Climate Tech A Hot Topic

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

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

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

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

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.

The Commercialisation Imperative

Oxford

Blue Skies Thinking Needed

Competing and surviving in a highly technological, fast changing and globalised economy increasingly dictates that universities and institutes step up and generate economic returns on their research. But although there have been a few notable exceptions at New Zealand universities, we continue to underperform in the commercialisation of new scientific knowledge into value generating products and services that drive economic growth. So if disruptive innovation lies at the core of economic development, how can we better reconcile commercialisation with the core purpose of our institutions?

Firstly, there are some valid arguments in favour of the separation of commerce from academia. Normative, collectivist elements of academic science as a social system, along with the autonomous nature of university culture, seem to sit uncomfortably with the motivations of profit seeking firms that wish to take ownership of intellectual property. Claims of IP ownership can lead to fears of diminishing the scientific commons, which would be detrimental to the collegial and collaborative nature of science and therefore hinder the very process that will drive future discoveries.

Furthermore, commercialising technology research is risky and accommodating new and developing fields of commercially focused science takes up resources that might be used for other teaching and research, impacting the core mission of universities. We have already witnessed closures and staff reductions within arts and humanities faculties where commercial outcomes are less of a focus. There’s also a danger that high tech institutes established in emergent fields become impenetrable and elitist silos of specialist knowledge open to only a few, at a time when we should be striving for greater equity. Are there other societal factors at play that dampen success?

Patent filings data is sometimes quoted as an indicator of “innovativeness” in the context of economic development. New Zealand sits at the lower end of the table, but not because it is a small economy. Countries with relatively small populations such as Finland, Switzerland and Israel lead the pack. In New Zealand total expenditure on research and development as a proportion of GDP has been increasing in recent years, but continues to lag behind other developed countries. Investment rose to 1.37% in 2018. This compares to an average research intensity figure of 2.38% across all OECD countries, ranking New Zealand 21st out of 34 nations [Statistics NZ — 2018]. So whilst the size of an economy does not fully explain the innovativeness of a nation, the level of commitment to research and development investment certainly plays a part.

Approximately half of that R&D investment originates from publicly funded sources. With government investment comes an expectation that tax payer funded academic research will provide a “return on science” or economic and social benefits to society. The challenge then is to generate meaningful commercial outcomes, that do not undermine the core missions of teaching and research. There are a great many reasons to do so, not the least of which is our ability to fund future health, education and welfare needs. As a nation heavily reliant upon commodity based income we must gravitate towards higher added value goods and services to ensure the future economic wellbeing of our society. Developing an ecosystem approach to cultivating innovation is a key part of this journey.

For example, benefits in cultivating university-industry ties become amplified due to network effects and serendipitous conversations around the humble water cooler (or perhaps kombucha fridge these days). This “innovation ecosystem” approach has benefitted a number of scientific fields. For example the emergence of biotechnology as both a science and business from MIT and other institutions clustered within the Boston area. Commercialisation of new knowledge can also speed up solving complex social, health and environmental problems that might not otherwise be addressed, attracting both government and private sector funding into academia.

The global pandemic has also accelerated the need for scientific innovation. Previous hard won gains against poverty and improvements in social equity have been wiped out by pandemic related economic carnage. In addition, because of growing urgency in relation to addressing environmental challenges, there is forecast to be a vast migration of capital away from polluting industries over the next two or three decades. This green transition will create enormous opportunities for scientific organisations operating at the leading edge of cleantech, renewable energy, low carbon construction and regenerative agriculture, for example.

Embedded within entrepreneurship centres of research, university innovation labs such as ThincLab at the University of Canterbury are important intermediaries in the cycle of innovation and a key part of a vibrant ecosystem that engages with a wide array of supporting players to ensure the success of spin-off companies, whilst at the same time respecting the scholarship that underpins scientific discovery.

