In a hyper-connected world: - Social media platforms like Twitter and Facebook have billions of users worldwide, transcending national boundaries and enabling new global markets. - Businesses need to evaluate, meet, and respond to global online markets to succeed. They must be agile and able to expand into new opportunities online. - New Zealand businesses are starting to find success exporting to major markets like the US by leveraging their online presence and connections in the hyper-connected world. However, New Zealand still lags other countries in internet connectivity and risks falling further behind without more competition in international data connections.

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 wanting
88 / idealog.co.nz

2. Idealog guide to exp orting
to use the internet, but it is absolutely vital for businesses that
want to make their mark by helping to shape its future. Intellectual property
TradeMe is our localised ebay, but where is our ebay, a
company that goes global on its big idea in this space? While we
salivate at the billions made by the likes of Mark Zuckerberg, or
in the internet age
Google 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 web
aware that behind and around those superstars there is a whole somewhere, or somebody copied and pasted it for you. Check your music
industry sector full of folks making it big, if not colossal, behind collection, your videos, and Google Samsung and Apple’s billion-dollar bunfight
brands 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 bottle
business. According to a survey by the Concentrate marketing store with an honesty box. But rather than abandoning legal protection
company, 88 percent of Kiwi high-tech businesses are selling to altogether, or shying away from going global online, Idealog has some advice
other 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 online
director 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 at
that transition – from how we used to do things in terms of which copyright works, in particular, can be published and distributed, which
product, 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 of
to 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 available
you. 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 makes
agility 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 which
behaviour that are evolving so there is a lot to draw on. But new products and services are brought to market. I think branding assumes
there are some spontaneous and serendipitous things that more importance for the same reason. Your brand can reach global markets
really go off. What is great about this is that unbridled overnight, so ensuring it is protected is vital, given that so much product
creativity, opportunity or innovation out of leftfield is still a differentiation online is about branding.
vibrant opportunity – and much of it is potentially quite
commercial. When we look at the local guys who have done Q Has the scale of big players like Google and Facebook distorted the
good 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 to
sure, 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 in
army of creative thinkers ‘attuned toward opportunity’. Within the internet space or not. The growth of major players in this area is good for
the entrepreneurial base in New Zealand we need to build an local businesses if it means they can exit and plough their capital back into
innovation 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 and
above its weight in the hyper-connected world. Both Silicon designs are spread more easily and can be ripped off, but it also means those
Valley and New York are witness to an influx of New Zealand ideas and designs are reaching large markets that New Zealand businesses
companies setting up to be closer to their customers. would have previously struggled to tap into. I know a number of local companies
Entertainment is also a focus of development, with NZ expertise who receive unsolicited interest in their products or their business simply
cutting 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 product
customised 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 critical
stage, 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 orting
The land of the long list of that many of the services advertised are
actually quite different when you read the
cloud-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 Office
First there was the internet, then there was platform (we call it the Marketplace Portal), 365, you may find that all the data is on servers
the cloud. Surprise! It’s the same thing – it has choose the server spec they need and be using in Singapore, which may have very different
just 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 to
TelstraClear, lays down what this could quickly to provide a development environment, find there has been a security breach, blackout
mean for your business. “Cloud-based services or who need additional server space for big or system shutdown that may cripple
are 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 only
you have a web-based sales business and you environment that is really going to set the as good as its weakest point so I would
suddenly take off and find your e-commerce standard for some time caution against keeping critical business data
site is overwhelmed, you can go online and to come.” on internet-based services. You don’t know
purchase the use of extra infrastructure to cope All the whizz-bangery won’t make up where they are being hosted, they typically
