 Thank you very much. So we have Cliff here from Callahan Innovation, Peter from Ministry of Business Innovation and Employment, and Shane from New Zealand Trade and Enterprise. And we're just so lucky and honored to have the three of you here. The goal of this conversation is just to better understand how government thinks and approaches how you invest in public capital into innovation, technology, and the future of the nation. So what I'd love to do is just to go around, perhaps tell us a little bit about yourself and your journey, the organization that you're a part of, and just the strategy that you have within that entity and how you're allocating capital and investing in the projects that you are working in. And you want that in two minutes? Two to three minutes, yeah. OK. So individual journeys, I mean, that's describing a life. I was born in New Zealand, brought up here, grew up in Christchurch, Auckland, Hamilton, ended up in Wellington. And along that journey, I ended up working for government in various ways, working with business, took me to Korea, Singapore, France and India. Those experiences are invaluable. The people I met were incredible. To tell you all about them would take another lifetime, I think. I'm now at Callaghan Innovation, so what's Callaghan Innovation? It's a really, it's an opportunity for New Zealand. The government has seen the value of innovation and it's dedicated an agency to that cause. It looks at our economy and it's looked at the future as to where New Zealand is going. We can't just rely on our agricultural and a commodity-sense trading product. We have to do more than that. So they've created Callaghan Innovation just two years ago to focus on what else can we do. Now, the basis of this organisation is really three key parts to it at the moment. One is about giving grants, investing in businesses that are committed to innovation within their company. And that's usually, that's based around new product development, new technologies. Another area is around the scientists who are employed on developing technologies that companies are not investing in. So there's new technologies that we can then link with what companies can do with product development. A third area which I'm involved in is the making connections and providing expert advice to companies and what innovation is about and how they can do it better and faster. So the mission for Callaghan is really about accelerating the commercialisation of innovation. It's a very pragmatic, practical-minded organisation. It is very connected with business. Business is at the heart of the organisation in terms of what companies can do to compete overseas with new products, new technologies, new applications. My role is in the international area and it's making those connections with other countries, other markets. I think it's one of the themes that have been made here is that New Zealand can be quite isolated in our thinking and in the way we develop ideas. The earlier we can connect to what's happening in other countries and other markets, the faster we can do things, the faster we can actually make that transference, that translation and the idea, the prototype into something that is real for everyone. Thanks. So good morning everybody. My name is Peter Thomas and I work for the Ministry of Business Innovation and Employment which is a bit of a mouthful I must say, so I'll probably just use the acronym MB which should be familiar to some of you. I was born in Wales and came to live in New Zealand as a six-year-old and grew up in the wire apper just over the hill from Upper Hut and moved into Wellington in the 80s and pretty much been living in Upper Hut ever since. I'm pretty passionate about the Upper Hut area and I share that with Brian and Matthew and Yusuf so that's a cool connection that we have. But I'm also really passionate about New Zealand and that's probably what got me working for the organisation I work for today which I'll talk a bit more about in a moment. My career was mainly in the banking sector and financial markets but predominantly it was about using technology to drive change and to improve the, I guess, the way that the bank operated. In recent years I've moved into the government sector. I spent some time as a CIO for the New Zealand Defence Force which was quite a different sort of role from working in banking and again that organisation is about protecting this country and I felt pretty passionate about working for them as well for a few years and I came and joined MB a couple of years ago. Really, the reason I joined MB is because MB, while unashamedly it's an economic agency it's actually about growing New Zealand and making this a better place to live for our family and our friends in the future and I genuinely believe that no other organisation can make as much difference to New Zealand as the one I'm working for at the moment so it's a pretty passionate thing for me and a strong connection. I guess overall my career has largely been about driving changes in technology and making things better for the organisations I've worked for. Sometimes it's about being more cost effective and more efficient but more importantly it's about making this more effective and I think the organisation I work for today it leads one of government's key result areas which is result area 9 which is looking to improve the online services to New Zealand businesses and give those New Zealand businesses a chance to interact with government to do that in a really seamless and effective way and remove some of that bureaucracy and burden that can come from running a company here in