By Gareth Vaughan
Forget the cows , vineyards, trees, oil and tax cuts.
If New Zealand is to climb back up the OECD ladder in terms of Gross Domestic Product (GDP) per capita, what we really need is to innovate and the best way of doing this is by building a truly great university on the Auckland waterfront, says Kiwi expat Michael Parker.
Parker, originally from Wellington and now a Hong Kong-based equity analyst, was in Auckland over the weekend discussing his book The Pine Tree Paradox; why creating the New Zealand we all dream of requires a great university with an influential group of business leaders, academics and others including the National Party's Auckland Central MP Nikki Kaye and University of Auckland vice chancellor Stuart McCutcheon.
The book goes as far as calling on readers to donate money towards the project which Parker envisages as being centred around a piece of breath-taking architecture on the Auckland waterfront along the lines of Bilbao's Guggenheim Museum or the Sydney Opera House.
Aiming high
His idea involves creating a new, private research focused university good enough to be ranked in the world's top 20, or preferably top 10, with the Auckland Council donating Ports of Auckland land with the port shifting, the government tipping in about NZ$220 million of taxpayers' money as a statement of intent to get the building up, and an endowment fund raising about NZ$2 million a week for 30 years to get the university to the level where it can drive an "innovation cycle" with California's Silicon Valley the model.
Parker told interest.co.nz in a Double Shot interview the creation of a great building on our biggest city's waterfront as a university would send strong messages to both people overseas and New Zealanders themselves.
"I think there is a clear signaling opportunity," Parker says. "You put a Sydney Opera House style building on the waterfront and you make it the university."
"That sends a bunch of messages. The first message it sends is to New Zealanders themselves. 'We’re serious about this. We’ve looked at all the other opportunities to return to the top of the OECD rich list, we’ve looked at the other opportunities to become as rich as Australia by 2025. That’s not going to happen, but 2030 or 2040 is a possibility but only if we focus on innovation'," says Parker.
"How do we do that? We need a great university and if we’re going to have a great university, let’s not look for the cheapest way to do it."
Building such a university would also send a strong message overseas.
"You want to put something on the waterfront to house this university that tells people when they see it that they think to themselves ‘wow, that’s their university? They are really serious about education'."
What New Zealanders want
Parker said there seems to be tremendous consensus in New Zealand in terms of the society we want.
"Egalitarian, democratic, green, liberal, a meritocracy, a couple of weeks at the beach every summer, and wealthy," Parker says. "The problem with that dream is if you look at OECD statistics in terms of GDP per capita, the country has been on a steady downward slide since the 1950s. (Fifth in 1960 to 27th in 2008)."
"You can make an argument about the difference between being eighth in the world and 12th in the world is really about cultural preference, but the difference between eighth in the world and 20 something in the world starts to impact life expectancy, quality of life, infant mortality," says Parker. "The core issues that really matter and start to have an influence on whether that kiwi dream is actually possible."
"So I make the argument that since we live in a society where there is really broad agreement in terms of what we want the country to look like, it then should be relatively simple to set some long term goals in terms of how we get back to a level of broad based prosperity that will drive the kiwi dream."
'Exporting food won't make us rich'
Exporting food to the world won't make us rich in the sense of outperforming the other countries in the Organisation for Economic Co-operation and Development (OECD), Parker argues, whether it's dairy products, wine, fruit, trees or anything else. To back up his argument he uses the example of pine trees.
"You can grow a pine tree in New Zealand seven times faster than anywhere else in the world and that feels like the kind of competitive advantage that should make us rich, it should make us the Saudi Arabia of timber," says Parker. "Instead what happens is that if you’re a forestry company in Canada or the United States, Scandinavia or Russia even, and you’re facing this disadvantage in terms of growth rates, you simply plant more trees."
