By Rod Oram
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Saturday 1st December 2001 |
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What d'ya mean? Of course Peter Jackson's perfect for the title role! What's with the kvetching about his youth and beauty? No problemo! Hand him over to the special effects guys and even his best friends won't recognize him.
Yes! If the Kiwi opportunists are right, Peter Jackson is going to morph into Father Christmas before our very eyes. Forget Miracle on 42nd Street. These optimists are already previewing the greatest-of-all-time Christmas blockbuster: Economic Miracle on 42nd Latitude South … coming soon to a small country near you, starring Peter Jackson as the man with loads of presents for all good girls and boys.
On December 19 no less, the first film in Jackson's The Lord of the Rings trilogy premieres in Australasia, opening around the country, and around the world, the following day. It is a stupendous achievement, starting with the megabucks of funding he wooed from Hollywood moguls.
Of course there will be some presents (read: spin-off opportunities) for other New Zealand companies. The Lord of the Rings, shot in New Zealand, can't help but promote the local film industry. Then there will hopefully be a few plane-loads of film-fan tourists staying in our hotels and drinking our beer. But cross-marketing everything from wine to widgets on the back of the films? Implausible, Unlimited reckons.
Still, from the staid corridors of Trade New Zealand (the self-appointed president of the commercial arm of the film's fan club) to the wacky workshops of The Lord of the Rings special effects company Weta, there is an utter conviction that Jackson is indeed Father Christmas. They believe his films will shower gifts upon our companies over the next three Christmases, as each film is premiered to the world.
"It's a good opportunity to showcase New Zealand creativity and technology," says Gary Langford, head of Investment New Zealand, Trade New Zealand's inbound foreign investment arm. Trade New Zealand is organising trade promotions to coincide with the premieres in Hollywood, London and possibly some other centres, this Christmas and the following two.
Undoubtedly, The Lord of the Rings will have a decent economic impact on the country and, if we play our cards right, it could be a catalyst for bigger things. But a change-agent for the New Zealand economy? Now, there's a dangerous delusion.
The Lord of the Rings will be a huge artistic and commercial triumph for Jackson. But, mythically medieval, it could also confirm some audiences' deepest suspicions about these distant isles. Some people might be hooked enough to visit New Zealand. But would the film motivate them to bankroll a sophisticated software or bio-tech business here? And to be brutally blunt, the sort of film cross-marketing that normally occurs - giving away plastic baubles with burgers - isn't going to do much for our knowledge economy image. So before too many more people jump on the The Lord of the Rings bandwagon, let's ask three basic questions:
These themes have run through the previous 10 parts in this series on the New Zealand economy, "This way up". We sought out Lords and Ladies of the Value-Added Rules, people doing sensationally good business things at home and abroad. They came from bio-business, science, e-business, IT, education, manufacturing and exporting, to name just some sectors. We rejoiced in their triumphs, sought ways to clone their success and wrestled with how people can grow from mediocrity into excellence. If these few succeed, how do we as a country get many more? How do we all get bigger, better, smarter, quicker?
Over the past couple of years, we've made a lot of progress. Businesses are becoming more astute, scientists more commercial, educationalists more attuned to the real world, government better at facilitating economic development and the public more engaged in the debate about how to move the country on. But is all this enough? Will this get us back into the top 10 of developed countries from number 21, to quote the prime minister's goal?
Well, we're doing many of the right things, according to the economic blueprints of other countries. But there's still a big piece of the jigsaw missing. The unfocused enthusiasm for The Lord of the Rings suggests we still don't have a clear idea of who we are and what we're trying to sell to the world.
As Michael Porter, the international guru of economic development and committed student of New Zealand, said forcefully at the "Catching the knowledge wave" conference: "You've done the hardest things (like macroeconomic reform) but you haven't set some aspirations. You lack the commitment and confidence to put the pieces together in an overall strategy and vision."
