Let's be an innovation factory....

First published in stuff.co.nz on 16.10.2012

New Zealand the Innovation Factory

New Zealand needs to turn itself into an innovation factory that creates more export products and services, then more jobs, then more export revenue, then more tax-paid profits. We have plenty of people working on "garden shed" innovations, but we're not good at commercialisation - that is, taking a great idea and turning it into a commercial product that we can sell globally. Why?

Because to create great export products we need: a great idea, enough money to develop it, connections to customers who want it, a superb sales and marketing strategy to sell it - all wrapped up in a fantastic business plan with a great team to execute it. Some organisations are doing this, but not enough of them.

What are NZ's weaknesses?

1. Expecting the government to pay for everything – wake up, New Zealand, the government hasn't got the money. We’re going to have to do for ourselves. They need US to give THEM tax revenue before THEY can give US anything.

2. Picking losers mentality - I've heard officials and "experts" in high-powered meetings say righteously: "We're not here to pick winners." Yeah right - what are we here for then? To waste government and private money picking losers? No, we need to develop the skills and nous to pick winners.

3. Lack of commercialisation skills, market nous, and market contacts among our scientists – and expecting them to have all these when they should be working on their ideas. Our scientists are good scientists, but generally not good business people. That’s because they're trained to be scientists, not business people. We need to give our scientists some basic business training, connect them with skilled business people to help commercialise their ideas, but mostly leave them alone to get on with it without worrying about who’s going to get made redundant next.

4. Lack of correct performance measures - we need to ask questions like: How much public money could this product save? How many export jobs will it create? How can we keep the jobs and tax revenue in New Zealand? Is it a new paradigm that will change the world? How do we foster an atmosphere of innovation?

5. We sell off our best ideas (and people) to overseas owners. This is promoted as a good thing - foreign capital raising so that majority ownership goes offshore. Pretty dumb, really. Sure, the inventor gets a few million (BMW, boat and bach) initially, but the billions are captured by foreign owners and foreign governments, and we end up working for them - same old, same old. We need to grow billion-dollar companies here, and keep the tax revenues here too, so we can afford the first world facilities we naively expect we can keep on a second world income. I know it’s a big ask for a country of only four million, but we need to figure out how WE can take over THEM - step by step.

6. "Can't do, woe is me, too far away from anywhere" attitude. This is what the Australians have over us. They have a "can do" attitude, "give it a go, mate, and if you fall down, we’ll help you up, and give it another go…" We need to stop looking at the obstacles, and instead look for a way around them. And if we need to do a deal (collaborate) with others (even Australians), we need to be commercially smart in the way we do this.

Innovation Network

All this needs to be wrapped up in an innovation network that pools all the brains, financial, and marketing resources of the country, so that innovators can get run through an Innovation Factory (boot camp) to make sure they get their science and sales strategies right. Because one doesn’t work without the other. We already have the kernel of this in New Zealand, with Auckland University’s Centre for Entrepreneurial Learning, and the NZ Venture Investment Fund, but we need much more unity and collaboration, and especially buy-in from NZ business – small and large. We're simply too small to have a whole heap of tiny (or even medium-sized) outfits doing bits of the Innovation Network unconnected. The Innovation Factory can be virtual - I’m not advocating we spend yet more millions on buildings. 

Key questions for investors in innovation

Key questions for everybody: How much public money did we save today? How many export jobs did we create today? How much tax-paid profit did we generate today? How many innovators, and brilliant young scientists and engineers did we mentor and inspire and keep in New Zealand today?

We must climate-change-proof our rural industries

Figure 1: Drought comes to New Zealand

This year’s drought is the first clear example we have of climate change directly affecting our very important rural industries.  The bill for the 2013 drought is $2 billion and climbing, according to the Deputy Prime Minister.  Climate change is having immediate and serious negative financial impacts on the rural sector.  Our farmers are bearing the brunt of the cost, and that makes all the rest of us poorer too. 