"So if you’re a Canadian forestry company you plant seven times the trees and all of a sudden our competitive advantage goes to zero and as a result the margins that we can derive from forestry, similarly, become very, very thin. And I make the argument that it is the exact same thing with kiwifruit, with peaches, with apples, with crayfish, with wine, with ostrich, goats, lamb, all of the agricultural products that we’ve talked about ever since I can remember and I’m 40."
Furthermore he argues that marketing or positioning products as premium ones won't make any difference.
"Fundamentally that comes down to even if you position a product as being better, if you can grow a great peach in Cromwell, you can grow an equally great peach in California or Chile so you’re now competing in terms of what’s your premium, you’re competing with a Chilean orchardist, and the made in New Zealand sticker might get you a premium but it’s not going to get you much."
'Of five options innovation the best for NZ'
Parker argues there are five ways a country or an economy can get rich. These are through exploiting natural resources, agriculture, by manufacturing, by providing services, or through innovating. He says sending iron ore or copper or tin to China or exploiting oil reserves is a way to get wealthy, but to do this a country needs to actually have the resources. New Zealand doesn't have these sorts of natural resources to the extent that would enable an economic growth rate faster than the best performing economies in the OECD.
Meanwhile, to be wealthier through manufacturing a country needs to have a very large uneducated population base with very low income levels.
"So for China, Bangladesh, India and Vietnam, that’s perfect. For us our unskilled wage rates are very high on a global basis and long may that be the case. So you really have to say manufacturing isn’t going to get us there," Parker says, adding that the average wage of Chinese iPhone makers is about NZ$500 a month.
And with services you need a large population base in close proximity. This works for the likes of Mexico and Spain in terms of tourism, with relatively low incomes and large populations nearby that like to get a tan. New Zealand doesn't have a big population base nearby.
"So the only thing that’s really left is innovation and this is a sector that didn’t even exist as a separate from the other four till maybe 20, 30 years ago," says Parker.
"Apple used to make its computers in California. It now designs its computers in California and makes them in China. So you go from the process of making stuff to designing stuff."
If you run through the other four options, as an innovator with natural resources, for example, you don’t drill for oil. You make a blowout preventer that actually works. With agriculture you look to improve technologies, as Gallagher has done with fencing, with services, you look to a travel aggregation website rather than simple tourism, and with manufacturing you need to develop a product yourself.
"This idea of innovation (for New Zealand) is through a process of elimination," says Parker. "(It's) what’s left. It’s also well suited to our personality type. As a country we like to think we’re smart, we like to think we’re nimble, we like to think we’re inventive. That’s great."
"This should be our century if that’s the case because innovation is where you really create those premium margins."
'A great private university the key missing ingredient'
Parker, who worked in San Francisco for four years, notes the similarities between Northern California in terms of climate, life style involving the likes of good food and wine, sailing, hiking and skiing, and friendly and outgoing people. However, one key factor that has helped drive the success of Silicon Valley in producing massively successful companies like Google, Apple, Facebook, Cisco Systems, Twitter, Oracle, e-Bay, Intel and Hewlett-Packard, is missing from New Zealand.
For although Northern California has Stanford University and the University of California, Berkeley, New Zealand lacks a great university.
"The difference between Northern California and New Zealand in terms of attracting talented, well qualified, ambitious people, is do you have great universities here that will draw people in at the age of 18 or at the age of 25 when they’re looking to do a PhD, feed them into a cluster of technology companies as happens in Northern California, and provide them with a lifestyle that even once they reach a level of success they don’t want to go back home again to from wherever they came from across the globe," says Parker.
"(Rather) they want to stay in Northern California, start their own company and achieve their own level of success and on, and on and on. And you look at the New Zealand experience and the thing that we’re missing, are those great universities."
Parker says that although some of New Zealand's universities such as Auckland and Otago may come in somewhere in the top 100 or 200 in various international rankings, what he's talking about is making the top 10. He argues none of our existing public universities will ever achieve this and there are structural reasons for this.