This article was first published on the ThincLab blog and formed the basis of my presentation to the Food, Fibre and Agritech Supernode Challenge 2021 cohort.

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.

Connecting Canterbury

DandelionFountain1 After nearly a decade of rebuilding, much of the baseline physical infrastructure needed for the regeneration of Christchurch is now in place. There’s still a lot more to do of course, but there’s now some breathing space to think about working on social infrastructure as well. Developing a vibrant and better connected local ecosystem will be the key to unlocking a wider pipeline of innovation across Canterbury.

Building a more connected innovation community also demonstrably aligns with the city-wide Prosperity Framework established by economic development agency ChristchurchNZ in 2018. This framework underpins business attraction and capability building activities across the city for the following decade and is strongly informed by the United Nations Sustainable Development Goals (SDG) and the New Zealand government Treasury Living Standards Framework. Environmental sustainability, inclusion, scalability and confidence are therefore viewed as pillars of a recovering and strengthening city economy and are encapsulated within the adjacent Supernodes Strategy.

The Supernodes Strategy, in its current form, has a focus on four designated areas of Food/Fibre/Agritech, Aerospace, HealthTech and High Tech services. All of these areas are obviously predicated upon a well connected ecosystem that is strongly underpinned by world class capabilities in software, high tech manufacturing and research. But it is less clear where important and enabling innovation infrastructure itself sits within the strategy. For example, platform based digital services and game offerings are amongst the highest value and fastest growing companies globally. Should we consider creating a local niche to include these sectors?

The Supernode strategy also speaks strongly about inclusion, especially in cultivating diversity of thinking and about better engaging young people with the business community. The strategy seeks to achieve progress through “a collaborative approach between education, industry and the government…to ensure a prosperous future for the city and the region”. So actively building these bridges is a mandated priority.

Resilient infrastructure and fostering sustainable and inclusive innovation incidentally also forms the basis of SDG Goal 9, a global commitment that central government signed us up to. Supporting small business growth and facilitating investments in research and development are fundamental to this goal. This is especially salient in the context of a post-quake, post-Covid economic rebuild in Christchurch. So there are many brilliant reasons to foster connectivity across the innovator community in Canterbury. One of the strongest arguments for doing so is that there is plenty of untapped capacity, unlike in some of our other main centre cities.

Pandemic related disruption has unfortunately hindered community-building activities throughout much of 2020, but has ironically amplified the need for it more than ever. Community minded responses have thus far averted a public health crisis. In the meantime people in education and business found ways to keep working together. Maintaining and building robust, collaborative communities is more important than ever in the disrupted, remote working and rapidly changing world to which we must adapt.

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 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.

Image credit: Renea Mackie

When Will CellTech Disrupt Our Economy?

What do a vegan Middle Eastern prince and a Singaporean cheese maker have in common? Not a joke. In fact it’s a rather serious question for New Zealand. Earlier this year Saudi based KBW Ventures invested over US $3 million in a “seed” round backing a company that claims to have developed a proprietary technology for producing milk from bovine mammary cells, by hosting the live cells within a laboratory bioreactor. The long term implications of this technology for the New Zealand economy are obvious.

This was the second tranche of funding for Singapore based TurtleTree Labs within six months. It is probably no coincidence that the first round was achieved just prior to lock downs due to the global pandemic. The increasing interest in lab raised food comes at a time when food security is under the spotlight more than ever. It has now become clear how easily global supply chains can be impacted in a crisis. No doubt these emerging technology stories are also of great interest to the food obsessed and security conscious residents of Singapore who currently import the vast majority of their food resources, due to very limited space for agriculture on the island.

Consumer preference is also tipping towards food sources that are less impactful on the environment. TurtleTree founder Fengru Lin claims that their future product will achieve 98% less carbon emissions than regular cow milk (and that’s without even considering other bovine greenhouse gases). With waterway degradation and groundwater quality under threat from a bloated and insufficiently regulated dairy industry in New Zealand, there’s a pent up demand for greater product sustainability. This only goes one of two ways. Either agricultural nations clean up their act and get on board with new food tech or they suffer enormous losses when the basis of global protein production gets hugely disrupted.

