Smart Capital

Amidst the hand-wringing over Christchurch’s loss of Rugby World Cup games I was once again left wondering why we struggle as a nation to focus on the really important issues that underly our efforts to rekindle economic growth.

In the global scheme of things the fact that a handful of rugby games won’t be played somewhere is hardly world breaking news, especially in comparison to the extraordinary drama unfolding on the other side of the Pacific Ocean. Yet the media spent a good portion of last week hounding politicians on the topic of World Cup venues. It was obvious that McCully and others were stonewalling and already knew the outcome, but there were much meatier issues left untouched. For example, where was the government going to find the $10 billion or more needed for the reconstruction of Christchurch and how will we round up sufficient numbers of skilled trades people to do the work?

Later in the week I attended a closed forum for leaders in the ICT community discussing how we could boost the economic return to the capital city from our industry. It was notable that at least half of the attendees were skilled migrants who, at some time or other, had deliberately chosen Wellington. It really brought home the significance of the contribution made by migrants to our creative industries. Naturally much of the forum conversation was taken up with suggestions around making our city a more engaging place for creative types and telling our story widely and more often.

Disconcertingly however, the topics of identifying external sources of capital and strengthening our entrepreneurial ecosystem were treated superficially. Recently I was reading an article by YCombinator’s Paul Graham talking about what start-ups need to help them stay in a given location. Provide them with financial capital, he says. Accessing creative talent and facilitating cross-pollination of ideas are really important too, but ex-pats don’t have a franchise on these things. Access to smart capital and developing a vibrant entrepreneurial community culture are major growth drivers. These are themes I will continue to be advocating for strongly.

Paul Henry Comments Out Of Step

Paul Henry’s ill advised on air comments suggesting that New Zealand’s Governor General was not fit for office because he neither looked nor sounded like a New Zealander demonstrated how disconnected the “state broadcaster” and its talking heads are from the real world. Worse than that, I found highly offensive the implication that an idiot like Henry speaks for all of us.

Television New Zealand spokesperson Andi Brotherston leapt to Henry’s defence suggesting that he merely reflects what society is “quietly” thinking. Perhaps that is true on some issues, but it certainly was not in this case. The record number of complaints from the public on this matter suggest that Henry grossly misjudged the public appetite for such commentary. The public backlash was as much about disapproving of Henry’s racist tone as it was about defending the good name and dignity of the office of Governor General. Republicanism aside, the GG performs a valuable role as a representative of New Zealand and as an apolitical interlocutor essential to the functioning of a civil society. Henry’s gaffe threatens our nationhood and questions our self perception.

Even more embarrassing was that Prime Minister, John Key was engaged in a conversation with Henry at the time of the incident. However, I’m prepared to give Key the benefit of the doubt. His guard was down during (what he thought was) a moment of light-hearted banter. But one has to question the wisdom of even appearing next to Henry, given his track record. Popular technology commentator Ben Gracewood obviously asked himself that very question, because he resigned from the Breakfast show immediately the comments came to light.

TVNZ mouth-piece Andi Brotherston might be looking back fondly to less controversial days when she shared a provincial radio turntable with DJ turned Cabinet Minister Steven Joyce. Perhaps he could find a parliamentary spokesperson role for her; she might be needing it. Way back then, Joyce established a private radio station to challenge the entrenched state monopoly. Perhaps the accepted moral authority of another state broadcaster needs to be challenged once again.

If you want to lodge a complaint with Television New Zealand about Paul Henry’s racist and denigrating comments, you can do so using the online form at the Broadcasting Standards Authority website.

Two Dimensional Culture Devalues Society

A couple of issues currently being debated in the New Zealand media suggest why as a nation we struggle to think outside the box. It also illustrates how we are failing miserably to deal with a selfish and deeply ingrained culture of alcohol misuse that continues to plague our society.

Proponents of street racing in Christchurch have suggested that the best way to keep intoxicated young drivers off the street is by providing a burn-out pad adjacent to a residential suburb away from the city centre. The disadvantages of this idea will be immediately apparent to local residents who will be required to endure hours of engine revving, tyre squealing and the stomach churning stench of burnt rubber associated with this mindless “sport”. Construction of a burn-out pad therefore simply legitimises what is already a highly anti-social form of behaviour.