"The first one being that you have to cut the baby eight ways. If you were to get the government to agree to an increased level of funding (for say Auckland) the obvious question from Canterbury, Otago, Victoria, Lincoln, would be what about us? That’s the first problem."
The second problem is you'd be looking at a "step change" in the quality of professors and PhD students so from an existing university you would have some push back from those already there. And the third problem is if you’re going to seek to raise hundreds of millions of dollars - or even billions -over time and aim to compete at a global level, people will ask why the government is continuing to subsidise this institution when it already has money in the bank.
"A university that has been part of the community for 125 years has a broad number of local stakeholders," Parker adds. "Convincing them that the single most important task, perhaps the only task, is to develop to get into the top 20 in terms of rankings, is difficult. So in my view the easiest way is to start is with a green field approach. Start from scratch and focus on becoming a research university."
'An amazing waterfront'
And it needs to be on the Auckland waterfront with the land is currently used for the port or bars.
"We have this amazing waterfront in Auckland and it has currently got a few containers and the odd ship turns up. Every city in the world sees that transition from its waterfront being used as a port to its waterfront being used as something that’s more profitable or more beneficial. Because cities finally decide that the best and highest use of their waterfront is something other than containers," says Parker.
"That process goes on everywhere in the world and it will probably happen in Auckland."
Building a great building in a great location will help with both recruitment of staff and students, and donations.
"From a recruitment perspective you look at PhDs, you look at 18 year olds looking at where they want to go to university, you look at administrators, you look at established professors, you want them day dreaming all around the world about 'I want to work in that building'," says Parker.
"Or from a donation perspective, or an endowment perspective, 'I want my name on the front of that building'. That’s how you really capture attention and generate momentum. You need to demonstrate that this is real. Concrete, glass, steel tells people, sends a message that yes, you can make a donation to this organisation. They are real, they are going to be around in 10, 20, 30 years time. So that first injection I think comes from the city of Auckland and ideally from the New Zealand government."
'Tap the expats'
From there Parker suggests university graduates and expatriates like himself can be the initial targets for fund raising.
"If you are like me a New Zealand expat living overseas, you pay no income tax in New Zealand, you’ve probably paid off whatever student loan you had along time ago, and no one is really tapping you on the shoulder and saying ‘don’t you think you should make a contribution?’"
The university project would supply them with a big idea that people's donations can gravitate to.
Parker says his only contribution to the idea is "soaring ambition: as he has no experience fund raising or running up or establishing a university. Although the idea is merely at "the embryonic stage", he's very serious about it.
"The thing that I find most interesting when I’ve been engaging with people about this discussion is that 98% of my argument I can get complete agreement on," says Parker.
"No one is defending cows or trees as a driver of New Zealand out performance over the next 30 years. Nobody is suggesting that services or manufacturing or tourism, or natural resources is going to drive our economy."
And there is a broad view that the global economy is going to continue to get bigger. It’s not always going to be about gold and bottled water as it is right now and that innovation is important. So you can get 98% of the way with 98% of the people I think there’s tremendous consensus about that in New Zealand.
What's needed now is the execution of the idea.
"We’re starting to have that dialogue right now."
This article was first published in our email for paid subscribers this morning. See here for more details and to subscribe.
60 Comments
Good interview.....some real outside the box proposals.
sticking points on... "No one is defending cows or trees as a driver of New Zealand out performance over the next 30 years. Nobody is suggesting that services or manufacturing or tourism, or natural resources is going to drive our economy."
hmmmmm...who have you been talking to...?
John Boy thinks we should be a Financial Hubris......I think we already are...!
Many of us have been banging on since forever about New Zealand and its hostile attitude towards education. That attitude will have to change before New Zealand can or will have a hope of advancing educationally. So long as the majority view education as an unjustifiable extravagance, New Zealanders will remain a pig ignorant lot.
Sod off, we are all to busy cheering the All Blanks and stuffing McD's and stainlager to worry about intellectual pursuits.....thankyou.....
