The Idealog guide to megatrends

88 / idealog.co.nz

Megatrend 1: The hyper-connected world

Twitter has 140 million users and

400 million messages sent

each day

Facebook currently has 955 million monthly active users, and 552 million use it

daily

That makes Twitter a potential marketplace about the size of the population of Russia and means Facebook

has one and a half times more users than

the population of the US

China’s

most active social network, Renren,

has 500 million users, 47 million registered users,

and 31 million active users

every month

Well, 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 retirement. But exporting is partly about the numbers, so here are some for you to chew on. Twitter has 140 million users and 400 million messages sent each day. Facebook currently has 955 million monthly active users and 552 million use it every day. That makes Twitter a potential marketplace about the size of the population of Russia, and means Facebook has one and a half times more users than the population of the US – the world’s third largest country.

And there’s more: these websites transcend national boundaries, even when those boundaries are otherwise heavily defended. But, as with all these mega-trends, rapid growth also brings with it intense competition. It’s all too easy with high-tech markets to assume that they are something we ‘do to’ the emerging economies of the world, when in fact these other countries are rapidly building their own capacity. The Chinese software industry, for example, has exploded in the past decade, with revenue reaching US$11.1 billion in 2010, growing at a rate of about 14 percent a year from 2007. There are now more than 500 million people on Renren, China’s most active social network. It has 47 million registered users and 31 million active users per month. Current reports are even charting rapid expansion in ‘developing’ regions where you might not necessarily expect it, like Latin America.

The result is a rapidly and radically changing world, in which customers are increasingly managing their own service experiences on their own terms. In this world, monster-size markets can be born almost overnight and then almost as suddenly change into something else that operates by a different set of rules. This is useful to understand for every business wanting

‘To do business in a hyper-connected world you need to be more adept at

evaluating, meeting and responding to markets, so that people can find what you do and interact with you’

– G r e n v i l l e m a i n, m a n a G i n G d i r e c t o r o f 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 d n a

Grenville Main

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

november-december 2012/ idealog / 89

I d e a l o g g u i d e t o e x p o r t i n g

to use the internet, but it is absolutely vital for businesses that want to make their mark by helping to shape its future.

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 Google founders Larry Page and Sergey Brin, we should also be aware that behind and around those superstars there is a whole industry sector full of folks making it big, if not colossal, behind brands you may never have heard of.

This is partly because a lot of the action happens business-to-business. According to a survey by the Concentrate marketing company, 88 percent of Kiwi high-tech businesses are selling to other businesses, while business-to-consumer makes up only 8 percent of sales and business-to-government only 4 percent.

So how do we get in on the action? Grenville Main, managing director of customer experience design consultancy DNA, says: “There are a lot of exporters and marketers who are still making that transition – from how we used to do things in terms of product, distribution and marketing. But how we do this in a hyper-connected world has become markedly different. You have to be more adept at evaluating, meeting and responding to markets, so that people can find what you do, and interact with you. You also need to be adept at expanding and evolving markets in a much smarter and more agile way. Hyper-connectivity makes agility a requirement, but it also enables and facilitates it.”

A lot of this is more of an art than a science, Main explains: “There are trends, things you can rely on and patterns of behaviour that are evolving so there is a lot to draw on. But there are some spontaneous and serendipitous things that really go off. What is great about this is that unbridled creativity, opportunity or innovation out of leftfield is still a vibrant opportunity – and much of it is potentially quite commercial. When we look at the local guys who have done good stuff, it has a hell of a lot to do with appetite and ability, sure, but you can’t help but think that timing has had a hell of a lot to do with it, too. This means we have to be building an army of creative thinkers ‘attuned toward opportunity’. Within the entrepreneurial base in New Zealand we need to build an innovation engine to be the place you will start to drop in the right ideas – ideas that are what the world needs and wants.”

There are already signs that Kiwis are finding the in-roads, especially in the US. Peta Conn, New Zealand trade commissioner in New York, says, “New Zealand is punching above its weight in the hyper-connected world. Both Silicon Valley and New York are witness to an influx of New Zealand companies setting up to be closer to their customers. Entertainment is also a focus of development, with NZ expertise cutting through areas like gaming from TV series and films, and customised book soundtracks. The calibre of technology coming out of New Zealand is competing successfully on the world stage, and fuelling our reputation for innovation.”

Intellectual property in the internet ageYou maY well not be paying to read this right now, it’s up on the web somewhere, or somebody copied and pasted it for you. Check your music collection, your videos, and Google Samsung and Apple’s billion-dollar bunfight over smartphone designs and you will be aware that intellectual property in today’s inter-connected world is about as safe as opening an unattended bottle store with an honesty box. But rather than abandoning legal protection altogether, or shying away from going global online, Idealog has some advice from Mark Hargreaves, partner at intellectual property specialists AJ Park.

Q To what extent has intellectual property control evolved in the online sector in the past few years?

A The law is moving slowly compared to online business models. The speed at which copyright works, in particular, can be published and distributed, which makes it difficult for copyright laws to keep up. Businesses are adapting though, and software as a service is a fantastic example of using the network effect of the internet to grow markets while keeping IP controlled as a trade secret. Meanwhile, some businesses are taking the view that the opportunities available justify exposing them to more risk of counterfeiting.

Q Does the speed and flexibility of online business present specific challenges to IP protection?

A It makes patenting more difficult to manage because of the speed at which new products and services are brought to market. I think branding assumes more importance for the same reason. Your brand can reach global markets overnight, so ensuring it is protected is vital, given that so much product differentiation online is about branding.

Q Has the scale of big players like Google and Facebook distorted the market for internet service businesses, where they simply want to get to the point of selling out to one of the big guys?

A I think most start-ups have one eye on exits, regardless of whether they are in the internet space or not. The growth of major players in this area is good for local businesses if it means they can exit and plough their capital back into new ventures.

Q Is it hard for New Zealand businesses to pioneer ideas in this space, without having your IP bought or stolen?

A I actually think the internet levels the playing field. Sure, it means ideas and designs are spread more easily and can be ripped off, but it also means those ideas and designs are reaching large markets that New Zealand businesses would have previously struggled to tap into. I know a number of local companies who receive unsolicited interest in their products or their business simply because more people are aware of what they do. The trick is to design a product or a process that allows you to retain critical pieces of the puzzle offline. Customers and competitors can whet their appetite online but you keep critical IP in house to retain competitive advantage.

90 / idealog.co.nz

The end of the pipe dream One thing that might limit our ability to exploit hyper-connectivity is if New Zealand remains significantly less hyper-connected than its rivals ThaT is The long-Term ThreaT in the wake of Pacific Fibre’s inability to raise the $400 million it needed to build a new 13,000-kilometre high-speed fibre-optic cable connecting New Zealand and Australia to California. Interestingly, alongside familiar complaints about a lack of investment cash in New Zealand and question marks over the viability of competing head-to-head with the existing Southern Cross Cable, there was also a hint that the project had fallen foul of diplomatic wrangles where the US was uncomfortable with Chinese investment in the project.

Government ministers in the throes of pushing through the $1.5 billion ultra-fast broadband network by 2016 have said there is no lack of capacity in the existing single cable, and Chris Brace, solutions architect at TelstraClear, agrees. But Rod Drury and Sam Morgan, who are behind Pacific Fibre, suggest that the development of Kiwi online offerings may be hobbled by a lack of bandwidth and the high cost of international data in New Zealand.

Paul Brislen, chief executive of the Telecommunications Users’ Association of New Zealand, says: “We have the Southern Cross network and that’s our lot, and Southern Cross will eventually need to be replaced. Given a 20-year lifespan, I’m guessing here, we’re already rapidly approaching its use-by date and planning for ‘Son of Southern Cross’ must be well advanced at the head office in Bermuda.

“The real tragedy in all this is that we, of all the nations on the planet, stand to gain the most from the digital economy. Instead of shipping our goods slowly and at great cost to distant ports, we are as close to our markets as anyone else. We need more competition on the international side of the equation to match our investment in the domestic setting. Without it, we’re left with a monopoly provider and no matter how well run a monopoly is, it’s still a monopoly.”

Brislen has called for government and superannuation support for an alternative scheme, and fears we might otherwise be doomed to create ‘the world’s fastest intranet’. If the Southern Cross cable breaks for any reason, which is not unheard of, we might all find ourselves trying to contact cloud services on dial-up.

David Dickinson, service delivery consultant with TelstraClear, adds: “I think that costs are a bigger issue here. We recently saw some downward price pressure come to bear under threat of competition in that market. It will be interesting to see what happens now that the threat is no longer there.”

The auckland waterfront innovation PrecinctThe very fact that we have all heard of Silicone Valley is testament to the value, ironically, of having hyper-connected businesses close together in an old-fashioned geographical sense. This is the kind of success that Auckland Council is trying to replicate in its rejuvenated Wynyard Quarter area. The idea is that the precinct will consist of residential, retail and office spaces where a cluster of companies, backed by government and business service providers, will accelerate the growth of high-tech ideas into commercial success, and of new and emerging businesses alongside more established companies with an eye on exporting.

