Innovation
New Zealand has some of the brightest people researching and developing some of the best ideas in the world, but we don’t necessarily hold on to the investment intellectual property to get the full value of the innovation.
We run into issues such as; capital restrictions, market restrictions and people restrictions. When these restrictions are met in New Zealand the easiest way to overcome this is to involve overseas strategic investment. This investment could involve acquisitions such as; capital, people or access to market.
I believe more work needs to be done by the government to ensure we maintain as much intellectual property as possible when overseas investment is involved.
At present the NZ government invests heavily into NZ companies research and development but we are not necessarily capturing the potential value, nor are we getting return on investment when the business is sold overseas.
Typically, in New Zealand business we are poor at recognizing the value of our ideas and how to protect them.
One way to capture more value is to hold onto the intellectual property.
How do we do this? I am not the right person to make recommendations but that is not to say it needs to be done.
Productivity
New Zealand is one of the least productive countries in the Organisation for Economic Co-operation and Development (OECD). Throughout this research, I have found that some of the reasons for this poor productivity is driven from:
- Our location
- Our lack of competition in markets due to scale
- Our people in leadership.
This might sound all bad, but there is a real opportunity to grow our people, introduce competition, and with technology, location issues are becoming less. In saying that it as I’m writing this, we have some huge challenges with climate change, and how that affects our location will be interesting to see how it plays out.
The only real way to introduce competition is by Foreign Direct Investment (FDI).
The FDI introduces capital into NZ. Capital is a huge constraint for New Zealand’s innovators and developers.
One of the main issues with capital constrained companies are that they are generally sold to overseas buyers.
These companies that are sold are often New Zealand’s most productive, most innovative, and most disruptive firms that have generally had investment/funding from the NZ government or other New Zealand funding sources.
What I have found in my research is that some of these companies stay in NZ and others relocate overseas completely.
My question is: ‘How do we maintain or capture the value of our ideas?’
Matthew Hodgson