Seriously, I roll my eyes when I overhear many fathers blathering about the all blacks or gathering to watch a game....or insisting the son(s) play rugby as "its in the blood".....what a load of bollocks.....I walk away.....kids get taken to music lessons or anything else I can afford that stimulates their brain....
regards
I take umbrage with that Steven as I played at Senior Club level and have a reasonable command of a couple of musical instruments having played professionally for in excess of twenty years.......
Unless you have ever played the game...you may not necessessarily get it...even if you have.....you may not have connected with the game ....
so you know ..! no need to go all "bourgeois." on the rest of us.....
And stop rolling your eyes too...some of the Dads might be under the impression your on the prowl.
"The book goes as far as calling on readers to donate money towards the project which Parker envisages as being centred around a piece of breath-taking architecture on the Auckland waterfront along the lines of Bilbao's Guggenheim Museum or the Sydney Opera House."...what book.....oh the book he wants us to buy...of course...silly me.
The construction companies will push this idea right up the hill. So will the mayor up there who seems made of other people's money....and the academics like Roger Kerr will leap aboard the bandwagon Tamberene in hand...what a party oh what a party...hang on...who's bloody paying for all this? What guarantee is there it won't be a dud..a big fat waste of borrowed cash...a hole on the waterfront to tip money into....a scam circus for future rorts.....
Send your donations to Wolly c/- BH at interest .co
Has this guy not been listening to the great John Key and alike? The RWC and the CHCH are going to save us all! ;-) joke
He has some good points yes, but fails to realize that:
1: GDP is a stupid measure
2: The NZ agricultural and dairy products do constitute great "manufacturing" and our pine is some of the best in the world, better than where it is native from here in California
3: We can't all be designers or use IP as a income because simply because it makes only a handful of individuals wealthy. Example: Apple makes computers in China and Americans max out their credit cards to pay for them is not a worthy longterm strategy as we can clearly see even with a global product where just about every western economy is borrowing more than it earns.
4: He seems to be saying NZ needs more niche products, only problem is a niche product is soon copied and then only IP lawyers get rich.
5:NZ universities like so many others around the world have become nothing more profit making "give em a degree" farms but not enough jobs exist for all those people who have those qualifications.
So, my suggestions for WORLD economic growth in the coming decades is this. Intellectual Property rights are holding us (the human race) back. If every country could eliminate having monopolies on products then we could simply have a ever increasing and improving market place that benefits everyone on the planet and the human race as a "collective" FASTER! . Is this not the same basis that implies that every natural resource on this planet is collectively ours to utilize, protect, & conserve for each new generation ? So is it not the same for IP? No invention or great idea has ever come from living in a vacuum
Just a thought.
Excellent points made above, the innovation we need today is around improving the things we already do well or already have a competitive advantage in, It is about staying one step ahead of the competition.
My business is built on a need for New Zealand to be able to export fresh wholesome food to distant markets. We are one of the best countries in the world at that particular enterprise and as a result I am now selling the same technology into the UK thereby generating that oh so needed foreign exchange income.
Necessity is the mother of invention, not universites, the guys in the US with the PhD's at the Universities there all want to know how we acheive the world leading results we do with our technology but guess what, I'm not telling them!
Couldn't agree more about IP lawyers. We spent millions trying to protect our developments with patents and all we did was tell our competitors what we were doing and how to do it.
Now if you want to know you need to be potential customer and sign a confidentiality agreement that threatens you with bankruptcy if you tell anyone else or try to reverse engineer our developments.
The money we used to waste on IP protection is now spent on the next system improvement to eliminate another problem we have identified in our customers businesses thereby creating another adjunct (read competitive advantage) to our core system. That is true innovation.
By the way I didn't go to university and neither did most of the guys who set up and/or own those successful tech companies in Silicon valley so I fail to see the connection!
