R&D and innovation news – Call to support innovation on button

 

FranMugnew2
Article by
Fran O'Sullivan
Head of Business for NZME
5:00 AM Wednesday Aug 10, 2016
Simon Moutter says balance sheets are not too stressed to support startups. Photo / Dean PurcellSimon Moutter says balance sheets are not too stressed to support startups. Photo / Dean Purcell

Here’s a challenge to NZ directors: Get behind Simon Moutter’s call to action to big business to invest in early stage companies.

The level of business investment in R&D and innovation is a national disgrace.

We’ve all known about this in the business sector for decades. It was a major issue at the Catching the Knowledge Wave conference in 2001 – 15 years on it remains so.

Moutter has put his head up over the parapet by not only coming back from an Innovation mission to “Startup Nation” Israel convinced that it would take support from the big end of town to reinvigorate NZ’s underdeveloped venture capital market. But he is also determined to shake the corporate sector out of its complacency and do something about it.

Moutter did not overly focus on that challenge when he released the mission’s findings – and plan – at a 90-minute presentation at Spark HQ.

But he made the point that balance sheets are not stressed. Directors and shareholders could take a nationhood view – and invest for the longer term by supporting startups and early stage businesses – without harming their own core business.

They could also get their senior leadership team members to assist in counselling early stage businesses which frequently lack the supportive architecture present in big companies. There is a tendency for directors of New Zealand companies to take the easy route of “giving back capital” to shareholders rather than go outside the corporate norms and get behind startups or early stage businesses. Or, to back takeovers and mergers instead of growing NZ companies organically.

Spark has its own innovation arm, Digital Ventures, which holds data business Qrious, Lightbox, internet service provider Bigpipe and the Skinny mobile brand.

Fonterra recently launched its Disrupt programme where chief executive Theo Spierings is out to tap ideas from within the dairy giant.

There are other companies at the forefront of innovation.

But the figures don’t lie.

New Zealand has very low R&D expenditure. The government contribution has increased. But business still lags.

This is what is refreshing about the Moutter challenge in that it is coming from business to business – not simply whining to government to do something about it.

We’re in the results season now and it would be refreshing – when it comes to preparing those press releases full of good news for shareholders – if boards tucked a bit aside to back the cause.