with 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 you
install what you need, whereas now it is more you reach for after you have done the hard and your services that is vulnerable
like 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 important
off 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 print
working 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 been
month 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.com
92 / idealog.co.nz

6. Idealog guide to exp orting
Megatrend 2:
Healthy ageing
Baby boomers
thought that 79%
of TV advertising
and 89% of online
and the baby
advertising appeared
to be aimed at
somebody younger
boomers
than them
Sou
rc e dy
:A2 Stu
010 Go mer
ogle /Nielsen Consu
The 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 are
end of World War II, combined with an era of relative world peace, still the funders of the industrialised world but
natural resource abundance and technological advancement fuelled they are shellshocked by the events in 2007 and
an era of unprecedented global affluence. The guns stopped booming, 2008. A considerable number have lost their
populations boomed and then the economy boomed retirement savings and are remaining in the
workforce. And those who are still financially
S
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-averse
million. By then there were 12 countries with marketing being much younger than the baby now in OECD countries, but in Asia they are
more than 10 million people aged 60 plus, boomers, or that marketers make incorrect still expansionary and tastes and wealth-based
including China (160 million), India (89 assumptions based on this generation. needs are expanding exponentially. It is still an
million), 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 the
million) and Germany (21 million). By 2050, experience design consultancy DNA, but he relative health of this population versus
the population aged 60 or over is expected to sees the influence of baby boomers everywhere previous generations. They live longer, have
triple, 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 them
million 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 is
Meanwhile, the 182 million people younger before, but on the other hand they are that they, like lots of other consumers, are
than 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 from
percent 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 destabilising
property specialists AJ Park, says it has stick to relationships. Baby boomers have for businesses, because you are not quite sure
triggered growth in certain sectors: “The changed the most in generational terms and where they are going to go next and what is
pharmaceutical industry has developed will basically suit themselves more than ever driving the decision-making. That’s where
significant IP in the face of demand from baby before, so if you aren’t providing something insight builds toward intimacy, which is now
boomers 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 this
massive cohort of the world’s population feels
‘Baby boomers have changed the most in generational terms
ignored by marketing folks. Blog after blog on and will basically suit themselves more than ever before, so if
the 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 to
live 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 FALSE
If you’re thinking about exporting to China, there’s no room for guesswork. New Zealand Trade and
Enterprise can give you the tips and tools you need to move your business into this market; from
country overviews and language and culture, to sales and marketing suggestions. That way, you’ll
know that the executive you’re dealing with hasn’t left for an impromptu holiday, he’s just waiting
for 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 k
Crushing the
counterfeits
Whether it’s Armani, Adidas or Anchor, well-known brands are all
subject 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 IP
H
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 to
anything can be faked and passed off as force the counterfeiter to agree to destruction
a 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 the
scale opportunists, but internationally the counterfeits – that was all done over a period
trend toward large-scale counterfeiting of two days with the help of a giant digger. The The destroyed
continues 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 were
discovered and foiled a large-scale attempt infringing Fonterra’s marks and gave away
to 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 in
thousands 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 product
intercepted by Fonterra’s representatives that risks being copied should protect their
in the Middle East. intellectual property.
Carolyn Green, Fonterra’s Auckland-based
trade mark manager, says the counterfeit
products were on their way from the United
Arab Emirates to Somalia but were found
before they left their port of origin.
“We’ve had a few instances where we’ve
been advised through Customs of infringing
products, but this was a particularly big one,”
says Green. “Anchor is one of our biggest
brands and is very popular in that part of the
world, so it’s a major target for counterfeiters.”
Intellectual property expert AJ Park has
been advising Fonterra since the dairy
co-operative formed in 2001.
Partner Alan Potter and senior associate
Emma McBride work closely with Carolyn
Green to help safeguard Fonterra’s valuable
trade mark rights.
“Fonterra sends its products to more than
140 countries around the world,” says McBride.
