The Idealog guide to megatrends

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Get ahead of the curve with the Idealog guide to today's megatrends in business.

Get ahead of the curve with the Idealog guide to today's megatrends in business.

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  • 1. Megatrend 1: The hyper-connected world Our increasing online omnipresence is radically changing the way we do business on a global scale. Here’s the lowdown on some cyber-age effects W ell, if you’re so out of the loop that you need us to tell you about the scale and rate of social media expansion worldwide, then you should consider ‘To do business in a hyper-connected retirement. But exporting is partly about the Twitter has 140 world you need to be more adept at numbers, so here are some for you to chew on. million users and Twitter has 140 million users and 400 million 400 million evaluating, meeting and responding messages sent each day. Facebook currently has messages sent to markets, so that people can find 955 million monthly active users and 552 million each day what you do and interact with you’ use it every day. That makes Twitter a potential marketplace about the size of the population of – G r e n v i l l e m a i n, m a n ag i n g d i r e c t o r o f Russia, and means Facebook has one and a half c u s t o m e r e x p e r i e n c e d e s i g n c o n s u lta n c y DNA times more users than the population of the US Facebook – the world’s third largest country. currently has 955 And there’s more: these websites transcend million monthly national boundaries, even when those active users, and boundaries are otherwise heavily defended. 552 million use it But, as with all these mega-trends, rapid daily growth also brings with it intense competition. It’s all too easy with high-tech markets to That makes Twitter a assume that they are something we ‘do to’ the potential marketplace emerging economies of the world, when in fact about the size of the these other countries are rapidly building their population of Russia own capacity. The Chinese software industry, and means Facebook for example, has exploded in the past decade, has one and a half with revenue reaching US$11.1 billion in 2010, times more users than growing at a rate of about 14 percent a year from the population of 2007. There are now more than 500 million the US people on Renren, China’s most active social network. It has 47 million registered users and 31 million active users per month. Current China’s reports are even charting rapid expansion in ‘developing’ regions where you might not most active social necessarily expect it, like Latin America. network, Renren, The result is a rapidly and radically changing has 500 million world, in which customers are increasingly users, 47 million managing their own service experiences on registered users, their own terms. In this world, monster-size and 31 million markets can be born almost overnight and then active users almost as suddenly change into something else every month that operates by a different set of rules. This is Grenville Main useful to understand for every business wanting88 / idealog.co.nz
  • 2. Idealog guide to exp ortingto use the internet, but it is absolutely vital for businesses thatwant to make their mark by helping to shape its future. Intellectual property TradeMe is our localised ebay, but where is our ebay, acompany that goes global on its big idea in this space? While wesalivate at the billions made by the likes of Mark Zuckerberg, or in the internet ageGoogle founders Larry Page and Sergey Brin, we should also be You may well not be paying to read this right now, it’s up on the webaware that behind and around those superstars there is a whole somewhere, or somebody copied and pasted it for you. Check your musicindustry sector full of folks making it big, if not colossal, behind collection, your videos, and Google Samsung and Apple’s billion-dollar bunfightbrands you may never have heard of. over smartphone designs and you will be aware that intellectual property in This is partly because a lot of the action happens business-to- today’s inter-connected world is about as safe as opening an unattended bottlebusiness. According to a survey by the Concentrate marketing store with an honesty box. But rather than abandoning legal protectioncompany, 88 percent of Kiwi high-tech businesses are selling to altogether, or shying away from going global online, Idealog has some adviceother businesses, while business-to-consumer makes up only 8 from Mark Hargreaves, partner at intellectual property specialists AJ Park.percent of sales and business-to-government only 4 percent. So how do we get in on the action? Grenville Main, managing Q To what extent has intellectual property control evolved in the onlinedirector of customer experience design consultancy DNA, says: sector in the past few years?“There are a lot of exporters and marketers who are still making A The law is moving slowly compared to online business models. The speed atthat transition – from how we used to do things in terms of which copyright works, in particular, can be published and distributed, whichproduct, distribution and marketing. But how we do this in a makes it difficult for copyright laws to keep up. Businesses are adapting though,hyper-connected world has become markedly different. You have and software as a service is a fantastic example of using the network effect ofto be more adept at evaluating, meeting and responding to the internet to grow markets while keeping IP controlled as a trade secret.markets, so that people can find what you do, and interact with Meanwhile, some businesses are taking the view that the opportunities availableyou. You also need to be adept at expanding and evolving markets justify exposing them to more risk of counterfeiting.in a much smarter and more agile way. Hyper-connectivity makesagility a requirement, but it also enables and facilitates it.” Q Does the speed and flexibility of online business present specific A lot of this is more of an art than a science, Main explains: challenges to IP protection?“There are trends, things you can rely on and patterns of A It makes patenting more difficult to manage because of the speed at whichbehaviour that are evolving so there is a lot to draw on. But new products and services are brought to market. I think branding assumesthere are some spontaneous and serendipitous things that more importance for the same reason. Your brand can reach global marketsreally go off. What is great about this is that unbridled overnight, so ensuring it is protected is vital, given that so much productcreativity, opportunity or innovation out of leftfield is still a differentiation online is about branding.vibrant opportunity – and much of it is potentially quitecommercial. When we look at the local guys who have done Q Has the scale of big players like Google and Facebook distorted thegood stuff, it has a hell of a lot to do with appetite and ability, market for internet service businesses, where they simply want to get tosure, but you can’t help but think that timing has had a hell of a the point of selling out to one of the big guys?lot to do with it, too. This means we have to be building an A I think most start-ups have one eye on exits, regardless of whether they are inarmy of creative thinkers ‘attuned toward opportunity’. Within the internet space or not. The growth of major players in this area is good forthe entrepreneurial base in New Zealand we need to build an local businesses if it means they can exit and plough their capital back intoinnovation engine to be the place you will start to drop in the new ventures.right ideas – ideas that are what the world needs and wants.” There are already signs that Kiwis are finding the in-roads, Q Is it hard for New Zealand businesses to pioneer ideas in this space,especially in the US. Peta Conn, New Zealand trade without having your IP bought or stolen?commissioner in New York, says, “New Zealand is punching A I actually think the internet levels the playing field. Sure, it means ideas andabove its weight in the hyper-connected world. Both Silicon designs are spread more easily and can be ripped off, but it also means thoseValley and New York are witness to an influx of New Zealand ideas and designs are reaching large markets that New Zealand businessescompanies setting up to be closer to their customers. would have previously struggled to tap into. I know a number of local companiesEntertainment is also a focus of development, with NZ expertise who receive unsolicited interest in their products or their business simplycutting through areas like gaming from TV series and films, and because more people are aware of what they do. The trick is to design a productcustomised book soundtracks. The calibre of technology coming or a process that allows you to retain critical pieces of the puzzle offline.out of New Zealand is competing successfully on the world Customers and competitors can whet their appetite online but you keep criticalstage, and fuelling our reputation for innovation.” IP in house to retain competitive advantage. November-december 2012 / idealog / 89
  • 3. The end of Succeeding in the the pipe dream online marketplace – or how to organise for chaos One thing that might limit our ability Timing is everything: good ideas dominate on to exploit hyper-connectivity is if New a global scale in the Zealand remains significantly less hyper-connected world, so you will need to create hyper-connected than its rivals something genuinely new very quickly. Don’t get wedded to an idea too early, That is the long-term threat in the wake of Pacific Fibre’s or stick with it too long. inability to raise the $400 million it needed to build a new 13,000-kilometre high-speed fibre-optic cable connecting Think globally: it’s the worldwide web, yeah? With New Zealand and Australia to California. Interestingly, the right idea, skills and alongside familiar complaints about a lack of investment personnel you can find cash in New Zealand and question marks over the viability markets big enough to of competing head-to-head with the existing Southern secure a happy retirement in the most unlikely places. Cross Cable, there was also a hint that the project had fallen You can also be blind-sided foul of diplomatic wrangles where the US was by competition if you don’t uncomfortable with Chinese investment in the project. stay alert. Government ministers in the throes of pushing through the $1.5 billion ultra-fast broadband network by 2016 There is no point trying have said there is no lack of capacity in the existing to compete with something that is already massive single cable, and Chris Brace, solutions architect at and hyper-connected. If TelstraClear, agrees. But Rod Drury and Sam Morgan, who are behind Pacific Fibre, suggest that the you doubt this, go and check the activity on your The Auckland Waterfront development of Kiwi online offerings may be hobbled by a lack of bandwidth and the high cost of international Google+ account. Innovation Precinct data in New Zealand. Integrity is the driving The very fact that we have all heard of Silicone Valley force of hyper-connected Paul Brislen, chief executive of the Telecommunications business. You need to have is testament to the value, ironically, of having Users’ Association of New Zealand, says: “We have the all your ducks in a row for hyper-connected businesses close together in an Southern Cross network and that’s our lot, and Southern an impeccable service old-fashioned geographical sense. This is the kind of Cross will eventually need to be replaced. Given a 20-year that’s totally in line with success that Auckland Council is trying to replicate in your brand philosophy. lifespan, I’m guessing here, we’re already rapidly If you screw up, or hide its rejuvenated Wynyard Quarter area. The idea is approaching its use-by date and planning for ‘Son of something, you will be that the precinct will consist of residential, retail and Southern Cross’ must be well advanced at the head office found out, and word office spaces where a cluster of companies, backed by in Bermuda. travels faster online than government and business service providers, will “The real tragedy in all this is that we, of all the nations anywhere else. accelerate the growth of high-tech ideas into on the planet, stand to gain the most from the digital commercial success, and of new and emerging Get good old-fashioned economy. Instead of shipping our goods slowly and at business advice. The businesses