Category Archives: Technology

Is NZ Missing Out on the “Clean Tech” Investment Wave?

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There was an excellent interview with Nick Gerritsen on National Radio this morning. Nick is a unique example of a Kiwi innovator and entrepreneur who has leveraged both his technology start-up expertise and some deep connections into the U.S. venture capital community to kickstart Marlborough based biofuels company fuels company Aquaflow Bionomics.

The company is reportedly negotiating with aircraft manufacturer Boeing to run an airborne trial involving aviation fuel derived from algae and using his firm’s technology. The ramifications of such a project are mind-boggling. Incidentally, Nick is also a director of Celsias a blogsite and virtual initiative that looks at issues around global sustainability and renewable energy. Celsias invites people to submit projects aimed at “global cooling”.

It was interesting to hear his comments about how truely disconnected New Zealand remains from global capital, especially in regards to the surge of investment in “clean tech” or technologies aimed (in particular) at transforming energy production and usage. Gerritsen reckons that NZ has a natural advantage in this area and claims to already have investors from Silicon Valley in close contact with his own venture. Yet local investors to have overlooked the project.

Why then is the NZ investor community standing off from participating? He thinks that the economy has become distorted to the point where domestic consumption and investment in property far outweighs interest in  industries that generate real export revenues. Hence our distance from capital markets does make a difference in terms of constraining investment in local technologies. Since there is little capital available locally, only a fortunate few who have the skills and networks to tap into substantial offshore investment can really make it big, says Gerritsen. He argued that government moves to cultivate venture capital investment have yet to deliver in any meaningful way.

I have already alluded to the potential that exists for New Zealand technology in renewable fuels. Is New Zealand at risk of missing out on the next big technology investment wave?

[tags] technology investment, biofuels, cleantech [/tags]

Genomics: The Next Technological Frontier?

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When J.C. Venter and his team of genomic researchers completed the sequencing and analysis of the human genome in 2001, the scientific world was turned on its head. Dr Venter went on to found a research institute  to support putting the gene mapping technology to work for the benefit of humankind. The Global Ocean Sampling expedition is a recently completed study by the same organisation, conceived for the purpose of evaluating the microbial diversity in the world’s oceans using the tools and techniques developed to sequence the human and other genomes. In the spirit of Darwin the researchers circumnavigated the oceans of the globe sampling a vast diversity of water-borne microbacteria. The project turned up millions of previously unknown genes and thousands of proteins. That the research was part funded by the U.S. Department of Energy gives some indication as to where this work is heading.

Microbial life forms were largely responsible for the deposition and decomposition of much of the materials that now form the basis of the global supply of oil. So it stands to reason that energy researchers should become more interested in the biogenic pathways that led there. In fact a small New Zealand company has recently received a boost for its gas-to-ethanol technology that employs bacteria to break down carbon monoxide to form ethanol. Influential Silicon Valley investor Khosla Ventures even saw fit to make a substantial investment in the company.

These developments underline the fact that there is a niche market for a range of technologies that arise from research into molecular biology and New Zealand is well placed to contribute because we have a highly regarded research community including the Bioinformatics Research Institute at Auckland University.

Biomatters is another New Zealand company that has identified the potential of this market. The company has recently moved its R&D headquarters inside the Bioinformatics Institute where it collaborates closely at the cutting edge of research. The firm has developed bioinformatics software for molecular biologists and biochemists. Their research software application provides protein and molecular visualisation, literature search help and data storage tools.

The institute is a great example of a public-private partnership that has the potential to spin off some world class research and more projects with commercialisation potential in the future. In fact there has been a shift in the landscape favouring “centres of excellence” as the preferred vehicle for high end innovation. There is a wealth of talent available around the country in applied technologies such as biotech, software, digital media and design. It would be great to see some more of these initiatives spring up outside of Auckland.

Broadband Treading Water

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The news that even third world nations are getting on with the job of rolling out broadband comes as no big surprise. If 300 million global users are now accessing the Internet through high speed networks, then that is a market segment New Zealand simply cannot ignore.

