Will The Real Wellington Please Stand Up

wcc2Our Prime Minister laid bare his regional biases when he implied recently that our Capital city is a hopeless economic case. But Mr Key would do well to remember that the regional economies are subsidising the infrastructure build up elsewhere.

Wellington may have lost a few corporate head offices, but its economy is a lot more diverse and robust than that. Let’s look at what’s really going on in Wellington in the context of high value, export oriented, knowledge based business activity. According to economic think tank Infometrics, in 2011/12 the overall number of businesses in Wellington actually grew slightly, whereas in Auckland the number dropped considerably. More importantly, Wellington has the highest GDP per capita of any New Zealand region. This is hardly surprising when we look at the emerging economic players.

Activity in the screen and digital sector grew twice as fast as the New Zealand economy generally, with film, animation, gaming and software delivering a billion dollars to the region annually. Wellington has the highest intensity of knowledge based businesses per capita, a busy port, two universities bursting with fee-paying foreign students and an enviable and growing tourism profile globally. Wellington also boasted the highest number of New Zealand companies in the Deloitte Asia Fast 500, an international benchmarking initiative that identifies high growth ventures across Asia-Pacific.

The only business types that decreased in Wellington were insurance and financial services. That is hardly surprising when you consider that insurance companies have little interest in the Wellington market post Canterbury earthquake and finance companies have been dropping like flies everywhere anyway. No great loss. It’s also no secret that government services have been operating with sinking lid staffing policies for some time amidst austerity measures. But despite fear mongering by public service unions, the actual number of staff affected has been minimal. Government sector makes up only about 10% of the regional economy (about the same as tourism income).

Many of us have invested a huge amount of effort into building creative communities in our region that have underpinned the growth of high value, knowledge based businesses. In the context of a sluggish global economy, Wellington has held its ground relatively well, so it is certainly unfair to make comparisons with the other main centres, which have entirely different contexts at present. The government should also be reminded that the growing tax take in the regions is supporting spend-ups in other parts of the country.

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

 

Shifting The Economic Goalposts

Economist Brian Gaynor’s recent article on why we will never “catch up” to Australia was another sobering reminder of the hard road that New Zealand has ahead. Invoking a sporting analogy by beating Australia may be a popular rally to arms, but it focuses public attention on completely the wrong set of goalposts.

Another sobering occasion was when we sadly learned of the passing of Sir Paul Callaghan, one of New Zealand’s most passionate science communicators and technology entrepreneurs. Sir Paul lived every moment and notably even turned his cancer treatment regime into an experiment. More importantly he was one of the most ardent promoters of science and technology commercialisation as a means of growing New Zealand’s economy.

“Sir Paul was a true public intellectual who earned the respect of everyone, including those who disagreed with him”, stated the government’s sternly worded Ministerial press release reporting news of Sir Paul’s death. Curiously, outside of Cabinet, I can’t name a single (intelligent) person who actually disagreed with his thesis that New Zealand urgently needs to ramp up economic growth through more investment in research, science and technology commercialisation, rather than continuing with an over-reliance on flogging unprocessed, environmentally unsustainable dairy commodities to the world.

To its credit, the government has finally moved to increase research funding and there are more frequent mutterings along the lines of “doing something” about uncovering intellectual property locked up within our many publicly funded institutions. But those of us who looked on frustrated over the last decade as the “Knowledge Wave” withered on the vine, are becoming more and more concerned that the opportunity to fully promote science and technology as an economic driver is disappearing.

Beyond pumping more cash into research, we need a huge cultural shift involving both governmental agencies and the public mindset. As clean-tech entrepreneur Nick Gerritsen stated at a recent seminar, “we need more millionaire scientists and fewer millionaire sportsmen”. With the loss of Professor Callaghan, I’m left wondering who will be brave enough to pick up the mantle.

You can follow the author on Twitter @GeniusNet

Building Our Innovation Ecosystem

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.

AMD Opens Doors For Fingertapps

Unlimited Realities is living up to its name. Last year the company inked a deal to provide its gestural interface software for integration into Dell manufactured computers. Now the door has been opened by computer chip maker AMD. Fingertapps was showcased this week at the AMD Fusion Developer Summit in Seattle ahead of its rollout with AMD’s next generation of chips for Windows based PC and tablet devices.

The company, which has development offices in Wellington and Palmerston North recently appointed former Kiwibank CEO Sam Knowles as chairperson. It now seems to be on a rapid growth trajectory, having been one of the earliest providers of computer touch screen technology. We saw the “unlimited potential” of the product back in 2008 when we invited Unlimited Realities business development manager Ben Wilde to show off Fingertapps at Wellington to the World.