alongside more established companies great cost to distant ports, we are as close to our markets online world is not Oz or with an eye on exporting. as anyone else. We need more competition on the Narnia. No matter how The project has announced that it has already had international side of the equation to match our investment whizz your new idea is 47 registrations of interest from companies, with 3D it will still need boring in the domestic setting. Without it, we’re left with a modelling company Nextspace claiming first mover things like funding, a monopoly provider and no matter how well run a decent advisory board, status after shifting into the upstairs section of a monopoly is, it’s still a monopoly.” an accountant and sail-making company on Pakenham Street West. Brislen has called for government and superannuation legal support. Grenville Main, managing director of customer support for an alternative scheme, and fears we might experience design consultancy DNA, reckons the idea otherwise be doomed to create ‘the world’s fastest Make friends and ask makes a good fit with Kiwi commercial culture. them stuff. No idea is intranet’. If the Southern Cross cable breaks for any so new and clever that “If you look at the clusters and groups of smart, reason, which is not unheard of, we might all find somebody else hasn’t like-minded businesses in New Zealand, we are pretty ourselves trying to contact cloud services on dial-up. tried something at least good – we aren’t that precious. If you own something David Dickinson, service delivery consultant with slightly similar before, or you want to get the benefit from it, but there is this is not trying something TelstraClear, adds: “I think that costs are a bigger issue collegiality where there are guys who are trying to get on hyper-connected to it here. We recently saw some downward price pressure right now. Talk to industry just like you, and they are willing to help you. They are come to bear under threat of competition in that market. insiders and share problems quite open to sharing their successes and always open to It will be interesting to see what happens now that the and solutions. helping other people build the critical mass of people threat is no longer there.” who want to live here but work all over the world.”90 / idealog.co.nz
  • 4. Idealog guide to exp ortingThe land of the long list of that many of the services advertised are actually quite different when you read thecloud-based companies? small print that most of us ignore. “It may also be important to consider where your data is actually domiciled. For example, if you are using something like Microsoft OfficeFirst there was the internet, then there was platform (we call it the Marketplace Portal), 365, you may find that all the data is on serversthe cloud. Surprise! It’s the same thing – it has choose the server spec they need and be using in Singapore, which may have very differentjust grown up and got a lot more businesslike. it within hours. This is ideal for businesses privacy laws than the ones you are used to. Chris Brace, solutions architect at with seasonal data loads, who want to scale You also don’t want to wake up one morning toTelstraClear, lays down what this could quickly to provide a development environment, find there has been a security breach, blackoutmean for your business. “Cloud-based services or who need additional server space for big or system shutdown that may crippleare essentially elastic; they can enable data analysis. They unsubscribe the server your business.”businesses to scale and grow very quickly. So if when they are done – it’s a pay-as-you-go Dickinson agrees: “Any environment is onlyyou have a web-based sales business and you environment that is really going to set the as good as its weakest point so I wouldsuddenly take off and find your e-commerce standard for some time caution against keeping critical business datasite is overwhelmed, you can go online and to come.” on internet-based services. You don’t knowpurchase the use of extra infrastructure to cope All the whizz-bangery won’t make up where they are being hosted, they typicallywith it very quickly. for a bad idea or a shonky business model fall under US legal jurisdiction and there is “In the past, it might have taken months to though, so the cloud should still be a tool a long line, literally, of exposure between youinstall what you need, whereas now it is more you reach for after you have done the hard and your services that is vulnerablelike a matter of hours. And as soon as you have yards commercialising the hell out of to attack.”finished with the cloud capacity, you can shut it your proposition. This means having a back-up is as importantoff again.” And however much you may like to believe in for the big internet players as it is for your David Dickinson, service delivery consultant the magic of Google, there are still significant personal computer, and reading the small printworking with TelstraClear, explains. “Someone risks that need to be considered. is just as important before clicking the ‘I agree’needing another server, maybe only for a Brace explains: “Security is obviously an button as it is on signing a contract that’s beenmonth or two, can now log into our cloud issue. Also, legal experts are now pointing out drafted by your own legal team. November-december 2012 / idealog / 91
  • 5. Kiwi companies kicking it online The Hyperfactory Derek and Geoffrey Handley set up shop as The Hyperfactory in 2001, forming a combined agency and technology company for advertising to mobile devices. In the years that followed the irrepressible Derek picked up a slew of awards, including 2009 Ernst & Young Young Entrepreneur of the Year, being rated one of the 40 Most Influential People in New Zealand Telecommunications in 2005 and 2006, and the 2006 Pricewaterhouse Young Achievement of the Year. He also received a nomination as one of the National Business Review Top 60 Innovators of 2007, and was named as a New Zealand 2011 Leader by the Sir Peter Blake Trust. More importantly, the company picked up a range of top-drawer clients including Kraft Foods, Adidas, L’Oréal and Coca-Cola, and then sold out to US media company Meredith for something in the low seven figures. It has now closed its New Zealand operations in favour of a new head office in New York. kkthehyperfactory.com Group Commerce With print media bleeding away onto portable screens, Otago University- trained New Zealander Jonty Kelt, co-founder and CEO of New Carnival Labs York-based Group Commerce, is helping to make online publishing pay Guy Horrocks tuned in to the social media global mega-trend for some big names, including CBS, The Daily Telegraph and the New when he co-founded Polar Bear Farm, the world’s first iPhone York Times. With 120 staff, the firm provides the smarts and technology application development company, even before the App Store to power and curate media e-commerce and deal websites affiliated to was up and running. major brands. It has just secured an additional US$21 million of capital Now in his late 20s, he says it made a huge difference being funding to fuel its expansion into Europe and has reported a monthly first to market. With his latest venture, Carnival Labs, he now growth of 30 percent in the past year. has the ear of major US brands, and is currently coming up with kkgroupcommerce.com the goods for global players such as Dreamworks, Kraft Foods, Intel, Estée Lauder, Pepsi and Nestlé. The firm originally Xero specialised in casual gaming, entertainment and advertising Wellington-based Rod Drury’s cloud-based accounting software apps, and now employs 10 full-time staff in New Zealand. company is listed on the NZX and is within a sniff of getting a major Horrocks is now the company’s roving ambassador, having percentage of a gargantuan market. Looking to top 300 employees in expanded into the US, and is currently preparing to make New the next few weeks, it has not pumped profits out in its ongoing York his permanent home. He reckons that most of the US establishment phase, but certainly looks to be making a serious challenge action for his firm has now shifted from Los Angeles to New on its offshore rivals. York, but the investment cash is still in Silicon Valley. kkxero.com The firm’s latest brainchild is the Core Push mobile engagement platform. It includes a groundbreaking real-time Rakon location-based analytics dashboard and aims to deepen the Most consumers will probably never have heard of the makers of connection between a brand’s app and its customers. Carnival crystal-based frequency control components for electronics, but its Labs already has 10 large brands using the system to send products are helping much of our everyday gadgetry, such as mobile around four million notifications a month to customers, and is phones, telecommunications and GPS systems, to function. From its set to open the taps wider in the next couple of months. beginnings in a Howick garage in 1967, sales revenue for the past financial “Our turnover is in the low seven figures (US dollars) this year was $178.3 million. In August the company sealed a deal that will year, but is growing around 200 to 300 percent on last year, quadruple its sales to Chinese electronics giant Huawei to US$56 million. which is exciting,” Horrocks says. Last year, Rakon UK Limited also picked up the coveted Queen’s Award kkcarnivallabs.com for Enterprise. kkrakon.com92 / idealog.co.nz
  • 6. Idealog guide to exp ortingMegatrend 2:Healthy ageing Baby boomers thought that 79% of TV advertising and 89% of onlineand the baby advertising appeared to be aimed at somebody youngerboomers than them Sou rc e dy :A2 Stu 010 Go mer ogle /Nielsen ConsuThe term ‘boomers’ for those born between 1946 and 1964 is such a Iain McLeod, BNZ national manager,fitting one on so many levels. This significant jump in birth rates at the international trade, offers further insight into the baby boomer brain: “The baby boomers areend of World War II, combined with an era of relative world peace, still the funders of the industrialised world butnatural resource abundance and technological advancement fuelled they are shellshocked by the events in 2007 andan era of unprecedented global affluence. The guns stopped booming, 2008. A considerable number have lost theirpopulations boomed and then the economy boomed retirement savings and are remaining in the workforce. And those who are still financiallyS secure are struggling to find a safe haven for peak of a global phenomenon. According advertising and 89 percent of online their investments as people endeavour to de-risk to the United Nations, the number of advertising appeared to be aimed at somebody their portfolios and look for investments with persons aged 60 or over increased three younger than them. Some analysts suggest this capital security.and a half times from 1950 to 2009, to 737 is due to the average person working in “They are more conservative and risk-aversemillion. By then there were 12 countries with marketing being much younger than the baby now in OECD countries, but in Asia they aremore than 10 million people aged 60 plus, boomers, or that marketers make incorrect still expansionary and tastes and wealth-basedincluding China (160 million), India (89 assumptions based on this generation. needs are expanding exponentially. It is still anmillion), the United States (56 million), Japan We are not, ahem, commenting on the age of affluent group with far greater demands than(38 million), the Russian Federation (25 Grenville Main, managing director of customer previous generations, mainly because of themillion) and Germany (21 million). By 2050, experience design consultancy DNA, but he relative health of this population versusthe population aged 60 or over is expected to sees the influence of baby boomers everywhere previous generations. They live longer, havetriple, reaching a total of two billion. he looks: “It’s a trend in direct terms but it also greater expectations and tend to have more That’s a hell of a lot of grey spending power. has a benefit and impact for everyone. If you disposable income than other generations.”Last year, the overall spending by the 116 are trying to target them as an audience you are According to Main, this profile makes themmillion US consumers aged 50 and older was going to have the potential for a longer well worth targeting if the product or service$2.9 trillion, up 45 percent in the past 10 years. relationship with them than you’ve ever had is right. “What people are grappling with isMeanwhile, the 182 million people younger before, but on the other hand they are that they, like lots of other consumers, arethan 50 spent $3.3 trillion last year, up just 6 definitely more discerning and may switch out starting to want to take the control back frompercent during the same decade. on you. They are not like the generation above the businesses supplying products and Mark Hargreaves, partner with intellectual them, which is more conservative and tends to services,” he says. “And this can be destabilisingproperty specialists AJ Park, says it has stick to relationships. Baby boomers have for businesses, because you are not quite suretriggered growth in certain sectors: “The changed the most in generational terms and where they are going to go next and what ispharmaceutical industry has developed will basically suit themselves more than ever driving the decision-making. That’s wheresignificant IP in the face of demand from baby before, so if you aren’t providing something insight builds toward intimacy, which is nowboomers and ageing populations. We only need good then they will move on.” and essential factor for all businesses.”to look at Viagra sales for that!” What’s weird is the extent to which thismassive cohort of the world’s population feels ‘Baby boomers have changed the most in generational termsignored by marketing folks. Blog after blog on and will basically suit themselves more than ever before, so ifthe internet says it, and a 2010 Google/Nielsen you aren’t providing something good, then they will move on’Consumer Study found that 79 percent of TV – – Grenville Main, MANAGING DIRECTOR OF CUSTOMER EXPERIENCE DESIGN CONSULTANCY DNA November-december 2012 / idealog / 93
