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Changing the Mindset for Innovation (Part 2 of 5)

Paul Matthews, NZCS Chief Executive. 19 August 2011, 4:30 pm
Changing the Mindset for Innovation (Part 2 of 5)

(Last week's column prompted considerable discussion and debate. We've hence decided to expand this to a 5-part series)

Last week I talked about how roles in the tech industry bring on average a huge $240k of business value per full-time job. This compares highly favourably up against the three "traditional" major industry sectors in New Zealand, being Tourism ($80k), the wine industry ($90k) and farming ($125k).

The technology industry is now the second largest export sector (following dairy). It has the potential to be the highest export earner within the next five years, however only if the barriers to growth are removed.

Some of the major factors to whether we achieve that growth (barriers or opportunities, depending on how you look at it!) are "Mindset", "ICT Skills" and "Government". This week let's looking at Mindset in more detail.

Check out the other parts to this series: Part 1 | .. | Part 3 | Part 4 | Part 5

Do we need more entrepreneurs?

Some people believe New Zealand needs more entrepreneurs, and especially in the tech sector. I disagree and here's why.

As of last year there were a total of 463,278 small and medium-sized businesses in New Zealand. That's a heap in anyone's language. While some will be "asset vehicles", the vast bulk of businesses in the tech sector fall within this 0-20 staff category.

So as it turns out, we already have a whole heap of kiwis getting out there and giving it a go. Almost half a million in fact and the tech sector is represented well. In other words, a thirst for innovation and entrepreneurialism is in our blood.

Business survival

However this only paints half the picture. The real problem is in business survival and growth, and the technology sector has some of the worst survival rates in New Zealand.

Only 26% of tech companies formed in 2001 survived to 2009 and only around 50% of tech companies last more than three years. And these stats are worse if we only look at smaller companies. But why?

There are scores of viewpoints and research on why small businesses, and especially in our sector, fail. However if you break down the multitude of reasons it's clear to see that the majority of it comes down to people: management skills, knowledge and experience.

All too often businesses are started by people who are great at what they do and think that that'll translate to business success. It doesn't. Or not on its own at least.

It's good that people give things a shot. But running a business is bloody hard work and can be hugely stressful, especially with the added responsibility of staff. Without the right skills and experience, running a business is often a train-wreck waiting to happen - just like those who try to practice IT without the skills and experience often crash and burn.

Equally, many don't fail but also never achieve anywhere near their potential. Why is that?

It's all about "Mindset"

Many business people have the mindset that skills and training aren't needed to run a business. They see it as more an art than a science.

Equally, others have the mindset that business success is success in New Zealand rather than focusing on serious growth offshore.

However the mindset issue is far wider than just the nuts and bolts of running a business and identifying opportunities. Without support or experience, tech business owners are often not even aware where the greatest growth opportunities lie, such as those outside their town or outside New Zealand.

Too many kiwi tech business owners are of the "trapped in their business" mindset, focusing on doing their skill well rather than growing their business well and others simply don't have the business skills to succeed.

Getting out to the world

A prevalent symptom of this is the lack of focus on exporting - taking products or services to the world. Some kiwi tech companies clearly do this well, but for many it's not even on the radar.

Exporting outside NZ is where the real growth options reside and more than that, brings significant economic growth to New Zealand.

So why aren't more working together and why isn't there a focus on exporting?

What we're talking about is the difference between the all too common "go it alone without scale" vs "collaborate and compete on the world stage" mindset we need to adopt en masse.

Where to start?

It's all very well talking about the need to change mindsets, but if you're a budding entrepreneur where do you start?

The great thing about being a kiwi is we love to help each other out. Aside from the unfortunately widely seen tall poppy syndrome, we're naturally wired to collaborate.

Success is about harnessing collaboration and there's plenty to be had. Kiwis are spread out around the world and in most cases, are dead keen to help.

The first port of call is the local Economic Development Agency. These are organisations set up by local government to help local business succeed. They have a wealth of knowledge and free advice on how to really get going. Best bet, drop them an email, make an appointment and go see them in person.

You can find the contact details of your local EDA here.

On the global side of things, NZ Trade and Enterprise (NZTE) is a government-funded organisation established to help kiwi businesses succeed globally. Take a look at what they have to offer here and again, reach out!

Landing in the USA

Here's a great example of our tech companies working together to tackle the world.

Last month a host of kiwi tech entrepreneurs announced the formation of The Landing Pad, a kiwi shared-services facility in the heart of San Francisco's tech hub within a stone's throw from the global HQs of Twitter, Salesforce.com, Bebo, Zynga and many others.

This facility provides either hot-desk or permanent space for eligible tech companies looking to establish business development, fundraising or sales activities in the USA, alongside other kiwis doing the same. They're not an incubator, but if you're a tech company seeking a launching pad into the US market this is a great opportunity to get alongside companies like Jade, Xero, and many others.

And at just $US300 per month for a hotdesk in the heart of USA's tech capital, with direct flights to San Fran for less than $1k each way from Auckland, there really is no reason not to.