The project has announced that it has already had 47 registrations of interest from companies, with 3D modelling company Nextspace claiming first mover status after shifting into the upstairs section of a sail-making company on Pakenham Street West.

Grenville Main, managing director of customer experience design consultancy DNA, reckons the idea makes a good fit with Kiwi commercial culture.

“If you look at the clusters and groups of smart, like-minded businesses in New Zealand, we are pretty good – we aren’t that precious. If you own something you want to get the benefit from it, but there is this collegiality where there are guys who are trying to get on just like you, and they are willing to help you. They are quite open to sharing their successes and always open to helping other people build the critical mass of people who want to live here but work all over the world.”

Succeeding in the online marketplace– or how to organise for chaos Timing is everything: good ideas dominate on a global scale in the hyper-connected world, so you will need to create something genuinely new very quickly. Don’t get wedded to an idea too early, or stick with it too long.

Think globally: it’s the worldwide web, yeah? With the right idea, skills and personnel you can find markets big enough to secure a happy retirement in the most unlikely places. You can also be blind-sided by competition if you don’t stay alert.

There is no point trying to compete with something that is already massive and hyper-connected. If you doubt this, go and check the activity on your Google+ account.

Integrity is the driving force of hyper-connected business. You need to have all your ducks in a row for an impeccable service that’s totally in line with your brand philosophy. If you screw up, or hide something, you will be found out, and word travels faster online than anywhere else.

Get good old-fashioned business advice. The online world is not Oz or Narnia. No matter how whizz your new idea is it will still need boring things like funding, a decent advisory board, an accountant and legal support.

Make friends and ask them stuff. No idea is so new and clever that somebody else hasn’t tried something at least slightly similar before, or is not trying something hyper-connected to it right now. Talk to industry insiders and share problems and solutions.



FirsT There was The inTerneT, then there was the cloud. Surprise! It’s the same thing – it has just grown up and got a lot more businesslike.

Chris Brace, solutions architect at TelstraClear, lays down what this could mean for your business. “Cloud-based services are essentially elastic; they can enable businesses to scale and grow very quickly. So if you have a web-based sales business and you suddenly take off and find your e-commerce site is overwhelmed, you can go online and purchase the use of extra infrastructure to cope with it very quickly.

“In the past, it might have taken months to install what you need, whereas now it is more like a matter of hours. And as soon as you have finished with the cloud capacity, you can shut it off again.”

David Dickinson, service delivery consultant working with TelstraClear, explains. “Someone needing another server, maybe only for a month or two, can now log into our cloud

The land of the long list of cloud-based companies?

platform (we call it the Marketplace Portal), choose the server spec they need and be using it within hours. This is ideal for businesses with seasonal data loads, who want to scale quickly to provide a development environment, or who need additional server space for big data analysis. They unsubscribe the server when they are done – it’s a pay-as-you-go environment that is really going to set the standard for some time to come.”

All the whizz-bangery won’t make up for a bad idea or a shonky business model though, so the cloud should still be a tool you reach for after you have done the hard yards commercialising the hell out of your proposition.

And however much you may like to believe in the magic of Google, there are still significant risks that need to be considered.

Brace explains: “Security is obviously an issue. Also, legal experts are now pointing out

that many of the services advertised are actually quite different when you read the 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 365, you may find that all the data is on servers in Singapore, which may have very different privacy laws than the ones you are used to. You also don’t want to wake up one morning to find there has been a security breach, blackout or system shutdown that may cripple your business.”

Dickinson agrees: “Any environment is only as good as its weakest point so I would caution against keeping critical business data on internet-based services. You don’t know where they are being hosted, they typically fall under US legal jurisdiction and there is a long line, literally, of exposure between you and your services that is vulnerable to attack.”

This means having a back-up is as important for the big internet players as it is for your personal computer, and reading the small print is just as important before clicking the ‘I agree’ button as it is on signing a contract that’s been drafted by your own legal team.

92 / idealog.co.nz

The hyperfactoryDerek 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.

k thehyperfactory.com

group CommerceWith print media bleeding away onto portable screens, Otago University-trained New Zealander Jonty Kelt, co-founder and CEO of New York-based Group Commerce, is helping to make online publishing pay for some big names, including CBS, The Daily Telegraph and the New York Times. With 120 staff, the firm provides the smarts and technology to power and curate media e-commerce and deal websites affiliated to major brands. It has just secured an additional US$21 million of capital funding to fuel its expansion into Europe and has reported a monthly growth of 30 percent in the past year.

k groupcommerce.com

XeroWellington-based Rod Drury’s cloud-based accounting software company is listed on the NZX and is within a sniff of getting a major percentage of a gargantuan market. Looking to top 300 employees in the next few weeks, it has not pumped profits out in its ongoing establishment phase, but certainly looks to be making a serious challenge on its offshore rivals.

k xero.com

rakonMost consumers will probably never have heard of the makers of crystal-based frequency control components for electronics, but its products are helping much of our everyday gadgetry, such as mobile phones, telecommunications and GPS systems, to function. From its beginnings in a Howick garage in 1967, sales revenue for the past financial year was $178.3 million. In August the company sealed a deal that will quadruple its sales to Chinese electronics giant Huawei to US$56 million. Last year, Rakon UK Limited also picked up the coveted Queen’s Award for Enterprise.

k rakon.com

Kiwi companies kicking it online

Carnival labs Guy Horrocks tuned in to the social media global mega-trend when he co-founded Polar Bear Farm, the world’s first iPhone application development company, even before the App Store was up and running.

Now in his late 20s, he says it made a huge difference being first to market. With his latest venture, Carnival Labs, he now has the ear of major US brands, and is currently coming up with the goods for global players such as Dreamworks, Kraft Foods, Intel, Estée Lauder, Pepsi and Nestlé. The firm originally specialised in casual gaming, entertainment and advertising apps, and now employs 10 full-time staff in New Zealand.

Horrocks is now the company’s roving ambassador, having expanded into the US, and is currently preparing to make New York his permanent home. He reckons that most of the US action for his firm has now shifted from Los Angeles to New York, but the investment cash is still in Silicon Valley.

The firm’s latest brainchild is the Core Push mobile engagement platform. It includes a groundbreaking real-time location-based analytics dashboard and aims to deepen the connection between a brand’s app and its customers. Carnival Labs already has 10 large brands using the system to send around four million notifications a month to customers, and is set to open the taps wider in the next couple of months.

“Our turnover is in the low seven figures (US dollars) this year, but is growing around 200 to 300 percent on last year, which is exciting,” Horrocks says.

k carnivallabs.com



The term ‘boomers’ for those born between 1946 and 1964 is such a fitting one on so many levels. This significant jump in birth rates at the end of World War II, combined with an era of relative world peace, natural resource abundance and technological advancement fuelled an era of unprecedented global affluence. The guns stopped booming, populations boomed and then the economy boomed

Speak of a global phenomenon. According to the United Nations, the number of persons aged 60 or over increased three

and a half times from 1950 to 2009, to 737 million. By then there were 12 countries with more than 10 million people aged 60 plus, including China (160 million), India (89 million), the United States (56 million), Japan (38 million), the Russian Federation (25 million) and Germany (21 million). By 2050, the population aged 60 or over is expected to triple, reaching a total of two billion.

That’s a hell of a lot of grey spending power. Last year, the overall spending by the 116 million US consumers aged 50 and older was $2.9 trillion, up 45 percent in the past 10 years. Meanwhile, the 182 million people younger than 50 spent $3.3 trillion last year, up just 6 percent during the same decade.

Mark Hargreaves, partner with intellectual property specialists AJ Park, says it has triggered growth in certain sectors: “The pharmaceutical industry has developed significant IP in the face of demand from baby boomers and ageing populations. We only need to look at Viagra sales for that!”

What’s weird is the extent to which this massive cohort of the world’s population feels ignored by marketing folks. Blog after blog on the internet says it, and a 2010 Google/Nielsen Consumer Study found that 79 percent of TV

advertising and 89 percent of online advertising appeared to be aimed at somebody younger than them. Some analysts suggest this is due to the average person working in marketing being much younger than the baby boomers, or that marketers make incorrect assumptions based on this generation.

We are not, ahem, commenting on the age of Grenville Main, managing director of customer experience design consultancy DNA, but he sees the influence of baby boomers everywhere he looks: “It’s a trend in direct terms but it also has a benefit and impact for everyone. If you are trying to target them as an audience you are going to have the potential for a longer relationship with them than you’ve ever had before, but on the other hand they are definitely more discerning and may switch out on you. They are not like the generation above them, which is more conservative and tends to stick to relationships. Baby boomers have changed the most in generational terms and will basically suit themselves more than ever before, so if you aren’t providing something good then they will move on.”

Iain McLeod, BNZ national manager, international trade, offers further insight into the baby boomer brain: “The baby boomers are still the funders of the industrialised world but they are shellshocked by the events in 2007 and 2008. A considerable number have lost their retirement savings and are remaining in the workforce. And those who are still financially secure are struggling to find a safe haven for their investments as people endeavour to de-risk their portfolios and look for investments with capital security.