"New Zealand is a small story, badly told," says Brian Sweeney, head of Wellington PR firm Sweeney Vesty, part of the Saatchi & Saatchi empire. "If you were promoting New Zealand as a show, nobody would turn up," says the former show producer. With Saatchi & Saatchi leader Kevin Roberts, who has tucked New Zealand under his mercurial galactic wing, Sweeney is pushing a vastly higher vision of New Zealand through their website www.nzedge.com. For them, the edge is a metaphor for life here. Change, adventure and growth happen at the edge of any system, not in the middle of it. On the edge of the world, we can create change and drive difference to our advantage. But to do so, we have to establish our true brand.
Brand states
The concept of "brand states" is attracting serious academic study, demonstrated in an article in the October issue of distinguished US journal Foreign Affairs. Its author Peter van Ham, a senior research fellow at the Netherlands Institute of International Relations, wrote that the likes of "Singapore and Ireland are no longer merely countries one finds in an atlas. They have become 'brand states', with geographical and political settings that seem trivial compared to the emotional resonance among an increasingly global audience of consumers." Strong brands, he argues, "are important in attracting foreign direct investment, recruiting the best and the brightest, and wielding political influence." Consequently, smart states are developing brands around reputations in the same way smart companies do.
For the US, read "wealth creation"; for Ireland, "gateway to Europe"; France, trading off brands like Moët or Chanel, is "luxury, sophistication, quality"; Singapore is a stable business beachhead for Asia.
"Brand states will compete not only among themselves but also with superbrands such as the EU, CNN, Microsoft and the Roman Catholic Church (boasting the oldest and most recognised logo in the world, the crucifix). In this crowded arena, states that lack the relevant brand equity will not survive."
And New Zealand? "Clean and green" isn't a bad start, but it isn't enough. As came out time and again in the "Catching the knowledge wave" conference, New Zealand has an opportunity to represent "innovation and creativity in business". Trouble is, it is not just about external projection; crucially, it is also about internal conviction that brings truth to the image. We say we're innovative, entrepreneurial risk-takers, fiercely independent, early adopters of technology … you name it. But unlike the Israelis, the Singaporeans, even the Irish, we don't really believe we match the best in the world. We certainly don't demonstrate it to the world.
"We're dysfunctional in our relationship with the rest of the First World. New Zealand is an invisible country. The rest of the world can't participate in our transactions so our innovation is locked into a marketplace that is going nowhere." So says Nick Gerritsen.
Gerritsen calls himself an "IP architect", though more dryly his business card says he is a lawyer with Minter Ellison Rudd Watt. Gerritsen is a good example of one of our little people getting an international name for himself (and therefore for New Zealand) as someone with creative solutions. This approach has landed the Wellington-based lawyer some lucrative intellectual property work for UK-based TangoZebra.com, a pioneer of Java software for delivering audio and visuals over the internet. Then there is Gerritsen's client Mamaku (www.mamaku.net), whose founders Deb Foster and Reg Nichol bill themselves as "consulting archaeologists and makers of juggling balls". Mock not. The latest balls, made by locals from the odd scrap of merino wool, sell for $15 to $20 a pop.
Getting a name for yourself as an innovative, creative brand state is all about the assets behind the brand. In particular, it's about having assets (that's companies or people) that are value creators, rather than value traders. Get a reputation for being a country of value creators, and you've got that unique selling proposition marketers everywhere are striving for. Here are three New Zealand companies doing it really well (and yes, Unlimited has mentioned them before!).
Too many of our companies are based on "value trading" rather than "value creation". "We've got world-beating quality here," Gerritsen says. "But we don't know how to get it in front of people abroad, people who will pay the full international price for it, give us its full value."
For example, the West Coast sells gold, coal and trees, but very little of their value sticks in the region. Our winemakers won't charge top prices for their sauvignon blancs, even though demand far outstrips supply. If they extracted full value they'd have more money for marketing, R&D and re-investment, drivers of bigger, better businesses. And much of the value of The Lord of the Rings will be captured downstream by the US producers. We need to make sure we develop the capability created here in Jackson's company Three Foot Six Productions and Weta, for example, so that we capture more downstream value in subsequent film projects.
"We could get a 20-fold increase in value out of the New Zealand economy," says Gerritsen. "It would be relatively easy to do if we had a new model of value creation, not the current model based on value trading." He has a big vision for New Zealand: "We could be the forerunner of post-industrial countries, identifying, creating and managing value. But we only have three to five years to answer the questions about how we do it. If we don't we'll have to take off-the-shelf solutions. Then we'll be another Tasmania."
