An accidental innovation hub has become a $1 billion venture. If New Zealand wants to build a better standard of living for everyone we must replicate that magic, says Vic Crone.
An unremarkable building in a leafy Parnell street is these days hi-tech hallowed ground. Level two of 24 Balfour Road is the birthplace of a new generation of Kiwi success stories – waste-to-energy firm LanzaTech, aerospace superstar Rocket Lab, and high-flying drone technology startup Dotterel have all called it home.
This low-rise complex a stone’s throw from Parnell’s famous rose gardens (incidentally a convenient test site for Dotterel’s drones) became an innovation hub by accident.
In the early 1990s word got around the Auckland scientific community that the old Department of Scientific and Industrial Research (DSIR) had a bit of spare space. A steady trickle of tech startups looking for no frills labs and workshops came to its door.
One of the early residents was agritech venture BioConsortia. There followed medical diagnostics company Pictor, and fellow Genesis Research offspring LanzaTech. Two years later one Peter Beck, who had worked at Balfour Road for the DSIR’s successor Industrial Research Limited (IRL), began filling the basement with smoke as he built his venture Rocket Lab.
Waste technology startup Avertana, co-founded by former LanzaTech employee Sean Molloy, also arrived around this time. BioConsortia, Pictor and Avertana remain Balfour Road old hands to this day.
Facilities manager Alan Johnston has worked for the government’s various science agencies for 40 years and has overseen Balfour Road since the DSIR moved there in 1988. IRL, as it became, had no grand plan for a tech hub, he says. It simply had the room and preferred to let to kindred organisations. The rule of thumb was, if your science is worth doing and you’re not competing with anyone else on the floor, you’re in. However it did put in shared facilities to promote cross-pollination and save on costs, and plenty of ideas were hatched following chance meetings in the level two kitchen and corridor, Johnston recalls.
Thus, the old 1950s wool store once occupied by Dalgety & Co quietly became a breeding ground for some of New Zealand’s most cutting-edge innovation. Other current residents include Mint Innovation, the biometallurgy company turning e-waste into gold co-founded by LanzaTech alumni Will Barker; Breathe Easy, which is developing a range of treatments for cystic fibrosis; and Hydroxys, a clean-tech startup extracting water from industrial waste.
Callaghan Innovation took over the hub when the agency was created by amalgamating IRL and other government innovation services in 2013. Now five years on Balfour Road is entering a new era.
Level Two, a commercial enterprise set up by Mat Rowe (ex-LanzaTech and BioConsortia, more recently co-founder and CEO of Dotterel) and Mint’s Will Barker, has taken over the famous floor. It is planning a $500,000 expansion to enable more deep tech startups to move in.
To date the Balfour Road cluster has created over $1 billion in economic growth for the New Zealand economy, holds over 300 patents, and has raised over $600 million in investment between them, Level Two says.
The entrepreneurs would have struggled to set up such a facility from scratch, so its history of government agency involvement is crucial.
Spaces like this with the right facilities for creating disruptive technologies are thin on the ground in New Zealand, and we need more of them. As the Balfour Road coincidental co-working experience shows, great things happen when startups can percolate and leverage off each other.
These days the government takes a more formal approach to accelerating collaboration. Earlier this year Research, Science and Innovation Minister Megan Woods launched Innovative Partnerships, an initiative aimed at attracting international innovators to our shores to develop their products.
Supported by a range of central and local government agencies including Callaghan Innovation, the programme’s first coup was Californian air taxi innovator Kitty Hawk Corporation, now testing its self-piloting, vertical take-off aircraft Cora in the skies above Canterbury.
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New Zealand Inc and Rocket Lab together created a space industry out of nothing. As Dotterel’s founders have remarked, conditions are ripe for us to become a hotbed for unmanned aerial vehicle (UAV) innovation also.
There will always be debate over how government should best deliver support to aspiring enterprises, but one truth we know: if New Zealand is to diversify its economy and raise living standards for all it must turn itself into a hub for high-value, knowledge intensive businesses.
This means that increasingly agencies such as ourselves will play the role of ‘super-connectors’ – next gen speed-dating services which introduce people, opportunities and networks. A better Aotearoa will be built on more Balfour Road-style innovation whakapapa.
This content is brought to you by Callaghan Innovation, New Zealand’s innovation agency. Talk to Callaghan Innovation about unleashing your ideas and growing your business faster for a better New Zealand.