  • 7. iP is about increasing potential If taking your idea, invention or business offshore is in Over the last century, we have worked with clients to your strategy — then the right IP advice will increase recognise great ideas and the best ways to protect your chances of success. and commercialise them globally. Our team of commercialisation specialists and IP litigators can help Making it overseas takes more than a good idea and you understand the laws of your destination country, the will to succeed. At AJ Park we not only have a develop global commercial agreements and cover clear understanding of intellectual property laws in patent or trade mark protection, giving you and your New Zealand, but know what your rights and obligations business the best chance of making it overseas. are when the rules change for another country. For the right IP advice to help turn your Kiwi business AJP10360_IA 0800 257 275 I www.ajpark.com I New Zealand + Australia into a global asset, call us now.AJ Park is about iP • intellectual property • igniting passion • ideas pervading • innovation protected • integrated processes • intelligent people • increasing potential
  • 8. l Idealog guide to exp orting Kiwi companies bringing it NZTE’s Health High Impact Programme This programme is focused on accelerating the growth of New Zealand health technology and services companies. It to the baby supports business to target niche markets, build relevant company capabilities, develop reference sites and evaluate new market opportunities. It includes working with a network of industry organisations, universities, researchers boomers as well as the Ministry of Health, the Ministry of Business, Innovation and Employment and multinational enterprises. To find out more, and for profiles of key health markets, go to nzte.govt.nz. New Image Colostrum: the first milk produced by cows that have just calved, is Fisher & Paykel Healthcare the latest superfood to take the health-conscious world by storm. In the last financial year, F&P Healthcare made a healthy net profit of Auckland-based NZX-listed New Image shifted $74.7 million worth $64.1 million out of its range of products and systems for use in of the stuff last year. Taiwan and Malaysia are key markets, sucking respiratory care, acute care, and the treatment of obstructive sleep up $55.9 million of New Image products. Unfortunately, a couple of apnoea. However, a bidding war in the US looks set to reduce incomes ailing brands and failed business partnerships, combined with the and take the shine off the F&P market in the years to come. relative strength of the New Zealand dollar, helped the company kkfphcare.com lose $6.1 million last year. However, according to senior managers, a restructured New Image is now in a good shape. Orion Health kknewimageasia.com The company that took out central Auckland billboards to brag about recruiting throughout the recession has built an enviable offshore Ecoya market for its eHealth software, most notably in the US. The company Based in Botany Bay, Australia, candle and skincare company Ecoya now has offices in the US, Canada, United Kingdom, Spain, Australia, is headed up by (among others) New Zealand’s own inimitable Geoff New Zealand, Japan, Thailand, Singapore, Dubai and France. It also Ross and Rob Fyfe. After swallowing rival skincare company Trilogy buddies up to heavy-hitting partners, including Accenture, Philips, last year, the company turned its first profits. It now makes more Cisco, IBM, Agfa and Oracle Corporation. than three quarters of its sales offshore and is focusing on expansion kkorionhealth.com into Asia, including an exclusive deal with a new Japanese distributor, the Kinu Corporation. Comvita kkecoya.com.au Comvita’s busy bees are building a global reputation for natural health and skincare products, including medicinal ‘Active UMF’ honey, with a $35 million chunk of its annual sales now happening in Asia. This has helped the company to notch up a 12 percent growth this year, and it also shrugged off a $71.6 million takeover bid from Singapore-based food conglomerate Cerebos. kkcomvita.co.nz Les Mills International Right now thousands of people are probably gyrating to one of Les Mills’ trademarked group fitness sessions, such as Body Attack and Tech-savvy boomers driving e-health demand Body Jam. The pioneering Kiwi fitness firm now exports its exercise- A report from KPMG and the Manchester Business School, to-music programmes to 80 countries, where 90,000 certified Accelerating Innovation: the power of the crowd, suggests that ageing of the baby boomers, and this generation’s increased comfort with new instructors teach classes through 14,000 licensed gyms and clubs. It has technologies, is driving the demand for openness in healthcare sold its patented workouts into about 11 percent of the world’s health systems. Jan De Boer, global health IT lead for KPMG in the clubs and employs 130 people across the group (80 of those are based Netherlands, says: “Today’s smartphone user is tomorrow’s patient in Auckland). This all adds up to seven figure revenue and a lot of who wants greater access and control of their healthcare and their medical records.” sweaty sportswear (which Les Mills now sells, too). kklesmills.com AJP10360_IA November-december 2012 / idealog / 95
  • 9. Who wants to Aged between 48 and 66, baby boomers are looking forward tolive forever? a long retirement in the active and affluent style to which they have become accustomed, and they don’t want a nuisance like ill health spoiling their fun. That’s why they are spending a lot of what would have been their children’s inheritance on cosmetic surgery, vitamins, health foods, exercise, alternative medicines and a magnitude of therapies According to the market research firm Global Industry Analysts, the boomer-fuelled consumer base seeking to keep the dreaded signs of ageing at bay will push the US market for anti-ageing products from about $80 billion now to more than $114 billion by 2015. Main says: “That suggests the one industry that will have really overtly benefitted from this block of people because they do not want the party to end. Defying ageing in our own minds as a group of people more and more, they don’t seem to be wanting to grow old. That is probably the one thing that defines them. The key insight, we think, is around control, flexibility and individual choice being held longer – it’s not just about how you look, it’s how you truly feel.” But Hargreaves warns of the regulatory complexities of dabbling in this marketplace. “From an IP perspective it can be challenging identifying patentable aspects of natural health supplements as opposed to pharmaceuticals, or even nutraceuticals with proven health benefits. It is likely that, as regulatory hurdles increase for these types of products, there will be more IP developed around them because more R&D and testing will be required for regulatory approvals. “At present, these products are regulated in New Zealand in an ad hoc way, which does present difficulties for manufacturers who may need to consider a range of legislation. This is compounded if the product is exported into other markets where different regimes exist.” In short, think difficult, time-consuming and expensive, but with the potential for massive payoffs. Hargreaves’ advice is to seek out advice of those who have trodden this road before.
  • 10. IN CHINA, A BUSINESS EXECUTIVE MAY CONSULT THE STARS, OR WAIT FOR A ‘LUCKY’ DAY BEFORE MAKING A DECISION. TRUE FALSEIf you’re thinking about exporting to China, there’s no room for guesswork. New Zealand Trade andEnterprise can give you the tips and tools you need to move your business into this market; fromcountry overviews and language and culture, to sales and marketing suggestions. That way, you’llknow that the executive you’re dealing with hasn’t left for an impromptu holiday, he’s just waitingfor the right time to make his decision.Visit www.nzte.govt.nz/answershere or call us on 0800 555 888.Get the answers here. Succeed over there. T&E0028/B
  • 11. i d e a l o g i n a s s o c i at i o n w i t h A J Pa r kCrushing thecounterfeitsWhether it’s Armani, Adidas or Anchor, well-known brands are allsubject to imitation. All exporters need to be wary of their trade Intercepted counterfeit Anchor goods.marks being ripped off and make moves to protect their valuable IPH andbags, watches, sunglasses and “In this case, we were able to get a really electronics are among counterfeiters’ clean outcome. We worked with Carolyn Green favourite products. But virtually and Gavin Scott from Fonterra’s legal team toanything can be faked and passed off as force the counterfeiter to agree to destructiona recognised and respected brand. of the fake products. We then arranged for Often these rip-offs are found to be small- Fonterra’s local agent to destroy all of thescale opportunists, but internationally the counterfeits – that was all done over a periodtrend toward large-scale counterfeiting of two days with the help of a giant digger. The The destroyedcontinues to grow. In late 2011, the world’s counterfeiters had actually filed for their own counterfeits.largest dairy products exporter, Fonterra, trade mark, but they accepted that they werediscovered and foiled a large-scale attempt infringing Fonterra’s marks and gave awayto counterfeit one of its flagship products, their application.”Anchor milk powder. This case demonstrates how important it The large shipment containing tens of is to have your own trade mark protection inthousands of tins of milk powder labelled place and to enforce it, Potter says. And‘Anhor’ and bearing a very close likeness he’s not just talking about big organisations –to Anchor’s famous red anchor logo was exporters of any size with a system or productintercepted by Fonterra’s representatives that risks being copied should protect theirin the Middle East. intellectual property. Carolyn Green, Fonterra’s Auckland-basedtrade mark manager, says the counterfeitproducts were on their way from the UnitedArab Emirates to Somalia but were foundbefore they left their port of origin. “We’ve had a few instances where we’vebeen advised through Customs of infringingproducts, but this was a particularly big one,”says Green. “Anchor is one of our biggestbrands and is very popular in that part of theworld, so it’s a major target for counterfeiters.” Intellectual property expert AJ Park hasbeen advising Fonterra since the dairyco-operative formed in 2001. Partner Alan Potter and senior associateEmma McBride work closely with CarolynGreen to help safeguard Fonterra’s valuabletrade mark rights. “Fonterra sends its products to more than140 countries around the world,” says McBride.“Because of all the valuable brands Fonterrauses, it has a significant registered trade markportfolio, which we help to manage.