A similar vision is articulated by John Blackham, a software entrepreneur and member of the Science and Innovation Advisory Council. "This is a brilliant time to sell the message to the world that we are a place for creators." But rather than "going flat out for foreign direct investment, we should be teaching people, starting with the smallest, youngest entrepreneurs, how to develop their own capital and how to build stuff with their own - and maybe their country's - identity buried in it."
Entrepreneurship is alive in New Zealand though not entirely well. Pleasingly, we rank top of the world's "opportunity entrepreneurs", according to the recently released Global Entrepreneurship Monitor. Some 15% of the adult population are in business for themselves because they have spotted opportunities. Another 3.7% are "necessity entrepreneurs", who have created jobs for themselves because they couldn't find employment. Put the two together and we rank second overall in entrepreneurship, behind only Mexico and well ahead of the likes of the US.
But is entrepreneurship robust in New Zealand? Not very, is the finding of the study done by Unitec as part of a 29-nation annual ranking, coordinated by the London Business School. Our ambitions are very modest and our exporting and growth skills limited. A typical company has six employees producing goods or services for the local market.
How to create value, vision, ambition and skills is a challenge many individuals and some organisations are taking a stab at. But so far the threads have yet to be woven into a tapestry. Government, seeing itself as something of a weaver, is having a go. Over the past seven or eight months the government has been commissioning studies, not just on concrete issues like foreign direct investment, but on rather more vague ones such as how to attract talent to New Zealand, how to foster innovation (the second report from the Science and Innovation Advisory Council is due out in early December) and how to sell our entrepreneurial story to the world. Other work on a raft of policies is being done by sympathetic civil servants from key ministries such as Treasury and Economic -Development.
Opinions differ widely on the quality of this investigation. "It's very radical, very creative and a very big change in mindset," says one private sector leader engaged in the effort. This may be why some in government have yet to be convinced it's the right road for New Zealand. "The edge is being taken off the government's initiatives by bureaucrats, because they are rewarded for reducing risk," says a business leader. "They are the grit in the gears. They drain momentum. It's not malicious, but parental."
Similarly, there are vastly different views on the public's appetite for envisaging and challenging change. "There's a lot of work to be done to communicate to the person in the street about their role, about what they can contribute," says one of the prime minister's advisers. "The whole vernacular around the Knowledge Economy alienates people. They think it is about research, universities, innovation and entrepreneurship but not about them. They don't get the concept of their own intellectual capital."
Some do though. Blackham thinks many people are pretty switched on. At a meeting in October seeking feedback from a wide range of Wellingtonians on the Science and Innovation Advisory Council's first state-of-the nation report, Blackham says he was "stunned by their passionate and radical thinking. They're all rooting for big changes."
To a great extent, the Prime Minister herself will determine the outcome of this work by government, according to several of her advisers. She could simply use it to inform political and policy decisions, or she could use it to articulate a very bold vision for New Zealand, plus the policies and big governmental structural changes needed to help fulfil it.
No doubt she will take big bundles of documents and an array of advice with her when she goes on her traditional deep-thinking, away-from-it-all Christmas holiday.
But this is a deadly serious game for the whole nation to play down at the beach this Christmas … and for Christmases to come. How can we all contribute to Brand Innovation New Zealand and hereby help realise The Economic Miracle on 42nd Latitude South?
That is, until a dramatic transformation in the last four or five years. What's new? A handful of ultra-luxurious lodges built by Americans: Blanket Bay at Glenorchy, Kauri Cliffs in Northland, Wharekauhau in the Wairarapa and Paratiho Farms near Nelson, all building on the trailblazing work of Kiwi Dutchman Alex van Heeren's Huka Lodge at Taupo.
"New Zealand was not known for being frightfully sophisticated," says Philip Jenkins, manager of Blanket Bay. "But it's astonishing how quickly that's changed. The lodges have created a real buzz in the US and UK markets."
Often promoting together, the string of lodges have carved out a prominent place in the market that is the envy of their Australian counterparts, says George Hickton, chief executive of Tourism New Zealand.