this country. So that's one of the key things we do but ultimately we are about trying to grow this country but most importantly it's also about growing it in a sustainable way so there's lots of ways that you can grow it's not always sustainable and I think it's one of the things that our organisation talks a lot about is as we look to grow New Zealand for all we do it in a sustainable way and so yes we do things like issue mining and petroleum permits for offshore investors that see opportunities here in New Zealand and that's a controversial area but it's also an area where it does represent opportunities for New Zealand and as long as we can think about those sort of things in a sustainable manner they should be things that we consider as positive things for the country in the long term. It's really exciting to be here today I guess and the people in this room here today are making just a huge difference to this country and I love the way we've got some people in this room who are encouraging small New Zealand businesses or just New Zealanders have got great ideas to make a difference and the level of investment that comes from people in this room and from some of the colleagues on my left and right here and helping those businesses grow is a pretty powerful thing and I think if we as a New Zealand community can work together and harness innovation for the future good of this country it can be a great thing so excited to be here and looking forward to meeting you. Thanks. Well that's not a hard act to follow at all. I'm Shane from New Zealand Trade and Enterprise I've had a fairly eclectic journey to get to where I am John Holt refers to himself as a recovering entrepreneur I think I'm an unrequited entrepreneur I started out with an IT startup out of college and then lost all my money in that and so then decided that I'd go and join Telecom which is one of the most sold destroying jobs I've ever done my role there was when the cellular market was just sort of starting and so my role was to go and visit large corporates who Vodafone had convinced to join them and then get them to rejoin Telecom and so two weeks later Vodafone would go back in and get all their equipment back out again so after spending a year and a half doing that achieving nothing really I decided I'd buy a furniture factory and actually make some things lost all my money doing that and so I decided to sort of follow the mantra of those who can't do teach and so I joined NZTE and now work primarily in the capital team working with New Zealand businesses to get them to understand actually how to manage cash flow and not lose everything and also take their first steps into an international stage which is as Cliff and Peter said you know it's a really exciting and fulfilling role to be able to work for your country every day and be involved in the inspiration that you see when you're working across the entrepreneurial space that we get to be involved in I really appreciate you talking about I really appreciate you talking about failures you've had if you want to do that sure because I think we can really do more in celebrating failure specifically around lessons that come from our experiences where we're failed and utilizing those to help others either avoid failures or recover from failures in a speedy way so thank you for bringing that up my first question is free to you Peter you talked about sustainable growth and really interested to dive deeper into what that actually really mean to MB and if Shane and Cliff also have any inputs into when you guys are investing in different companies and helping them grow how do you conceptualize the idea of sustainability and then doing it in a way that is responsible for the nation and environment I guess a bit of a tricky question on one level but one that I think is really important I suppose when we think about sustainability or we think about growth I think it's important that we've got it as a country and as a group of individuals be prepared to take some risk I think you can't just look to invest in things that are going to create growth at the opposition of sustainability you've got to get a balance right but you've also got to be prepared to take some risks and I think one of the things that you see with New Zealand entrepreneurs and I guess that the people that MB looks to invest in it's people who are prepared to go out and take some risks and there will be some failures that come from that I think to Shane's point but I think it's really important that when we think about innovation and we think about how we're going to grow this country that we've got to be prepared to look at it with a risk lens sometimes you won't get that lens quite right and you might lurch too far which has an impact on the sustainability of the country and other times we may not take enough risks so that we don't realize or maximize our potential I think it's really important that you do quite a bit of reflection look at the mistakes that have been made in the past we heard from Bill before about some of the mistakes some of the previous generations may have made it's easy to say that sitting here now with the benefit of hindsight so I do think it's important that we use reflection as a tool but we also be positive about the future and continue to look at taking risks so that we can maximize the benefit for everybody so it's just getting that balance right don't be afraid of failure but learn from those mistakes and look at how you can do things better into the future I hear the word sustainability a lot and I don't know exactly what everyone means by it does everyone have the