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

Innovation As Infrastructure

For the first time in decades, the government has an extraordinary amount of political license available to expend on addressing key social, environmental and infrastructural problems that have become a handbrake on progress in New Zealand. The dual public health and economic disasters visited upon us have provided an unprecedented impetus to unlock the public purse. It is also a once in a lifetime opportunity to transform the economy towards a cleaner, more inclusive, lower carbon future. Innovators and entrepreneurs must be part of that conversation.

With the exception perhaps of the fibre rollout, it is widely understood that there has been decades of under-spending on key infrastructure which forms the foundations of the wider economy. Resilient infrastructure and fostering innovation also comprises part of the United Nations sustainable development goals, to which New Zealand is a signatory. So as part of recovery investment, we are hearing that there will be government led co-funding for “shovel-ready” infrastructure projects. Debt constrained local bodies are now scurrying to dust off previously paused plans for roads, cycleways, water pipes and much more. Useful works that will provide much needed short term employment – but hardly transformational.

We have also recently seen a proposal from the Greens calling for a $1 Billion investment in the natural environment. The project involves regeneration of wetlands, protection of waterways and restoration of native bush. Apart from providing instant employment, the long term environmental returns would be substantial. The crisis has also illuminated shortcomings and under-investment in the health sector. It is clear that there is room for funding some improvements. There will no doubt be numerous other programmes and waves of investment arising in the future. How can this public investment generate the best return to our economy at a time when external trade is problematic?

With support from government, our innovation ecosystem has grown vastly during the last two decades, so there is plenty of talent available to work in partnership on these problems. Government agencies will require substantial additional capability to quickly deliver on these initiatives and to get cash out the door and circulating within the economy. A collaborative approach involving the rapid roll out of partnerships with local bodies, social enterprises and other businesses will be required. This calls for a bold evaporation of the the risk aversion and gate-keeping that so often derails and delays promising and innovative partnerships with government.

What if we devolved responsibility for identifying, funding and managing discrete environmental projects to regional public-private innovation partnerships? How about an education technology incubator that sits alongside a teacher training institution? What if we had a private sector centre of excellence for IoT and AI tech embedded within the proposed public works agency? How about a FinTech entrepreneur programme engaged with Treasury?

Let’s re-purpose our innovation ecosystem, in partnership with the State, onto solving the really big social, environmental and technological problems confronting us currently. GovTech on steroids, with meaningful funding, actionable deliverables and value creation through protecting and growing any associated intellectual capital.

Christchurch based Carl Pavletich had already been looking at transition processes within organisations when the crisis hit. He realised that, like during the earthquakes, there had once again been a catastrophic transition forced upon us. “Instilling a startup mindset may be our best emergent strategy to adapt”, he says. Paveletich developed Spire, a simple model that guides rapid prototyping of organisational responses and keeps all stakeholders in the loop. This is the kind of thinking that should inform and accelerate engagement between government and the innovation community.

So as the government grapples with how to breathe life back into a dormant post-virus economy, we must ensure that innovation and entrepreneurship are at the forefront of progress. Beyond that, we actually need to rethink how we view the structural aspects of the economy. Glass, bitumen and concrete infrastructure are important, but as futurist and serial entrepreneur Nick Gerritson suggested recently, we all need to start thinking of innovation as economic infrastructure. If the goal is transformational change plus avoiding a terminal economy – the public sector must get onboard with this philosophy, fast.

Paul Spence is a commentator and serial entrepreneur, a recently exited co-founder of New Zealand based technology venture iwantmyname,  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.

Redeployment Of Capital Needed For A Greener Future

firesThis year has seen extreme heatwaves in Europe, numerous and more frequent devastating tropical storms across all of the world’s oceans and a record number of destructive bush fires in both Australia and North America. Politicians may not agree on the causes, but there is no doubt that climate change represents a huge risk to economies and quite possibly an existential threat to some nations altogether. But climate change action and reduction of CO2 in the atmosphere may require re-framing as an economic opportunity in order to make progress.