At the other end of the country there is much public hand-wringing and a media feeding frenzy over the lack of progress to develop the Auckland waterfront into “party central” in time for the predicted influx of visitors to the Rugby World Cup (RWC). But nobody has yet questioned whether there exists a real need. A quick survey of Princes Wharf and surrounds reveals dozens of existing bars and restaurants, many of which seem to be struggling to attract any custom at all outside of the traditional boozy weekend nights. Surely the basis for “Party Central” already exists. On the other hand, given the rugby playing community’s poor track record in treating alcohol responsibly, perhaps the Police would prefer all of the RWC drinkers to be corralled into a large centralised holding pen, as is being suggested.

The most disturbing aspect of these two debates is that the focus seems to be on providing a solution that caters for and indeed promotes boorish behaviour as a cultural norm rather than addressing the prevailing values in wider society. In a nation that seems overly self-obsessed with a two dimensional culture of sport and binge drinking, will we ever truly be able to nourish and grow an environment of creativity and innovation?

Why Would Welly?

I’ve never been particularly fond of the “Welly” moniker. But to have it plastered all over a local hillside on the approach to Wellington Airport smacks of a complete lack of imagination.

I generally try to avoid getting too deeply mired in political debate and I don’t want to start a rant about why we don’t need to be aping American culture; but there remains something rather disturbing about the prospect of a Hollywood style sign being plonked on my front doorstep. I have friends and family over in Hataitai and there is certainly no great enthusiasm for the idea amongst local residents.

For me personally, the overriding image attached to the original Hollywood sign is one of tacky fakery and gross self-indulgence. Yes, Wellington has benefitted economically through partnerships that reach deep into the L.A. film industry. But that doesn’t mean we need to emulate it entirely. In fact our strength is that we differ from it.

I would also question whether a creative city, such as Wellington, needs to brand itself by ripping off someone else’s intellectual property. This seems entirely counter-intuitive when we have a vast richness of other iconology available from amongst our collective Maori, Pacifica, Asian and European peoples. I hope the airport company will sniff the wind and quietly retire the concept. As one commentator suggested, they would gain a lot more respect by simply replanting the hillside in native trees.

Ready, Fire, Aim – How Kiwi Culture Impacts Value Creation

Despite exceptional rates of entrepreneurialism and a highly innovative culture, New Zealand continues to lag in terms of economic performance. But a new study commissioned by New Zealand Trade & Enterprise points to some of our self limiting cultural attributes.

Being a nation built upon successive waves of largely working class migrants, it comes as no surprise that practical self reliance and a tendency to under-value intellectual assets and capabilities, feature strongly in our national psyche. Sometimes the very attributes that make us strong, can also be our undoing.

Perhaps that it is why I have found it refreshing to work with some recently arrived skilled migrants. It has forced me to confront some of my own self-limiting behaviours and to adjust my success horizon. In fact it has challenged me to redefine exactly what success looks like.

The NZT&E report suggests that it’s not just about working smarter to create more economic value, it’s also about capturing that value. It is not sufficient simply to be innovative (which we are already). I think what they are trying to say is that we undervalue the intangible assets like intellectual property and customer relationships.

The report author proposes adding value by not only addressing the cultural peculiarities that sometimes afflict us but also by ensuring that we create value through other channels such as licensing and transfer of intellectual assets. For example at ideegeo we not only provide domain management through iWantMyName, but we also license out the software to other registrars.

It is also suggested in the study that we have deeply embedded cultures within our organisations and a “commodity trading psyche” that sometimes impedes us from getting to know our offshore customers. We need to get better at relationship building. Perhaps the producers of goods, targetted by this report, could learn from how web based businesses create value through open communication environments, knowledge-sharing and the construction of social capital as a means to building intangible value within business.

Animation Digerati Illuminate Capital

As an already highly respected world centre for games, animation and visual effects, it is only fitting that our capital city plays host to AnimFX ’09, an event that has emerged as an increasingly noteworthy gathering amongst the global digital animation and movie effects community. 