  • 12. i d e a l o g .c o. n z / b u s i n e s s p l a n “It’s about taking the time to work out where cost-effective. When you’re exporting, you you think you may be at risk and getting need to have your trade mark registrations and protection in places close to your markets, Customs notices in place. IN BRIEF where people might want to counterfeit your “If you start off with weak rights because Fonterra is the world’s largest diversified products,” says Potter. you haven’t done your homework, things milk processing company and one of the “You may not always be able to register every always end up more complicated.” world’s top producers of dairy nutrition for mark in every country, but you need to at least Green is in daily contact with AJ Park to export, including milk powders, cheese and butter. The co-operative sells its products to think about it. Exporting branded goods help protect Fonterra’s trade marks and to more than 100 countries. Intellectual without trade mark protection is a bit like manage cases like this one. She says the input property expert AJ Park has been working running an uninsured business – it’s all fine and advice she receives from both Potter and with Fonterra since it was formed in 2001 until something goes wrong, then you wish McBride is extremely valuable. and recently helped the company with a large counterfeiting case of Anchor milk you’d put adequate insurance in place.” “AJ Park is the liaison between Fonterra powder from the UAE. Potter says that for smaller companies, it’s and our lawyers in various countries and always a risk assessment – how big a risk are maintains Fonterra’s trade mark database. CONTACT you willing to take? We couldn’t do what we do without them. To find out more, contact: All exporters need to turn their mind to the Sometimes we’re in touch several times a day. AJ Park 0800 257 275 risk they’re taking. We talk about IP protection strategies across www.ajpark.com “In this case, Fonterra had its registered our various markets; and when things like this protection in place, which led to a good counterfeiting situation happen, we work as outcome that was both quick and very a team to deal with it.”L-R: Gavin Scott, Carolyn Green, Emma McBride and Alan Potter.
  • 13. Megatrend 3: Feeding the world’s middle classes You know all those years we have been calling huge swathes of the globe the ‘developing world’? Well guess what: a lot of them have developed. And as a result, now may be a good time for New Zealand to re-evaluate our position in the world economy. Experts in the field tell you how C hina is the most obvious example, where it is Mark Hargreaves, partner at intellectual property reported that wages have quadrupled in the specialists AJ Park, agrees, but adds that global supply is past decade and the World Bank estimates GDP already rising to meet this new demand: “There are a lot will match the US by 2030. But it is also happening in of global players developing protein supply which will Brazil, where the Fundacao Getulio Vargas economic compete with our dairy and meat exports long term. think tank estimates that 40 million people have joined Ultimately, our competitive advantage is more likely to the ranks of Brazil’s middle class between 2003 and lie in high-quality, high-value food and ingredients 2011. And in Africa, the African Development Bank says produced in a clean environment. We have to strive to the middle class rose to 313 million people in 2010, ‘New Zealand produce that high-quality product and compete on which is just over a third of the continent’s population. leads the world in quality and brand. Perhaps one of the biggest Then there’s Indonesia, where Japanese banking exports of dairy competitive risks is that we lose our quality reputation, group Nomura reports that the middle class – those with a disposable income of at least $3,000 a year – now and sheep and is a meaning we’re reduced to competing on price, which won’t be easy long term.” numbers about 50 million. major exporter of For the time being we appear to be holding our According to New Zealand Trade and Enterprise, half beef, seafood, and ground, but value-added propositions such as Burger a billion people in Asia currently earn ‘middle incomes’. kiwifruit. But Fuel, or the Dairy Collective’s successful expansion into By 2020 that will treble to 1.7 billion, and by 2030 the figure will be 3.2 billion. And according to The when we consider the UK, would seem to be the way to go, rather than sheer volume. Economist, for the first time in history, more than that New Zealand Grenville Main, managing director of customer half the world’s population could be described as is a similar size to experience design consultancy DNA, explains why we middle class. Italy, and Italy need to play it smart. One of the main things these people spend additional “Even our big companies are tiny on a global scale. money on is food. At the bargain bucket end of the feeds its own I don’t think we are scratching the surface on what this market KFC is currently opening a new outlet in China considerably could be as a growth opportunity. That said, we are almost every day, with thousands springing up all over large population small and we are having trouble scaling up in all the the country. New Zealand’s own Burger Fuel is also expanding into the Middle East, with a combination of and exports twice established sectors – whether it’s through a lack of talent, funding or resources. When you look at dairy, the halal certification and a brand based on high quality and as much food and drain on waterways and the impact on agricultural healthy eating. Alongside stores in the United Arab beverage as growth potential – there is only so much headroom left.” Emirates and Saudi Arabia, the company has also New Zealand, He looks to examples like Leitissimo in Brazil, where starting flipping patties in Iraq, and is looking to add Libya to its post-warzone market share. According to a there is a sense a Kiwi dairy team has set up a successful New Zealand- style dairy farm (see Idealog #34), hooking up our report by the Carnegie Endowment for International that we could be country’s know-how with their cheap land, labour and Peace, their plan for dishing out 100 percent pure New doing more’ burgeoning market for fresh milk. Big players such as Zealand ground beef in one-third pound slabs makes – – M i k e A r a n d, Federated Farmers, Fonterra and PGG Wrightson all good sense. The report states: “Demand for protein is New Zealand Trade have similar projects on the go in South America and expected to expand along with the global middle class, Commissioner, across the globe. which may be as large as 600 million people in G20 Shanghai Fonterra is currently planning to create 25 new farms developing countries.” in China alone, at a cost of $1 billion, in an attempt to s100 / idealog.co.nz
  • 14. Idealog guide to exp orting Indian, Inc Indian food now rightfully receives a warm welcome almost everywhere in the world, but Say hello New Zealand tucker is slowly getting its own to halal back, as the subcontinent’s tastebuds seek out According to a recent estimate, 23 percent of the new flavours backed with an increasing ability to global population, or 1.57 pay top dollar for them. billion people, are Muslims, Richard White, trade commissioner to New with a massive and rapidly Delhi, India, says: “Wine is not a traditional growing Muslim population beverage of choice in India but demand is steadily among our near neighbours in South East Asia. Halal in growing, driven by increasingly international the Muslim faith is defined consumer tastes. New Zealand labels are by the Quran as ‘allowed’, positioning themselves to take advantage of growth ‘permitted’ or ‘lawful’. in the Indian market, leveraging their international To be halal, certain activities must be done in reputation through active promotional activities accordance with a specific with their local distribution partners. set of rules and guiding “New Zealand apples are also becoming principles. This includes the increasingly popular in India. This is on the back prohibition on consuming of a strategy by the Kiwi apple industry dating certain animals, including pork, intoxicants such as back to the 1990s to work closely with growers alcohol and blood or blood and marketers in India. As a result, New Zealand products. It also stipulates was the first country allowed to export apples to methods of slaughtering for India. Consumer demand is growing steadily.” animals that are to be eaten. The good news is, if you Storage, transport and distributions networksKFC is currently opening a new outlet in China on an almost get halal certification, you in India still need to work to help make importing daily basis, and the middle classes are flocking to the feed. gain access to a massive fresh produce really fly, but here, too, NZ firms export market at the have sniffed out an opportunity. exclusion of companies that have not. Kiwi companies Fiona Acheson, trade commissioner for Malaysia, helping to feed Indonesia and Brunei, says halal food markets are of growing importance to the seven billion New Zealand. “In 2011, Indonesia, Malaysia and Singapore were Fonterra among the top five export destinations for halal ‘Wine is not a traditional The big boy on the block is still a flagship exporter both in terms of its size and in its certified meat. Included in New Zealand’s top 10 export beverage of choice in India but R&D prowess. destinations were China, demand is slowly and steadily kkfonterra.com South Africa and France. “And the growth in the growing, driven by increasingly global halal market, which is international consumer tastes. Aotearoa Fisheries currently estimated at As one of New Zealand’s largest seafood US$2.3 billion, is not New Zealand labels are businesses and one of the sector’s largest confined to meat. Fonterra’s exports to Indonesia and positioning themselves to exporters, Aotearoa Fisheries had $152 million Malaysia are also halal take advantage of growth in of offshore sales last year, $63 million of which went to Asia and China. The company also certified, as are other New Zealand dairy products, the Indian market’ owns 50 percent of Sealord Group. health supplements and ––Richard White, Trade Commissioner to processed foods.” New Delhi, India kkafl.maori.nz November-december 2012 / idealog / 101