You know great universities are not about lots of money, flash buildings, fantastic research facilities; that’s all a given. (Except for the buildings. Some are absolute shit). They are actually about great people. And based on my experience of having worked at the University of Auckland as well as one of the world’s top research universities in Boston, I can tell you now, sadly, that based on my experience New Zealand will never have a truly great university.
The psychology of the New Zealander, the culture of our collective, the ecosystems in our workplaces, the narrative of our laws, none of these are conducive to supporting, sustaining or growing a truly great research university in New Zealand. And until those change (which they won’t) aspirations, no matter how well intentioned, of establishing a top research facility here are doomed to failure. That’s not to say we can’t have pockets of excellence or some very talented people at our universities. But sufficient in number of them to create the critical mass required to spark something really special, forget it.
Wouldn't a better use of that prime waterfront land , be to construct a new rugby stadium ....... hmmm ? .... put up a fence of course , to stop the balls going into the harbour ......no one likes to play with salty balls , male members of the NZ Labour Party excepted ....
It was worth visiting this thread to see that comment.
You SAID it, David B.
Ask another great NZ-er with some ideas very similar to what this thread is about, Sir Paul Callaghan; about our Nuclear-Free legislation, and what that does to attitudes to "science" and "technology".
NZ will never have a great uni while we are a society of Luddites. A large proportion of Uni education in NZ now, is a total waste of money; the graduates will never contribute enough to NZ to justify the cost of their education. Many "graduates" actually join the great brick wall of obstruction to progress and wealth, in bureaucracies. The Clark Govt was great at creating these sorts of McJobs to poison the chances of any future Govt of actually turning the economy around.
THIS recently started Uni in the USA sounds promising:
http://www.academia.org/hope-change-in-harrisburg/ But this sort of thing is never what the "establishment" is talking about, when they sound off about "higher education" and how wonderful it is. It is all about a few years of "fulfilling a dream", studying useless impractical and utopian subjects and then joining the unemployed, under-employed, or the raft of obstructionist jobs in the State. I say Student Loans should be subject to a few years working and paying into a "Student Loan Savings Account" first. I bet some of the utopian subject choices would drop off if the young idiots had a taste of real life practicalities before getting to go to Uni.Time for Wolly to float his version of the Kiwi century...yessir and only 89 years left too...
The future wealth is in the test tubes!. Science is where it's at. 99.99% of the scientific discoveries have yet to be made in the field of plant microbial medicines and yes there's more...the other 99.99% of discoveries are hidden inside the fauna right here on these shakey islands.{data comes from rubbing two braincells together} and in the sea
Just look at where the Manuka honey is taking us...what about seaslug slime and crayfish pee...so many chemicals out there waiting to be turned into billion dollar a year export stuff the Chinese just gotta have...
I agree with you there, Wolly. In fact one of the Noble Laureates christened this century the century of biology, whereas last century was the century of physics. And of course what he meant by that was the just as fundamental breakthroughs in our understanding of physics had transformed the lives of humanity throughout the course of the last century in totally unexpected ways, unimaginable to people of the 19th century, fundamental breakthroughs in biology will transform our lives in this century. But not in NZ because the fruits, flakes and the greens won't allow it to happen here.
One of the areas in which I am personally very much looking forward to is the marriage between biotechnology, in particular genetic engineering and engineered biochemistry, with combinational chemistry. That will be a transformational space to watch in my view.
I wrecked me Gummy back , helping someone build their mudbrick house .... and tofu makes me puke .......
..... I'm with you DB , I'm optimistically looking forward to a bright future where combinations of GE / chemistry / nano-tech & bio-tech push us into new frontiers .
The Greenies , they can take their tofu , and jam it where their ultra-left-wing socialist ideals begin & end .
Great Idea ... BUT
It will involve a mindest change with a focus on degrees in the hard sciences.
PhD's in Physics, Engineering Biology, Chemistry involve YEARS of very hard work and only a few have the skills and commitment today.
We excel in B Com LLb's ... and anything that doesnlt really stretch the mind but offers a well paid future in treaty settlements and ETS processes.
