OPINION: The great tradition of Kiwi innovation is part of our cultural heritage, but how does the world view our potential in technology innovation?
In my experience, as a board member of industry membership body NZTech and a bit of a global ambassador for the sector, not much – mainly because they don’t know about it.
And that’s a real shame, because there’s a great story to be told and the opportunity for cross-border partnerships that could help our home grown tech expand beyond even their wildest dreams.
Technology is a sector that is growing fast in New Zealand, representing 8 per cent of our economy. In 2014/15 tech contributed $26.2 billion GDP – tourism $10.6 bn.
The sector employs around 100,000 people and continues to grow at a rapid pace. You will have heard of the large companies like Microsoft and Fujitsu but did you know about the Auckland start up TranscribeMe that now employs over 40,000 workers worldwide? Or Glidepath, the world leading baggage handling system used in 60 countries?
Then there’s Vista Group, who provide cinema management and box office analysis software to nearly 40 per cent of the global market.
There are many more success stories like this, in offices and coffee shops all over New Zealand, just waiting to happen.
What I tell the technology leaders and investors at the conferences and industry events I speak at, most recently in Shanghai and London, is that New Zealand is a fantastic place to develop new software and other products.
Why? We’re an ideal home for growing technology ‘under the radar’. We have some great talent, and the ability to incubate, validate and scale quickly before the Europe and the US even wake up to what we’re doing here.
Speed to market and scalability are two of the most important success factors in becoming a global success story.
I believe the biggest opportunity for a natural partnership, to achieve this growth, is Asia.
That’s why NZTech is supporting the Bank of China (New Zealand) Ltd, the China Chamber of Commerce in New Zealand, the New Zealand Venture Investment Fund and New Zealand Trade and Enterprise to bring six Chinese investors to New Zealand for a hi-tech summit on Monday.
The investors are some of the most well-known names in China, drawn from the worlds of angel investing, invention, and venture capitalism.
What I find is that while Asian investors may not be aware of the New Zealand technology sector compared to our primary or other sectors, they are a great fit because Asian investors are more interested in founder enthusiasm, potential – scalability and international scope – than the profitability and domestic focus favoured by New Zealand investors.
Put simply, investors like the six coming here for the 16 October event, understand the sector better and are willing to take more risk if they see an opportunity.
Foreign direct investment plays a crucial role in New Zealand’s economy given the country has a relatively small capital base.
According to Statistics New Zealand figures, foreign direct Investment in technology stood at NZ$2.3 billion in 2015, a small proportion compared to the NZ$32 billion invested in finance and insurance and the NZ$15 million invested in manufacturing.
We have a great deal to learn from China, home to some of the largest technology giants in the world like Baidu, Huawei, Alibaba and Tencent. These partnerships aren’t just about investment – they also give you a great ‘in’ to an overseas market.
Five years ago I founded one of New Zealand’s first “Social Entrepreneurship” FinTech businesses and most recently I was CEO of New Zealand’s 2017 Hi Tech Start Up Of The Year.
I have also recently been involved in securing US$3m in funding from Singaporean investors. They understood New Zealand’s potential for innovation and incubation, and as CEO I understood that along with receiving vital investment, I would gain a partner in the Singaporean market that would play a key part in business growth.
But many New Zealand companies don’t know how to find Asian investment, or realise why there’s such a great fit.
I would encourage them to first understand why raising overseas capital is necessary for their business expansion, and then explore how funding from Asia can actually act as a force multiplier by providing new market access, cultural depth, experience and additional networks into their business.
Sourcing investment from Asia can be as simple as communicating your business proposition in a mature manner to this highly agile group of funding models through industry bodies, banks and venture capital channels.
This story was originally published in stuff.co.nz