  • 15. ward off the rapidly increasing competition there to meets what is effectively bottomless demand. Mike Arand, New Zealand trade commissioner in Shanghai, Half a touches on similar ground. “New Zealand leads the world in exports of dairy and sheep billion and is a major exporter of beef, seafood and kiwifruit. But people in when we consider that New Zealand is a similar size to Italy, Asia and Italy feeds its own considerably larger population and currently ‘With the predicted growth in global exports twice as much food and beverage as New Zealand, earn ‘middle population and the associated there is a sense that we could be doing more. “What is clear to me, first and foremost, is the need to incomes’. By growth in food supply, New Zealand develop the New Zealand Brand, to tell our New Zealand 2020 that will become a smaller, less story more. Many in the trade and many consumers are totally will treble to significant cog in the global food unaware of New Zealand. We also need to better understand system unless we have a clear vision the needs of the Chinese trade and consumers, and supply 1.7 for our agri-food sectors, focused billion, those needs – different packaging or presentation, different formulas and more.” not just on exporting product but Hargreaves says these larger players are still doing most of and by 2030 also on lightweight exports of the innovating and creating most of the new intellectual the figure industry know-how and innovation. property in this space, when there is plenty of scope for more small- and medium-sized companies, such as Leitissimo, to will be We believe that the time is right get their snouts in the trough. 3.2 for the development of an Main adds: “If it’s designed here, it’s innovative and there’s billion industry strategy’ something about the Kiwi environment or attitude that has – – I a n P ro u d f o o t, H e a d o f Ag r i b u s i n e s s a n d some brand power then let’s use it. But we don’t necessarily L e a d Pa rt n e r , C o n s u m e r a n d I n d u s t r i a l have to build it, fund it or even sell it here.” P ro d u c t s at KPM G builds Business bu F102 / idealog.co.nz a BNZ721
  • 16. BNZ7219IP Need to pay Chaoxiang in Beijing? Do it online with live exchange rates. ommunity builds Business builds Community builds Family builds Community builds Business builds Comm builds Family buildsC Secure a live exchange rate with BNZ’s International Payments online. It’s convenient, it’s cost-effective, and it provides your supplier with an automatic email advising them your payment is on its way.builds Business builds Community builds Family builds Community builds Business builds Community Contact us today and let’s get you set up for business. 0800 273 916 bnz.co.nz/internationalpayments Full details, our current Disclosure Statement and Qualifying Financial Entity Disclosure Statement may be obtained from any BNZ store or Partners Centre, or viewed on our website bnz.co.nz. BNZ terms and conditions, fees and charges apply. Correspondent bank commissions, fees and charges may also apply. You must be registered for Internet Banking for Business and opt into international payments in Internet Banking for Business. BNZ7219IP_Partners International Payments_Idealog_02 rev.indd 1 6/09/12 9:56 AM
  • 17. i d e a l o g i n a s s o c i at i o n w i t h N Z T ETurning milkinto moneyStarting with the high-end consumer, and working back to the cow, a Canterburynewcomer has turned the traditional New Zealand dairy industry model on its headS ynlait Milk started as a smart idea for Penno says Synlait kicked off with thorough need not take years to establish a trusting, a primary sector exporter, but with market research and worked back from there, successful partnership. determined entrepreneurial drive, figuring out what the consumer wanted and Synlait used New Zealand Trade andcountered by steady and disciplined establishing its operation to meet those needs. Enterprise’s networks to access other Kiwigovernance, it has grown its annual revenue “We literally just jumped on the plane and businesses operating in China and learn fromto $400 million in just four years. visited potential customers, refined a sales their experiences. The Canterbury dairy company exploits the strategy and formed a long-term view of how Synlait has a coveted major partnership withregion’s abundant pastures, healthy livestock to cater and develop markets,” Penny says. China’s Bright Dairy, which is also one of itsand pure water supply to turn milk into money, “We’ve had the privilege of building the numerous Chinese customers. But Penno sayscreating higher-value products for luxury business backwards.” the global focus on China has left a vacuum inoffshore customers. This is one example of Synlait’s point of other markets. While competitors have Synlait makes nutritional powders that difference in a dairy industry dominated by scrambled to establish themselves in China,directly target global demand for safe, reliable, farmer co-operatives. The company nurtures Synlait has picked up opportunities in Vietnam,protein-rich foods. The leaders of its a nimble, entrepreneurial spirit. the Philippines, Japan, North Africa and the128-person team based in the small Canterbury “We pride ourselves on learning very Middle East.town of Dunsandel doggedly pursue quickly and quickly killing the things that The Synlait milk facility processes more thanopportunities presented by global mega-trends: aren’t working.” 550 million litres of milk every August to MayChina’s emerging middle class, protein demand Right from its first season (2008/2009), in milking season. It boasts three leading-edgeto fight global obesity and a particular focus on more than 95 percent of Synlait’s product milk powder dryers, one of which is the largestboth nutrition for infants and the swelling were sold offshore. Today, it exports to around and most sophisticated infant formula facility inranks of the elderly. 40 countries. the Southern Hemisphere and can process up to Synlait’s products range from calcium-fortified “Early on in our life, NZTE was enormously seven tonnes of infant milk powder per hour.powders for bone health to fully formed infant helpful in connecting us with companies,” says As a relatively small company with a tightformulas designed to mimic mother’s milk, to Penno, adding that the company’s global sales cluster of suppliers whose geographica sideline in cream products made as a result strategy is built on a three-way market focus: proximity ensure a consistent taste profile,of the powder manufacturing process. one-third of its business in China, one-third Synlait is able to maintain absolute control over Chief executive John Penno, a scientist with in the rest of Asia and one-third in the rest of the quality of milk supply, milk processing andan acclaimed career in dairy industry research, the world. market distribution to guarantee its customersjoined forces with commercial dairy farmers “China’s the big opportunity for food absolute food safety, security and traceability.Ben Dingle and Juliet Maclean to establish producers, as they fight to feed the swiftly Penno says this level of product assuranceSynlait. Together Penno, Dingle and Maclean ballooning middle class and satisfy growing and accountability is a point of difference forown the largest dairy farm in the country, demand for high-quality animal protein. China which luxury customers are willing to pay.which is naturally one of Synlait’s 150-plus is the biggest influence in the market, there’s Synlait is determinedly focused on higher-suppliers. Almost all of the company’s milk no question about that.” value products, turning New Zealand milk intosuppliers, with an average herd size of 700 Penno says aspiring exporters cannot hope to premium luxury goods offshore.cows, are located within an 80-kilometre build relationships by email. Solid foundations “You need to be at the top end of the valueradius of the company’s Dunsandel base. are built by social interaction, but he says it chain,” Penno says. “Otherwise there’s no use.”
  • 18. i d e a l o g .c o. n z / b u s i n e s s p l a n‘You need to be at the topend of the value chain,otherwise there’s no use’ IN BRIEF Since operations began in 2008, Synlait Milk has grown its revenue to $400 million, its supply base to more than 150 farms and its staff to more than 130. Synlait processes more than 550 million litres of milk per year to produce a range of nutritional milk powders that are exported to more than 40 countries. www.synlait.com CONTACT New Zealand Trade & Enterprise, www.nzte.govt.nz, @NZTEnews
  • 19. Megatrend 4: For example, New Zealand Trade and Enterprise has identified significant Sustainable Global opportunities in Chile, where the government is expected to support the investment in development of geothermal electricity renewable energy generation with US$200 million over the energy projects next few years. will rise from In the meantime, New Zealand has also nurtured smart sustainable energy start-ups US$195 like Aquaflow, which makes algae-based billion in biofuels and the multi-award winning Lanzatech, which, among other things, How would you like 23,577 percent growth in 2010 to is doing pioneering research on ethanol- three years? That’s what Baltimore-based US$395 based biofuels. Astrum Solar has achieved since 2009, Both are targeting the incredibly lucrative installing solar heating systems. This makes it billion liquid fuels market against a background in the second-fastest growing company in the US, in 2020, which Bloomberg forecasts that production of gasoline substitutes, mainly ethanol, is with a current revenue of US$26.9 million and to projected to increase from 100 billion litres US$460 in 2010 to 190 billion and 300 billion litres in A 2020 and 2030 respectively. The production 2011 Bloomberg report forecasts that global investment in billion by of diesel substitutes, the report predicts, will 2030. renewable energy projects will rise from US$195 billion in double by 2020, reaching 100 billion litres 2010 to US$395 billion in 2020, and then US$460 billion by from roughly 50 billion today, and will 2030.Over the next 20 years, this growth will require nearly $7 trillion Over the next double again by 2030 reaching 200 billion of new capital. The explosive growth in this sector is backed by huge 20 years, this litres. This is to meet fuel demands from the government subsidies and investment in research and development, transport sector that is projected to rise by especially in the US. growth will 20 percent by 2020 and 46 percent by 2030 Mark Hargreaves, partner at intellectual property specialists require nearly based on 2010 levels. AJ Park, says: “IP development in this space is and will continue to be huge. It will become more mainstream.” $7 trillion Aquaflow, as a purveyor of what are called ‘second generation’ or ‘advanced’ biofuels, is So, do you fancy a slice of that action? of new capital particularly well-placed for a future in which You’d think New Zealand companies that do would have a significant Source: Bloomberg, 2011 there will be an increasing demand for fuel home advantage. About 70 percent of the country’s electricity supply is sources that do not conflict with the stability renewably generated from our significant array of hydro-electric, of our climate, nor human food sources. geothermal and wind