same view of what is sustainability often there is a lot of value around it in terms of impact on the environment and the values that we share as individuals as a country, as people in the world but Callahan also looks at sustainability in terms of the technology and the idea and whether it can actually sustain a business and help sustain the economy that we live in or the society that we're actually creating our lives so we'll look at the qualities around the business itself the company and what it's trying to do and see whether that is actually realistic and sustainable we look at the wider system the innovation system in New Zealand you can't do things on isolation on your own we'll try some of us try more than others but you actually need other institutions other organizations, you need contacts you need networks to make it happen so we're very conscious of the system the networks in New Zealand and internationally and the other aspect we're very conscious of is the international connection because invariably you're going to be taking part in what we call a global value chain a sort of like a system of transferring value and supply demand you need to be embedded in that we need to see how a company can embed that how a business can be embedded in a global value chain in a longer term competitive basis otherwise wasting our time we're wasting our resource any reflections? one of the other things that I'm responsible for in MB is the procurement of our goods and services and often with the government with its own fiscal challenges looks at the procurement of goods and services at a lowest cost basis more and more though we're trying to encourage people to think about sustainability in the supply chain and whilst it's important to get the best price it's also important that when you procure goods and services you think about the sustainable manner that those things are done and I think back to my time when I worked for Westpac where I was also responsible for our sourcing function there and Westpac had a deliberate focus on sustainability in the supply chain and was often prepared to buy goods and services that may have come at a higher price but because the companies they were working with had more of a focus on sustainability and on the environment and I think it's something that government can think more about certainly we do have our own fiscal challenges so some of the rules that we operate in force us to look at price as the first determinant but I think as we move into the future we've got to be prepared to balance some of that stuff up and be prepared to look at those supplies that government works with and make sure that the practices they have are also helping to drive that future sustainability for the country and so on so I think it's probably a key point I'd like to make and the organisations all through if you represent are investing in Kiwi companies and various different innovative projects I'm curious to hear how you go about measuring the value that those investments are creating I'll start because my life is actually relatively easy because we work with New Zealand businesses more around the educational piece and making sure they're getting their structuring correct and making sure they're actually a financially sustainable business primarily we only know if we've done a good job when some of you guys part with your money and invest in the company or if the bank at the end of the day agrees to give that company more money so we have quite a direct market feedback as to whether the value that we're adding to those businesses simply by the fact that the business is still there in three or four years time so one of the things that MB does is it provides a lot of grants out to the sort of science community to people who've got some ideas of how they can use science to improve the country we live in and one of the things that we're learning a lot as we invest in that particular area and we literally give hundreds of millions of dollars each year out in grants to the science community is making sure that we have a really robust process I think there's lots of people with great ideas which then allows organizations like us and others in the room to invest in them I think it's also really important you put in place a pretty robust sort of benefit framework to make sure that you're getting the value out of those investments and that's something that I think we as an organization can do more of and be more transparent about some of that with the organizations that we work with I think it's fair to say that it's an area we're actually learning and discovering how better we can do that I mean at the end of the day it's the positive results and the impact on business and society and the economy when you start looking at it at a company level it's usually quite easy and quite to see what the impact has been once you start looking at it in the wider economic or social level that's more difficult and that's something we're learning about So before we go to Q&A I have a personal question to all of you not as representatives of the organizations that you're here with but as individuals is 2050 what is your vision for the nation what would it be to be living in New Zealand to be a member of the Kiwi community here what is your aspiration of the country that we're creating here you know I won't be around in 2050 my children will be and I would want to see them happy and fulfilled as individuals I'd want to see them in a world where they were not as under say so much threat or exposed to the problems that have been building up in the society and the economy that we face and