What should our response as a country be, when most of our economy and all of our households are exposed to the increasing risk of drought, flood, sea level rise, and economic loss?  Emission trading systems aren’t working.  This is not surprising - how can we expect a market mechanism to fix market failure?  The Earth’s atmosphere is a global commons that needs one thing, and one thing only – a massive reduction of human-sourced greenhouse gas emissions by whatever means possible.

The direct and costly impact that climate change is having upon New Zealand’s key export earners means that we must climate-change-proof our rural industries as much as we can.  Fortunately the farming and forestry industries already hold most of the capabilities needed to do this.  Here are some suggestions on things we could do: 

• Carbon tax - introduce a carbon tax at a price that discourages carbon emissions.  The revenue raised can be used to fund the strategies below. 

• Plant trees - reforest non-productive areas of New Zealand.  Plant trees and re-vegetate riparian margins, river valleys and erosion prone areas.  Massively increase the replanting programme and all possible forms of assistance to farmers and foresters.  Also replant areas where commercial wood crops can be harvested and then replanted in future.  Encourage the forest and farming industries to get together and plan a national strategy to achieve this.

• Carbon negative New Zealand - aim to make New Zealand carbon negative by an agreed date.  As a net consumer of carbon we would never face carbon tariffs in any market.  We would be a leading example to the world, and we would be seen as a good global citizen.  This position would open many doors to our exporters, especially in environmentally sensitive and wealthy markets in Europe and Asia.

• Renewable energy options - focus more on encouraging non-fossil fuel and renewable energy technologies, such as electric car development, wind, geothermal, and marine energy.  Impetus seems to have dropped out of this lately.  We need to forge on.  For example, we could aim to change the New Zealand Government vehicle fleet over to renewable energy vehicles as soon as practical.  Encourage all Government suppliers to do the same.  We are blessed with large geothermal and wind resources – we need to develop them more.

• Water charging – fix fair prices for water by local area.  Studies show that this rapidly decreases water demand and waste, in some cases by up to 50%.  Such a policy will benefit councils financially by delaying the need for upgrades and expansion of water and wastewater services.  Most people appreciate the need to charge for water when drought looms.

• Collaborative model for water resource management – reconvene the Land and Water Forum with a mandate to come up with a Collaborative Model and Action Plan that will clearly identify strategies to deal with water problems on a collaborative, mutually-beneficial basis.  We must address over-allocation, and move away from a destructive competitive model for water.  The collaborative programme should have clear goals and tasks, an outline of who will do what by when, and at what cost.  The programme’s schedule and a statement of funding sources should be publicly available.  In short, a Business Plan for New Zealand Water Management.

• Water catchers – we need to build more water catching infrastructure quickly.  These can range from “soft green” solutions where valleys and gullies are replanted to catch water, through to large dam structures in the right places.  A task force of selected members from the Land and Water Forum could be given the responsibility to coordinate the “water catchers”.

• Water trading – this form of water allocation needs to be carefully assessed to prevent wealthy water users shutting out others with an equal claim, but not so healthy a pocket.  Water is also a resource of the public “commons”, so market mechanisms to control its use and distribution need to be used with caution.

• “Use it or lose it” water allocation policy – if water users don’t use their allocation, they should lose it.  Each should provide a compulsory water use plan that shows their real water needs and how they plan to use their water allocation over time, including any plans they have to reduce water use.

• Diversification by innovation – diversify our export industries by encouraging new innovations and products that are not so vulnerable to climate change.  Make this a focus of the Callaghan Institute.

There is a lot at stake here.  We must pursue a collaborative model to focus all our country’s intellectual and practical resources on this problem.  There is much work to do in climate-change-proofing our rural industries and strengthening the Environmental Balance Sheet for New Zealand.

Electric trucks are go in Kapiti...

http://www.scoop.co.nz/stories/BU1303/S00678/electric-trucks-first-public-appearance-at-kapiti-show.htm

Go Keith!

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