“They are more conservative and risk-averse now in OECD countries, but in Asia they are still expansionary and tastes and wealth-based needs are expanding exponentially. It is still an affluent group with far greater demands than previous generations, mainly because of the relative health of this population versus previous generations. They live longer, have greater expectations and tend to have more disposable income than other generations.”

According to Main, this profile makes them well worth targeting if the product or service is right. “What people are grappling with is that they, like lots of other consumers, are starting to want to take the control back from the businesses supplying products and services,” he says. “And this can be destabilising for businesses, because you are not quite sure where they are going to go next and what is driving the decision-making. That’s where insight builds toward intimacy, which is now and essential factor for all businesses.”

‘Baby boomers have changed the most in generational terms and will basically suit themselves more than ever before, so if you aren’t providing something good, then they will move on’

– G r e n v i l l e ma i n, ma naG i n G d i r ect o r o f c u st om e r e x pe r i e n c e d e s i G n c o n s u lta n cy d n a

BaBy Boomers thought that 79% of tV adVertising and 89% of online

adVertising appeared to Be aimed at

someBody younger than them

source: a 2010 google/nielsen consumer study

Megatrend 2: Healthy ageing and the baby boomers

AJ Park is about iP • intellectual property • igniting passion • ideas pervading • innovation protected • integrated processes • intelligent people • increasing potential

0800 257 275 I www.ajpark.com I New Zealand + Australia

If taking your idea, invention or business offshore is in your strategy — then the right IP advice will increase your chances of success.

Making it overseas takes more than a good idea and the will to succeed. At AJ Park we not only have a clear understanding of intellectual property laws in New Zealand, but know what your rights and obligations are when the rules change for another country.

Over the last century, we have worked with clients to recognise great ideas and the best ways to protect and commercialise them globally. Our team of commercialisation specialists and IP litigators can help you understand the laws of your destination country, develop global commercial agreements and cover patent or trade mark protection, giving you and your business the best chance of making it overseas.

For the right IP advice to help turn your Kiwi business into a global asset, call us now.

iP is about increasing potential

AJP

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AJ Park is about iP • intellectual property • igniting passion • ideas pervading • innovation protected • integrated processes • intelligent people • increasing potential

0800 257 275 I www.ajpark.com I New Zealand + Australia

If taking your idea, invention or business offshore is in your strategy — then the right IP advice will increase your chances of success.

Making it overseas takes more than a good idea and the will to succeed. At AJ Park we not only have a clear understanding of intellectual property laws in New Zealand, but know what your rights and obligations are when the rules change for another country.

Over the last century, we have worked with clients to recognise great ideas and the best ways to protect and commercialise them globally. Our team of commercialisation specialists and IP litigators can help you understand the laws of your destination country, develop global commercial agreements and cover patent or trade mark protection, giving you and your business the best chance of making it overseas.

For the right IP advice to help turn your Kiwi business into a global asset, call us now.

iP is about increasing potentialA

JP10

360

_IA

new image Colostrum: the first milk produced by cows that have just calved, is the latest superfood to take the health-conscious world by storm. Auckland-based NZX-listed New Image shifted $74.7 million worth of the stuff last year. Taiwan and Malaysia are key markets, sucking up $55.9 million of New Image products. Unfortunately, a couple of ailing brands and failed business partnerships, combined with the relative strength of the New Zealand dollar, helped the company lose $6.1 million last year. However, according to senior managers, a restructured New Image is now in a good shape.

k newimageasia.com

ecoyaBased in Botany Bay, Australia, candle and skincare company Ecoya is headed up by (among others) New Zealand’s own inimitable Geoff Ross and Rob Fyfe. After swallowing rival skincare company Trilogy last year, the company turned its first profits. It now makes more than three quarters of its sales offshore and is focusing on expansion into Asia, including an exclusive deal with a new Japanese distributor, the Kinu Corporation.

k ecoya.com.au

Fisher & Paykel healthcare In the last financial year, F&P Healthcare made a healthy net profit of $64.1 million out of its range of products and systems for use in respiratory care, acute care, and the treatment of obstructive sleep apnoea. However, a bidding war in the US looks set to reduce incomes and take the shine off the F&P market in the years to come.

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orion healthThe company that took out central Auckland billboards to brag about recruiting throughout the recession has built an enviable offshore market for its eHealth software, most notably in the US. The company now has offices in the US, Canada, United Kingdom, Spain, Australia, New Zealand, Japan, Thailand, Singapore, Dubai and France. It also buddies up to heavy-hitting partners, including Accenture, Philips, Cisco, IBM, Agfa and Oracle Corporation.

k orionhealth.com

ComvitaComvita’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.

k comvita.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 Body Jam. The pioneering Kiwi fitness firm now exports its exercise-to-music programmes to 80 countries, where 90,000 certified instructors teach classes through 14,000 licensed gyms and clubs. It has sold its patented workouts into about 11 percent of the world’s health clubs and employs 130 people across the group (80 of those are based in Auckland). This all adds up to seven figure revenue and a lot of sweaty sportswear (which Les Mills now sells, too).

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Kiwi companies bringing it to the baby boomers

nZTe’s health high impact Programme This programme is focused on accelerating the growth of New Zealand health technology and services companies. It 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 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.

Tech-savvy boomers driving e-health demandA report from KPMG and the Manchester Business School, Accelerating Innovation: the power of the crowd, suggests that ageing of the baby boomers, and this generation’s increased comfort with new technologies, is driving the demand for openness in healthcare systems. Jan De Boer, global health IT lead for KPMG in the Netherlands, says: “Today’s smartphone user is tomorrow’s patient who wants greater access and control of their healthcare and their medical records.”

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.

IN CHINA, A BUSINESS EXECUTIVE MAY CONSULT THE STARS, OR WAIT FOR A ‘LUCKY’ DAY BEFORE MAKING A DECISION.

TRUE FALSE

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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.

Who wants to live forever?

Aged between 48 and 66, baby boomers are looking forward to 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

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.

IN CHINA, A BUSINESS EXECUTIVE MAY CONSULT THE STARS, OR WAIT FOR A ‘LUCKY’ DAY BEFORE MAKING A DECISION.

TRUE FALSE

T&E0028/B

i d e a l o g i n a s s o c i a T i o n w i T h a J Pa r k

Handbags, watches, sunglasses and electronics are among counterfeiters’ favourite products. But virtually

anything can be faked and passed off as a recognised and respected brand.

Often these rip-offs are found to be small-scale opportunists, but internationally the trend toward large-scale counterfeiting continues to grow. In late 2011, the world’s largest dairy products exporter, Fonterra, discovered and foiled a large-scale attempt to counterfeit one of its flagship products, Anchor milk powder.

The large shipment containing tens of thousands of tins of milk powder labelled ‘Anhor’ and bearing a very close likeness to Anchor’s famous red anchor logo was intercepted by Fonterra’s representatives in the Middle East.

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.

“In this case, we were able to get a really clean outcome. We worked with Carolyn Green and Gavin Scott from Fonterra’s legal team to force the counterfeiter to agree to destruction of the fake products. We then arranged for Fonterra’s local agent to destroy all of the counterfeits – that was all done over a period of two days with the help of a giant digger. The counterfeiters had actually filed for their own trade mark, but they accepted that they were infringing Fonterra’s marks and gave away their application.”

This case demonstrates how important it is to have your own trade mark protection in place and to enforce it, Potter says. And he’s not just talking about big organisations – exporters of any size with a system or product that risks being copied should protect their intellectual property.

Crushing the counterfeitsWhether it’s Armani, Adidas or Anchor, well-known brands are all subject to imitation. All exporters need to be wary of their trade marks being ripped off and make moves to protect their valuable IP

Intercepted counterfeit Anchor goods.

The destroyed counterfeits.

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 you think you may be at risk and getting protection in places close to your markets, where people might want to counterfeit your products,” says Potter.

“You may not always be able to register every mark in every country, but you need to at least think about it. Exporting branded goods without trade mark protection is a bit like running an uninsured business – it’s all fine until something goes wrong, then you wish you’d put adequate insurance in place.”

Potter says that for smaller companies, it’s always a risk assessment – how big a risk are you willing to take?

All exporters need to turn their mind to the risk they’re taking.

“In this case, Fonterra had its registered protection in place, which led to a good outcome that was both quick and very

cost-effective. When you’re exporting, you need to have your trade mark registrations and Customs notices in place.

“If you start off with weak rights because you haven’t done your homework, things always end up more complicated.”

Green is in daily contact with AJ Park to help protect Fonterra’s trade marks and to manage cases like this one. She says the input and advice she receives from both Potter and McBride is extremely valuable.

“AJ Park is the liaison between Fonterra and our lawyers in various countries and maintains Fonterra’s trade mark database. We couldn’t do what we do without them. Sometimes we’re in touch several times a day. We talk about IP protection strategies across our various markets; and when things like this counterfeiting situation happen, we work as a team to deal with it.”

IN BRIEFFonterra is the world’s largest diversified milk processing company and one of the

world’s top producers of dairy nutrition for export, including milk powders, cheese and butter. The co-operative sells its products to

more than 100 countries. Intellectual property expert AJ Park has been working with Fonterra since it was formed in 2001

and recently helped the company with a large counterfeiting case of Anchor milk

powder from the UAE.

