Growing world of knowledge

By Tom Clarke

Knowledge industries will be the high flyers of the future, says Auckland business leader Peter Menzies, the new chairman of Auckland UniServices Ltd.

The company is the contract research arm of the University of Auckland.

Future value will increasingly come from intellectual activity, he says.

"World share markets are showing the trend through the enormous support they're giving to knowledge industries, as against commodity producers."

It is all part of the automation of production, including the increasingly highly automated manufacturing sector, he says, and the variability of quality is reducing constantly.

"As a result, we're seeing anyone that has to sell products - be it manufactured or a commodity - having to produce to very high standards for very competitive and stable prices. So, the real interest for new money is where you can see growth, and today it's very hard to see growth in the more traditional areas."

Mr Menzies says that fewer people are being employed in these intensified forms of production.

As a result jobs are flowing into service industries such as health, education and entertainment, which he identifies as major growth areas of the future.

The role of Auckland UniServices Ltd, he says, is to get value from the constant stream of novel science and technology that flows from the highly-skilled people in the university's teaching and research areas.

"We're trying to get growth out of the things that are coming through these centres of excellence, into spin-off industries," he says. "It's very important for students, for the university, and for Auckland that we do so, because the spin-off from this can be highly valuable in job creation.

"That equation is accelerating so we need to focus on it so we can create employment from the internationally-valid novel science and technology that is coming from the university."

Mr Menzies points to Massachusetts Institute of Technology in the United States.

The turnover of companies that have evolved from the science and technology produced by that institution, is said to exceed the gross domestic product of South Africa, he says.

Auckland UniServices Ltd is already using its intellectual property to participate in companies in England and the United States. Along with its other activities, this resulted in it generating revenues of almost $25 million last year.

Mr Menzies wants to ensure that most of the employment benefits from these developments occur in Auckland.

He adds that it is not always easy to do that because of the capital demands and market relationships that most of those developments require. He believes that increasingly UniServices will be able to negotiate with its overseas partners to have production based in Auckland.

He is optimistic for the future of the company, despite the fact that it operates in a highly-competitive international market where most other universities are also operating.

Mr Menzies is a former chairman of Mainzeal Group, has been a director of ECNZ and several public companies, and is chairman of Mercury Energy.

He takes over the chairmanship of the company from Sir John Ingram who has retired after 10 years in the role.