I'd want to see them as connected if not even more connected to other people other countries other societies around the world I hope I'm still here in 2050 we'll see I think I want it to be the same but different if it makes any sense I think one of the awesome things about this country is it's outdoor environment it's culture it's peaceful nature and I guess it's focus on freedom and equality and diversity and those sort of things I really hope that in 2015 New Zealand still has all those characteristics but also hope that we're playing a bigger role in the global marketplace and helping to avoid some of the conflicts that occur in the world today and doing our bit to sort of help with that broader ecosystem and sustainability so I think it's as important we don't lose our values and the things that make this such a great country but I think there's more we can do and as the global marketplace evolves there's more New Zealand can do to show leadership to some of the other parts of the world that may have more troubles than we have in this part of the world so I hope that's something that we can achieve Like the others I too hope that I will be alive by that point I probably stand slightly greater chance than Cliff but we'll see I think New Zealand is incredibly lucky in a lot of respects we have one of the few abilities to really feed all of our people and hopefully are continuing to be sustainable way and our economy is based on that so it's kind of important that we continue to embrace new technologies and change and I think we can actually take the kind of entrepreneurial spirit and incubation spirit that we have in New Zealand and really actually use that to create technologies that will ultimately change the world we're starting to see that today in the new investment environment that we're seeing being seeded in New Zealand which I think is quite exciting so I'd like to see in 2050 as a leader in eco innovation agriculture innovation and just generally as a new way of doing things Thank you very much I'd love to open it up I'd love to open it up to a few questions from the crowd Lots of hands here I've got a reflection Sorry I wouldn't beat yourself up too much about coming up with metrics and measuring some of this stuff the amount of angel deals I've been involved in crunched and set milestones for businesses and then just completely thrown them out the window to continue to invest in them is the same as what you're doing if you're really committed to innovation in these businesses then is the commitment that counts often so that's more my reflection than anything else the question is if you had more money what do you think you could do or what would you like to do that you're not doing now If we had more money I think the question should be if business had more money because at the end of the day it comes down to the businesses that are going to take the innovation take the technology to the rest of the world I think if you had more money with Callahan it would be to improve our ability to help businesses do just that I was just saying so going to your point around what we would do if we had more money apart from having a big party on a boat for us it's actually not about money it's about connections and people kind of collaborating in with us we're kind of in the luxury where money doesn't actually really matter and time doesn't really matter but what does matter is the kind of intellectual capital and the connections to the rest of the world so if I had one wish it would be for us to be much more connected into the business community and the investment community globally The only thing I'd add to that is if we had more money I think we should take more risk be prepared to invest in what on the surface maybe more risky initiatives and be prepared to sort the out of the possible so that's probably how I think about it Just a really quick sneaky question from me for you Peter you mentioned your passion to create a sustainable prosperous country and I'm just wondering as far as the areas of focus for MB how does both future trends and scenarios mega trends that are happening in the world and also looking at our current social and environmental assets and maybe the gap between the future trends and our current social and environmental assets how does that inform your thinking of areas of focus you mentioned oil and mining and a couple of other things I'm just wondering the decision making process there It's quite a complex one I mean MB plays a role across so many different sectors and parts of New Zealand whether it's in the mining and petroleum areas whether it's in affordable housing whether it's in making sure we get the right skills through the immigration system to come into New Zealand and I think we are often victims of the way we've done things in the past and the way that for example if you look back over the last 20 years the immigration cycle in terms of how we've at times look at the immigration cycle with a security lens I think more and more we're looking at the immigration cycle as an economic development lens and how we can bring those right skills to the country and that doesn't necessarily get widespread approval across New Zealand there'll be some that would argue that we shouldn't be opening our doors or our borders as much as perhaps some others do but I do think that we've got to look to try and encourage more and more of the right skills from around the world to come and operate in this market because whilst we've got some great people in this country and some great ideas and some great innovation we can't do it all alone and we need to leverage