power, all of which we have gained significant expertise over the years. Fiona Acheson, New Zealand trade commissioner for Malaysia, Indonesia and Brunei, says she is seeing this innovative pedigree starting to make in-roads there. “The current phase of the Indonesian government’s power infrastructure programme is dominated by geothermal energy,” she says. “The Indonesian government aims to have geothermal energy Plugging in across the Tasman provide at least 9,500 MW, or five percent, of the nation’s electricity by Dan Taylor, New Zealand trade commissioner in Australia, says 2025, and has also selected geothermal energy as one of its major Australia provides an interesting and potentially lucrative market for sources of alternative energy. New Zealand companies involved in sustainable energy. “These opportunities relate not just to energy generation, but also “Geothermal New Zealand, a consortium of 40 plus New Zealand energy-efficiency solutions. Australia has a Mandatory Renewable companies with a range of expertise in geothermal development, is Energy Target (MRET) of having 20 percent of the electricity working with Pertamina, the Indonesian’s state-owned oil and gas supply coming from renewable sources by 2020, and achieving this company, to scope opportunities in consultancy as well as engineering, target will require major investment over the next few years. “Meanwhile, Australia has significant unharnessed renewable sources procurement and construction contracts.” where New Zealand has, or is developing, capability, including wind, Other major sites of activity are China, the US, India, Germany and solar, geothermal, wave and biomass. New Zealand will be looking to Brazil, while renewable energy investment is also gathering pace commercialise solutions around these sources in the near future and across Africa and Latin America as companies take advantage of the funding support is available at both state and federal levels.” relatively abundant natural resources and growing domestic demand.106 / idealog.co.nz
  • 20. Idealog guide to exp orting NZ renewable energy is making powerful moves abroad Here’s a rundown from analysts from the Bank of New Zealand of where New Zealand renewable energy companies are kicking into action offshore. Meridian Energy Australia • Has, since 2006, owned and operated the Mt Millar wind farm in South Australia, which generates up to 70 megawatts (MW). • Has a partnership with AGL to build the Southern Hemisphere’s biggest wind farm in Macarthur, south of Sydney, with 140 turbines and a generation capacity of 42MW, enough to power 220,000 homes. • Is also developing a 131MW wind farm in Mt Mercer, Victoria, at a cost of AUS$260 million. Construction starts in December. United States • Owns solar farm CalRENEW-1, the first grid-connected solar farm to be built in California. Over 50,000 solar panels cover almost 50 acres of farm land, generating 5MW per year. Tonga • Is the lead developer of Maama Mai, the island’s first solar farm, leveraging off expertise gained during the construction of CalRENEW. The farm can generate up to 1.32MW and will reduce carbon emission by approximately 2,000 tonnes per year. Mighty River Power International Geothermal • Owns 29 percent of US-based GeoGlobal Energy LLC (GGE), a privately owned geothermal company which has established a broad portfolio of geothermal projects in various stages of development in the US, Chile and Germany. • Has so far committed US$250 million to its international geothermal develop- ments via a GGE-managed fund, of which US$225 million is already deployed. • Invested US$92 million into the US$400 million John L Featherstone plant in California (previously known as Hudson Ranch Power I), through a GGE-managed fund. The 50MW plant was commissioned in May 2012 and is the largest geothermal development in the US in recent years. It uses similar technology to Mighty River Power’s Kawerau and Nga Awa Purua geothermal stations in New Zealand. Trustpower • Owns and operates a 100MW wind farm in Snowtown, South Australia. FurtherKiwi company makes waves in Oregon development in Snowtown will add 270MW via two separate new wind farms,Wave Energy Technology-NZ (WET-NZ) is a research collaboration with commissioning scheduled for 2014.between IRL and private Wellington company Power Projects Ltd • Is investigating further wind generation opportunities throughout Australia,(PPL). They are currently testing a half-sized 18.4-metre long, 20kW including sites in South Australia, New South Wales and Victoria.device designed to generate electricity from the full range of oceanmotions. The deployment of the wave energy converter, inpartnership with US company Northwest Energy Innovations, Vectorfollowed a US Department of Energy grant worth nearly US$2 million. • Is internationally recognised for developing its smart metering business. Therekkwavenergy.co.nz may be commercial opportunities for Vector in Britain, where the company is looking at becoming an affiliate member of the UK Networks Association. November-december 2012 / idealog / 107
  • 21. i d e a l o g i n a s s o c i at i o n w i t h DNACreating theperfect stormExport victories rarely happen by accident – they require insight and strategic planning.Customer experience design agency DNA has developed a model for successA s an exporting nation, New Zealand appetite for who we are and how we do things important, but we mustn’t ignore emerging has some innate attributes that other has grown, in part due to key successes, but trends either, says Main. While responding to countries don’t enjoy. It’s these also due to the intrigue that we keep cropping them can be challenging, they can also providequalities that can provide real value to up and won’t go away despite our size and youth.” compelling opportunities.companies looking at offshore markets. Main believes several aspects define the NZ “Of course, trends wax and wane, but they Customer experience design agency DNA has Inc. story. There’s our pioneering nature align to who we are and how we create, sodeveloped a model for success that it uses to combined with our racial diversity in a young using them to our advantage is valuable.”help New Zealand businesses make their mark and ambitious nation, the physical beauty and For New Zealand, one of the most significanton international markets. pure(-ish)ness of our landscape, our pastoral current trends is hyper-connectedness, with Its clients are diverse, but those that export heritage and future, which embody qualities social media and digital channels allowing everhave taken a dose of Kiwi thinking to the world such as innovation, drive, resilience and greater direct connection.and seen positive results. ambition, and the Treaty of Waitangi and what The rise in self-determination and self- So how exactly does this model for success it symbolises in terms of the settlement process, service now mean we have a two-way channelwork? Companies should be aiming for a sweet and the indigenous culture and language we are thatfinally defeats the tyranny of distance andspot at the intersection of two vital objectives, embracing. the lack of scale that have so often challengedsays managing director Grenville Main. There’s also our sense of adventure. Kiwi exporters. “It’s a combination of being able to meet the “From Hillary to Hackett, and Pearce to “This hyper-connectedness benefits usreal needs of a changing market and Jackson, Kiwis have been ‘knocking the bastard specifically, because it now enables learning,embedding the right amount of the ‘New off’ for generations,” says Main. “It’s an attitude testing, dialogue and advocacy for who we areZealandness’ into your product, brand or way others want to taste and share.” and what we do,” says Main. “We can longerof working,” he says. The final element in the NZ Inc story is blame the old blockers – distance, youth, scale “This is about being able to leverage and our innovation, but it’s something we need and self consciousness.”address trends, sell the New Zealand story and to tap into more deeply, says Main, so weembody our attributes in valuable ways. It’s can prove that our ability to innovate isalso about being guided by the key commercial hardwired and built into our way of thinkingprinciples: hitting the market quickly and and doing business.potently, focusing on customer needs, DNA helped skincare company Trilogyimproving your products and services to suit capitalise on its simplicity, purity, vitality IN BRIEF Customer experience design agencythem, and acting with integrity and openness. message using the New Zealand story as DNA has developed a model for successThe more of these elements you can factor in, validation and credibility. for Kiwi businesses looking offshorethe greater your difference and value, and the The product and market expansion of and has used it to help brands such asmore your prospects are enhanced.” orthotic manufacturer Foot Science leaned Trilogy and the All Blacks. What makes things trickier – and where heavily on the Kiwi innovation story and CONTACTDNA can really add value – is that the New allowed for distinct differentiation from US and Grenville Main, managing director.Zealandness– or ‘NZ Inc. attributes’ as Main European rivals. And naturally, the All Blacks (04) 499 0828,also calls it – is continually evolving. brand story was a blend of the mystique of New grenville.main@dna.co.nz, “We see it as the amalgamation of prime Zealand’s location and physicality, our culture www.dna.co.nz.attributes of our make-up, our country’s and determination.success to date and its overall appeal. The Making the most of our New Zealandness is
  • 22. i d e a l o g .c o. n z / b u s i n e s s p l a n Current Trends Hyper- Healthy connected ageing The Attributes of Feed the middle classes Sustainable energy New Zealand, INC Our The social adventurous laboratory nature the Our The natural inventive landscape culture Our The factor pastoral Treaty heritage Imtimacy Agility Experience Integrity Guiding Principles DNA’s tips for exporting in the modern world1 Stand for something. 2 Aim high and target 3 Collaborate to 4 One size doesn’t fit 5 Create experiences. Breaking into opportunities. We innovate. Connect all. Before leaping Focus not only on international markets can’t compete on mass with right people, into new markets, what you offer, but requires something manufacture, but resources and access understand what how you offer it. compelling, relevant having an innovation in specialist fields to they need, review how Hyper-connected and differentiated. and design focus give you the greatest your offer measures advocates are the Identify your unique provides exportable chance of success. up and carefully most viral and selling proposition and profitable plan your impact effective means of and amplify it. opportunities. to that audience. market validation.