The main conference programme kicks off on Friday November 6th and includes talks by none other than Weta Workshop founder Richard Taylor. His colleague Matt Aitken, who was visual effects supervisor for District 9, will also be speaking. If that weren’t enough, the impressive international line-up includes Sander Schwartz, formerly president of Warner Brothers Animation, and Academy of Motion Picture Arts & Sciences stalwart Jeff Okun who masterminded the terrifying “nano-bots” in the most recent rendition of The Day the Earth Stood Still.

Having such luminaries under one roof represents a huge opportunity for the New Zealand industry to form valuable network linkages into what is arguably the entertainment production capital of the world. Now in its fourth year, success stories from previous AnimFX event remind us how important it is for local technology firms to reach out globally and incidentally how we can leverage our natural attributes to lure highly acclaimed individuals to our shores.

W2W’09 is another event that aims to build capability and connect technology entrepreneurs globally. Focussing on web-based and ICT enabled ventures, W2W runs on the afternoon of 17th November. More about this next week…

Le B’astard!

French rugby representative Mathieu Bastareaud brought shame and embarrassment to my city and my country last week with his serious assault allegation. Although the truth has now emerged about his drunken idiocy there seems little likelihood of proper redress.

Of course if any ordinary member of the public made a false complaint to Police they would immediately be up on a charge. But the local Police and NZ Rugby Union, who “diligently” investigated the claim, made sure the touring French team were well beyond our shores before they released their findings – and its not like it is an offence worthy of extradition. So it is very unlikely there will be any legal recourse in the case.

Mercifully, rugby receives relatively little media bandwidth outside of Australia and New Zealand (contrary to popular belief here), so I’m unsure how much international coverage this incident actually received. Perhaps then it is a moot point. But the fact that a number of highly placed individuals colluded to protect the errant player and the arrogance shown by some involved has led to a few analogies being drawn with another infamous insult involving a certain rainbow coloured vessel.

Perhaps that analogy is a little harsh. After all we have plenty of examples of our own immature, drunken sportsmen getting into trouble whilst on tour. Nothing new there. What continues to rile me is that our society tolerates this kind of behaviour even at the expense of national reputation. It is the kind of slur a small, geographically distant nation can ill afford.

Rural Towns Left to Wither

I had occasion to head home to the provinces for a family visit last weekend. What always strikes me is the character of the little towns along the way. Some of them have been dying off for years, only kept alive of late by the fact that the surrounding rural economy has been booming. But with commodity prices plunging, the underlying support from dairy (and oil) is falling away.

If city dwellers are feeling the pinch now, spare a thought for the rural towns. For some, almost nothing has changed since the 1950s. Their central business districts generally comprise a petrol station, convenience store and a public bar. Now with falling trade even some of the pubs and petrol stations have passed on. Weeds creep insidiously through gaping holes in ramshackle corrugated iron fences that surround overflowing car wrecking yards and the odd farm machinery repair workshop. It’s not rustic or charming, it’s decay; and it’s a testament to how decades of questionable government economic policy has left such towns unimproved.

The one beacon of hope amongst this desolation is the local school. Tidy, manicured grounds surround the elderly buildings, replete in yet another coat of standard issue Ministry paint. The school is the last remaining focus point for the community. But even the school is at risk as roll numbers dwindle and the same Ministry casts its bureaucratic ruler over the books. Not even community pride in the school can prevent the young people from leaving town as soon as they are able – there is nothing to hold them.

Some of the troubles faced by rural towns are simply geographical. No amount of government intervention can compensate for poor soil, challenging climate or remoteness. For those towns that do not have viticulture or glaciers or fishing quota, the future looks rather bleak. On a broader front, the withering of our small towns is related to the fact that New Zealand in general continues to lag behind in GDP per capita. There is simply not enough cash to go around, largely because we have underinvested in innovation as a nation. Our small provincial towns are a metaphor for the wider economy.

I mentioned that education is a beacon of hope, there was also another glimmer of light on the horizon last week. McKinsey run an annual exercise involving mapping global innovation. Auckland was the only New Zealand city that was polled, but it showed up in the top left corner of the data as a “hot spring” of innovation. In other words we are registering more technology patents each year, but only in a small number of areas. Now, it turns out that bubbling hot springs generally host a thriving microcosm of life. On that basis investing in science and technology innovation as a means to generate economic wealth seems like a good idea. So why is the government heading in the opposite direction?