Whilst we continue the academic debate over telco restructuring and the benefits of fibre versus wireless, other countries are getting on with connecting their businesses and emancipating their burgeoning middle classes through fast access to digital content.

New Zealand is brimming over with digital creativity, whilst emerging economies are crying out for it. It’s bad enough that our domestic network speeds are intermittently slow and patchy, but there is clearly now a tangible opportunity cost because our connectivity to the rest of the world is not that flash either.

We have a very fast research network with very little traffic, I’m told there is spare capacity on the Southern Cross cable and there are a number of high speed urban networks in operation or being planned. Surely digital content and applications providers would pay a small premium to be hosted within a high speed network environment with global reach?

What I cannot fathom is with all the smart people involved in the ICT industry in New Zealand, why nobody seems capable of making a good business case. If we don’t do this soon, then the most exciting digital offering to come out of NZ will likely be websites flogging insurance or similar.

Dental Software Deal Hard to Swallow

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Investors may be spitting blood in the wake of a $77 million takeover bid for Software of Excellence (SOE). American healthcare mammoth Henry Schein cites “cross selling opportunities” as the fundamental attraction for absorbing the newly profitable dental software provider. Are they serious?

Henry Schein is a Fortune 500 company with 12,000 employees across 19 countries and a multi billion dollar turnover. Why are they interested in a tiny software company from the other side of the world? The answer is that the cheapest way for a large U.S. company to innovate is to simply buy in what it needs to dominate a global market whilst simultaneously smothering the competition. That strategy makes a lot of sense – for them.

One doesn’t need to look far afield to find several recent examples of American corporations swooping on New Zealand technology firms, buying up the intellectual property and then shutting down the local side of the business. That’s fine if you are a foundation shareholder looking for a nice fat return, but it doesn’t help the economy much. Jobs are lost and profits head offshore. Sound familiar?

But, I hear you say, haven’t cashed up entrepreneurs reinvested into new ventures? Yes they have, but most of those new companies have not yet made a dollar in profit and some possibly never will. For every headline sale of a tech company abroad, there are a hundred firms that never make it. I guess the question we have to ask ourselves is a simple one. Is it an acceptable model for NZ to be an ideas incubator to the rest of the world and for us to accept that we have neither the organisational heft nor the capital required to fully exploit global markets?

Perhaps incubation and sale is a perfectly acceptable model? But it seems to me that you need to be sequentially churning out lots of quality ventures to make that model work for the broader economy. I don’t think we are quite there yet. Whatever happened to the plan to build and grow 100 by $100 million tech companies?

Considering some of the other recent trade sales, $77 million seems a little on the light side. I hope SOE shareholders don’t sell themselves short.

Mobile is King in Developing Nations

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Young people obviously have way too much time on their hands these days judging by the volume of bizarre content sitting around on servers out there. It must be a great time to be a hardware manufacturer. But is anyone actually making any revenue by hosting and sharing the stuff? Perhaps the trick is to guess which kind of hardware is going to win out and become a reseller or manufacturer?

When you think about developing countries, my guess is that mobile devices like phones, notebooks and i-Pods already way outnumber PCs. That leaves us wondering what kind of content sharing and business applications could be usefully deployed to cater for mobile but connected users. I’m involved with a project in India at present looking at this very problem, having last year successfully assisted a New Zealand digital technology exporter to find a product champion in this market. We find that the number of mobile users to (reportedly) be a staggering 115 million, whereas the number of individuals with direct access to a PC is only about 40 million. In fact if you look up almost any source it’s clear where the growth path lies.

With this in mind, a New Zealand startup venture called Voeveo has set out to corner the market on mobile content by devising a trading portal that allows mobile content producers to market and sell their wares online. It will be interesting to see how this evolves, given the high global growth rates in mobile phone usage.

Making Sense of P2P Content

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Looking around at the proliferation of Web 2.0 applications that involve peer production of content in one form or another, I find I’m still scratching my head and wondering where it’s all going. There are now so many YouTube wannabes that you need a specialised search engine just to index all the crazy video content sitting around on servers out there.

