A review into government innovation agency Callaghan Innovation published last year found weaknesses with its management, but its Māori economy unit was singled out for praise. Rebecca Stevenson caught up with Callaghan’s Hēmi Rolleston to find out how it’s helping Māori entrepreneurs build export-ready businesses.
It has a mission that is mammoth. Callaghan Innovation aims to boost New Zealand Inc by helping businesses use technology to become players in markets outside of Aotearoa. It was established in 2013, after a 2011 report found low levels of investment by New Zealand companies in research and development. It said development of the “high value manufacturing and services sector” has “the ability to the potential to generate a step change in the economic growth and social wellbeing of New Zealand”. But among the barriers to Kiwi businesses succeeding at scale was the structure of the sector, and the infrastructure in which it operated. The effectiveness of Crown Research Institutes, set up to undertake research which would hopefully bring growth in the sectors they operate, were investigated and one of them – Industrial Research Limited – became the basis for the new agency, Callaghan.
It has now been operating for long enough to have been the subject of a wide-ranging review. This said there was considerable debate about whether Callaghan Innovation’s current business strategy is able to deliver fully on its mission. “A number of partners believe that Callaghan Innovation’s services miss some vital parts of its potential customer base and indeed if these segments remain underserved that New Zealand firms will fail to reach the scale required to lift New Zealand’s R&D and export potential.”
However, Callaghan said it had already made changes – and has continued to do so. Today the agency’s chief executive, Vic Crone, says Callaghan worked with two-thirds of the TIN 200 (New Zealand’s top technology companies) over the past year. She says “at the macro level, our customers are investing in R&D well ahead of the market, and our grants are stimulating R&D, with $3.70 invested by businesses for every grant dollar received”.
But in amongst the criticisms and recommendations, the report found the Māori economy team “has a clear understanding of its target customers, is widely seen to operate in a customer-led, participatory style, engaging partners and customers early, co-creating strategy and aligning tactics, culture, priorities, and agreed outcomes”. We caught up with Callaghan’s sector manager, Hēmi Rolleston, to find out where the Māori unit’s special sauce comes from.
The Māori economy group within Callaghan was highlighted as a good performer in a review of Callaghan this year. Why do you think it has been more successful than some of Callaghan’s other parts?
All teams in Callaghan Innovation are devoted to moving the dial for their customers. The Māori Economy team’s successes are down to a talented team of dedicated individuals, but also a wider effort across the organisation. All our initiatives are delivered with support from other parts of the agency.
What action would you say has been most successful in encouraging Māori entrepreneurship, and business, since you started with Callaghan? What made it more successful than other ideas?
My team connects, guides, nurtures and challenges Māori innovators and businesses to help them develop, test and commercialise their ideas. To that end, there are so many things we do that have a positive impact. And along with the big initiatives it’s important to remember the cumulative effect of little things, such as connecting individuals to other agencies and business people, and sponsoring small events. They all add up to encourage Māori entrepreneurship.
That said, there are two examples of major initiatives of ours that have been, and continue to be, especially impactful. Our Matariki X event, the first of which took place in 2015 when we were a young organisation. It’s great at unearthing and showcasing some of our most innovative Māori entrepreneurs. It’s also very effective at raising awareness among Māori businesses of what Callaghan Innovation is, and how we can help them. So far, the event has touched and inspired over 1,150 attendees and thousands more via social media.
The Nuku ki te Puku programme, which connects Māori food and beverage businesses across the supply chain – from the growers, to the harvesters, to the manufacturers, to the retailers – enabling them to find common ground and ways to create new products and ventures through collaboration. For example, the Miro Berry initiative (led by Steve Saunders), which has brought 27 different Māori entities together to create NZ’s biggest berry collective, was a direct result of the Nuku ki te Puku initiative.
You’ve talked in the past about being bold in this role. But there’s been some criticism that Callaghan has shied away from making bold moves that could make a tangible difference, such as supporting Enspiral Dev Academy’s proposal to build a free web development tool for Māori. What would you say to those critics? Why was this tool not supported?
‘Bold’ is one of our core values as an organisation. Why? Because you need to be bold to innovate and succeed. You need to be bold to make a tangible positive difference to customers. It’s an approach we take to our activities, and one of the lenses we use to decide if something is worth doing or not. Looking at things that way, Matariki X and Nuku ki te Puku are bold moves – and they are just two examples of the many things we run or are involved in.