CONTACTTo find out more, contact:

AJ Park0800 257 275

www.ajpark.com

L-R: Gavin Scott, Carolyn Green, Emma McBride and Alan Potter.

100 / idealog.co.nz

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

China is the most obvious example, where it is reported that wages have quadrupled in the past decade and the World Bank estimates GDP

will match the US by 2030. But it is also happening in Brazil, where the Fundacao Getulio Vargas economic think tank estimates that 40 million people have joined the ranks of Brazil’s middle class between 2003 and 2011. And in Africa, the African Development Bank says the middle class rose to 313 million people in 2010, which is just over a third of the continent’s population.

Then there’s Indonesia, where Japanese banking group Nomura reports that the middle class – those with a disposable income of at least $3,000 a year – now numbers about 50 million.

According to New Zealand Trade and Enterprise, half a billion people in Asia currently earn ‘middle incomes’. By 2020 that will treble to 1.7 billion, and by 2030 the figure will be 3.2 billion. And according to The Economist, for the first time in history, more than half the world’s population could be described as middle class.

One of the main things these people spend additional money on is food. At the bargain bucket end of the market KFC is currently opening a new outlet in China almost every day, with thousands springing up all over the country. New Zealand’s own Burger Fuel is also expanding into the Middle East, with a combination of halal certification and a brand based on high quality and healthy eating. Alongside stores in the United Arab Emirates and Saudi Arabia, the company has also starting flipping patties in Iraq, and is looking to add Libya to its post-warzone market share. According to a report by the Carnegie Endowment for International Peace, their plan for dishing out 100 percent pure New Zealand ground beef in one-third pound slabs makes good sense. The report states: “Demand for protein is expected to expand along with the global middle class, which may be as large as 600 million people in G20 developing countries.”

Mark Hargreaves, partner at intellectual property specialists AJ Park, agrees, but adds that global supply is already rising to meet this new demand: “There are a lot of global players developing protein supply which will compete with our dairy and meat exports long term. Ultimately, our competitive advantage is more likely to lie in high-quality, high-value food and ingredients produced in a clean environment. We have to strive to produce that high-quality product and compete on quality and brand. Perhaps one of the biggest competitive risks is that we lose our quality reputation, meaning we’re reduced to competing on price, which won’t be easy long term.”

For the time being we appear to be holding our ground, but value-added propositions such as Burger Fuel, or the Dairy Collective’s successful expansion into the UK, would seem to be the way to go, rather than sheer volume.

Grenville Main, managing director of customer experience design consultancy DNA, explains why we need to play it smart.

“Even our big companies are tiny on a global scale. I don’t think we are scratching the surface on what this could be as a growth opportunity. That said, we are small and we are having trouble scaling up in all the established sectors – whether it’s through a lack of talent, funding or resources. When you look at dairy, the drain on waterways and the impact on agricultural growth potential – there is only so much headroom left.”

He looks to examples like Leitissimo in Brazil, where a Kiwi dairy team has set up a successful New Zealand-style dairy farm (see Idealog #34), hooking up our country’s know-how with their cheap land, labour and burgeoning market for fresh milk. Big players such as Federated Farmers, Fonterra and PGG Wrightson all have similar projects on the go in South America and across the globe.

Fonterra is currently planning to create 25 new farms in China alone, at a cost of $1 billion, in an attempt to

‘new Zealand leads the world in

exports of dairy and sheep and is a major exporter of beef, seafood, and

kiwifruit. But when we consider that new Zealand is a similar size to

italy, and italy feeds its own considerably

large population and exports twice as much food and

beverage as new Zealand,

there is a sense that we could be

doing more’ – m i k e a r a n d,

n e w Z e a l a n d t r a d e c o m m i s s i o n e r ,

s h a n G h a i

Megatrend 3: Feeding the world’s middle classes

s



FonterraThe big boy on the block is still a flagship exporter both in terms of its size and in its R&D prowess.

k fonterra.com

aotearoa Fisheries As one of New Zealand’s largest seafood businesses and one of the sector’s largest exporters, Aotearoa Fisheries had $152 million of offshore sales last year, $63 million of which went to Asia and China. The company also owns 50 percent of Sealord Group.

k afl.maori.nz

Kiwi companies helping to feed the seven billion

Say hello to halal

According to a recent estimate, 23 percent of the global population, or 1.57

billion people, are Muslims, with a massive and rapidly growing Muslim population among our near neighbours in South East Asia. Halal in the Muslim faith is defined by the Quran as ‘allowed’,

‘permitted’ or ‘lawful’. To be halal, certain

activities must be done in accordance with a specific

set of rules and guiding principles. This includes the

prohibition on consuming certain animals, including pork, intoxicants such as

alcohol and blood or blood products. It also stipulates

methods of slaughtering for animals that are to be eaten.

The good news is, if you get halal certification, you gain access to a massive

export market at the exclusion of companies that

have not. Fiona Acheson, trade

commissioner for Malaysia, Indonesia and Brunei, says halal food markets are of growing importance to

New Zealand. “In 2011, Indonesia,

Malaysia and Singapore were among the top five export

destinations for halal certified meat. Included in

New Zealand’s top 10 export destinations were China, South Africa and France.

“And the growth in the global halal market, which is

currently estimated at US$2.3 billion, is not

confined to meat. Fonterra’s exports to Indonesia and Malaysia are also halal

certified, as are other New Zealand dairy products, health supplements and

processed foods.”

Indian food now rightfully receives a warm welcome almost everywhere in the world, but New Zealand tucker is slowly getting its own back, as the subcontinent’s tastebuds seek out new flavours backed with an increasing ability to pay top dollar for them.

Richard White, trade commissioner to New Delhi, India, says: “Wine is not a traditional beverage of choice in India but demand is steadily growing, driven by increasingly international consumer tastes. New Zealand labels are positioning themselves to take advantage of growth in the Indian market, leveraging their international reputation through active promotional activities with their local distribution partners.

“New Zealand apples are also becoming increasingly popular in India. This is on the back of a strategy by the Kiwi apple industry dating back to the 1990s to work closely with growers and marketers in India. As a result, New Zealand was the first country allowed to export apples to India. Consumer demand is growing steadily.”

Storage, transport and distributions networks in India still need to work to help make importing fresh produce really fly, but here, too, NZ firms have sniffed out an opportunity.

Indian, Inc

‘wine is not a traditional beverage of choice in india but demand is slowly and steadily

growing, driven by increasingly international consumer tastes.

new Zealand labels are positioning themselves to

take advantage of growth in the indian market’

– r i c h a r d w h i t e , t r a d e c o m m i s s i o n e r t o n e w d e l h i , i n d i a

KFC is currently opening a new outlet in China on an almost daily basis, and the middle classes are flocking to the feed.

102 / idealog.co.nz

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0800 273 916 bnz.co.nz/internationalpayments

Secure a live exchange rate with BNZ’s International Payments online. It’s convenient, it’s cost-effective, and it provides your supplier with an automatic email advising them your payment is on its way.

Contact us today and let’s get you set up for business.

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Half a billion people in

asia currently

earn ‘middle incomes’. by

2020 that will treble to

1.7 billion,

and by 2030 the figure

will be3.2

billion

ward off the rapidly increasing competition there to meet what is effectively bottomless demand.

Mike Arand, New Zealand trade commissioner in Shanghai, touches on similar ground.

“New Zealand leads the world in exports of dairy and sheep and is a major exporter of beef, seafood and kiwifruit. But when we consider that New Zealand is a similar size to Italy, and Italy feeds its own considerably larger population and exports twice as much food and beverage as New Zealand, there is a sense that we could be doing more.

“What is clear to me, first and foremost, is the need to develop the New Zealand Brand, to tell our New Zealand story more. Many in the trade and many consumers are totally unaware of New Zealand. We also need to better understand the needs of the Chinese trade and consumers, and supply those needs – different packaging or presentation, different formulas and more.”

Hargreaves says these larger players are still doing most of the innovating and creating most of the new intellectual property in this space, when there is plenty of scope for more small- and medium-sized companies, such as Leitissimo, to get their snouts in the trough.

Main adds: “If it’s designed here, it’s innovative and there’s something about the Kiwi environment or attitude that has some brand power then let’s use it. But we don’t necessarily have to build it, fund it or even sell it here.”

‘with the predicted growth in global population and the associated

growth in food supply, new Zealand will become a smaller, less

significant cog in the global food system unless we have a clear vision

for our agri-food sectors, focused not just on exporting product but

also on lightweight exports of industry know-how and innovation.

we believe that the time is right for the development of an

industry strategy’ – i a n p r o u d f o o t, h e a d o f a G r i b u s i n e s s a n d l e a d pa r t n e r , c o n s u m e r a n d i n d u s t r i a l

p r o d u c t s at k p m G

s

Full details, our current Disclosure Statement and Qualifying Financial Entity Disclosure Statement may be obtained from any BNZ store or Partners Centre, or viewed on our website bnz.co.nz. BNZ terms and conditions, fees and charges apply. Correspondent bank commissions, fees and charges may also apply. You must be registered for Internet Banking for Business and opt into international payments in Internet Banking for Business.

