When it comes to courting investment from Asia - or anywhere else - we should be aiming to get the best, not the most.
When foreign investors take up a substantial stake in a New Zealand company, the implications go beyond the money that enters the country. Potentially, the foreign investor brings skills, connections and technological expertise that raise productivity and boost higher value-added exports. Potentially. Getting foreign investment right means recognising that it doesn't always turn out this way. Mergers and acquisitions can be painful and messy, sometimes ending in outright failure. There's nothing magical about a foreign investor that will ensure a good outcome.
But there is a potential payoff and it's worth knowing what it looks like. Earlier this year colleagues at the University of Auckland Business School wrote a report on investment from Asia for the Asia New Zealand Foundation. We profiled a diverse set of New Zealand-based companies in which investors from Asia, either migrant investors or foreign investors, had taken substantial roles. In some cases the investment resulted in an entirely new business venture being created, resulting in jobs that would otherwise not exist. Addiction Pet Food, for example, is an export-focused natural pet food venture with a factory in Te Puke. That means forty or so employees in Te Puke working for a company that would not exist if a young Singaporean vet hadn't gotten inspired by the New Zealand story and set up his business here.
Or take Fitzroy Engineering, established in New Plymouth in the 1950s and part of Malaysia's Dialog Group since 2011. Being part of Dialog's much larger corporate network has brought added depth, financial resources and international connections to the New Plymouth-based company that employs around 400 people in New Zealand.
Kiwi icon Griffin's gained access to the Southeast Asian local market expertise and distributional links of its Philippines-based parent company when it was acquired in 2014. Since then it has upgraded its export strategy in Southeast Asia, with a better understanding of the specific tastes and customer needs of the Southeast Asian consumer.