Not a good background for the next Apples of this world.
First step would be free fees for the hard sciences - and make the other students pay higher fees to compensate.
No cost to Government and an immediate signal to students the world has changed.
Grandiose ideas with some merit, but unfortunately off the mark in a few areas. Good archictecture is not about a shiny monolith, but about the space inside and what happens in that space. If you really want to stamp your mark then what about a rammed earth university?
I would suspect that universities today are very different to what Parker experienced. As pointed out they are businesses that have become an extension of high school, rather than extended learning. They are too focussed on the piece of paper outcome, than the knowledge and its application.
Get back to the model of ancient Greece, where lectures are a public affair where students can pick and choose those that are most interesting to them. That then puts some emphasis back on the quality of the lecturer, because otherwise no one will turn up.
He is right in one way, about getting the foundation right. But it is the nature of that foundation that has gone awry in the last 100 years or so.
And how the hell are the ever going to get a building sorted for the water front, look at the bull**** that transpired over the Queens wharf competition. Then they scrap the competition and contract out the job to mates that immediately breach the terms of the design brief. What a joke.
I proposed a floating 100,000 seat stadium very early on, instead of the upgrade to Eden Park. I refined the idea for the Queens Wharf competition.
If they had done this they could have sold the stadium instead of ending up with a dinosaur that will never get used to capacity again.
One of my favorite commentators .. ( Richard Duncan ) has written a book called the Corruption of Capitalism.
he suggests that USA can regain its economic supremecy by being the one that comes out with the next major innovation.
The 3 areas that he suggests could fuel the next major innovation/growth cycle are :
1/ Solar energy
2/ Genetic engineering and biotechnology
3/ Nanotechnology
Just like the Space race in the 1960s' brought together the "greatest minds under one roof", along with huge amounts of research dollars from Govt.. .. he suggests that Govt should step in again to provide the direction and investment..
I can't comment on his choice of technologies... but I do agree with him that it is Americas only hope of growing its' way out of its' current mess..... It has to come up with the next major technological/innovation paradigm.
The same principles apply to NZ.... (we could do this on a smaller scale)
Hoping to grow our way out of our problems in the same ways we did in the past is just such plain madness... Borrowing to generate that growth is even more crazy..
Another new book is
"City Dynamics and the Coming Capitalist Revival"- By John Montgomery, Urban Cultures Ltd, UK and Australia
(John Montgomery's web site is www.urbancultures.com.au)
Countering the many claims that the best days of capitalism are over following the economic meltdown of 2008 onwards, this book provocatively argues that a new golden age of capitalism - or upwave - began around 2002, and despite the unstable markets in the western world of the past few years, this upwave will produce previously unseen levels of wealth creation during the next twenty years.
Basing this theory on the commercialisation of new technologies and the growth of new markets, the author claims that these positive trends are key to economic recovery in the US, UK and Europe. It argues that the true problem facing some countries in the West is government debt and that economic policy is of limited use in flexible and adaptive economies, where innovation, entrepreneurship and private investment should be encouraged in a range of regions.
This highly original book will interest those concerned with national economies, nation states and urban policy.
· Contents: Prologue; The long waves of capitalist economic development; The problem with economics; Real economic development; Growth and decline: part 1 merchants and mercantile capitalism; Growth and decline: part 2 industrial capitalism and the new economy; The new upwave; Epilogue; Bibliography; Index. · Reviews: 'John Montgomery is one of Australia's most original and interesting analysts of contemporary life. This important new book audaciously peers beyond the gloom of the recent banking crisis to assert that global capitalism is alive and well and that a new wave of growth and prosperity is already under way. Politicians as well as economists should read it.'www.petersaunders.org.uk
'The commentary on the 'Global Financial Crisis' has been dominated by economists so it is very welcome to have this broader perspective from John Montgomery. There is no doubt that we need an analysis of this kind and it is very refreshing to have the crisis located in such a historical context. The author establishes fascinating links to the city scale and provides a very enjoyable, erudite and provocative read.'