0800 273 916 bnz.co.nz/internationalpayments

Secure a live exchange rate with BNZ’s International Payments online. It’s convenient, it’s cost-effective, and it provides your supplier with an automatic email advising them your payment is on its way.

Contact us today and let’s get you set up for business.

Need to pay Chaoxiang in Beijing? Do it online with live exchange rates.

BNZ7

219I

P

builds Business builds Community builds Family builds Community builds Business builds Community b

uild

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mily

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BNZ7219IP_Partners International Payments_Idealog_02 rev.indd 1 6/09/12 9:56 AM

i d e a l o g i n a s s o c i a T i o n w i T h n Z T e

Synlait Milk started as a smart idea for a primary sector exporter, but with determined entrepreneurial drive,

countered by steady and disciplined governance, it has grown its annual revenue to $400 million in just four years.

The Canterbury dairy company exploits the region’s abundant pastures, healthy livestock and pure water supply to turn milk into money, creating higher-value products for luxury offshore customers.

Synlait makes nutritional powders that directly target global demand for safe, reliable, protein-rich foods. The leaders of its 128-person team based in the small Canterbury town of Dunsandel doggedly pursue opportunities presented by global mega-trends: China’s emerging middle class, protein demand to fight global obesity and a particular focus on both nutrition for infants and the swelling ranks of the elderly.

Synlait’s products range from calcium-fortified powders for bone health to fully formed infant formulas designed to mimic mother’s milk, to a sideline in cream products made as a result of the powder manufacturing process.

Chief executive John Penno, a scientist with an acclaimed career in dairy industry research, joined forces with commercial dairy farmers Ben Dingle and Juliet Maclean to establish Synlait. Together Penno, Dingle and Maclean own the largest dairy farm in the country, which is naturally one of Synlait’s 150-plus suppliers. Almost all of the company’s milk suppliers, with an average herd size of 700 cows, are located within an 80-kilometre radius of the company’s Dunsandel base.

Penno says Synlait kicked off with thorough market research and worked back from there, figuring out what the consumer wanted and establishing its operation to meet those needs.

“We literally just jumped on the plane and visited potential customers, refined a sales strategy and formed a long-term view of how to cater and develop markets,” Penny says. “We’ve had the privilege of building the business backwards.”

This is one example of Synlait’s point of difference in a dairy industry dominated by farmer co-operatives. The company nurtures a nimble, entrepreneurial spirit.

“We pride ourselves on learning very quickly and quickly killing the things that aren’t working.”

Right from its first season (2008/2009), more than 95 percent of Synlait’s product were sold offshore. Today, it exports to around 40 countries.

“Early on in our life, NZTE was enormously helpful in connecting us with companies,” says Penno, adding that the company’s global sales strategy is built on a three-way market focus: one-third of its business in China, one-third in the rest of Asia and one-third in the rest of the world.

“China’s the big opportunity for food producers, as they fight to feed the swiftly ballooning middle class and satisfy growing demand for high-quality animal protein. China is the biggest influence in the market, there’s no question about that.”

Penno says aspiring exporters cannot hope to build relationships by email. Solid foundations are built by social interaction, but he says it

need not take years to establish a trusting, successful partnership.

Synlait used New Zealand Trade and Enterprise’s networks to access other Kiwi businesses operating in China and learn from their experiences.

Synlait has a coveted major partnership with China’s Bright Dairy, which is also one of its numerous Chinese customers. But Penno says the global focus on China has left a vacuum in other markets. While competitors have scrambled to establish themselves in China, Synlait has picked up opportunities in Vietnam, the Philippines, Japan, North Africa and the Middle East.

The Synlait milk facility processes more than 550 million litres of milk every August to May in milking season. It boasts three leading-edge milk powder dryers, one of which is the largest and most sophisticated infant formula facility in the Southern Hemisphere and can process up to seven tonnes of infant milk powder per hour.

As a relatively small company with a tight cluster of suppliers whose geographic proximity ensure a consistent taste profile, Synlait is able to maintain absolute control over the quality of milk supply, milk processing and market distribution to guarantee its customers absolute food safety, security and traceability.

Penno says this level of product assurance and accountability is a point of difference for which luxury customers are willing to pay.

Synlait is determinedly focused on higher-value products, turning New Zealand milk into premium luxury goods offshore.

“You need to be at the top end of the value chain,” Penno says. “Otherwise there’s no use.”

Turning milk into moneyStarting 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


‘You need to be at the top end of the value chain, otherwise there’s no use’

IN BRIEFSince 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

CONTACTNew Zealand Trade & Enterprise,

www.nzte.govt.nz, @NZTEnews

106 / idealog.co.nz

How would you like 23,577 percent growth in three years? That’s what Baltimore-based Astrum Solar has achieved since 2009, installing solar heating systems. This makes it the second-fastest growing company in the US, with a current revenue of US$26.9 million

A 2011 Bloomberg report forecasts that global investment in renewable energy projects will rise from US$195 billion in 2010 to US$395 billion in 2020, and then US$460 billion by

2030.Over the next 20 years, this growth will require nearly $7 trillion of new capital. The explosive growth in this sector is backed by huge government subsidies and investment in research and development, especially in the US.

Mark Hargreaves, partner at intellectual property specialists AJ Park, says: “IP development in this space is and will continue to be huge. It will become more mainstream.”

So, do you fancy a slice of that action?You’d think New Zealand companies that do would have a significant

home advantage. About 70 percent of the country’s electricity supply is renewably generated from our significant array of hydro-electric, 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 provide at least 9,500 MW, or five percent, of the nation’s electricity by 2025, and has also selected geothermal energy as one of its major sources of alternative energy.

“Geothermal New Zealand, a consortium of 40 plus New Zealand companies with a range of expertise in geothermal development, is working with Pertamina, the Indonesian’s state-owned oil and gas company, to scope opportunities in consultancy as well as engineering, procurement and construction contracts.”

Other major sites of activity are China, the US, India, Germany and Brazil, while renewable energy investment is also gathering pace across Africa and Latin America as companies take advantage of the relatively abundant natural resources and growing domestic demand.

For example, New Zealand Trade and Enterprise has identified significant opportunities in Chile, where the government is expected to support the development of geothermal electricity generation with US$200 million over the next few years.

In the meantime, New Zealand has also nurtured smart sustainable energy start-ups like Aquaflow, which makes algae-based biofuels and the multi-award winning Lanzatech, which, among other things, is doing pioneering research on ethanol-based biofuels.

Both are targeting the incredibly lucrative liquid fuels market against a background in which Bloomberg forecasts that production of gasoline substitutes, mainly ethanol, is projected to increase from 100 billion litres in 2010 to 190 billion and 300 billion litres in 2020 and 2030 respectively. The production of diesel substitutes, the report predicts, will double by 2020, reaching 100 billion litres from roughly 50 billion today, and will double again by 2030 reaching 200 billion litres. This is to meet fuel demands from the transport sector that is projected to rise by 20 percent by 2020 and 46 percent by 2030 based on 2010 levels.

Aquaflow, as a purveyor of what are called ‘second generation’ or ‘advanced’ biofuels, is particularly well-placed for a future in which there will be an increasing demand for fuel sources that do not conflict with the stability of our climate, nor human food sources.

Megatrend 4:

Sustainable energy

global investment in

renewable energy projects

will rise fromUS$195

billion in 2010 to US$395 billion

in 2020, and to

US$460 billion by

2030.over the next 20 years, this

growth will require nearly

$7 trillion of new capital

source: BloomBerg, 2011

Plugging in across the TasmanDan Taylor, New Zealand trade commissioner in Australia, says Australia provides an interesting and potentially lucrative market for New Zealand companies involved in sustainable energy. “These opportunities relate not just to energy generation, but also energy-efficiency solutions. Australia has a Mandatory Renewable Energy Target (MRET) of having 20 percent of the electricity supply coming from renewable sources by 2020, and achieving this target will require major investment over the next few years. “Meanwhile, Australia has significant unharnessed renewable sources where New Zealand has, or is developing, capability, including wind, solar, geothermal, wave and biomass. New Zealand will be looking to commercialise solutions around these sources in the near future and funding support is available at both state and federal levels.”



meridian energyAustralia

• Has,since2006,ownedandoperatedtheMtMillarwindfarminSouthAustralia,which generates up to 70 megawatts (MW).

• HasapartnershipwithAGLtobuildtheSouthernHemisphere’sbiggestwindfarm in Macarthur, south of Sydney, with 140 turbines and a generation capacity of 42MW, enough to power 220,000 homes.

• Isalsodevelopinga131MWwindfarminMtMercer,Victoria,atacostofAUS$260million.ConstructionstartsinDecember.

United States• OwnssolarfarmCalRENEW-1,thefirstgrid-connectedsolarfarmtobebuiltin

California. Over 50,000 solar panels cover almost 50 acres of farm land, generating 5MW per year.