  • 23. i d e a l o g i n a s s o c i at i o n w i t h B N ZSpreading liquid goldaround the globeGrowing demand for New Zealand-produced honey has seen a small been quite favourable and the cost of finance has been reasonable. The bank also offersboutique honey company flourish into our largest single producer of strong support through its business advisoryspecialty honey. Here’s how BNZ made it sweeter than ever service. And over the past couple of months, our new CFO and I have found it really useful to connect in with the treasury part of the bank.W It’s the complete package.” ith so many artificial colours, outstripping its ability to supply, the issue isn’t NZHS also makes use of BNZ’s Queenstown- flavours and additives in our food so much one of looking for new markets but based international trade specialist who works these days, consumers are rather managing market growth carefully in with import/export clients in the Otago andincreasingly looking for food that’s healthy, order to build a premium brand, says Cox. Southland regions and provides ongoing advicenatural and pure. That’s great news for In its first three years, from August 2006 to around the risks the company faces whenMosgiel-based honey producer New Zealand August 2009, NZHS recorded a 995 percent exporting. Plus, regular export and trainingHoney Specialties (NZHS). A number of its increase in sales and won the 2009 Deloitte events held at BNZ’s Dunedin Partnersproducts are harvested in pristine World Fast 50 Award for fastest growing company in Business Centre provide Cox and otherHeritage sites using sustainable beekeeping New Zealand. Naturally, that growth has local managers with plenty of learning andpractices, and contain goodies such as leveled out a little, but NZHS is still enjoying a networking opportunities.beneficial bacteria, antioxidants, vitamins, strong upward trend in sales, thanks mainly to “I recently went to a BNZ event that Kateminerals and amino acids. the expansion of its Asian markets. ran,” says Cox. “It was extremely good and Established in 2006, NZHS was set up with “Our main export markets are the UK, Hong I got a lot out of it – not just the informationa strong export focus from day one. Just six Kong, Singapore, China and South Korea. The provided, but also the chance to connect withyears on, it’s New Zealand’s largest single Asian market is where all the opportunity is at a variety of different business people.”producer of specialty honey and makes some of the moment. It’s quite underdeveloped for For her part, Skeggs enjoys dealing withthe world’s purest mono-floral honey varieties, NZHS compared to the Northern Hemisphere NZHS and is excited about the company’smost of which are unique to this country. business, and Asia is experiencing better bright future. Among them are premium raw honey economic times. “It’s a very interesting business and it’s fantasticvarieties, predominantly in a creamed format. “In the longer term we’re looking to that they are growing in offshore markets. It’sNZHS produces varieties such as thyme, strengthen and build our brand as opposed exciting to be working with a company that ismanuka, clover and beech forest honeydew, as to simply selling a commodity.” successfully developing and exporting whatwell as two honey-based drinks, which are sold A company experiencing business growth is very much a New Zealand product.”through Waitrose in the UK. The company also on this scale requires robust banking facilitiesmarkets manuka honey and blackcurrant extra and sound financial advice. In 2010, NZHSjam, which it sells internationally, and has switched to BNZ, and works with BNZplans to build on the range in 2013. Partners in Dunedin. NZHS general manager Peter Cox says the “We work closely with the management team IN BRIEFpremium profile of New Zealand honey has at NZHS to understand their export business Founded in 2006, Mosgiel-based New Zealand Honey Specialties is our largestonly been enhanced by the country’s ‘100% and to devise payment and financing options single producer of specialty honey. Withpure’ tourism messages. that are suitable for them. Using BNZ’s 95 percent of its products sold offshore, the “Our honey has a very good reputation in International Payments Online system, they company relies on BNZ to help it manageterms of its purity, quality and taste, and track payments from overseas clients and get its day-to-day export transactions and plan for ongoing sales growth.our mono-flora honeys are a real point of email alerts when payments arrive,” says Katedifference,” Cox says. Skeggs, international trade and cashflow CONTACT That’s more good news for NZHS. With 95 solutions specialist at BNZ Partners, Otago. To find out more about BNZ Partners,percent of its sales made to offshore buyers, the It’s a facility that Cox says has been really phone 0800 273 916 or visitcompany has experienced impressive growth. useful, but he’s also impressed by the overall www.bnz.co.nz.With worldwide demand opportunities for service offering from BNZ.New Zealand Honey Co branded products “The financing facilities BNZ offers have
  • 24. i d e a l o g .c o. n z / b u s i n e s s p l a n BNZ’s Kate Skeggs and New Zealand Honey Specialties’ Peter Cox.
  • 25. Country case study: China China is arguably the natural homeland of all the mega-trends of the is especially the case since, according to MacKenzie, Fonterra is perceived to have early 21st century. It is the world’s second-largest country, and its most acquitted itself admirably in its populous. Since the introduction of economic reforms in 1978, China interventions in the widely publicised has become the world’s fastest-growing major economy, and its melamine contamination of milk powder second largest after the US. Since the 1990s, it has been a place of in 2008. However, China’s regulatory jaw-dropping development statistics framework, perhaps in light of incidents S like this and the general level of concern, ince 2000, China’s cities have been expanding by 10 percent each can be torturous. year. To put this in perspective, imagine trying to build homes for an MacKenzie says: “When it comes to extra 137,000 people in Auckland this year, and carrying on that rate dietary supplements, the regulatory of expansion for the next 12 years. environment here is so complex and To link these exploding cities up, China is reported to be building changeable that we are not having the something like 5,000 kilometres of new highway a year. And to connect same success as has been experienced in them with the outside world, the country is currently the world’s largest Hong Kong and other parts of Asia.” constructor of new airports. The Chinese government has begun a US$250 In the meantime, NZTE is showcasing billion five-year project to build about 170 new airports across the country. ‘If you don’t the best of what New Zealand food has All this activity has accelerated China’s long-held role as a relatively understand to offer, but giving it a twist by using a low-cost manufacturing powerhouse, but it has also opened up the country’s new, more affluent middle classes as an enormous market for the political local team of chefs to better target the Chinese palate. goods and services from the outside world and energised a huge business culture you And the biggest mistake folks are still ecosystem chock full of potential partnerships. can get making? The trick is knowing how to access it all. yourself in a “Companies come here, find an ‘expert’ Rod MacKenzie, New Zealand Trade and Enterprise’s regional director for China, is a handy guide to have on this unfamiliar ground. world of who says they know everybody, then go away again and wait for it all to happen,” “You can’t come here thinking it is like any other export market, trouble quite says MacKenzie. “It doesn’t [happen], if but maybe a bit more complex,” he explains. “It is massively more quickly. It’s all you try to do it that way.” complex. Consumer attitudes are different; consumerism itself is only about just beginning. “Yes, there is an emerging middle class, but for the most part they are preparation, just experimenting, so the idea of brand loyalty is still largely foreign establishing to them.” your reason When it comes to being hyper-connected, MacKenzie says China’s social media is seen as a very powerful tool for attracting the attention of for being here Since 2000, China’s China’s young generation, particularly women. Tourism New Zealand has and actually cities have been paved the way for using social media in China, but NZTE is now being here: expanding by 10 percent gathering ground. putting people each year. To put this in Across the board, language is still a major barrier for NZ companies in China, but MacKenzie points out that understanding the culture, rather on the ground’ perspective, imagine than just the words being said, is also crucial. – – Ro d M ac K e n z i e , trying to build homes “If you don’t understand the political culture you can get yourself in a New Zealand Trade for an extra 137,000 world of trouble quite quickly,” he says. “It’s all about preparation, a n d E n t e r p r i s e’s people in Auckland this establishing your reason for being here and actually being here: putting Regional Director people on the ground.” for China year, and carrying on New Zealand food companies that gain a foothold are finding plenty to that rate of expansion leverage in terms of an overriding concern for food safety in China. This for the next 12 years112 / idealog.co.nz
  • 26. Idealog guide to exp orting Areas ofThe mysteries of GuanxiTim White is lead partner with KMPG’s For example, a new client approached White, believing that they were very close potentialBusiness Advisory Team and leads theirgrowing China business practice. He is also to securing a software deal with a large Chinese company, because the company in Chinachairman of the New Zealand China Trade had repeatedly asked him to return withAssociation, and a board member of the New further details on how his software could workZealand China Council. Tim believes understanding for them. But when White and a Chinese KPMG‘guanxi’is vital to business success in China. colleague joined the next meeting, the company The term encapsulates many different aspects of thanked White’s client sincerely for his help, tookhuman relationships, particularly and crucially the everybody out to dinner and enthusiasticallyintertwinement of both personal and business explained how they had now handed all the Winedealings. At its most basic level a person’s guanxi is information on to their own team of software China has more than 2,000his or her network of relationships, but it is also a developers to create something similar. years of winemaking history,measure of the depth of those relationships and White says: “Chinese people are very friendly, so although you wouldn’t reallythe extent by which a person is bound or obligated the way things like this happen can be quite recognise anything from beforeby them. difficult to understand, because the processes the 20th century. There are Many Kiwi businesspeople are used to involved are quite foreign to us. I would never more than 160,000 acres worth of vineyards nationwide,establishing trust relationships in business by attempt to do a deal in China without working with but many are too remote to beworking directly towards the creation of deals, an established Chinese partnership, which may truly commercial. Despite this,contractual obligations and other legal paperwork. take years to develop. It’s not just for translation, the Chinese tipples of choiceThis can mean they become confused by the way in but also to establish and understand these were based on beer and grain spirits until the governmentwhich, in China, this process remains largely relationships. Once you have guanxi with a person, encouraged a shift to wine tosubordinate to the establishment of the guanxi, or this gives you a certain amount of access to their stave off alcohol-related illness,personal relationships between the parties. network, and so on.” and Chinese Premier Li Peng decreed that state banquets would go better in wine in future. Wine is now becoming a fashionable drink among the CHINa’S SHARE IN MERCHANDISE EXPORTS wealthy, younger urban Chinese generations, and is the favoured drink of China’s elite. 15% 12% 9% Aviation Building 170 new airports in the 6% next few years also means a boom in ancillary markets like navigation equipment, air crew Credit: BNZ/Statistics NZ 3% training and safety equipment. 0% 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 New Zealand’s mega-trend in exports is not so much one of the nature of what we send overseas, which these days is largely the same as it was four decades ago – primary products. Instead, the main development is where we send our goods to. Sixty three percent of New Zealand’s export receipts come from Asian countries, including Australia. Twelve years ago Marine that proportion was 56 percent. Growth in our exports to Asia over the past year has been 2.6 percent, with Chinese The Chinese middle class has receipts rising by 11.4 percent. In fact, China now produces 15.2 percent of goods export receipts – up from 7 percent only the house and the car, and is four years ago. This strong growth, however, has come largely from a surge in exports of minimally processed dairy products now looking to the coasts and waterways as their next and logs. The challenge for New Zealand is to move up the value-added chain and produce goods (and services like playground. Already companies education and tourism) more tailored to the rising wants of China’s ballooning middle class. In that regard, the launch in like North Shore-based trimaran April of the government’s NZ Inc. China Strategy is an important development, and an invitation to all of NZ. builder Weta Marine are setting – – T o n y A l e x a n d e r , BN Z C h i e f E c o n o m i s t a course for expansion in this offshore market. November-december 2012 / idealog / 113