that global marketplace so I think the immigration area is one area of massive opportunity for us I think a number of other countries who we would consider long-term allies look at immigration with a very much of security lens and a lot of that is because of perhaps their place in the world but I think that's a big opportunity for New Zealand to think a bit more broadly about the immigration system and how we get the right people into this country to help us grow it Okay, time for one more reflection over here, Elizabeth So I've worked a great deal in this area of sustainability and usually those investments look like new fuels different ways of handling waste paper, et cetera and it turns out that the only entities that really make those businesses run are governments that make a commitment to it and I'm just wondering if the New Zealand government is actually willing to make those kind of commitments like personally recall studying the fact that recycled paper wouldn't have happened in the US if the FDA hadn't essentially committed to deliver all documents and only receive documents on recycled paper so that's part one The second thing is I think one of your biggest challenges is this concept of rapid prototyping and I think there's a rare opportunity to advance that business globally with 3D printing and the various substrates you can use but you have so much competition in that arena with Asia nearby wondering how you're addressing that for your entrepreneurs Yeah, I might just have a crack at the first part of the question and it goes back to that sort of sustainability in the supply chain that I talked about earlier and I do think, you know, as a government we've got a responsibility to think more than just about price and about getting goods and services at the cheapest level and your example of recycled paper I know having sat round a procurement table before and seen that there's ways that we can procure a particular good but the price would be higher a lot of people will challenge that and I think it's up to us within government to think more broadly than just price and getting things at the cheapest level and think about how we can work with those more sustainable or environmentally friendly companies because overall I think that will achieve our overall goal and not just focus on short-term price I think that's a really good point I agree that the New Zealand Government and Government agencies can kind of take a leadership role in some of that because we have that kind of luxury but more to the other point around what kind of sustainable businesses actually look like I think there is a lot of opportunity in New Zealand to actually create and we're seeing it where entrepreneurs are kind of creating businesses that have sustainability at their heart so an example of that would be something like Wilding & Co where they take a pervasive pest species of pine and turn that into an incredibly expensive and valuable natural pine oil that they sell on the world market so that is taking what is a problem for New Zealand and turning that into a high-value commodity that becomes a very sustainable and high-value company so I think the more that we can kind of look at those solutions where the kind of environmental aspect and the financial and investment aspect are actually lining up completely that's where we're going to drive real change rather than having to rely on subsidies to create a false economy to drive that change Totally agree with that I think there is a lot of entrepreneurship as well as philanthropy and having businesses that create more value than they consume is the answer to some of these things so final reflection from Dan Foy I'm just going to not so much an answer but just an observation or reflection is that in New Zealand we have a pretty open government and you've heard what Peter and Shane have just said in their response and I hope one of the messages here would be that government isn't the sole source of ideas or initiative neither is business it's an open sort of relationship in which we all can work together and I think you'll find that the agencies that we work for work with are very open to making things happen and if it takes looking at your suggestions around rapid prototyping or the impact on the environment or what is sustainable there is no monopoly on where the answers will come from there's a lot of interaction there's a lot of discussion and exchange at all levels in all areas which is why we're all here today Important point there's awesome awesome to hear I think one of the big issues for me in the New Zealand ecosystem as a whole I've been here for 10 years is just the lack of entrepreneurial density here I remember reading a recent report from Startup Compass which surveyed 40,000 startups across the world and the interesting thing for me is the number of ventures founded in different countries by serial entrepreneurs Silicon Valley was about 56% of ventures Tel Aviv was about 48% Sydney probably about 26% New Zealand not enough data to even put any numbers down at all but from my experience I would put that sub 5% and that's why I think one of my personal visions or passions is trying to create more serial entrepreneurs in New Zealand not just importing them here so I'm really interested in for each of you in your various agencies how do you see us making that step change like how do we create a thousand serial entrepreneurs in New Zealand in the next 10 years what do you need to do what are you doing at the moment that needs to change to make that happen I wish I had the answer for you and I'm really glad that you're devoting