Andy Thornley, London School of Economics, UK
'John Montgomery's good news is that the next economic 'upwave' will come. In answering the question about which cities will benefit, the book takes us through a sophisticated review of what makes cities work, drawing on his depth of experience and delivering the argument in his lucid and forthright style.'
Peter Newman, University of Westminster, UK
· This title is also available as an ebook, ISBN 978-1-4094-2227-3
Innovation is all well and good, Apple a great example, however without the capital your great ideas/products become someone elses money spinner. The partial buyout of F&P by Haier another sorry story in our long list of loss of ownership.
An economy will inevitably decline (actually or relativley) if it fails over the long term to generate a surplus i.e. capital. We've been running current account deficits for forty years - not only our great ideas and companies but key resources and infrastructure are now in foreign hands. Our surplus - such as it is - now flows to the offshore owners of our loans and best money generating businesses and resources.
Contrast this with the German economy, great companies, innovation and a skilled workforce - all underwritten by a strong savings culture. Innovation is wasted without capital.
A great example of our lack of capital.
"Pacific Fibre is planning fibre-optic links to transport data between Auckland, Sydney and Los Angeles, but is still gathering capital for the US$400 million project.
The company was part of a New Zealand information and communications technology trade delegation to Shanghai and Hangzhou last week which met operators such as China Mobile and China Telecom.
Chief executive Mark Rushworth said discussions with potential equity investors in China were "very successful".
"There's some strong Chinese interest."
Trade Minister Tim Groser said he supported Pacific Fibre and confirmed he had introduced the company to a Chinese investor with deep pockets - "We are talking serious money here."
No Tim, what we're talking here is Chinese investors clipping the ticket on every Kiwi internet user for the foreseeable future. Meanwhile our Government is, every fortnight, just to pay the grocery bill, borrowing enough to build this thing. So we end up paying, ad infinitum, both the Government bond lenders AND the Chinese owners of our infrastructure. Disgusting!
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10746997
It'll be Sir Tim soon. Rewards for achieivng sooo much. The lesson Kiwidave is clear...New Zealand is not a country in control of it's own economy...that is done by the banks and suppliers of credit. Just ask bollard. Even English can grasp this...not that he will say so.
How you like being a serf Kiwidave?
FYI from a reader via email:Hi Bernard,
I would like to say that as a private entrepreneur I am finding it impossible to get help from NZ Plc. and am probably going to move my company to Aus.I have gone through all the govt funded "business adviser" only to finally conclude that without the financial support to actually help the businesses with R&D etc. then its a waste of time (although the business advisers make a living out of it and good for them!).
The problem is that there is simply no investment available in NZ; even to the extent that our top business people buy 1million in gold bricks rather than invest in NZ companies!
Myself and the other director have fairly powerful jobs but all that does is keep the staff paid and strangles our companies ability to get to launch for our product.
We have 3x1 Billion dollar turnover companies very keen to get to pilot,and then use our product but lack of money means this date keep slipping as we have to assign our developers to "other paid work".
This ides of building a pretty building on the waterfront of Auckland is pointless unless there is real backing of investors to see the companies over the "valley of death".
I personally have 2 more ideas for world class products, but simply cannot fund them alone.
I believe even XERO had to go through multiple start-ups to grow his OWN money pot until he could fund XERO personally (initially).
How about YOU help NZ Plc. and have a section each week, on interest.co.nz which is a hugely influential publication, about a company seeking investment and get some of the "dead money" in NZ locked up in Gold, Housing and other unproductive areas working for OUR NZ.
Regards
Many thanks. I share your frustration and your story is not unusual.
It's one of the reasons we try to report on these issues and suggest alternatives.
All I can do though is report. We're not a financial intermediary or broker. That's another kettle of (stinky) fish.
cheers
Bernard
Bernard that is a brilliant suggestion. Provide a platform for entrepreneurs to explain their difficulties and frustrations.