The surge of business has taken the lodges by surprise. Blanket Bay, celebrating its second anniversary this month, expected to take up to three years to break even at the operating level, but it did so in six months.
One reason is that the New Zealand lodges are "different and better" than their foreign competitors, says Jenkins. They can make multimillion-dollar investments pay on far fewer guest suites - Blanket Bay has only 15 suites. So the experience is far more relaxed and personal.
"Guests constantly remark that here in New Zealand we have a very unaffected, charming way of dealing with people. We take time with them, we're genuinely interested in them," says Jenkins.
Blanket Bay is the 30-year-old dream of Tom Tusher, who retired a few years ago as president of Levi-Strauss, and his wife Pauline. Critical to its success and that of the other luxury lodges is the willingness of the owners to invest very big money to achieve the very highest standards, Jenkins says.
The "other" New Zealand still comes though, to the delight of visitors. If a guest wants a round of golf, Jenkins might suggest he or she try the municipally owned nine-hole course next door. Here's what leading US resort reviewer Golf Odyssey wrote recently:
"The course has one sand trap and is manicured no more carefully than a stray sheep dog. Even so, its mountain panoramas make for an idyllic hour's walk under the high New Zealand sky. Ask the staff at Blanket Bay for directions and leave $NZ5 ($2.50) in the club's collection box."
Because Peri Drysdale asked him to. At the previous evening's gala dinner in the Town Hall, Clinton was introduced to Drysdale as the maker of the very fine merino casual shirts he and the other Apec leaders were to wear the next day. Plucking up her courage, Drysdale suggested he should leave his jacket unbuttoned to show off the shirt. But Clinton being Clinton, of course, went the whole way despite the wet weather.
"Everything we do in our company is geared to communicating New Zealand to the outside world," says Drysdale, owner of Snowy Peak, the Christchurch-based maker of very smart, very luxurious casual clothing. It's been a long haul for the former nurse, who started out 20 years ago organising hand-knitted woollen jumpers to sell to tourists.
The hardest slog - and the biggest reward - has been the Japanese market. For 12 years, Drysdale has battled bureaucracy and indifference to break in. She's been selling to selected department stores for some years, but the big breakthrough came in September last year. Nobukazu Muto, who was about to become president of Isetan, the country's pre-eminent fashion department store, decided to visit Snowy Peak - prompted, in part, by Drysdale's gift of a replica Clinton shirt.
Drysdale was stunned. On buying trips to Europe, Muto normally spends only an hour with a leading designer. But he said he wanted to spend one-and-a-half days at Snowy Peak. Out of the trip came a big promotion of Snowy Peak's Untouched World brand in September in Isetan stores across Japan. Bad timing given Japan's economic wreck? No. Istean's group sales were up 12% in the year to September. And New Zealand's exports to Japan were up 26% in the year to June.
As part of the promotion, Isetan direct mailed a million of its wealthiest customers, gave away New Zealand holidays and advertised New Zealand and its products in Japanese magazines.
"Out of this spins almost anything we want," says Drysdale, including lots more orders for Snowy Peak products. Top of the line are merino jackets, which retail in Japan for $NZ2000. The benefits are spread widely, too. Isetan's travel subsidiary has, for example, just arranged its first New Zealand tour for 30 "very, very high-end travellers," says Drysdale. "Tourism New Zealand and Air New Zealand had been trying for 20 years to get Isetan into the country."
Through Snowy Peak's clothes, cosmetics and travel business, Drysdale markets an image of New Zealand as a clean, green, relaxed, unspoiled place where people can achieve their dreams. An advertising line for Untouched World is "Where man and nature have found perfect balance."
Drysdale knows exactly what the pitfall is: "We're skating on very thin ice, but we're working hard to try to close the gap with reality."
Snowy Peak pushes high standards on environmental and community issues through the production of its own goods. It is also a member of the Redesigning Resources Group, a collection of seven New Zealand companies and one Australian organisation. Other members include Macpac, the Christchurch maker of recreation equipment and clothing, and The Warehouse.
As a country, "we're throwing away our environmental advantage," says Drysdale. "We should be diverting our resources to sustainable development."
Rod Oram
oram@clear.net.nz
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