your career your life to actually doing that and I'd love to talk to you about how best to do that I've been in Callaghan for less than 6 months so I'm in discovery mode and that's very much one of the questions in my mind but I tell you when I first met Yosef it was just before an event I went to at Creative HQ in Wellington and I was blown away by the number of people in that room there would have been a couple of hundred they packed the offices weren't even ready yet it was just a concrete shell and people filled the room so there's a lot of good intention there's a lot of energy there's a lot of people who are prepared to make the commitment and have the aspiration to do that how we make that happen I think it's already starting there are incubator programs there's accelerators there's a number of people putting up funds looking for new places to invest money and there's a lot of individuals actually looking at what they can do so let's see where we can take this one of the things I'd reflect on about which is a really positive thing about our culture but maybe a negative thing as well is that a lot of New Zealand entrepreneurs will come up with a new idea or a new business venture will make a bit of money and then think well I've done my job now I'm quite keen to just sit back at the beach and chill out you know and it is part of the laid back culture we have here in New Zealand and I think one of the things that we could do a lot to learn from some of the people in this room and some of the global entrepreneurs is why would you stop when you've done your little bit and made your money so you can have your beach house and your boat and your car how can we change the culture that drives people on to want to strive to the next level because I think that is a big challenge for New Zealand I think events like this and other similar events that Cliff talked about will help change that culture over time it is still very much part of that Kiwi culture that you get that money behind and you just sit back and relax because I think we've got to think about how we can build a culture in our young people who are coming through to always want to strive for the next challenge and not just accept I've sort of reached my goal and I'm going to sit back and cruise now so it is part of our culture which is positive but I think we've got to find a way of stretching that particularly the younger generation as they come through I'd agree with Peter quite strongly on that I think it's also the kind of downside of our traditional tall poppy culture that we have in New Zealand where certainly in my generation you never really talked about money and being incredibly successful was not something that you really kind of talked about or kind of aspire to unless it was sort of being an all black or something like that and I think what Evan was saying yesterday around working your way up that spiral from being an employee to being an owner to being an entrepreneur to being an investor to being a philanthropist if we could actually kind of embed that in the New Zealand culture as actually people being able to see that the reason that I'm trying to be a successful business person is so that I can actually give back and make change I think that will drive a lot of cultural acceptability around that and I think also the kind of other side of that is actually being accepting of failure so you know if somebody goes out and tries to create a business and falls over that's not that in many other you know in Israel and in the US that's not seen as a failure that's seen as a right of passage so I think we kind of need to change that dynamic in New Zealand too Thank you a few quick reflections from my end one is actually around attending events there are lots of events that are happening around Wellington and Auckland and various of the entrepreneurial communities that we have here and perhaps creating an open invitation to members of government and not just the usual suspects of individuals who attend all these events but those who are actually making policy that are influencing research allocation and direction of capital in these areas I think that I've seen there's such a huge impact that that makes when we have various members of government attending these events and actually meet a lot of entrepreneurs and listen to their stories and the challenges and another reflection is also from you Peter when you talked about risk taking and Shane you mentioned welding and co a lot of innovations that take place in the sustainability space sometimes initially might not have a clear business case but if they're paving a new path and if they're developing a whole new vertical that could have potential for greater business opportunities in the future there could be a lot of opportunities to do that we talk about Facebook and Twitter when they started they had no business plans you know they they're just building a whole new product but it was a very interesting captivating vertical that was transforming the way humans interact with one another so that's another open invitation as well as we think about risk taking do you have any I accept the invitation it's great I think we all do and I think there's always room for more interaction and more discussion and I look forward to meeting as much as many of you as I can today and if we don't have time to catch up then we can look each other up in Wellington or wherever thank you all very much for taking your time to joining us today and there are quite a lot of people who'd be keen to interact with you so take your time but thank you very much for your time thank you guys