With respect to Enspiral Dev academy, the school has received support from us. In 2015, as part of a cross-agency initiative, Callaghan Innovation provided funding to support Māori students going into its programme.
Can you give an example of a Māori business that has used Callaghan R&D in their business successfully? Have any Māori businesses been able to scale up or launch in overseas markets due to Callaghan’s R&D?
Computer graphics production company, Animation Research Ltd (ARL), is a fantastic example of a Māori business that has been able to scale to address a global market – thanks in part to grants funding and a range of R&D support from Callaghan Innovation. A recent success for ARL that Callaghan Innovation contributed to is the America’s Cup 360 camera footage. The company’s America’s Cup Mobile App (with hundreds of thousands of downloads and recommended by Apple as one of its top three global sports apps) has helped to consolidate ARL’s reputation in the market as an innovative provider of leading-edge technologies.
IT healthcare solutions provider, Whanau Tahi, joined the TIN 200 ranks and was announced as the Number 1 Hottest Emerging Company in this year’s TIN Report. The business has its sights set on overseas markets, and has already started selling into the US. Support from Callaghan Innovation has included R&D funding and participation in our international delegations.
A common gripe about Callaghan is that the process to access funding is too onerous, takes too much time and therefore gets applicants that are good at form filling, rather than the best businesses. Is there any merit in that argument? How does Callaghan weigh up checks and balances needed through the application process, versus putting a burden on businesses?
Anyone who is eligible for a grant from Callaghan Innovation can get a grant. As part of our continuous improvement focus, we have undertaken a Grants Enhancement Programme to improve the responsiveness of our grants in a fast-changing marketplace and to enhance the overall user experience. We have taken each grant product and formed a working group of grants and sector participants to work through how each product can be improved. That includes reviewing the whole journey, including the application process, our internal approval process, and our funding agreements. So far we have enhanced Student Experience Grants and Career Grants, and we are now working on Fellowship Grants and Project Grants. Any improvements we make here will flow onto Growth Grants. We are also piloting a new process for small grants (maximum $40,000), which is due for evaluation in the new year.
Let’s think big. What needs to happen for the Māori economy to become the fastest growing sector in NZ?
The Māori economy is estimated to be worth $50 billion now, and is expected to continue growing strongly. But we know it can grow even faster through, among other things, a sense of urgency regarding preparing for, and taking advantage of, the huge opportunities technology presents. Underlining this technological imperative, and the opportunity for Māori in this area, are the five Māori owned or investment-backed companies ranked in this year’s TIN 200. These companies – Waikato Milking Systems, Straker Translations, Sentient Software, ARL, and Whanau Tahi – are estimated to have generated NZ$93.9m in revenue this year. Thinking big means unlocking our barriers and turning them into opportunities. This is where the challenge starts. Overcoming it will involve focusing on succession, skills development around innovation, more investment in research and development, and new approaches to commercialisation. I’m excited to be part of an organisation that has a significant part to play in making these things happen.
I was surprised to read on MBIE’s website that 10 per cent of small businesses are started by Māori. Commentators have linked Māori entrepreneurship to being a tribal, trading people. What do you think makes Māori keen to start new businesses?
In pre-colonial times we were already trading internationally and among ourselves. Māori have a lineage of exploring, navigating, and entrepreneurship. Having tino rangatiratanga over your life and income is appealing too. Māori in business is a natural fit!
Finally, tell us about a Māori business you absolutely love.
We work with so many amazing Māori businesses. Along with others I’ve mentioned there are (to name a few) Pango Productions, Robotics Plus, iMoko, Emergency Q, and Anagenix. But if you want just one, here’s a great customer of ours with an inspiring story.
Hēmi Rolleston is a former chief executive of Te Awanui Huka Pak, a Māori-owned kiwifruit business, and a winner of the Export NZ, Export Achiever Award and the NZ Institute of Directors Aspiring Director Award for Bay of Plenty. Rolleston has iwi affiliations to Ngati Whakaue and Tauranga Moana.
The Spinoff’s business content is brought to you by our friends at Kiwibank. Kiwibank backs small to medium businesses, social enterprises and Kiwis who innovate to make good things happen.