“Because of all the valuable brands Fonterra
uses, it has a significant registered trade mark
portfolio, 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
s
100 / 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 networks
KFC 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 meet
s
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
F
102 / idealog.co.nz a
BNZ721

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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 E
Turning milk
into money
Starting with the high-end consumer, and working back to the cow, a Canterbury
newcomer has turned the traditional New Zealand dairy industry model on its head
S
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 and
countered by steady and disciplined establishing its operation to meet those needs. Enterprise’s networks to access other Kiwi
governance, it has grown its annual revenue “We literally just jumped on the plane and businesses operating in China and learn from
to $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 with
region’s abundant pastures, healthy livestock to cater and develop markets,” Penny says. China’s Bright Dairy, which is also one of its
and pure water supply to turn milk into money, “We’ve had the privilege of building the numerous Chinese customers. But Penno says
creating higher-value products for luxury business backwards.” the global focus on China has left a vacuum in
offshore 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 the
128-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 than
opportunities presented by global mega-trends: aren’t working.” 550 million litres of milk every August to May
China’s emerging middle class, protein demand Right from its first season (2008/2009), in milking season. It boasts three leading-edge
to fight global obesity and a particular focus on more than 95 percent of Synlait’s product milk powder dryers, one of which is the largest
both nutrition for infants and the swelling were sold offshore. Today, it exports to around and most sophisticated infant formula facility in
ranks 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 tight
formulas designed to mimic mother’s milk, to Penno, adding that the company’s global sales cluster of suppliers whose geographic
a 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 and
an acclaimed career in dairy industry research, the world. market distribution to guarantee its customers
joined 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 assurance
Synlait. Together Penno, Dingle and Maclean ballooning middle class and satisfy growing and accountability is a point of difference for
own 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 into
suppliers, 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 value
radius 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 top
end 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. Further
Kiwi 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 ocean
motions. The deployment of the wave energy converter, in
partnership with US company Northwest Energy Innovations, Vector
followed a US Department of Energy grant worth nearly US$2 million. • Is internationally recognised for developing its smart metering business. There
kkwavenergy.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 DNA
Creating the
perfect storm
Export victories rarely happen by accident – they require insight and strategic planning.
Customer experience design agency DNA has developed a model for success
A
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 provide
qualities 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, so
developed 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 significant
on 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 ever
have 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 channel
work? Companies should be aiming for a sweet and the indigenous culture and language we are thatfinally defeats the tyranny of distance and
spot at the intersection of two vital objectives, embracing. the lack of scale that have so often challenged
says 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 us
real 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 are
Zealandness’ into your product, brand or way others want to taste and share.” and what we do,” says Main. “We can longer
of 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 we
embody our attributes in valuable ways. It’s can prove that our ability to innovate is
also about being guided by the key commercial hardwired and built into our way of thinking
principles: hitting the market quickly and and doing business.
potently, focusing on customer needs, DNA helped skincare company Trilogy
improving your products and services to suit capitalise on its simplicity, purity, vitality IN BRIEF
Customer experience design agency
them, and acting with integrity and openness. message using the New Zealand story as DNA has developed a model for success
The more of these elements you can factor in, validation and credibility. for Kiwi businesses looking offshore
the greater your difference and value, and the The product and market expansion of and has used it to help brands such as
more 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 CONTACT
DNA 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 world
1 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 Z
Spreading liquid gold
around the globe
Growing demand for New Zealand-produced honey has seen a small been quite favourable and the cost of finance
has been reasonable. The bank also offers
boutique honey company flourish into our largest single producer of strong support through its business advisory
specialty 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 and
increasingly looking for food that’s healthy, order to build a premium brand, says Cox. Southland regions and provides ongoing advice
natural and pure. That’s great news for In its first three years, from August 2006 to around the risks the company faces when
Mosgiel-based honey producer New Zealand August 2009, NZHS recorded a 995 percent exporting. Plus, regular export and training