For example, industrial scale sequestering of CO2 seems like science fiction right now, but the point at which this technology will become essential may be closer than we think. Developing countries are increasingly switching to renewable energy sources by constructing hydro dams, solar cells and wind turbine farms. How do we redirect funding away from polluters towards such vast projects or to many others that involve greentech solutions to solve global problems like energy, transport and food? The manner in which financial investors engage with impact enterprises requires considerable re-imagining.

Finding new approaches to carbon removal does not absolve humankind from acting more responsibly of course. Government mandated reductions in CO2 production are a starting point, but that alone may be insufficient to heal the atmosphere. The disappointment of the COP25 talks this week unfortunately illustrates that we cannot wait for governments to solve these issues. In the meantime, what can us ordinary citizens do to minimise our own impact on the planet when the problem seems so overwhelming?

In 2015, under the leadership of our former Prime Minister Helen Clarke, a working group at the United Nations delivered the Sustainable Development Goals (SDG). These 17 integrated goals seek action across the many systemic issues facing the world, calling for promoting economic prosperity, human health and especially protecting the environment. If you work in government, you will probably have some awareness, as this ambitious programme has slowly percolated within the public sector. But the general public have precious little understanding of this initiative.

So in order to continue to be ambitious and remain relevant, the project needs wider exposure. The SDG provides a framework by which we can all work towards a cleaner and fairer world. At a University of Auckland talk earlier this year, Clarke herself described the SDGs as, “a blueprint to achieve a better and more sustainable future”. So 2020 is the start of the United Nations “decade of action” now aimed at accelerating progress on the sustainable development goals. There’s never been a better time to think about how business can get involved meaningfully.

The SDGs also provide corporations with a basis to improve how they operate in society generally, especially in mitigating impact on the environment. More and more businesses are beginning to accept that social and environmental concerns must be part of a sound business strategy. This is critically important because it is becoming clear that governmental organisations alone have insufficient resources to aid the transition to a greener more equitable economy. It will require partnerships between public sector and private finance to find a new way forward and in particular a huge boost in impact investing globally will be needed.

At GeniusNet, we want to play our part and have some interesting developments in the pipeline. Watch this space!

Paul Spence is a commentator and serial entrepreneur, a recently exited co-founder of New Zealand based technology venture iwantmyname,  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.

Not A Drop To Drink

The environment and human development seem to be increasingly at odds. Having recently moved to a drought prone province, the state of the local rivers and reservoirs is never far from our minds. On the other hand we’ve also had a spate of storm damage around the country during the last few months, thanks to a heavy rain and sea swells. So whilst we have a vast surplus of water in some places, others are running dry.

Of particular concern in our own province is that plans to future proof the area against looming fluctuations in water supply have been knee-capped by the government for the sake of political expediency. Given that the region has a growing population, a water dependent agricultural base and an expanding viticulture industry, that’s a big concern. It’s a concern that could be addressed by levying the biggest users, rather than turning off the tap to residential consumers (as currently occurs). But worries over water sustainability are not limited solely to Wairarapa.

The counter argument to investing in water reservoirs is that irrigation fueled intensification of agriculture has demonstrably led to the degradation of waterways and lakes in New Zealand. Even Fonterra’s current charm campaign cannot detract from the facts. Having a prominent sportsperson deliver milk to schools by helicopter is fun, but it won’t enable the kids to swim in the rivers that have been despoiled by Fonterra’s suppliers. By the way, the damage caused by Fonterra’s corporate greed extends beyond New Zealand shores. Expect to hear more about their slow moving China train wreck this year. But I digress.

How we manage our most valuable, life-giving resource may well turn out to be the most important issue of our time. But at a time when central government claims to be interested in supporting economic growth in the regions it is difficult to understand why they are failing to address water security.

Paul Spence is a commentator and serial entrepreneur, a co-founder of Wellington, New Zealand based technology ventures iwantmyname and Polanyio and a mentor with Startup Weekends and Lightning Lab. 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.

