SMES allow innovators to succeed

WHAT THE World Bank paper Export Superstars lacks, as reports of this nature often do, is an understanding of the persevering nature of the human condition.

While the report (see page 1) seems well researched and written, not everyone wants to work in a large exporting corporation.

Many of the smartest folk I know left exactly these environments to pursue their own destiny, often as exporters, within a small or medium-sized enterprise (SME).

Some have been very successful.

Increasingly, cities compete with cities more than countries with each other. Of the 600 cities that drive the world economy, 25 per cent will change to cities in China and other Asian countries. So in addition to New Zealand’s primary exports, what are we doing to address global export competition at a local, city level?

For example, Auckland’s key growth markets are the marine industry, food and beverage processing, export education, information and communications technology, and screen production (films and commercials). All could earn significant export revenues if targeted resources are put into those sectors instead of using a scatter-gun approach.

Second, the World Economic Forum has identified innovation and business sophistication as the most important drivers of the incomes of advanced economies.

The only way a country can sustain higher incomes and associated standards of living is if their businesses are able to compete by offering new and advantaged products and services.

New Zealand, by economic definition, is an advanced economy. Therefore, we must compete using innovation and sophisticated production processes.

SMEs often struggle with this in respect of both cost and education (access to practical learning).

We are 21st out of 34 countries, with Switzerland, Sweden and Japan at the top. Greece, the Slovak Republic and Turkey are at the bottom and New Zealand comes immediately behind Australia.

Many countries are focusing on lifting innovation and business sophistication as an economic strategy. If New Zealand does not do better as an innovator, it will not keep up economically with other advanced nations.

As business owners, how do we lift innovation and sophistication in our enterprises, including SMEs seeking to grow in global markets?

Third, education. Today’s children are tomorrow’s workforce, or not, as the case may be.

Skills are critical to economic performance for developed economies. Again, the World Economic Forum has identified the gap between countries that invest in education and those that do not as being critical to economic performance.

This also manifests in talent competition – that awful term, human capital, is widely used nowadays – given its correlation to innovation, the economic value creator of the future.

Lastly, a comment on courage. History and psychiatry both prove that continually behaving in the same way and expecting a different outcome doesn’t work.

So when are we going to behave differently in New Zealand? Importantly, when are we going to back ourselves? Even more importantly, when are we going to stop myopically chasing Australia?

As much as I love Australians and Australia, we are playing an Aussie game with Aussie rules. We will lose and destroy value for New Zealand in the process.

Closing the Gap has become a yawn for many New Zealanders. We are fighting a war of economic attrition that we are not equipped to win. Fighting from the trenches, against a mineral and resources-rich country, is an uncreative plan that continually fails us.

We do this despite the creative strategic alternatives readily available to us, one of which is greater investment in New Zealand’s breadth of competence which, in addition to the depth of our established primary industries, includes agricultural technology and bio-technology.

The world is in dire need of, for

We live in an era when discovery is the new currency.

example, food-security solutions and we have the wherewithal to provide it. Much of the world is starving, thirsty and physically sick, the latter because of the two former. Not only do we have abundant food and water, but we have intellectual property (IP) to export the technology.

Imagine if New Zealand could lead the world in food security. If we did, we could create a firm base from which a range of businesses could grow.

Not only could we sell the IP, but we could lead its execution by ensuring it worked in these environments. Linking our worldclass science to our globally proven practical experience will