Honey Specialties (NZHS). A number of its increase in sales and won the 2009 Deloitte events held at BNZ’s Dunedin Partners
products are harvested in pristine World Fast 50 Award for fastest growing company in Business Centre provide Cox and other
Heritage sites using sustainable beekeeping New Zealand. Naturally, that growth has local managers with plenty of learning and
practices, 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 Kate
minerals 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 information
a strong export focus from day one. Just six Kong, Singapore, China and South Korea. The provided, but also the chance to connect with
years 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 with
the world’s purest mono-floral honey varieties, NZHS compared to the Northern Hemisphere NZHS and is excited about the company’s
most 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 fantastic
varieties, predominantly in a creamed format. “In the longer term we’re looking to that they are growing in offshore markets. It’s
NZHS produces varieties such as thyme, strengthen and build our brand as opposed exciting to be working with a company that is
manuka, clover and beech forest honeydew, as to simply selling a commodity.” successfully developing and exporting what
well 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 facilities
markets manuka honey and blackcurrant extra and sound financial advice. In 2010, NZHS
jam, which it sells internationally, and has switched to BNZ, and works with BNZ
plans 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 BRIEF
premium profile of New Zealand honey has at NZHS to understand their export business Founded in 2006, Mosgiel-based New
Zealand Honey Specialties is our largest
only been enhanced by the country’s ‘100% and to devise payment and financing options single producer of specialty honey. With
pure’ 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 manage
terms 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 Kate
difference,” 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 visit
company 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 years
112 / idealog.co.nz

26. Idealog guide to exp orting
Areas of
The mysteries of Guanxi
Tim White is lead partner with KMPG’s
For example, a new client approached
White, believing that they were very close
potential
Business Advisory Team and leads their
growing China business practice. He is also
to securing a software deal with a large
Chinese company, because the company
in China
chairman of the New Zealand China Trade had repeatedly asked him to return with
Association, and a board member of the New further details on how his software could work
Zealand 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, took
human relationships, particularly and crucially the everybody out to dinner and enthusiastically
intertwinement of both personal and business explained how they had now handed all the
Wine
dealings. At its most basic level a person’s guanxi is information on to their own team of software
China has more than 2,000
his 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 really
the extent by which a person is bound or obligated the way things like this happen can be quite recognise anything from before
by 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 be
working 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 choice
This 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 government
which, in China, this process remains largely relationships. Once you have guanxi with a person, encouraged a shift to wine to
subordinate 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 about
farming for profit?
Our national and international, cross-functional
agribusiness professionals focus on understanding
the issues facing agribusinesses and help create
pathways to prosperity for you.
Whether you are doing business from the kitchen
table or boardrooms in international markets,
KPMG agribusiness specialists have the
experience to help you achieve your
business goals.
Our local agribusiness leaders
Jan Gatley
Director
T: +64 (7) 858 6557
E: jmgatley@kpmg.co.nz
Hamish McDonald
Partner
T: +64 (7) 858 6519
E: hamishmcdonald@kpmg.co.nz
Robert Braithwaite
Partner
T: +64 (7) 858 6517
E: rbraithwaite@kpmg.co.nz
Murray Dunn
Partner
T: +64 (7) 858 6512
E: murraydunn@kpmg.co.nz
Download this year’s KPMG
Agribusiness Agenda at
kpmg.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.nz
118 / 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 in
Don’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 attractive
special 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 keep
All these mega-trends and more will What this can do is guide your thinking. For turning out good ideas, keep growing
make some currencies go up and example, Derek Handley has said that mobile entrepreneurial Kiwi minds. Having a culture
down like a bride’s nightie, but Iain ad company Hyperfactory started from a pretty of growing innovators is probably what our
McLeod, BNZ mational manager, clear conversation on where advertising was future has to be based on. The world is getting
international trade, cautions against going to go in the mobile age, and that little bit smaller and more blended in the sense of who’s
getting carried away with playing the of foresight has helped him trouser something funding things, where ideas are being created
numbers 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 recognised
balance 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 company
FX policy spend little time on FX Polar Bear Farm well before the App Store even
management, as the rules are set and existed, but still has to bust his hump on his
understood and can be implemented Carnival Labs day job, grabbing the red eye in
by 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 he
business owners actively involved and is riding a mega-trend. And in the process he is
spending 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 r
of time in tracking markets and trends achievements. idealog contributor and
when 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