Tonga• IstheleaddeveloperofMaamaMai,theisland’sfirstsolarfarm,leveragingoff

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 PowerInternational Geothermal

• Owns29percentofUS-basedGeoGlobalEnergyLLC(GGE),aprivatelyownedgeothermal company which has established a broad portfolio of geothermal projects in various stages of development in the US, Chile and Germany.

• HassofarcommittedUS$250milliontoitsinternationalgeothermaldevelop-ments via a GGE-managed fund, of which US$225 million is already deployed.

• InvestedUS$92millionintotheUS$400millionJohnLFeatherstoneplantinCalifornia (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• Ownsandoperatesa100MWwindfarminSnowtown,SouthAustralia.Further

development in Snowtown will add 270MW via two separate new wind farms, with commissioning scheduled for 2014.

• IsinvestigatingfurtherwindgenerationopportunitiesthroughoutAustralia,includingsitesinSouthAustralia,NewSouthWalesandVictoria.

Vector• Isinternationallyrecognisedfordevelopingitssmartmeteringbusiness.There

maybecommercialopportunitiesforVectorinBritain,wherethecompanyislooking at becoming an affiliate member of the UK Networks Association.

Kiwi company makes waves in oregonWave Energy Technology-NZ (WET-NZ) is a research collaboration betweenIRLandprivateWellingtoncompanyPowerProjectsLtd(PPL).Theyarecurrentlytestingahalf-sized18.4-metrelong,20kWdevice 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, followed a US Department of Energy grant worth nearly US$2 million.

k wavenergy.co.nz

NZ renewable energy is making powerful moves abroadHere’s a rundown from analysts from the Bank of New Zealand of where New Zealand renewable energy companies are kicking into action offshore.

i d e a l o g i n a s s o c i a T i o n w i T h d n a

Creating the perfect stormExport 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 has some innate attributes that other countries don’t enjoy. It’s these

qualities that can provide real value to companies looking at offshore markets.

Customer experience design agency DNA has developed a model for success that it uses to help New Zealand businesses make their mark on international markets.

Its clients are diverse, but those that export have taken a dose of Kiwi thinking to the world and seen positive results.

So how exactly does this model for success work? Companies should be aiming for a sweet spot at the intersection of two vital objectives, says managing director Grenville Main.

“It’s a combination of being able to meet the real needs of a changing market and embedding the right amount of the ‘New Zealandness’ into your product, brand or way of working,” he says.

“This is about being able to leverage and address trends, sell the New Zealand story and embody our attributes in valuable ways. It’s also about being guided by the key commercial principles: hitting the market quickly and potently, focusing on customer needs, improving your products and services to suit them, and acting with integrity and openness. The more of these elements you can factor in, the greater your difference and value, and the more your prospects are enhanced.”

What makes things trickier – and where DNA can really add value – is that the New Zealandness– or ‘NZ Inc. attributes’ as Main also calls it – is continually evolving.

“We see it as the amalgamation of prime attributes of our make-up, our country’s success to date and its overall appeal. The

appetite for who we are and how we do things has grown, in part due to key successes, but also due to the intrigue that we keep cropping up and won’t go away despite our size and youth.”

Main believes several aspects define the NZ Inc. story. There’s our pioneering nature combined with our racial diversity in a young and ambitious nation, the physical beauty and pure(-ish)ness of our landscape, our pastoral heritage and future, which embody qualities such as innovation, drive, resilience and ambition, and the Treaty of Waitangi and what it symbolises in terms of the settlement process, and the indigenous culture and language we are embracing.

There’s also our sense of adventure. “From Hillary to Hackett, and Pearce to

Jackson, Kiwis have been ‘knocking the bastard off ’ for generations,” says Main. “It’s an attitude others want to taste and share.”

The final element in the NZ Inc story is our innovation, but it’s something we need to tap into more deeply, says Main, so we can prove that our ability to innovate is hardwired and built into our way of thinking and doing business.

DNA helped skincare company Trilogy capitalise on its simplicity, purity, vitality message using the New Zealand story as validation and credibility.

The product and market expansion of orthotic manufacturer Foot Science leaned heavily on the Kiwi innovation story and allowed for distinct differentiation from US and European rivals. And naturally, the All Blacks brand story was a blend of the mystique of New Zealand’s location and physicality, our culture and determination.

Making the most of our New Zealandness is

IN BRIEFCustomer experience design agency

DNA has developed a model for success for Kiwi businesses looking offshore

and has used it to help brands such as Trilogy and the All Blacks.

CONTACTGrenville Main, managing director.

(04)4990828,[email protected],

www.dna.co.nz.

important, but we mustn’t ignore emerging trends either, says Main. While responding to them can be challenging, they can also provide compelling opportunities.

“Of course, trends wax and wane, but they align to who we are and how we create, so using them to our advantage is valuable.”

For New Zealand, one of the most significant current trends is hyper-connectedness, with social media and digital channels allowing ever greater direct connection.

The rise in self-determination and self-service now mean we have a two-way channel thatfinally defeats the tyranny of distance and the lack of scale that have so often challenged Kiwi exporters.

“This hyper-connectedness benefits us specifically, because it now enables learning, testing, dialogue and advocacy for who we are and what we do,” says Main. “We can longer blame the old blockers – distance, youth, scale and self consciousness.”


guiding principles

Experience Integrity

Imtimacy

Agility

the

factor

Sustainableenergy

Feed the middle classes

Healthy ageing

Hyper-connected

The sociallaboratory

The natural landscape

Our pastoral heritage

The Treaty

Our adventurous nature

Our inventive culture

current trends

the attriButes of new Zealand, inc

1 Stand for something. Breaking into international markets requires something compelling, relevant and differentiated. Identify your unique selling proposition and amplify it.

2 Aim high and target opportunities. We can’t compete on mass manufacture, but having an innovation and design focus provides exportable and profitable opportunities.

3 Collaborate to innovate. Connect with right people, resources and access in specialist fields to give you the greatest chance of success.

4 One size doesn’t fit all. Before leaping into new markets, understand what they need, review how your offer measures up and carefully plan your impact to that audience.

5 Create experiences. Focus not only on what you offer, but how you offer it. Hyper-connected advocates are the most viral and effective means of market validation.

DNA’s tips for exporting in the modern world

i d e a l o g i n a s s o c i a T i o n w i T h B n Z

Spreading liquid gold around the globeGrowing demand for New Zealand-produced honey has seen a small boutique honey company flourish into our largest single producer of specialty honey. Here’s how BNZ made it sweeter than ever

With so many artificial colours, flavours and additives in our food these days, consumers are

increasingly looking for food that’s healthy, natural and pure. That’s great news for Mosgiel-based honey producer New Zealand Honey Specialties (NZHS). A number of its products are harvested in pristine World Heritage sites using sustainable beekeeping practices, and contain goodies such as beneficial bacteria, antioxidants, vitamins, minerals and amino acids.

Established in 2006, NZHS was set up with a strong export focus from day one. Just six years on, it’s New Zealand’s largest single producer of specialty honey and makes some of the world’s purest mono-floral honey varieties, most of which are unique to this country.

Among them are premium raw honey varieties, predominantly in a creamed format. NZHS produces varieties such as thyme, manuka, clover and beech forest honeydew, as well as two honey-based drinks, which are sold through Waitrose in the UK. The company also markets manuka honey and blackcurrant extra jam, which it sells internationally, and has plans to build on the range in 2013.

NZHS general manager Peter Cox says the premium profile of New Zealand honey has only been enhanced by the country’s ‘100% pure’ tourism messages.

“Our honey has a very good reputation in terms of its purity, quality and taste, and our mono-flora honeys are a real point of difference,” Cox says.

That’s more good news for NZHS. With 95 percent of its sales made to offshore buyers, the company has experienced impressive growth. With worldwide demand opportunities for New Zealand Honey Co branded products

outstripping its ability to supply, the issue isn’t so much one of looking for new markets but rather managing market growth carefully in order to build a premium brand, says Cox.

In its first three years, from August 2006 to August 2009, NZHS recorded a 995 percent increase in sales and won the 2009 Deloitte Fast 50 Award for fastest growing company in New Zealand. Naturally, that growth has leveled out a little, but NZHS is still enjoying a strong upward trend in sales, thanks mainly to the expansion of its Asian markets.

“Our main export markets are the UK, Hong Kong, Singapore, China and South Korea. The Asian market is where all the opportunity is at the moment. It’s quite underdeveloped for NZHS compared to the Northern Hemisphere business, and Asia is experiencing better economic times.

“In the longer term we’re looking to strengthen and build our brand as opposed to simply selling a commodity.”

A company experiencing business growth on this scale requires robust banking facilities and sound financial advice. In 2010, NZHS switched to BNZ, and works with BNZ Partners in Dunedin.

“We work closely with the management team at NZHS to understand their export business and to devise payment and financing options that are suitable for them. Using BNZ’s International Payments Online system, they track payments from overseas clients and get email alerts when payments arrive,” says Kate Skeggs, international trade and cashflow solutions specialist at BNZ Partners, Otago.

It’s a facility that Cox says has been really useful, but he’s also impressed by the overall service offering from BNZ.

“The financing facilities BNZ offers have

been quite favourable and the cost of finance has been reasonable. The bank also offers strong support through its business advisory 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. It’s the complete package.”

