In the mid 1970s, few would have foreseen that 25 years later a low profile Finnish company called Nokia would be the world’s largest seller of mobile phones.
As we look forward a quarter of a century, it could be that some New Zealand innovation is leading the world.
It’s not too farfetched. In 25 years, electrical cords could be a past relic as the world uses PowerbyProxi’s wire-less power transmission technology. Or a small industrial membrane system invented by Hydroxsys may have cleaned up agriculture and mining operations around the world.
While we are seeing some impressive activity in the technology sphere (the NZ Venture Investment Fund’s portfolio alone encompasses over 150 innovation companies), where will major growth and innovation will come from? What are the industries and technologies that will change the New Zealand landscape over the next 25 years?
The game changers for New Zealand will come about through innovating across different sectors, making the most of our population’s diversity, and forging high quality international trade and investment relationships.
We led the world with our China free trade agreement, and now with Taiwan. The large Asian economies will be driving the world’s economic growth over the next century. Over the next 25 years, we must continue to forge and build these relationships, not just in the trade context, but also the investment partnerships we form. It can only be positive.
We tend to have an all or nothing approach to offshore ownership.
We need to be flexible – better owning 10% of something huge, than 100% of nothing. Partnering with international investors retains an ownership stake here, helps create jobs, and enables us to benefit from the wealth created (even more so if our superannuation and Kiwisaver funds are involved).
Innovating across sectors is where the biggest gains can be achieved. Icebreaker does this very well – combining primary sector resource – merino – with textile and brand innovation. Christchurch company K9 is combining primary products with value-add processes to create a high quality natural pet nutrition brand. It is about brand creation, and developing highly differentiated high-end products which meet discerning global consumer needs.
In 25 years, we will have worked out how to make the best of cultural diversity in the workplace. Cultural stereotyping is still a barrier to many first and second generation Asian migrants who have the potential to become major contributors to the success of NZ businesses operating in the greater Asia market.
Internationalisation of capital markets dramatically changed the investment landscape in the 1980s, with the rapid and free flow of capital across borders. The free flow of information will continue to grow and the flow of people and talent will become faster and easier.
New Zealand, while an attractive place for migrants, is in danger of becoming a retirement village for the wealthy, unless we change our wealthy migrant policies.
If the rules required that 10 percent of wealthy migrants’ investments have to be into growth companies via venture capital and private equity funds, this would bring $25-$30 million a year into the sort of growth companies which could make a real difference.
Let’s focus on attracting wealthy and entrepreneurial migrants who are willing to invest in and grow world leading businesses from New Zealand.
Franceska Banga is the Chief Executive of the NZ Venture Investment Fund.