On a more positive note, check out the prophetic and highly rated Worldchanging.com, an internet magazine that connects people with ideas, models and technologies aimed at social equity and environmental sustainability. It’s a thoughtful site that shares knowledge rather than preaches and I predict we will hear more about it in the future. Let’s use the Web to do some good in the World.

I’m also currently enjoying exploring the O’Reilly Radar blog that examines Web 2.0 and other emerging technologies. O’Reilly produce research, publish books and organise technology sector events in the United States. However, the firm has a Kiwi connection in writer Nathan Torkington who has recently moved his family back home to NZ. Torkington is also regarded as a leading light in the Perl developer community and a prime mover behind the New Zealand Foo Camp (another form of peer-to-peer knowledge network). His move lends some more weight to the idea that the peer production of content is breaking down old economic paradigms. You can now dream up good ideas and share them just as easily from Washington as you can from Warkworth.

And with weblogs hovering around the 70 million mark, some commentators are now questioning whether there needs to be some rules and etiquette in place to govern blog usage…if we are to fulfil the democratic potential of peer to peer content. A recent incident, in which Digg had to censor postings because of a legal liability, demonstrates just how loose the protocols around peer produced content really are.

Of course it may be a moot point considering how few of the visitors to Web 2.0 sites actually contribute content. The power of peer produced multimedia still resides with a relatively small group of people for the time being.

[tags] Web 2.0, P2P [/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?

Going Global from New Zealand

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Rod Drury, a well known New Zealand technology entrepreneur, runs a great weblog talking all about the challenges and rewards of taking NZ technology to the world. Rod is passionate about the subject and is committed to adding value when he works with technology ventures.

Drury has also become a self-titled “digital socialist” because of his strong views on how the current digital communications network model is failing New Zealanders and why we need to open our digital trade routes. There was also a recent discussion on his blog about the role of mindset in overcoming the challenges of geographical separation.

From an organisational researcher perspective, I agreed that the discourse/mindset, within which an organisation frames its global strategy, does make a difference to how it projects itself. But I also thought that we should not downplay the challenges of small size and geographical isolation. For example, if we truly aspire to increasingly become an exporter of digital knowledge, then we need to sort out some fundamental structural issues like bandwidth and network peering – and fast. 

As a nation I think we tend to lack a collective sense of self esteem. Outside of rugby and the haka, we don’t quite seem to know what we stand for – it’s cringeful at times. On the other hand, I’m fascinated by the biographical accounts of people like Peter Jackson, Burt Munro and Bruce McLaren. All examples of hero innovators from our recent history who (in some way or another) crossed the Valley of Death and went on to build dominant positions in a global niche, based on their creative talents. We don’t give these role models nearly enough public exposure at home. 

There’s a funny TV ad for theft insurance running here at present that implicates “foreigners” who swipe all our Kiwi icons eg. Dame Kiri, Split Enz, Coutts and Butterworth etc. It sums up our current inwards looking mindset. In fact these iconic characters saw opportunities to go global with their talent and were cocky enough to do so.

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

ION e-Letter – March 2007

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dubai.jpgION is New Zealand’s leading innovation and entrepreneurship online community. ION provides an informative and interactive virtual knowledge sharing forum plus a private business matchmaking service for emerging technology enterprises.

www.ion.net.nz

We are hosting this newsletter on the GeniusNet blog to allow participants to opt in and engage in the conversation. GeniusNet is project manager for ION.

Auckland MBAs to Look at Dubai Marketplace

A group of MBA students from Auckland University are heading to Dubai shortly as part of their research practicum. The group are keen to make connections for Kiwi tech businesses and to dig up some inexpensive market research. Notwithstanding the troubles in other parts of the Middle East, the UAE is booming with huge investments in infrastructure planned and a rapidly increasing standard of living. Dubai itself is also a key trading post in the region and garners most of its revenues from trade, finance and tourism – rather than oil.

