Category Archives: Economy

Opening the Door to Economic Wealth

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Nick Willis, the Auckland inventor who developed the cellphone lock opener, says that if you “make success your dominant thought” that is where you will gravitate towards. His story has captivated the business media and looks like a PR person’s dream come true. Not only has the guy made a lot of money for himself by licensing the technology, but he’s intelligent, articulate and has a highly photogenic family. The fact that he’s on a first name basis with both Sam Morgan and Stephen Hawking is just the icing on the cake.

Willis is very much the poster boy for the government’s economic development strategy right now, illustrating that a little intervention can be a good thing. He benefitted from publicly funded business training and startup programmes and also secured financial backing through the government’s Seed Co-Investment Fund. That’s good news. But we need 100 more companies like this.

Frankly the government needs some good news on the economic front right now! The departure of “iconic” Fisher and Paykel to Thailand came as no surprise, given the current economic settings. However the news that Australia’s GDP per capita is now a huge 38% more than New Zealand is somewhat more alarming. This startling fact received scant coverage or analysis. Where it was reported on, the media got their numbers wrong.

I know F&P have a proud history in New Zealand, but if the global price for an assembly line worker has dropped to $20 a day, do we really need that kind of industry? Wouldn’t it be better to grow some more high value, low density industries such as electronics, optics, biotechnology and software? For that to happen there needs to be a complete remodelling of the culture around research and development. That includes tax treatment, education and incentives on the government side. But it also calls for businesses to underwrite risky ideas and good people like Nick Willis.

Perhaps we need to take Nick’s advice and make success the predominant thought for the national economy.

[tags]globalisation, export, technology, New Zealand, innovators[/tags]

Distilling NZ’s ICT Exports

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The recently released  New Zealand ICT Supply Survey may not be everyone’s idea of bedtime reading, but  bear with me, because it does give us a useful snapshot of growth patterns within the industry. Up until 2004 Statistics NZ compiled a slightly different set of figures, but the new data set has now been realigned for easier comparison to figures from surveys in other OECD nations. So this years figures (2005/06) are the first by which we can draw any meaningful conclusions under the new regime.

Perhaps the most significant change is that data from the electronics industries is now included. Consequently, nearly a third of all ICT exports fell into the “electronic devices and equipment” category, comprising over $500 million in export returns. So sales figures from high growth hardware exporting companies like Rakon, Endace, Tait and 4RF may have actually inflated the figures somewhat. Whether you consider them to be manufacturers or ICT firms, it doesn’t really matter – it’s all good news.

Notwithstanding this, the value of ICT exports still only equates to about 5% of our total commodity export trade or about the same value as our (declining) fruit and vegetable exports. New Zealand remains near the bottom of the OECD ladder based on ICT export value and (like most nations) we are a net importer of ICT. Interestingly, two comparably sized exporters, Finland and Ireland, are amongst a small number of nations who actually export more ICT than they import. This demonstrates that agility has more to do with being successful at selling technology than does size.

ICT export revenue grew almost 20%, compared to a growth rate of 7.9% across the entire industry, but 90% of New Zealand’s ICT revenue comes from domestic sales consisting largely of telecommunications and sales of computer hardware. An optimist would say that this shows there exists a huge growth opportunity. A pragmatist might suggest we have done a poor job of articulating our value proposition globally.

Why aren’t we exporting more of our good ideas?