Finding The Happiness Particle

happyRecently I had the great pleasure of being guest of honour at Startup Grind in Auckland. We had a very frank Q&A session about the many challenges facing startup entrepreneurs. Some of the discussion revolved around bootstrapping and growing globally. But we also devoted a lot of time to the emotional challenges faced by business founders, because I think this is a topic that we don’t hear enough about.

Entrepreneurship is a hugely demanding calling and few of us get through it entirely unscathed. Along with the daily dramas of driving sales, paying the bills and keeping your team on track, there is the pressing need to balance work and home life. This balance becomes especially difficult if you have young children at home. With the need to put in long hours when starting a business, having the support of your family is critical to entrepreneurial success. So you must engage loved ones in the process early and set some clear expectations.

Funding rounds, media recognition and rolling out the next big software release are exciting and wonderful things, but all of that is fleeting. Family and friends are ultimately what sustain us in the long term – not money, public accolades or brilliant software code. Participating and contributing positively in the community and building authentic familial, personal and professional relationships is infinitely more rewarding.

Creating a palatable work environment is also important. Holacratic workplaces is one controversial approach to addressing this. However, there remains ongoing (and valid) criticisms from within traditional schools of management about whether holacracy can ever succeed. But perhaps the real issue is how you actually define “success” in this context. Tech companies such as Twitter, Medium and Zappos are the most well known proponents of holacracy, within which customer and employee happiness also figures large in company reporting.

At iwantmyname we built a virtually enabled company around a flat structure and uniform remuneration across the company. We engrained an ethos of self-management across the organisation, bringing with it both freedoms and responsibilities. Weaving elements of holacracy into our work setting has been extremely challenging at times and there have certainly been missteps. Whilst very rewarding, it is still a work in progress.

The face of management has evolved very little in the last century within the corporate world, despite the fact that there has been a huge migration away from assembly lines to desk-bound work. But companies that are disrupting traditional business models and leading change have a special responsibility to illuminate the way forward. Finding a suitable balance between home life, personal freedom and the demands of your business is essential to finding the elusive happiness particle.

Paul Spence is a commentator, technology entrepreneur, a co-founder of iwantmyname (a New Zealand based global Internet venture) and a mentor with Startup Weekends. You can follow him 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.

Imagination Key To Winning Online Retail Race

shirtsLast week three iconic local retail brands shut their doors in my city. Whilst traditional “bricks and mortar” retailers continue to blame their demise on the growing threat from online, the real threat is complacency in the face of a changing market. But it’s an issue that e-commerce businesses need to be mindful of also.

Listed on the New Zealand stock exchange, Kirkaldie and Stains had an amazing history catering for high-end retail in the capital city. The firm was started in 1863 by a pair of immigrant entrepreneurs and is one of the oldest surviving retailers in the country. But the writing has been on the wall for some time, with ongoing financial losses and flagging share price. Subject to shareholder approval, the company will be acquired and re-branded by Australian retail giant David Jones.

The historic Bank Arcade is one of the few tasteful retail venues in the region. Longtime tenant Rixon Groove was an upmarket shirt and tie retailer and manufacturer that opened to much fanfare in 1991, catering for inner city businessmen and office workers. I often walked past that tiny shop and noticed, unlike its busy neighbours, there was sadly almost never a customer in sight. With the price of a shirt hovering around $200 and fashion trending away from formal attire in the workplace, it’s not hard to see what went wrong.

Shoe retail is sometimes regarded as the most competitive category, but boutique shoe store Minnie Cooper was always a hit with the ladies. Rather than go the way of the other dinosaurs, the business has elected to close its stores and go 100% online. They will continue to face huge competition, but without the substantial overheads of a high street presence. It will be tough, but least Minnie Cooper is attempting to adapt to the changing market.

Online businesses also face challenges and must be prepared to adapt and innovate. Customers online are fickle and have the attention span of a small fruit fly. Barriers to entry are relatively low and very few online retailers have a natural monopoly in their market. So e-commerce properties that fail to remain fresh and relevant have a limited lifespan in cyberspace. Addressing a huge global market is a far more interesting proposition, but shirts and ties all look much the same. Clearly differentiating your product offering against dozens of competitors requires a lot of imagination.

