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Business Matariki2

ĀteaJune 30, 2018

What the new year holds for Māori business

Business Matariki2

Ka puta Matariki ka rare whānui, ko te tohu tēnā o te tau e! Matariki reappears, Vega starts its flight. The new year begins!

Matariki is a period of reflection and renewal. An opportunity to reflect on the past, celebrate the present, and plan for the future. As we move into the new year, it is appropriate to take stock of the Māori economy and look at some of the issues that will shape the next 12 months. It is an exciting time for Māori business, and there is a real sense that momentum is building throughout the country. I am fortunate to have a job working with Māori businesses across the country and there are a lot of common themes coming through in my conversations with business owners and managers.

So what are we talking about, and what should we be talking about?

There is a vast difference between the conversations that we are having and the conversations that we should be having. The conversations I am having around the country around developing Māori business are predominately focused on expanding our activity in the primary sector, honey, hemp (or medical cannabis), and rongoā products. It is encouraging to hear talk of diversification away from a primary focus into more value-add products, but there are still challenges with this approach.

Forestry, farming, and primary production are all the tools of the 20th century. They have provided a small economic base for Māori but their futures are far from certain. Recent storms on the East Coast have highlighted the dangers of conventional logging and the environmental impact that forestry has on our environment. One billion new trees will only make this problem worse. Farming will come under increased scrutiny now that we have a cross-party consensus on the need for a Carbon Zero society and the rise and rise of alternative proteins and synthetic milks and meat products have the potential to disrupt the entire dairy and beef industry in New Zealand.

Climate change is also affecting the crops we can grow as the warmer humid air moves further south every summer. High value processing in the forestry sector has been uneconomic for so long that we have lost both the capability and competitive advantage in this industry, reducing land and forestry owners to commodity exports with economic returns flowing only every 30 years.

Honey, especially Mānuka, is capturing a high premium in the international markets but with over 200 New Zealand brands exporting to the world, shelf space is becoming harder and harder to secure. Hemp and medical cannabis holds large potential, but massive risk – dozens of groups across the country are racing to be first to market in an industry which is still illegal. And finally, our rongoa provides strong opportunities as ingredients in food, cosmetics, and medicinal products but while the health benefits are well know to Māori, the rest of the world is in the dark.

Meanwhile, the world has changed. Millennials, soon to be the most dominant generation the world has ever known, are seeking a different life from our parents and grandparents. Jobs are temporary – partly by design, and partly by choice; travel is a way of life, not an occasional experience; and the trend towards on-demand and online via mobile applications is only going to intensify. We are the generation who aspire to buy sustainable products and spend our money on experiences rather than the cheap, disposable products that filled our childhood homes. We are building technology companies. Building online lives. Expecting more and more convenience alongside higher and higher quality. We want to tear down walls, and remove borders. And yet, we are still be told that primary production and forestry is our future. Nineteen-thirties thinking is alive and well in policy discussions around the future of Aotearoa New Zealand.

We need a higher level of conversation. A level of conversation that is driven by those of us who have to live the future, a level of conversation that cannot be delivered by those creating a future that they will not live in. Technology and innovation are more than buzzwords for the new generation. They are a way of life. And they have the potential to drive economic growth and prosperity for Māori, and for New Zealand, in a way never seen before.

Business accelerators such as Kōkiri help to speed up the development of early stage Māori businesses. Image:

We need to invest in the infrastructure that allows for this new future. UFB was a good first start. It will unlock the regions, and make them a far more attractive space for rangatahi to live and work. Decentralising education needs to follow. Decentralising the work force is a crucial component to a new future. We do not need to base everything in Auckland and Wellington. You can build an international company out of regional New Zealand. I work with exporting companies in Kaitaia, Kerikeri, Whangarei, Tauranga, Gisborne, Napier, Hastings, New Plymouth, Palmerston North, and throughout the South Island. Distance is no longer a barrier. The lower cost of living and better lifestyle of our regional centres is our competitive advantage.

So how do we achieve this? We need to be talking collaboration, building our brand overseas, and developing tech companies.

The first key to further growth for Māori organisations is greater collaboration and connectivity between organisations. The overall capital base of Māori organisations is large, but with the exception of the handful of billion dollar outfits (Ngāi Tahu, Waikato-Tainui, Ngāti Whātua Ōrākei for example), the capital is widely distributed across hundreds of iwi and land trusts and incorporations. Take, for instance, my home province of Taranaki. The eight iwi and the Parininihia Ki Waitotara Incorporation hold individually anywhere between $10m and $200m, but as a collective control over $500m worth of assets. This is a powerful asset base when deployed collectively. Iwi, land trusts, and businesses are starting to collaborate to explore domestic and international opportunities. We are too small to take on the world individually. It is only when we come together, work together, and share our resources and talent, that we can build and grow our economic wealth.

The second key is to continue to develop our “brand” as Māori worldwide. Marketing is big business, and the ability to tell a story can be a massive contributor to increased sales and economic wealth. Think of any successful company and they have built their brand, and consequently their value, on the stories they tell. Apple has built a brand that inspires loyalty and record sales year on year. Closer to home, and Xero are making waves with their “making accounting beautiful” tagline and their efforts to portray what has traditionally been seen as a boring industry, appear fun and innovative. Marlborough Wine is renowned the world over and Zespri has build a very successful brand internationally.

The clean, green, 100% pure New Zealand marketing angle is no longer sufficient in a world where dozens of countries can make the same claim. We are no different from Iceland, Switzerland, Chile, Norway, or Sweden to name just a few countries who can trade off the same breathtaking images as we do. What is unique, what makes New Zealand stand out is our Māori culture and our deep and enduring connection to the land. This is a powerful story when told in the right way – consumers the world over are demanding more and more quality control and naturally sourced products.

The third and final key, and the largest opportunity for Māori economic development is in developing Māori tech businesses. The recent High Tech Awards in Christchurch highlighted the potential of Māori tech business – with a large number of winners being Māori owned businesses. Technology is currently our third largest export earner and Māori play only a very small role in this. We currently lack the ecosystem and the capital funding to drive innovation and grow Māori tech companies. Our iwi have a large role to play in this but many are far too conservative to realise the opportunity. We have to start taking a chance on our rangatahi who have the tools and drive to create a better future.

Māori have always been entrepreneurs but for far too long we have produced and exported milk, honey, and timber around the world. Low value, high quantity exports. New Zealand has tried to feed the world from a small land base. We need to aspire to a higher level of business activity. We need to aspire to an economy that not just meets the national average. We need to aspire to a level above the average. Our aspirations for Māori have to be about more than closing the gaps with Pākehā. The most recent Māori unemployment figures continues to show a massive gap between the Pākehā and Māori unemployment rates. We need different thinking from that which created this situation. It is not about trees, or roads, or mainstreaming social services, or more trades training. We need a higher vision for Māori, and for Aotearoa. We should be investing in jobs. Investing in improved social conditions. Investing in improved environmental conditions. Investing in entrepreneurs. And investing in collaborations.

The 21st century holds unlimited potential for Māori business. We are uniquely placed both in terms of our capital resources, our unique story, and our innovation capabilities to develop and grow international businesses from Aotearoa. When we collaborate, innovate, and take those products to the world with our unique story as tangata whenua, we can create more economic wealth for our society. That is definitely something worth aspiring to.

Keep going!