Celltech may not yet be scalable or widespread yet – but it’s only a matter of time. There will no doubt be many more cellular technology companies to follow TurtleTree and eventually technologies for growing lab based food will be licensed widely and become ubiquitous and more acceptable to consumers. That poses an existential threat to nations such as Australia and New Zealand for whom a very large section of the economy rests on animal based protein production.

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 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.

Photo Credit: Renea Mackie

Entrepreneur Ecosystem Resource Rethink Requested

Square EManifestoNZ PostDuring the last few months a number of us from the entrepreneur enabler community have been working on a manifesto document aimed at making the case for a more coordinated and vastly better resourced entrepreneurial ecosystem. The initiative sprung from a weekly discussion session that began during the pandemic lock-down and was hosted by the Global Entrepreneurship Network in New Zealand.

As entrepreneurs we are accustomed to dealing with uncertainty and frequently making do with limited funding. But as the economic and health crises evolved, it has become clear that as a nation we will need to do a great deal more together to support entrepreneurship. This is more important than ever now because encouraging early stage new venture development will be fundamental to both the economic recovery and preserving our living environment. In fact we need to be embedding transition thinking into every economic policy decision.

Despite claims by officials to the contrary, government support for early stage entrepreneurship is negligible by comparison to our neighbours across the region. New Zealand is light years behind and it’s time we had an honest conversation about it. Singapore and Australia have already injected hundreds of millions of dollars into developing their ecosystems over the last few years, with demonstrable success – particularly in software and deep tech. There are currently over 4,000 technology based startups operating in Singapore and there was around US $10 billion in venture investments made during 2019 alone. Australia’s “deep tech” incubation program turns 20 years old this year and continues to churn out high tech success stories with publicly funded support through the universities.

But how do we make a case for scarce public funds at a time when there are so many other competing needs? The reality is that we cannot afford to delay any longer. Our innovation infrastructure has been left to languish for far too long thanks to gate-keeping and a lack of a compelling vision. This long-standing under-investment now looks like a threat given the challenges we currently face. So it is our role to inform and educate through the Manifesto document.

Fortunately we could make a huge difference with even a modest increase to resourcing. Through the manifesto we’ve suggested five areas [PDF] that could deliver early wins and for which there are already a number of initiatives in play that could very easily be leveraged and scaled up. Building upon our existing innovation infrastructure is the smartest way to grow economic activity and employment.

For example, there are several excellent educational programmes operating within New Zealand that aim to build entrepreneurial and innovative capability, specialising in various demographics from primary school through to postgraduate research level. All of these programmes bring value to the ecosystem and help to create a pipeline of talent. But there is little in the way of coordination between these initiatives. This is a lost opportunity at a time when there has never been a greater need for high value, new venture innovation across society.

One approach would be to provide an overlay to better align our efforts in educating, encouraging and empowering entrepreneurs from an early age. Furthermore, creating an “innovation nation” is the key to solving the most intractable environmental problems that confront us, whilst also generating positive economic and environmental outcomes across society. New Zealand has a unique window of opportunity to show global leadership in this space right now, in order to attract the capital and talent we will need to rebuild better.

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 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.

Environmental Entrepreneurship Focus Needed

fern5The pandemic induced economic crisis has raised awareness that economies remain fragile since the GFC and that we must urgently shift to more sustainable and environmentally sound forms of economic development if we are to survive as a species. As a nation in the spotlight right now, New Zealand has an opportunity to lead with change. But we need a vehicle to drive this process and we must shift the mindset of the nation towards environmental entrepreneurship.