  • 27. Mega-predictions It’s all very well and good to point out how fast the world is changing and the increasing influence digital technology has on our lives. But what does it all mean for the future? Come and peer into our crystal ball Hyper-connection Getting funding for internet start-ups may continue to be a challenge. Ben Speedy, BNZ national manager, business and commercial, says bankers still struggle with this, even in banks like BNZ, which has provided specific staff training on the sector and has staff with backgrounds in private equity and ICT businesses. How to get help from “The main reasons for this include the the banks to get going level of investment required prior to the with your online idea. first sale, the lack of certainty around future cash flow, limited exit options and the Firstly, demonstrate that intangible nature of the business, which you understand business means there are no assets to sell if the and not just social media. business does not pan out,” Speedy says. “The people behind these ventures also You’ll also need a great tend to have no track record in business. product, strong governance, Another challenge is the number of to know your market and businesses involved in the industry and have a clear idea as to choosing which horse to back. It’s becoming exactly how you are going very crowded and new players lack to be successful. sufficient points of difference.” There are already signs that Kiwis are Don’t be afraid to seek help finding in-roads, especially in the US. New and guidance if you need it. ‘Silicon Valley and New York are Zealand trade commissioner in New York, Peta Conn, says New Zealand is punching Make sure you’ve got strong seeing an influx of New Zealand above its weight in the hyper-connected world. knowledge of the industry, companies setting up to be closer “Both Silicon Valley and New York are including leveraging external to their customers. The calibre of witness to an influx of New Zealand relationships with those companies setting up to be closer to their technology coming out of New customers. Entertainment is also a focus of who have expertise. Zealand is competing successfully development with New Zealand expertise on the world stage and fuelling our cutting through areas such as gaming from – – B e n S p e e dy, BN Z reputation for innovation’ TV series and films and customised book soundtracks. The calibre of technology N at i o n a l M a n ag e r , Business and coming out of New Zealand is competing C o m m e rc i a l successfully on the world stage and fuelling New Zealand’s reputation for innovation.”114 / idealog.co.nz
  • 28. C H R I S T C H U R T C H U R CEH S O N E L SW E L L I N GE LO NN G T O N K L A N D K L ASN D N E Y Y D N E Y CHRISCH N L N ON W T LI AUC AUC YD S
  • 29. Expenditure per capita on food (USD) Healthy ageing and 4,000 the baby boomers 3,000 3,396 3,631 2,873 Ian Proudfoot, head of agribusiness and lead 2,000 2,425 partner, consumer and industrial products 2,087 2,179 at KPMG, is seeing signs that the boom in 1,558 healthcare products is going to go well 1,000 beyond the baby boomer. 223 338 “There are growing opportunities to sell 558 0 products to all consumers on more than the INDIA CHINA INDONESIA SOUTH USA UK GERMANY NEW AUSTRALIA JAPAN KOREA ZEALAND traditional attributes of taste, texture, cost and safety of the product,” he says. “Recognition that food can have proven health benefits and consequently demand a premium price is Food expenditure as % of household income expanding rapidly, particularly in western 40.0% markets. The challenge for companies, particularly the many smaller food exporters 30.0% 32.2% in New Zealand, is the cost associated with obtaining the scientific certification of the 27.7% health properties of the product. Consequently, 20.0% 22.3% while many companies recognise the size and 14.8% 15.0% 15.0% scale of the opportunities, many lack the 10.0% 10.7% 11.0% financial capacity to fund the necessary science 9.7% 6.4% to make health claims about their products.” 0.0% That may be where close relationships with USA UK AUSTRALIA GERMANY JAPAN NEW SOUTH CHINA INDIA INDONESIA Crown research institutes such as Industrial ZEALAND KOREA Research Limited become vital to Kiwi businesses grabbing real growth in this sector. Proudfoot says big players such as Zespri and markets such as Japan and Korea.” He doubts that the best results will be Fonterra are already using health benefit And of course, New Zealand’s manuka honey achieved by just piling into Asia. research to differentiate their products from has already gained a good grip on the shelves of “Food expenditure per capita remains the competition and are achieving good results. health food stores worldwide. very low in the growth regions of the world “Fonterra has focused heavily on the benefits Proudfoot would like to see more research compared to the levels in our traditional export that calcium in milk can deliver to older and development specifically targeting this markets,” he says. “And food represents a much women at risk of osteoporosis in its promotion area, including work on the full spectrum of higher proportion of income in these growing of Anlene brand milk products,” he explains. milk enzymes and the potential nutraceutical economies than it does in the traditional “Zespri continues to invest in supporting the benefits of some of New Zealand’s native flora markets. This suggests spending on food health benefits of New Zealand kiwifruit and and fauna. remains focused on eating for survival rather uses this in its promotional activities in key “This could create market opportunities that than having discretionary funds to experiment other countries could not replicate,” Proudfoot with high-value food products produced in points out. countries such as New Zealand.” ‘Recognition that food The key to success in these markets is to can have proven health Feeding the world’s really understand the food preferences of a country’s consumers, which requires the sort benefits and consequently demand a premium price is middle classes of presence and cultural immersion that has so far proven difficult to establish for many expanding rapidly, That said, New Zealand will never be able to New Zealand companies. feed the world. Estimates vary, Proudfoot says, “Too many of our export activities remain particularly in western but people argue that we are likely to be able focused on moving product rather than markets. The challenge for to feed between 20 and 100 million people. understanding and fully delivering on New Zealand is the cost “So we need to ensure that the products customers’ priorities,” he adds. associated with getting we produce and export are targeted into the market niches that will enable us to generate He also bemoans the lack of a real national strategy for New Zealand’s agricultural food scientific certification of the the best returns for the exporter, the producers sector at a time when the nation relies on it products’ health properties’ and the wider economy.” so heavily for export earnings.116 / idealog.co.nz
  • 30. Thinking aboutfarming for profit?Our national and international, cross-functionalagribusiness professionals focus on understandingthe issues facing agribusinesses and help createpathways to prosperity for you.Whether you are doing business from the kitchentable or boardrooms in international markets,KPMG agribusiness specialists have theexperience to help you achieve yourbusiness goals.Our local agribusiness leadersJan GatleyDirectorT: +64 (7) 858 6557E: jmgatley@kpmg.co.nzHamish McDonaldPartnerT: +64 (7) 858 6519E: hamishmcdonald@kpmg.co.nzRobert BraithwaitePartnerT: +64 (7) 858 6517E: rbraithwaite@kpmg.co.nzMurray DunnPartnerT: +64 (7) 858 6512E: murraydunn@kpmg.co.nzDownload this year’s KPMGAgribusiness Agenda atkpmg.com/nz/aa2012 © 2012 KPMG, a New Zealand partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International Cooperative
  • 31. TelstraClear. Taking your business further Using the latest technology, we can connect you with your emerging markets anywhere in the world. 0508 555 500 www.telstraclear.co.nz118 / idealog.co.nz
  • 32. New Zealand must get mega-trendy It is extremely unlikely that, even after reading this excellent guide, you will be able to go away to create and commercialise an idea custom ‘Resist the urge for made for one of the current mega-trends. It is even less likely that you punting the balance will be able to do it for one of the mega-trends yet to emerge sheet looking for windfall foreign exchange gains. H ‘Having a culture of growing istory seldom works like that. Did Mark Zuckerberg really know that he Businesses that have was creating a 21st century cultural innovators is probably what a robust FX policy touchstone when he started wiring up his our future has to be based on’spend little time on FX student buddies? Probably not. Steve Jobs management, as the often said that when he and his friends started Apple they had no business aspirations experience design consultancy DNA, where he rules are set and whatsoever, they just wanted to make is managing director. His advice? understood and can computers for their friends. And how could “People always come to us at DNA with a be implemented by college runner Philip Knight and his coach Bill problem, but it’s often ‘their’ problem. We say, virtually anyone’ Bowerman have known, when they started selling a Japanese running shoes out the back align yourself with the opportunity and then reconsider what the problem or challenge you of a car, that they were on their way to creating face may be. Our ability to fund our own R&D– – I a i n M c L e o d, BN Z N at i o n a l US$24billion sporting mega-brand Nike? sector governmentally is constrained; there M a n ag e r But that doesn’t mean you should just chance aren’t enough Kiwis who have invested over your arm and trust to luck anymore than you the years, so there is not a tonne of money inDon’t rely on should smoke 40 a day because my Pop did and survived until he was 80. Like any guide on superannuation funds that can invest in local innovation. This means we have to be attractivespecial FX commercialisation, what we are talking about here is planning for risk minimisation, because enough to get offshore interest, because they have the money and we don’t. life has quite enough of that already. “The only saviour that we have is to keepAll these mega-trends and more will What this can do is guide your thinking. For turning out good ideas, keep growingmake some currencies go up and example, Derek Handley has said that mobile entrepreneurial Kiwi minds. Having a culturedown like a bride’s nightie, but Iain ad company Hyperfactory started from a pretty of growing innovators is probably what ourMcLeod, BNZ mational manager, clear conversation on where advertising was future has to be based on. The world is gettinginternational trade, cautions against going to go in the mobile age, and that little bit smaller and more blended in the sense of who’sgetting carried away with playing the of foresight has helped him trouser something funding things, where ideas are being creatednumbers game. in seven figures. and developed, where they are being made. Our “Resist the urge for punting the In this lightning speed age, even being first to resource base could be a globally recognisedbalance sheet looking for windfall the punch is no guarantee of easy money and ‘creation engine’.”foreign exchange gains,” he says. early retirement. Guy Horrocks co-founded the“Businesses that have a robust world’s first iPhone development companyFX policy spend little time on FX Polar Bear Farm well before the App Store evenmanagement, as the rules are set and existed, but still has to bust his hump on hisunderstood and can be implemented Carnival Labs day job, grabbing the red eye inby virtually anyone. search of the big pay day. But he has a lot more “A lack of policy usually has chance of getting there than most, because hebusiness owners actively involved and is riding a mega-trend. And in the process he isspending a disproportionate amount likely to add to the sum of New Zealand’s – – A n dy K e n w o rt h y i s a r e g u l a rof time in tracking markets and trends achievements. idealog contributor andwhen they should be working on or in Grenville Main sees all sorts of folks with au t h o r o f t h i s g u i d e .the business.” ideas coming through the doors of customer w w w. a n dy k e n w o rt h y.c o m November-december 2012 / idealog / 119