Paul Spence is a commentator, technology entrepreneur and is a co-founder of iwantmyname, a New Zealand based global Internet venture. You can follow him on Twitter @GeniusNet

Tunnel Collapses. Good Call Minister!

hollyfordAs you may be aware, Minister of Conservation Nick Smith this week delivered his decision on whether or not to grant a concession to Milford Dart Limited for construction of an eleven kilometre, one-way bus tunnel between the Dart Valley and Milford Sound. One has to sympathise with the Minister who frequently has to make such rulings and whose decisions are not always popular.

However, it beggars belief how such a ridiculous proposition even got as far as the Minister’s desk in the first place. Proponents of the tunnel who energetically cite how it will reduce travel times to and from Milford Sound seem to have missed the point. Tourists come to enjoy New Zealand’s scenery, not to sit in a dark tunnel. Others have championed how the plan will bring new economic life to the region – when in fact it is likely to kill small towns like Te Anau that rely on passing traffic. Milford Sound itself is physically constrained and simply cannot grow any more, so that argument also falls flat.

Smith used some sound reasoning as to why he declined the project. Uppermost in his mind seems to have been concerns about exactly where millions of tonnes of earth would be deposited after it was dug from the tunnel and that it was not consistent with the park management plan. Even ignoring the fact that the economics of the venture don’t actually stack up; there are much more important, but less tangible, reasons for filing the plan in the waste paper bin.

Despoiling our greatest national park (and world heritage area) for highly questionable commercial gain, would simply be a crime against all New Zealanders. We should keep our special places intact. Good call Mr Smith and deep shame on Tipene O’Regan and his fellow directors of Milford Dart who, given their connections, you’d think might have had more respect for the intrinsic value of a relatively untouched region.

Paul Spence is a commentator, technology entrepreneur and is a co-founder of iwantmyname, a New Zealand based global Internet venture. You can follow him on Twitter @GeniusNet

 

 

It’s Life Jim…

Bernard Hickey’s curious opinion piece in the Herald this week reminded me of a famous quip from Star Trek. “It’s life Jim, but not as we know it.” Normally I enjoy Hickey’s rants, because he frequently questions the boring, unimaginative style of economic management and fiscal policy that we currently have to endure in New Zealand. The new Reserve Bank governor shows little sign of demonstrating any more initiative than the previous incumbent, so it’s important that the media stand up and heckle occasionally. But I’m going to call out Hickey on his stance regarding Auckland’s housing crisis, which sits a world apart from the situation across rest of New Zealand.

Advocating for high rise, in-fill housing in central Auckland is a bit like shooting the goose that laid the golden egg. The lack of housing in the region is because large numbers of  economic migrants have been increasingly attracted to Auckland due to it’s unique lifestyle and are arriving at a faster rate than can be accomodated at a time of low investment in housing. However, if the Auckland CBD is transformed into downtown Kowloon, with row upon row of identical, tasteless concrete apartments, the city will presumably become somewhat less attractive to migrants intent on escaping the very same kind of environment. There is a more obvious solution.

Even us Wellingtonians understand that Auckland is (currently) the economic centre of gravity for New Zealand and we certainly endorse the assistance provided as Christchurch struggles to rebuild. Furthermore, with most of the present government senior cabinet members originating from either Auckland or Christchurch regions, it’s been clear for some time where the chief investment focus lies. In the meantime Wellington is languishing with one of the lowest economic growth rates of any region, despite its diverse economic base.

Business activity here in our region powerfully leverages a creative workforce and increasingly invigorates high value, knowledge based export businesses. Provincial areas such as Northland, Gisborne and Wanganui have mild climates and vast tracts of land available, yet are also struggling. Other areas such as Manawatu and Taranaki have held their own, thanks to the dairy boom. But the economic benefits of those returns are no longer shared throughout the community, because of the increasing trend towards corporate farming and centralised processing. What can be done to redress this imbalance?