New Zealand companies are becoming increasingly adept at forging relationships offshore and the U.S. computing market is generally the most obvious first port of call. Fingertapps is yet another great example of high flying Kiwi technology going global from New Zealand.

Startup Weekend Comes to New Zealand

Startup Weekend is a life-changing creative workshop for web entrepreneurs that has been held all over the world from Boston to Bangalore. Participants have 54 hours from 6pm on the Friday evening to strategise, build and launch a brand new web business. It’s a pressure cooker event that ensures everyone leaves with new ideas, brilliant personal networks and maybe even a new business. The great news is that the very first New Zealand Startup Weekend will be held in Auckland on 1st-3rd of April.

About a year ago, Startup Weekend global director Marc Nager approached me about bringing the event to New Zealand. But anticipating a very full year at Unlimited Potential plus lots of hard work growing iWantMyName, regrettably I had to decline. So I’m really pleased that Jason Armishaw and his team have stepped forward and I’m chuffed to be invited along as an advisor to the initiative. I’m looking forward to rolling up my sleeves and getting stuck in with some brain-storming on the day. It’s an opportunity for me to share some of the lessons learned within a high growth web start-up business and no doubt to learn heaps myself from a bunch of much smarter people.

With the event only a few weeks away, we need to muster resources and get folks signed up pronto! Developers, designers, business strategists, marketers, investors. Get your dream team together or just rock up by yourself and be ready to contribute your particular skills. If you know of any companies that can help out with some resources please contact Jason as soon as possible. There will be media involvement, so it’s a great opportunity to share what you do. See you there.

100% Puree

The recent media clamour criticising Tourism New Zealand’s new campaign threw up some intriguing responses from a seemingly random selection of  “marketing experts” who had been canvassed for their views, but who completely missed the real problem with the new approach.

With New Zealand already ranking as third strongest “country brand” for tourism last year, you would think that Tourism New Zealand might think twice about giving up on their successful twelve year old promotional style that focuses on New Zealand’s natural attributes such as landscapes, flora and fauna. 100% Pure New Zealand has evolved into 100% Pure You. I’m not sure if that is a reflection on our increasingly tenuous environmental credentials or the fact that the next generation of global travellers are more self-absorbed. Perhaps both.

The new campaign is obviously a response to the Aussie battle cry “where the bloody hell are you?”. All of the actors in the video clips are youthful, white, middle class, which not only belies the multicultural nature of Australian society to which it is targeted, but also politely ignores the fact that the fastest growing inbound tourist sources are in fact other places like China and India. The new campaign strengthens the message that New Zealand is all about hedonism and short term gratification – a message that resonates with young backpackers.

Unfortunately backpackers have the lowest per diem spend of any segment in the market. Shouldn’t we be focussing on attracting more of the upper end of the market? Don’t get me wrong. I’ve backpacked all over the world myself and it was character building and great fun at the time. I’m not for one minute suggesting we limit access on the basis of disposable income. I’m simply suggesting we revisit where our tax dollars might best be spent for greatest return.

Tourism is a huge part of the New Zealand economy, but it has a considerable environmental footprint and creates little ongoing value. It’s all about extracting short term gains from renting as many seats as possible. Jobs in the tourism service sector are generally amongst the least well paid. Perhaps we need fewer “freedom campers” pooping on our roadsides and more doctors and their families from Bangalore enjoying our sparsely populated geographic beauty. Dare I suggest it, but maybe we could also get them thinking about investing in New Zealand, whilst we have their undivided attention.

What’s Wong?

Pansy Wong was New Zealand’s first member of parliament of Asian descent and our first Asian Cabinet Minister. By all accounts she has been an effective and hard-working representative. Her early departure from the halls of government is an unnecessary loss and points to why there is such a dearth of talent amongst our legislators.

Whilst Pansy Wong was deciding her future over the weekend, Labour Party President Andrew Little was denouncing Labour MP George Hawkins as a “lightweight” after the retiring MP scuttled a bid to install a pro-union candidate in his safe Manurewa seat. Little is quite right however, Hawkins has contributed very little to the business of government of late. But perhaps Little should have kept this view to himself. No matter. What Hawkins lacked in intellectual capacity he made up for in much needed Labour votes, which is why he was kept on well past his use by date.

Wong resigned over the media clamour about her husband doing some business on a tax-payer subsidised trip abroad. Now she wants to retire so she and her husband can get on with their entrepreneurial endeavours out of the public eye. Who can blame her? But shouldn’t we be encouraging our MPs and Ministers to go out and represent the country? If they pull in some more business for New Zealand, how is this a bad thing? 

With the departure of Wong, Parliament will become less diverse and an even more unwelcoming place for high calibre individuals. Meanwhile, plonkers like George Hawkins will sit quietly on their bottoms waiting to collect fat retirement pensions. Somehow this doesn’t seem right.