Trevor Mallard: Think smarter, grow richer

Trevor Mallard

New Zealanders have always managed to hit the mark when it comes to bright ideas, and finding creative and innovative ways of doing things - we've seen it in fashion, film and music.

This week in Auckland, it's the turn of some of our top business thinkers, innovators and exporting experts and companies to showcase the way forward to a stronger, export-led, innovative economy.

Newthinking06 is a week of biotech, information technology and creative events beginning today, aimed at promoting knowledge-based industries - based on the power of ideas and international connections.

New Zealand tops international tables for ease of doing business, entrepreneurship and economic freedom, yet we have some way to go to move up the OECD wealth table.

Certainly, our economic performance is related to our physical constraints - distance from key markets and small size.

But it is also to do with our attitudes. As a nation, we need to start valuing our businesses (in particular our exporters) and stop being bashful about the creation of wealth.

We need to back our business stars, and be proud of them, just as we take pride in our film, arts and sports stars.

The need for a change in attitude is also one for business, which needs to get more comfortable with the concept of adding value and building international networks.

The Labour-led Government is committed to working with business to achieve these goals.

To create higher standards of living for all, our country needs more firms that are innovative, can compete at the leading edge in offshore markets and grab the attention of the world's consumers.

New Zealand's future will be determined by the way in which we commercialise our innovations and take them to the world.

If we are to fast-track our economic growth, adding value, international networks, innovation and technology are the way ahead.

A New Zealand Trade and Enterprise survey of exporters, conducted when the high dollar was starting to bite, showed that companies exporting higher-value products were faring better than those at the commodity end of markets.

Too many of us are afflicted by "old thinking".

The label "New Thinking" arose out of NZTE's programme to promote this country as innovative and technologically savvy, as well as clean and green.

Now New Thinking is now being used to brand stands at trade fairs, in marketing and in the media. It is a powerful framework for reshaping the way we are seen internationally.

The phrase New Thinking also applies to a challenge facing us all. If we want to lift our economic performance, we need to do some new thinking about what and how we export.

If we don't build more high-growth, internationally competitive exporting companies, we won't achieve economic success.

While the rest of the OECD has moved most of their exports into faster-growing markets for more lucrative, value-added goods, ours remain skewed towards commodities that are more vulnerable to fluctuating exchange rates, prices and downturns.

Now we are trying to catch up. Commodity-based exports will make a contribution and already there is success in adding value to commodity-based goods. But, alone, they'll never deliver the above-average growth needed.

If we become a producer of high-value exports, businesses will be in the position to be the price-makers, rather than the price-takers.

The organisers of events at newthinking06 - NZBio, Incubators New Zealand and KEA New Zealand, all supported by the Government - can help attendees understand the issues and plot ways forward.

The week will also be used to acknowledge outstanding performances during the past year by business incubators, biotechnologists and Kiwis promoting New Zealand abroad. Accentuating the positive is a big part of New Thinking.

In the past four years, NZTE's business incubator programme has invested $13 million in small, high-growth potential companies, most with a technology at their heart.

Last year, there were 17 incubators containing 157 companies which, on average, increased their turnover 111 per cent. They employed more than 700 people and earned revenues of more than $27 million.

Our four-year-old beachheads programme has been hugely successful in kick-starting company launches into offshore markets. The key feature of beachheads is their ability to quickly lock member companies into local networks overseas and connections that would otherwise take years to develop.

Some 70 technology-focused companies are spread across six beachhead offices in the United States (Silicon Valley and Fort Lauderdale), Britain (London), Dubai, Singapore and Japan (Tokyo). By this time next year, I expect to have 120 companies on board.

These programmes are key platforms that are designed to help our companies on to the world stage of business.