Surely, if Auckland is bursting at the seams and Christchurch is still awaiting re-building, would it not make sense to actively redirect economic investment and migration to less favoured provincial areas, where it could do most good? Or is that too obvious to contemplate?

Paul Spence is a commentator, technology entrepreneur and is a co-founder of iwantmyname, a New Zealand based global Internet venture. You can follow him on Twitter @GeniusNet

Old Industries Are The Pits

Railways, coal mining and industrial scale manufacturing were all economic activities that had their origins in the 19th Century. This week has not been a good one for anyone employed in those businesses in New Zealand, with widespread redundancies having been announced. The reasons for the collapse of these industries differ, but they share the historical hallmarks of “creative destruction” as expounded by Austrian economist Schumpeter.

Schumpeter was remarkably prescient for a man of his time. Drawing upon the political organisational theories of both Marx and Weber he concluded that innovation was the primary driver of economic change and that every industry was subject to a cycle of emergence, ascendance and decay. He controversially proposed that democracy could never truly empower the ordinary citizen because the electorate were largely ill-informed or ignorant. His predictions that social democratic governments would emerge in the West (rather than socialist revolution) have largely come true.

None of this will be of any consolation to our miners, factory workers and railway engineers. But it does underline precisely why we need to be moving up the value chain through exporting our knowledge rather than relying upon filthy, dangerous and extractive commodity based industries. After more than a decade talking about it, the penny has finally dropped and the government is now attempting to reorganise commercialisation of publicly funded research and has been increasing the investment in research, science and technology. Bullish talk by government ministers about opening up more public land for mineral exploitation also seems to have faded for the time being. That’s why I spend a lot of my time promoting and supporting knowledge based entrepreneurship and emerging technologies and industries.

Paul Spence is a commentator, technology entrepreneur and is a co-founder of iwantmyname, a New Zealand based global Internet venture. You can follow him on Twitter @GeniusNet

Aussie Rules?

My annual escape to the West Island always provides plenty of food for thought and this visit has been no exception. Australia is a nation of rule makers, a trait complicated by the fact that there are both federal laws and those laid down by state governments – and they sometimes do not align comfortably.

Australian Prime Minister Julia Gillard is under seige at present after ushering in new taxation regimes aimed at redressing both climate change and mineral exploitation rights. The Minerals Resource Rent Tax takes a small percentage of the billions of dollars of profits generated from mineral extraction and redirects it towards infrastructure projects and social needs. It’s a brave effort in wealth redistribution by a government with a wafer thin parliamentary majority. The new Carbon Tax creates an impost on the 500 largest polluters in the “Lucky Country” and will largely be passed on to consumers, although it will be rebalanced to a large degree by tax reductions for small business and low income earners.

In a bizarre move, the Queensland State government is in the process of taking the federal government to court, to oppose the resource tax. Queensland has been one of the biggest beneficiaries of the infrastructure spend up that has helped keep the Australian economy bouyant throughout the GFC. The Sunshine State is brimming over with new roads, bridges and public amenities such as the $2 billion regional hospital construction about to get underway north of Brisbane.

Opposition leader Tony Abbott is reveling in the negative media attention, with an election looming next year however. It’s payback time after being narrowly defeated at the polls last time around and therein lies the worry. Abbott is a conservative, former Catholic seminary student turned political hack, famous for rolling his predecessor in protest against his own party supporting a carbon emissions trading scheme. Abbott has a short fuse and a penchant for firing up the red-neck right. He recently called foreign asylum seeking boat people “un-Christian” for immigrant queue jumping and wants the Navy to turn back boats on the high seas by force ( a position that reportedly horrifies senior military analysts). His latest gaffe was to elevate the New Zealand government as a shining example of economic management, when all our performance indicators in fact remain below that of Australia’s.

It remains to be seen who will be making Aussie’s rules after the election in 2013. Whatever the outcome, we should take note of Gillard’s formula for addressing social and environmental concerns in the context of Australia’s windfall from the minerals boom. Our own government has recently backed away from acting likewise in terms of our wealth-creating but polluting commodity based primary industries. Perhaps we should review that stance in light of Australia’s approach.