Entrepreneurs are a misunderstood lot, we are seen as opportunists because we always look for the way forward - often going around obstacles by finding a weak link.
Talk to Amanda at BERL today.
I'm sure your email contributor knows all about the venture capital funding sources and angel investors in NZ, but just in case he doesn't, here's a place to start.
Actually, Bernard, why don't you get somebody in from NZVCA for a double shot interview and go over what it is that they do as well as trawl over some of the issues which face venture capital, angle investors, start-ups etc., face in NZ? If you do, don't forget to ask them about common mistakes (and deficiencies) that seekers of capital make when trying to source venture capital funds to get their ideas going.
We did have the NZVCA chairman in last December for a Double Shot - http://www.interest.co.nz/news/51801/nz-venture-capital-association-cha… - but perhaps didn't cover the ground you're talking about.
No such thing as an Angel investor.
There are investors but they are only interested if the business is already up and running and making a good profit. In other words like all investors, they are looking for scalability.
Don't blame them really, but they do not come under the definition of an "angel" investor.
Cheers
Roger
Absolutely correct. NZ doesn't have the venture capital industry such as those in grown up economies. We just have raiders. The takers, not the givers. Kiwis ought to go read the history of Apple (computers) to see what can happen when VCs are about...and what won't ever happen when they aren't. But hey, at least New Zealanders are still willing to throw an endless stream of money at highly productive houses...
FYI, for those interested Michael Parker now has a Pinetree Paradox Facebook page - http://www.facebook.com/pages/The-Pine-Tree-Paradox/179956308742066
Speaking as someone who works in science, New Zealand already has some world leading reseach going on. In Raman measurement, MRI, and agricultural sciences for example, New Zealand really is up there with the best of them. I think NZ's science sector is already sufficient to drive a period of growth - the skills are there.
However, NZs scientists are, in general, terrible at turning scientific research into marketable goods and services. It would really help to have people with experience in marketing, product development, entrepreneurship... come to us and help us out in that respect. I know we need the help, but with it I think we could make a huge difference to the NZ economy if we got it.
The pine tree analogy is flawed because in the example countres given these are native natural forest and were not grown as a crop. Incidently, Canada is dumping a lot of wood on export markets at the moment because a beetle has managed to get over the Rockies due to a succession of very warm years and is now muching its way through the interior (climate change anyone?)
Research also needs critcal mass and a lot of capital investment; one university on the water-front is not going to cut it. That's why research gets concentrated in places like Silicon Valley.
Shoe-string budgets and very low salaries means that it is pretty hard to do world-class science so gifted students end up leaving NZ or the profession entirely.
I've also seen what happens when you put people with "real-world" or marketing experience in charge, it usually doesn't work because they just don't understand the science.
Why is everyone always coming up with the "great idea" to spend more to maybe make something.
Good idea to put all expats to work selling New Zealand. When do we headhunt them and put them on the payroll to make them work for New Zealand, and getting rid of laid back coach potatoes as obsolete NZTE.
We don't need another university, we need more Indians and less chiefs on deck.
40% of all top skilled Kiwis has already left. Put them to work, me included.
Another prophet on how to save NZ!
Every political party has got one.Whats different?
This is not outside the box. all. All the same people and thinking jumbled up and regurgiitated.
As an artist my job is creativity. Creative ideasare not found in economics or even in universities these days. Universities are businesses now. How much original thought has been suppressed by peer review and institutionalised self interest. Somehow research leads to innovation. How does that work. The right people in the right place with lots of money.there is something missing the x-factor. Creative endeavour, something truly outside the box.This is the century of creativity.
What about some creative people-usually university drop-outs these days.
Oh, and as an after-thought, if this idea was to be successful, why would all kiwis get in behind it if it is only going to make the top 1% wealthier? This topic is head of the agenda at present.I think people want answers to this before following some new standard into battle again.
Lets be innovative about sharing this wealth.
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