In summary

As a country we need to focus on entrepreneurialism and equip our tech sector entrepreneurs with the skills, knowledge, networks and confidence to approach exporting technology with the same drive many bring to their local businesses now.

However it's not about more entrepreneurs or getting more people to think about starting businesses, it's about changing the mindset of those already doing it, to build their management and entrepreneurial skills and to focus beyond local.

The real opportunities for New Zealand are in exporting top-end technology-driven solutions and creating a reputation for delivery of high quality boutique/niche and innovation-laden specialised products and services. The 3M of the world if you like.

But if we're serious about it we need a change in mindset. We need to approach business as a profession in itself, equip ourselves with the skills and tools necessary and focus on the massive export potential our sector is in the unique position to leverage.

Next week we'll take a look at ICT skills, the current huge skills shortage and what's being done through the education sector and elsewhere to address it.

Check out the other parts to this series: Part 1 | .. | Part 3 | Part 4 | Part 5


Other news...

Government ICT Roadmap 

Hon Nathan Guy officially announced the Government ICT Roadmap at an event in a rather wet and windy Wellington on Thursday.

The roadmap doesn't come as a huge surprise for Wellington-based NZCS members as we've already given briefings on this over three NZCS events in the capital in recent months.


We think it's great that the Government has outlined a strategy and roadmap for better ICT services across Government. Many of the changes indicated are well overdue and the focus on collaboration is excellent.

We do still remain concerned, however, about the lack of focus on skills development. The roadmap considered where Government wants to go and how it wants to get there, but history elsewhere shows us that without a focus on professionalism, professional development and building capability it'll be difficult for this to become a reality.

Capability is covered within the programme, of course, however it'll be interesting to see if this becomes a central integrated strategy, thereby allowing for the type of change and growth they want to see, or treated as just a small stream.

Anyway, well done to Government CIO Brendan Boyle, Stephen Crombie and the rest of the GTS team who contributed to this. NZCS will be continuing to work with Government to help contribute to the success of the roadmap, especially in the skills area.


Pathway to a Revitalised New Zealand Health IT Industry by 2015

healthitAlso released this week was the Health IT Cluster's strategic pathways document, Pathway to a Revitalised New Zealand Health IT Industry by 2015.

This document provides a clear and detailed pathway to success of the Health IT sector in New Zealand.

It's great to see the strong focus on building industry capability as a key plank to this success and a clear understanding that a focus on the skills and development of those building and supporting health IT-related products and services is how the sector will achieve growth and potential.

It's great to also see the Cluster focusing on rolling out NZCS's independent ITCP qualification among cluster members.

You can read the document here and find out more about the Health IT Cluster here.


Auckland Education Summit: Unblocking the Skills Pipeline

If you're in Auckland, keep the evening of 7th September free. We'll be holding a second Summit in a series, this time focusing on many of the issues above - how to unblock the skills pipeline.

More details on this (including registration options) soon.


Enter the Internet Awards!

The Australia and New Zealand Internet Awards (ANZIAs) are a collaboration between InternetNZ and auDA.

The awards are an annual event celebrating the achievements of organisations, businesses and individuals that have made significant contributions to the development and use of the Internet in Australia and New Zealand.

This year the ANZIAs features six categories:

  • Security & Privacy
  • Internet Access & Digital Skills
  • Information
  • Diversity
  • IPv6
  • Innovation

The ANZIA Awards are being held 17 October 2011 in Melbourne. For more information about the awards, including criteria and entry forms, visit www.internetawards.co.nz


Talent Development, Recruitment & Retention in IT Conference

I'll be speaking at this conference primarily about growing the IT talent pipeline and the importance of, and strategies to, increase the numbers of students choosing IT as a career.

The one-day conference looks excellent with a range of speakers from industry and academia.

When: Tuesday 27 September 2011

Where: Crowne Plaza, Auckland

More info: Conferenz website

NZCS members - use Discount Code EQOM8G for an exclusive 10% discount


Driving Public Sector Services to the Web & Online Community Engagement Conference

The landscape of doing business and service delivery is rapidly changing, with the internet and Web 2.0 technologies changing the way organisation’s engage and deliver services to stakeholder and customers. Government has the opportunity to embrace these developments and experience the benefits that come from new communications and sharing methods.

This conference will provide you with the tools you need to help drive and sustain change within your organisation and will provide you with a unique opportunity to hear from New Zealand’s leading Web 2.0 experts.

When: 26-27 October 2011

Where:, Amora Hotel, Wellington

More info: Conferenz website

NZCS members - use Discount Code AQZXPQ for an exclusive 10% discount


Creative Camp 2011

Creative Camp NZ is a non-profit, 2-day and multiple-track event in Wellington happening later this year and successor of the Flash Platform Camps we've held in the past two years in Wellington.

The event itself is only $19 to attend and should be excellent. They're also running a couple of excellent related full-day workshops which you should check out.

When: 28-29 October 2011

Where: NatColl, Wellington

More info: Creative Camp website

NZCS members - use this link to receive a $40 discount on workshops attendance


Paul Matthews is Chief Executive of NZCS, the professional body of the IT sector.


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