Institutional leaders such as the World Economic Forum (WEF) and the European Investment Bank predict that the next two decades will see a vast migration of capital from traditional industrial verticals to green investments, “responsible” deep tech and “bio-impact” investment, as the “just transition” to a cleaner, low carbon economy takes hold. Some sources claim that this “green shift” could be worth as much as $6 Trillion[1] per annum as infrastructure replacement and the migration to cleaner industries proceeds. The global effects of the COVID 19 pandemic has only served to accentuate the very urgent need for deep structural reform. In fact the WEF argues further that the fiscal response to the resultant economic crisis absolutely must be tied to a greener economy.[2]

Along with this shift comes increasing recognition from global corporations that profit and social purpose are inextricably linked. Socially responsible companies and those that develop engaged, happy and productive learner employees, will capture a greater share of value within the transition economy. Consequently this will invoke greater delivery on environmental, social and governance objectives (ESG) as part of reporting to boards, shareholders and other stakeholders such as local communities. Indeed, the New Zealand government is a signatory to the UNDP Sustainable Development Goals (SDG) of which SDG 9 has a particular focus on “building resilient infrastructure, promoting inclusive and sustainable industrialization and fostering innovation”. At the same time, governments remain interested in endogenous approaches to economic development[3] that value development of human capital, since innovation through creating new knowledge is essential to sustainable growth and wealth creation.[4]

Problem

With rapidly shifting technologies, the reconfiguration of the global economy and consequent disruption of traditional industries, in what has been described as the “fourth industrial revolution”, there is an ongoing need for discovery, evolution and enrichment of entrepreneurial skills, from an early age and throughout life, supported by better connectivity, greater insight and structured exchange of knowledge. Many of the capability building mechanisms required for this journey already exist in their own silos within New Zealand. But there is no unifying framework or plan in place to fully capitalise on this energy.

Solution

As part of the response to our Entrepreneurship Manifesto 2020 document I am calling for the establishment of a New Zealand Centre for Environmental Entrepreneurship (CEE). This would provide a coordinating role in aligning innovation and entrepreneurship programmes nationwide towards delivering a pipeline of talent fit and ready to address the biggest and most important economic opportunity of our lifetimes – our living environment. Partnership with the CEE would be through an application process with successful programmes receiving additional government funding support. A lean and future focused advisory board would administer the CEE. The board would comprise an equal weighting of experienced founders, business academics and government representatives supported by an executive officer. The CEE could be a virtual organisation as well as rotating hosting among academic institutions with strengths in business and environment.

Impact

Success would be measured thus:

  1. By a more coordinated national approach to entrepreneurship and innovation education in general, through supporting high performing enablers.
  2. By implementing micro-accreditation and NCEA credits for entrepreneurship and innovation courses.
  3. By delivering a talent pipeline with an environmental and social innovation mindset (including migrant entrepreneurs).
  4. By raising the status of entrepreneurs as champions of change and opportunity in the global transition economy.
  5. By a growing pipeline of new ventures that address both the SDGs and position New Zealand as a global leader in green transitional technologies.

Possible Focus Areas

  1. Technological responses to climate change.
  2. Alternative energy technologies.
  3. Social housing solutions.
  4. Management and improvement of flora and fauna ecosystems.
  5. Agritech and food security.
  6. Infotech and data security.
  7. Health Tech solutions for pandemic response.
  8. AI and Education.

References

  1. https://newclimateeconomy.report/2016/
  2. https://www.weforum.org/agenda/2020/05/the-european-green-deal-must-be-at-the-heart-of-the-covid-19-recovery/
  3. Isaac Ehrlich, Dunli Li, & Zhiqiang Liu (2017),The Role of Entrepreneurial Human Capital as a Driver of Endogenous Economic Growth, J Human Capital 11,3.
  4. Maradana, R.P., Pradhan, R.P., Dash, S. et al. Does innovation promote economic growth? Evidence from European countries. J Innov Entrep 6, 1 (2017).

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 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.