NZHS also makes use of BNZ’s Queenstown-based international trade specialist who works with import/export clients in the Otago and Southland regions and provides ongoing advice around the risks the company faces when exporting. Plus, regular export and training events held at BNZ’s Dunedin Partners Business Centre provide Cox and other local managers with plenty of learning and networking opportunities.

“I recently went to a BNZ event that Kate ran,” says Cox. “It was extremely good and I got a lot out of it – not just the information provided, but also the chance to connect with a variety of different business people.”

For her part, Skeggs enjoys dealing with NZHS and is excited about the company’s bright future.

“It’s a very interesting business and it’s fantastic that they are growing in offshore markets. It’s exciting to be working with a company that is successfully developing and exporting what is very much a New Zealand product.”

IN BRIEFFoundedin2006,Mosgiel-basedNew

Zealand Honey Specialties is our largest single producer of specialty honey. With

95percentofitsproductssoldoffshore,thecompany relies on BNZ to help it manage

its day-to-day export transactions and plan for ongoing sales growth.

CONTACTTo find out more about BNZ Partners,

phone0800273916orvisit www.bnz.co.nz.


BNZ’s Kate Skeggs and New Zealand Honey

Specialties’ Peter Cox.

112 / idealog.co.nz

Since 2000, China’s cities have been expanding by 10 percent each year. To put this in perspective, imagine trying to build homes for an extra 137,000 people in Auckland this year, and carrying on that rate

of expansion for the next 12 years. To link these exploding cities up, China is reported to be building

something like 5,000 kilometres of new highway a year. And to connect them with the outside world, the country is currently the world’s largest constructor of new airports. The Chinese government has begun a US$250 billion five-year project to build about 170 new airports across the country.

All this activity has accelerated China’s long-held role as a relatively low-cost manufacturing powerhouse, but it has also opened up the country’s new, more affluent middle classes as an enormous market for goods and services from the outside world and energised a huge business ecosystem chock full of potential partnerships.

The trick is knowing how to access it all. Rod MacKenzie, New Zealand Trade and Enterprise’s regional director

for China, is a handy guide to have on this unfamiliar ground. “You can’t come here thinking it is like any other export market,

but maybe a bit more complex,” he explains. “It is massively more complex. Consumer attitudes are different; consumerism itself is only just beginning.

“Yes, there is an emerging middle class, but for the most part they are just experimenting, so the idea of brand loyalty is still largely foreign to them.”

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 China’s young generation, particularly women. Tourism New Zealand has paved the way for using social media in China, but NZTE is now gathering ground.

Across the board, language is still a major barrier for NZ companies in China, but MacKenzie points out that understanding the culture, rather than just the words being said, is also crucial.

“If you don’t understand the political culture you can get yourself in a world of trouble quite quickly,” he says. “It’s all about preparation, establishing your reason for being here and actually being here: putting people on the ground.”

New Zealand food companies that gain a foothold are finding plenty to leverage in terms of an overriding concern for food safety in China. This

is especially the case since, according to MacKenzie, Fonterra is perceived to have acquitted itself admirably in its interventions in the widely publicised melamine contamination of milk powder in 2008.

However, China’s regulatory framework, perhaps in light of incidents like this and the general level of concern, can be torturous.

MacKenzie says: “When it comes to dietary supplements, the regulatory environment here is so complex and changeable that we are not having the same success as has been experienced in Hong Kong and other parts of Asia.”

In the meantime, NZTE is showcasing the best of what New Zealand food has to offer, but giving it a twist by using a local team of chefs to better target the Chinese palate.

And the biggest mistake folks are still making?

“Companies come here, find an ‘expert’ who says they know everybody, then go away again and wait for it all to happen,” says MacKenzie. “It doesn’t [happen], if you try to do it that way.”

Country case study:

ChinaChina is arguably the natural homeland of all the mega-trends of the early 21st century. It is the world’s second-largest country, and its most populous. Since the introduction of economic reforms in 1978, China has become the world’s fastest-growing major economy, and its second largest after the US. Since the 1990s, it has been a place of jaw-dropping development statistics

‘if you don’t understand the political culture you

can get yourself in a

world of trouble quite

quickly. it’s all about

preparation, establishing your reason

for being here and actually being here:

putting people on the ground’

– r o d m a c k e n Z i e , n e w Z e a l a n d t r a d e

a n d e n t e r p r i s e ’s r e G i o n a l d i r e c t o r

f o r c h i n a

Since 2000, China’s cities have been

expanding by 10 percent each year. To put this in

perspective, imagine trying to build homes

for an extra 137,000 people in Auckland this

year, and carrying on that rate of expansion

for the next 12 years



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 thatproportionwas56percent.GrowthinourexportstoAsiaoverthepastyearhasbeen2.6percent,withChinesereceipts rising by 11.4 percent. In fact, China now produces 15.2 percent of goods export receipts – up from 7 percent only four years ago. This strong growth, however, has come largely from a surge in exports of minimally processed dairy products and logs. The challenge for New Zealand is to move up the value-added chain and produce goods (and services like education and tourism) more tailored to the rising wants of China’s ballooning middle class. In that regard, the launch in April of the government’s NZ Inc. China Strategy is an important development, and an invitation to all of NZ.

– t o n y a l e x a n d e r , b n Z c h i e f e c o n o m i s t

Areas of potential in China

WineChina has more than 2,000 years of winemaking history, although you wouldn’t really

recognise anything from before the 20th century. There are morethan160,000acres

worth of vineyards nationwide, but many are too remote to be truly commercial. Despite this, the Chinese tipples of choice were based on beer and grain spirits until the government

encouraged a shift to wine to stave off alcohol-related illness, andChinesePremierLiPengdecreed that state banquets

would go better in wine in future. Wine is now becoming a

fashionable drink among the wealthy, younger urban

Chinese generations, and is the favoured drink of China’s elite.

Aviation Building 170 new airports in the

next few years also means a boom in ancillary markets like navigation equipment, air crew training and safety equipment.

MarineThe Chinese middle class has the house and the car, and is

now looking to the coasts and waterways as their next

playground. Already companies like North Shore-based trimaran builder Weta Marine are setting

a course for expansion in this offshore market.

cred

it: B

nZ/s

tati

stic

s nZ

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012

15%

12%

9%

6%

3%

0%

CHINA’S SHARE IN MERCHANDISE EXPORTS

The mysteries of guanxi Tim White is lead partner with KMPG’s Business Advisory Team and leads their growing China business practice. He is also chairman of the New Zealand China Trade Association, and a board member of the New Zealand China Council. Tim believes understanding ‘guanxi’is vital to business success in China.

The term encapsulates many different aspects of human relationships, particularly and crucially the intertwinement of both personal and business dealings. At its most basic level a person’s guanxi is his or her network of relationships, but it is also a measure of the depth of those relationships and the extent by which a person is bound or obligated by them.

Many Kiwi businesspeople are used to establishing trust relationships in business by working directly towards the creation of deals, contractual obligations and other legal paperwork. This can mean they become confused by the way in which, in China, this process remains largely subordinate to the establishment of the guanxi, or personal relationships between the parties.

For example, a new client approached White, believing that they were very close to securing a software deal with a large

Chinese company, because the company had repeatedly asked him to return with

further details on how his software could work for them. But when White and a Chinese KPMG colleague joined the next meeting, the company thanked White’s client sincerely for his help, took everybody out to dinner and enthusiastically explained how they had now handed all the information on to their own team of software developers to create something similar.

White says: “Chinese people are very friendly, so the way things like this happen can be quite difficult to understand, because the processes involved are quite foreign to us. I would never attempt to do a deal in China without working with an established Chinese partnership, which may take years to develop. It’s not just for translation, but also to establish and understand these relationships. Once you have guanxi with a person, this gives you a certain amount of access to their network, and so on.”

C H R I S T C H U R C H N E L S O N W E L L I N G T O N A U C K L A N D S Y D N E YC H R I S T C H U R C H N E L S O N W E L L I N G T O N A U C K L A N D S Y D N E Y

Mega-predictionsIt’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

How to get help from the banks to get going with your online idea.

Firstly, demonstrate that you understand business and not just social media.

You’ll also need a great product, strong governance,

to know your market and have a clear idea as to

exactly how you are going to be successful.

Don’t be afraid to seek help and guidance if you need it.

Make sure you’ve got strong knowledge of the industry,

including leveraging external relationships with those

who have expertise.

– b e n s p e e dy, b n Z n at i o n a l m a n a G e r ,

b u s i n e s s a n d c o m m e r c i a l

Hyper-connectionGetting 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.

“The main reasons for this include the level of investment required prior to the first sale, the lack of certainty around future cash flow, limited exit options and the intangible nature of the business, which means there are no assets to sell if the business does not pan out,” Speedy says.

“The people behind these ventures also tend to have no track record in business. Another challenge is the number of businesses involved in the industry and choosing which horse to back. It’s becoming very crowded and new players lack sufficient points of difference.”

There are already signs that Kiwis are finding in-roads, especially in the US. New Zealand trade commissioner in New York, Peta Conn, says New Zealand is punching above its weight in the hyper-connected world.

