Monday, April 10, 2006

Stephen Jacobi: Turning those good ideas into serious money

In case you didn't know it, the world is flat. That's the title of a new book on globalisation by New York Times columnist Thomas Friedman.

Friedman says the forces of globalisation are flattening out differences between countries, giving rise to new players in global commerce, new business ideas and new generators of wealth.

That is very relevant to New Zealand, far from its export markets. We are a country of innovators, no question. Our challenge is to turn good ideas into serious money. That's something they know a thing or two about in the United States.

Some Kiwis criticise aspects of American life but, ultimately, we share a can-do attitude.

The big difference is that there are 300 million of them. As Friedman notes, graduates from just one institution - the Massachusetts Institute of Technology - are estimated to have founded 4000 companies, creating at least 1.1 million jobs worldwide and generating sales of US$232 billion ($380 billion).

He says people forget what an open, say-anything, do-anything, start-anything, go-bankrupt and start-anything-again society the US is.

Kevin Roberts, Kiwi head of Saatchi and Saatchi, is not daunted by the disparity in size and wealth between this country and the US.

He has a vision of the New Zealand Edge meeting the American Dream. It's a romantic image but one that pays dividends. Look no further than Peter Jackson to see what can happen when Kiwi creativity meets American commercial power.

There are plenty of examples of Kiwi business making inroads into the US. Fisher & Paykel is manufacturing high-end appliances there. From Ellerslie, Trends Publishing produces and distributes design books for the US market. Fonterra manages a significant proportion of US dairy exports. And Tenon, formerly Fletcher Challenge Forests, has moved its head office to the US to better control its distribution network.

The kind of synergy that comes from combining Kiwi ingenuity with viable commerce is critical if New Zealand is to transform itself into a value-added economy.

How do we make more of this opportunity? While a Free Trade Agreement (FTA) with the US would be great, and appropriate given our long association, New Zealand can't afford to just sit and wait.

That's why the NZ-US Council, with our counterpart in Washington, has organised a Partnership Forum taking place in Washington DC later this month. It's a business rather than Government initiative, though there will be senior Government participation on both sides.

The New Zealand delegation, led by former Prime Ministers Jim Bolger and Mike Moore, comprises board members or CEOs of some of this country's largest exporters including Air New Zealand, ANZCO, Fonterra, NZ Post, PPCS, Meat and Wool New Zealand, Solid Energy and Trends Publishing.

We will be met in Washington by a similar group including senior Bush Administration officials and representatives of US corporates with interests in New Zealand like Boeing, Caterpillar, EDS and Weyerhaeuser.

The focus will be on building relationships and co-operative business opportunities for New Zealand and US firms elsewhere in the world.

We have been told many times the barriers to achieving an FTA are more economic than political. We represent only a small market for US exporters - the 43rd largest in fact.

Our key challenge is to demonstrate that New Zealand's relevance is not limited to the size of our domestic market. There are much greater opportunities for both countries globally and in the Asia-Pacific region if we work together.

As Roberts is fond of saying, pound for pound, New Zealand's contribution to global creativity and trade liberalisation is top of the world.

The similarities between New Zealand and the US are woven by our shared history, love of freedom and opportunity, and our design and creative capability.

Ask Friedman if the US already has all the creativity and innovative ideas it needs and the answer is: "No. Never."

In a flattened world, businesses in the US and New Zealand need all the friends and partners they can get.

* Stephen Jacobi is executive director of the NZ-US Council.

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