invested hundreds of millions of dollars into building out their own innovation ecosystems.

Developing more frontiers firms is not about growing more “unicorns” as some have mistakenly claimed. But it is about building a more interconnected economy that has research, science and technology at the heart of the beast. That’s a big ask for a small nation for which there are many competing priorities and challenges to face such as health, housing and climate change. But the key to motivating the decision-makers involves grasping the reality that having a powerful innovation ecosystem is actually part of the solution to those challenges.

Paul Spence is a commentator and serial entrepreneur, a recently exited co-founder of a New Zealand based technology venture, a co-founder and director of Creative Forest, advisor at ThincLab within the University of Canterbury Centre for Entrepreneurship and principal at GeniusNet Research. You can follow Paul on Twitter @GeniusNet or sign up for a free weekly digest of startup, tech and innovation related events curated by him through New Zealand Startup Digest. Paul is a co-author of the Entrepreneurship Manifesto 2020.