Innovation, incubation and competitiveness are firmly back on the political agenda. 2011 has been a busy year, with the government setting about reforming publicly funded scientific research and reconfiguring IRL in an effort to drive more commercialisation activity in the technology sector. The government funded trade agency has also been talking up successes from its incubator programme. In the meantime, the recently formed Productivity Commission has quietly begun developing an academic framework to address infrastructural inefficiencies in the New Zealand economy.
In this context, it was unsurprising to see some recent commentary that was highly critical of the manner in which government gets involved in innovation and business. More specifically, Rowan’s comments alluded to some deficiencies in the methodologies being employed by business incubators when advising software start-ups. Notwithstanding the fact that incubators are generalists and lack the huge depth of experience and background of success that Rowan brings to his own web and software ventures, there were some fair criticisms which pleasingly generated a lot of intelligent follow-up discussion.
Where I parted company with this debate however was when the tone shifted towards questioning the necessity for providing events to engage the start-up community. Most readers will be aware that I’m deeply involved in organising such activities in addition to my role as a co-founder of a couple of tech companies. One of these companies is pre-revenue start-up, the other is growth phase and profitable. Being involved in the community is a deliberate strategy which is partly altruistic (because it’s fun), but also good for business. We are only as strong as the people around us.
The government’s moves to redefine how we approach identifying and commercialising high value science and technology based ventures are oxygen for our economic flame; so too are the various contributions made by formal incubators, informal “innovation hubs”, university commercialisation offices and the various business related events and competitions. The Ministry of Science & Innovation’s report on Powering Innovation even talks about “…the creative connection of talented minds across discipline boundaries“. We do not need to emulate Silicon Valley, but we should learn from that ecosystem model.
Around the world, entrepreneurship is increasingly seen as both a legitimate career option for young people and a growth spark in an otherwise dull economy. At a time when youth unemployment stands at around 30% in New Zealand, we cannot afford to ignore the opportunity of infusing young people with an entrepreneurial spirit. I recently attended the 30th anniversary celebration of the Young Enterprise Trust. This organisation provides entrepreneurship programmes for high schools and counts such luminaries as Rod Drury and Seeby Woodhouse amongst its alumni, demonstrating the importance of a community approach to entrepreneurship education.
Building an entrepreneurial and export focused culture has never been so important as now, with traditional models breaking down faster than ever. Knowledge sharing and relationship building within and amongst our specialist communities is foundational to strengthening our innovation ecosystem. We can no longer afford to operate in silos or to make the assumption that there is only a single approach to building cool businesses that solve real problems and generate economic returns.
The Global Innovation Index judges nations’ progress against a basket of parameters including infrastructure, research output plus market stability and institutional strength. In 2010 New Zealand surged ahead to 9th place out of 125 countries after languishing at 27 the previous year. But in 2011 we dropped back a little to 15th place, or more correctly, we were slightly overtaken by our close competitors U.S., U.K., Ireland and Canada. Whilst there’s no need for alarm, we must remain vigilant that government keeps the right settings in place and that businesses continue to take advantage of global opportunities by leveraging our creativity and growing new knowledge. I remain optimistic.
Last week I attended the outstanding Ice Ideas conference presented by the much lauded Icehouse business incubator which has a close relationship with the University of Auckland and has been involved in raising $50 million in funding for high-tech companies in the ten years since its inception. The incubator has now set itself the goal of achieving 3000 new business launches over the next decade. It’s an unashamed grab for more deal flow and a call to action for the community to support the initiative financially, for the betterment of NZ Inc.
Incubation is certainly a valuable aspect of the overall innovation ecosystem and I applaud these efforts. But we must also ensure that other structural features are strengthened, not undermined. Not the least of these is ensuring that the spectre of a capital gains tax (CGT) on business asset sales never sees the light of day. On the other hand, some kind of modest taxation of gains on speculative property transactions certainly has merit, in order to encourage more productive forms of investment. Unfortunately the two issues, although related, tend to become intertwined in the minds of the public as politicians desperately seek to gain a foothold.
A capital gains tax on business sales would discourage investment and accelerate the loss of talent offshore by taking away one of the key competitive advantages that we have over other developed economies. It may also have a negative impact on New Zealand’s standing as an innovative and business investment friendly destination.
Speaker presentations from the Ice Ideas conference are available here.
It has been a busy year, but I always manage to keep some time free for an important project close to my heart. It involves curating content for the New Zealand StartupDigest. The weekly publication provides a quick reference summary of all the best start-up, technology and innovation events across New Zealand.
StartupDigest was co-founded by Chris McCann who describes himself as an “entrepreneurial activist”. Based in the heart of Silicon Valley, Chris has managed to motivate around 50 writers, entrepreneurs and fellow activists from around the globe to contribute all of the event content that goes into the various digests each week. It’s a much needed (free) service that helps everybody to connect within the tech start-up ecosystem.
You can subscribe to StartupDigest by selecting a country, city or university community that interests you. It is also possible to subscribe to specific verticals such as green tech or mobile, for example. This week’s NZ StartupDigest is available here. If you have any start-up, technology or innovation related events coming up in 2011 we’d love to hear about it. There is no cost for listing an event and it’s a great way to connect with hundreds of people interested in the tech start-up scene.
I’ve been resisting this for some time, but finally succumbed and opened an account at Twitter. And since Twitter now appear to have identified how they will make money, it’s clear that the increasingly popular micro-blogging service is here to stay.
Described alternately as “narcissistic and self indulgent” or (predictably) “the next killer app”, Twitter is like most things in life, there are pros and cons. If used judiciously it can be beneficial. It delivers me links to useful news and articles and it opens up another channel for me to share ideas. According to this explanatory webcast by O’Reilly Media, it’s also a “mood meter” for whatever is going in your sphere of interest. On the other hand, I don’t have any control over what I receive, once I subscribe to another user. So there are the vexing questions of truth and relevance. Do I really need all that additional information about somebody elses lifestream and how much of it is real anyway?!
But the really interesting part about Twitter is that it has the power to aggregate a huge global community. At present Twitterdom is largely confined to geeks, technophiles and early adopters. But that’s exactly what you’d expect at this point in its evolution. I think that will change. What will make the difference is when other communities realise that Twitter can work for them too. For example, there are lots of third world countries where Internet access is poor but mobile phone access is ubiquitous. So what better way to keep in touch with friends and family, when back-packing, than by micro-blogging via your mobile. Maybe even criminal dictators like Mugabe will be unseated by Twitter campaigns in the future?
But what really sold me on joining up was two things. Firstly a friend introduced me to TwitterEarth where you can spot tweets from all over the globe. OK so it’s a wee bit gimmicky, but it demonstrates how interesting new opportunities will spring up from the paradigm shift towards micro-blogging. Secondly I read a great article about how to use Twitter as a marketing tool. Suddenly I could see some value in it for me. It also occurred to me that Twitter is a great case study for the kind of mental transition our business will need to think about engendering as we push our own technology projects out into the global marketplace, such as our recently released site iWantMyName.
Looking forward to some “tasty Tweets” from you all over the Festive Season. And by the way, I promise not to squawk more than once or twice a day.