Jobs Summit Lacked Innovation

Predictably the sketchy proposals emerging from last week’s “Jobs Summit” ranged from mildly interesting to the completely ridiculous and I’m left wondering how many will actually come to pass. But the ideas fest, hosted at Manukau City, was not actually about generating sensible approaches to the economic crisis, it was about putting on a display of unity and generating some positive buzz. Ironically, the business leaders at the conference will likely preside over hundreds of layoffs themselves in the coming months.

I like that John Key is an ideas man and is prepared to entertain novel concepts. But his sidekick Bill English made it very clear going into the summit that the state of the nation’s finances would not allow for a great deal of additional expenditure. By lowering expectations ahead of the summit he allowed the government to wiggle out of addressing any meaningful economic reform. His comments may even foreshadow some backpeddling on big ticket sacred cows like tax cuts, broadband and superannuation.

I guess my real concern is that the Jobs Summit hoopla has eclipsed the fact that economic realities have shifted so much that we really need to make a quantum leap in how we approach investing in our future as a nation. I’m not convinced that the summit properly addressed these issues. Borrowing cash to dig cable trenches and build a cycleway will simply not cut the mustard in my opinion.

Since it was elected, the government has astutely avoided making any comments about the need to invest in research, science and technology innovation. In fact the only promise they have made in this area is to kill off the R&D tax credit. They still don’t get it. The only businesses that are growing right now are precisely those that have invested in technology research and development. For example colostrum manufacturer New Image have exploded onto the Asian market. Even the horrendous balls-up in China by dairy commodity behemoth Fonterra has failed to suppress the demand for this high end, added value product.

Saving jobs in the breakfast cereal factories and assembly lines of South Auckland is important. But even more important is creating more high tech companies and developing our largely under-educated workforce. The lack of aspiration we currently demonstrate as a nation is reflected more and more in the ugly twin cultures of ethnic gangs and idiot boyracers that are furtively permeating our society and populating our streets with a generation of social rejects. What we really needed was an all encompassing social, economic and technological Innovation Summit.

Power to the Tweeple

Last week’s “blackout” protest was a lesson in how readily Internet technology can be used to disintermediate traditional sources of information and motivate a community to action. It also showed how quickly informed debate can be subsumed by a vocal minority making clever use of the very same technology.

Recently I suggested that Twitter might one day seed a political revolution. Now Twitter users in New Zealand have put that theory to test by calling for others to black out all their online profiles (and blogs) in order to raise awareness of a protest against amendments to the Copyright Act. The section 92A amendment was originally proposed to counter illegal downloads of copyrighted material and supposedly places the onus on ISPs to disconnect offenders upon accusation.

I say “supposedly” because I have yet to locate a complete rendition of the new legislation. In fact an examination of numerous “prominent” blog sites that are supporting the protest fails to reveal any links to the complete text of the amended Act. So we are taking it completely on trust regarding their interpretation of the wording of the amendment. But there was an even more disturbing aspect to the manner in which this protest was conducted.

Spreading the word about the protest through viral means such as blogs, Twitter and Facebook has turned out to be hugely successful, with global media and some prominent individuals picking up on the event. But my heart sank when I read a tweet from an over enthusiastic supporter who suggested that Twitter users should “unfollow” anyone who didn’t conform to the blackout mandate. I wonder if anyone noticed the irony?

S92A is certainly an unjust and poorly drafted piece of legislation that both impacts on personal freedoms and has facist bully-boy overtones. Yet calls for the black-listing of non-protestors shows the same level of crass indifference as demonstrated by the politicians who drafted the amendment in the first place. Join our cause or suffer the consequences? So it was with some sense of relief that I discovered that at least one popular blog site has set up a forum to allow both sides in this argument to express some viewpoints. Some informed debate, including a discussion about the experience of other countries in such matters, would be refreshing at this point. Isn’t that how intellectual communities find consensus and move forward together in an open society?