NZ technology firms interested in receiving research from Dubai should post a response to this thread prior to the end of March, 2007.

ION Connects Mobile Developers to India

We can report that ION has brokered a valuable relationship with one of India’s leading mobile content aggregators that has led to Christchurch company Zodal to break into the world’s second fastest growing mobile market. New connections are around the 5 million per month mark!

The company is capitalising on the Indian love of cricket by providing a nifty multi-player mobile game with the sport as its theme. The revenue-sharing partnership provides access to one of India’s most popular short code service portals.

We are currently in the process of introducing a Wellington company to the same provider, a subsidiary of one of the largest entertainment conglomerates in that market.

Forum Assists Skilled Migrants to Acclimatise

There has been a lot of discussion recently about concerns that skilled migrants are experiencing problems integrating themselves into NZ society. There is a good chance your immigrant taxi driver has a PhD, but cannot find other work. Some give up and return home frustrated. At a time of skilled labour shortages, it seems like a wasted opportunity.

Because of the importance of this issue to the economy, ION has been hosting an online forum aimed at skilled migrants and migrant entrepreneurs. The aim is to provide a collegial environment for knowledge sharing and to tap into migrants’ stories about both the obstacles and successes on their journey to New Zealand.

Danes Leverage Networks to Top EU Innovation Stakes

The European Commission reports that Germany and the Nordic states are leading the charge in terms of rapidly catching up to levels of innovation in the United States. Interestingly, around 40% of Europes business enterprises consider themselves as innovators, with suppliers and customers perceived as the main partners and collaborators, rather than research or educational institutions.

Well established business networks are critical to the task of innovation, hence networking is an area that Denmark has put a lot of effort into. Copenhagen (one of my favourite cities) has a well established ICT Cluster and pitches itself as an enabler for the nearby ‘Medicon Valley’ cluster of biopharmaceutical firms. Medicon Valley is regarded as the poster boy of cluster success in organisational research circles.

But around 91% of all businesses in Europe have less than 10 employees. ‘Mikronet’ is another Danish network established to link knowledge and arts based micro-enterprises. Similar to ION, it runs an online community forum and weblog. Encouraging collaboration amongst smaller firms is seen as an important part of driving innovation and business growth in the region.

Kiwi Steers Canadian Software Venture Towards Success

An ex-pat Kiwi is applying his knowledge of capital markets and technology commercialisation to guide a Canadian software firm to success. Darren Sissons already had a very solid track record as both a VC investor and tech startup guru when he was asked to step in and assist with a new project. Log in and read how he took a technology venture from zero to hero in the highly competitive North American market. This informative article is exclusive to ION. Post comments on the forum or reach Darren here by adding a comment to this blog thread.

Need more info? Lost your password? Want to profile your New Zealand based technology venture? Post a reply to this weblog thread and we will endeavour to help out or to connect you to someone who can.

Why are Java and J2EE Developers Looking for Work?

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I can’t believe that there are Java developers sitting around unemployed, but yes it’s true. Had drinks tonight with a few friends, two of whom are Java developers recently arrived from Germany. Lured by reports of skill shortages and hankering for the clean air and natural environment of NZ, they packed their bags and headed down under.

With good English language skills and a solid track record of projects behind them, you would think they would be snapped up. Not so. They are facing the same uphill battle that many migrants face…no Kiwi experience, no job.

Java has become the “lingua franca” for many important business projects in both the public and corporate sector here in Wellington. With the flow of grads having reduced to a trickle, it would be great if employers could connect to new migrants who have the appropriate skills and attitude. Give these guys a break.

What I can’t believe is that we are wringing our hands and planning an industry initiative to upskill brand new I.S. grads with zero experience and attract them into Java, when there is a steady stream of arrivals from offshore who could fill the shortfall in the interim.

If you are an employer with a position or can help with networking, please email me or post below. If you are a recruiter and trying to fill your quota, please don’t bother me unless you are actually willing to put people in front of some interviews. ‘Nuff said.