“Both Silicon Valley and New York are witness to an influx of New Zealand companies setting up to be closer to their customers. Entertainment is also a focus of development with New Zealand expertise cutting through areas such as gaming from TV series and films and customised book soundtracks. The calibre of technology coming out of New Zealand is competing successfully on the world stage and fuelling New Zealand’s reputation for innovation.”

‘silicon Valley and new York are seeing an influx of new Zealand

companies setting up to be closer to their customers. The calibre of

technology coming out of new Zealand is competing successfully on the world stage and fuelling our

reputation for innovation’

114 / idealog.co.nz

C H R I S T C H U R C H N E L S O N W E L L I N G T O N A U C K L A N D S Y D N E YC H R I S T C H U R C H N E L S O N W E L L I N G T O N A U C K L A N D S Y D N E Y

markets such as Japan and Korea.” And of course, New Zealand’s manuka honey

has already gained a good grip on the shelves of health food stores worldwide.

Proudfoot would like to see more research and development specifically targeting this area, including work on the full spectrum of milk enzymes and the potential nutraceutical benefits of some of New Zealand’s native flora and fauna.

“This could create market opportunities that other countries could not replicate,” Proudfoot points out.

Feeding the world’s middle classesThat said, New Zealand will never be able to feed the world. Estimates vary, Proudfoot says, but people argue that we are likely to be able to feed between 20 and 100 million people.

“So we need to ensure that the products we produce and export are targeted into the market niches that will enable us to generate the best returns for the exporter, the producers and the wider economy.”

Healthy ageing and the baby boomersIan Proudfoot, head of agribusiness and lead partner, consumer and industrial products at KPMG, is seeing signs that the boom in healthcare products is going to go well beyond the baby boomer.

“There are growing opportunities to sell products to all consumers on more than the 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 expanding rapidly, particularly in western markets. The challenge for companies, particularly the many smaller food exporters in New Zealand, is the cost associated with obtaining the scientific certification of the health properties of the product. Consequently, while many companies recognise the size and scale of the opportunities, many lack the financial capacity to fund the necessary science to make health claims about their products.”

That may be where close relationships with Crown research institutes such as Industrial Research Limited become vital to Kiwi businesses grabbing real growth in this sector. Proudfoot says big players such as Zespri and Fonterra are already using health benefit research to differentiate their products from the competition and are achieving good results.

“Fonterra has focused heavily on the benefits that calcium in milk can deliver to older women at risk of osteoporosis in its promotion of Anlene brand milk products,” he explains. “Zespri continues to invest in supporting the health benefits of New Zealand kiwifruit and uses this in its promotional activities in key

‘recognition that food can have proven health benefits and consequently demand a premium price is expanding rapidly, particularly in western markets. The challenge for new Zealand is the cost associated with getting scientific certification of the products’ health properties’

He doubts that the best results will be achieved by just piling into Asia.

“Food expenditure per capita remains very low in the growth regions of the world compared to the levels in our traditional export markets,” he says. “And food represents a much higher proportion of income in these growing economies than it does in the traditional markets. This suggests spending on food remains focused on eating for survival rather than having discretionary funds to experiment with high-value food products produced in countries such as New Zealand.”

The key to success in these markets is to really understand the food preferences of a country’s consumers, which requires the sort of presence and cultural immersion that has so far proven difficult to establish for many New Zealand companies.

“Too many of our export activities remain focused on moving product rather than understanding and fully delivering on customers’ priorities,” he adds.

He also bemoans the lack of a real national strategy for New Zealand’s agricultural food sector at a time when the nation relies on it so heavily for export earnings.

10.7%

6.4%9.7% 11.0%

22.3%

14.8%

32.2%

27.7%

15.0%

0.0%

10.0%

20.0%

30.0%

40.0%

Food expenditure as % of household income

3,396

2,087 2,1792,425

338

3,631

558223

1,558

0

1,000

2,000

3,000

4,000

NEW ZEALAND

AUSTRALIAUSA UK GERMANYCHINA JAPANINDONESIAINDIA SOUTH KOREA

NEW ZEALAND

AUSTRALIAUSA UK GERMANY CHINAJAPAN INDONESIAINDIASOUTH KOREA

Expenditure per capita on food (USD)

2,873

15.0%

116 / idealog.co.nz

Jan Gatley DirectorT: +64 (7) 858 6557E: [email protected]

Hamish McDonald PartnerT: +64 (7) 858 6519E: [email protected] Robert Braithwaite PartnerT: +64 (7) 858 6517E: [email protected]

Murray Dunn PartnerT: +64 (7) 858 6512E: [email protected]

Our local agribusiness leaders

© 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

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.

Download this year’s KPMG Agribusiness Agenda atkpmg.com/nz/aa2012

Jan Gatley DirectorT: +64 (7) 858 6557E: [email protected]

Hamish McDonald PartnerT: +64 (7) 858 6519E: [email protected] Robert Braithwaite PartnerT: +64 (7) 858 6517E: [email protected]

Murray Dunn PartnerT: +64 (7) 858 6512E: [email protected]

Our local agribusiness leaders

© 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

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.

Download this year’s KPMG Agribusiness Agenda atkpmg.com/nz/aa2012

118 / idealog.co.nz

TelstraClear.Taking your business further

Using the latest technology, we can connect you with your emerging markets anywhere in the world.

0508 555 500www.telstraclear.co.nz


History seldom works like that. Did Mark Zuckerberg really know that he was creating a 21st century cultural

touchstone when he started wiring up his student buddies? Probably not. Steve Jobs often said that when he and his friends started Apple they had no business aspirations whatsoever, they just wanted to make computers for their friends. And how could college runner Philip Knight and his coach Bill Bowerman have known, when they started selling a Japanese running shoes out the back of a car, that they were on their way to creating US$24billion sporting mega-brand Nike?

But that doesn’t mean you should just chance your arm and trust to luck anymore than you should smoke 40 a day because my Pop did and survived until he was 80. Like any guide on commercialisation, what we are talking about here is planning for risk minimisation, because life has quite enough of that already.

What this can do is guide your thinking. For example, Derek Handley has said that mobile ad company Hyperfactory started from a pretty clear conversation on where advertising was going to go in the mobile age, and that little bit of foresight has helped him trouser something in seven figures.

In this lightning speed age, even being first to the punch is no guarantee of easy money and early retirement. Guy Horrocks co-founded the world’s first iPhone development company Polar Bear Farm well before the App Store even existed, but still has to bust his hump on his Carnival Labs day job, grabbing the red eye in search of the big pay day. But he has a lot more chance of getting there than most, because he is riding a mega-trend. And in the process he is likely to add to the sum of New Zealand’s achievements.

Grenville Main sees all sorts of folks with ideas coming through the doors of customer

– a n dy k e n w o r t h y i s a r e G u l a r i d e a l o G c o n t r i b u t o r a n d

a u t h o r o f t h i s G u i d e . w w w. a n dy k e n w o r t h y.c o m

TelstraClear.Taking your business further

Using the latest technology, we can connect you with your emerging markets anywhere in the world.

0508 555 500www.telstraclear.co.nz

New Zealand must get mega-trendyIt is extremely unlikely that, even after reading this excellent guide, you will be able to go away to create and commercialise an idea custom made for one of the current mega-trends. It is even less likely that you will be able to do it for one of the mega-trends yet to emerge

experience design consultancy DNA, where he is managing director. His advice?

“People always come to us at DNA with a problem, but it’s often ‘their’ problem. We say, align yourself with the opportunity and then reconsider what the problem or challenge you face may be. Our ability to fund our own R&D sector governmentally is constrained; there aren’t enough Kiwis who have invested over the years, so there is not a tonne of money in superannuation funds that can invest in local innovation. This means we have to be attractive enough to get offshore interest, because they have the money and we don’t.

“The only saviour that we have is to keep turning out good ideas, keep growing entrepreneurial Kiwi minds. Having a culture of growing innovators is probably what our future has to be based on. The world is getting smaller and more blended in the sense of who’s funding things, where ideas are being created and developed, where they are being made. Our resource base could be a globally recognised ‘creation engine’.”

‘having a culture of growing innovators is probably what our future has to be based on’

Don’t rely on special FXAll these mega-trends and more will make some currencies go up and down like a bride’s nightie, but Iain McLeod, BNZ mational manager, international trade, cautions against getting carried away with playing the numbers game.

“Resist the urge for punting the balance sheet looking for windfall foreign exchange gains,” he says. “Businesses that have a robust FX policy spend little time on FX management, as the rules are set and understood and can be implemented by virtually anyone.

“A lack of policy usually has business owners actively involved and spending a disproportionate amount of time in tracking markets and trends when they should be working on or in the business.”

‘resist the urge for punting the balance

sheet looking for windfall foreign exchange gains.

Businesses that have a robust FX policy

spend little time on FX management, as the

rules are set and understood and can be implemented by

virtually anyone’

– i a i n m c l e o d, b n Z n at i o n a l m a n a G e r

The Idealog guide to megatrends

Business

Transcript of The Idealog guide to megatrends