Kiwi high-tech companies need better launchpad

News that 32 of New Zealand’s biggest high-tech companies have been sold offshore in the past decade shows that current economic development policies are not working, says Labour’s David Cunliffe.

“Some of New Zealand’s best and brightest young companies are being sold offshore very early in their lifecycle for less than they would be worth if capital and export conditions permitted them to grow further before selling out.

“Kiwis are known around the world for our creativity and entrepreneurship, it’s part of our DNA. That’s why foreign companies want to buy our smart young companies. But, as Navman inventor Peter Maire said, many New Zealand companies are bought too early, or end up being gutted for their intellectual property.

“New Zealand has the brains and the work ethic to build a new generation of Navmans. For example, there is a $6 trillion global opportunity in clean-tech, where Kiwi companies already have experience and brand advantages such as in geothermal and other renewable energy.

“Our companies stand ready to be a world leader in eco-technologies in the 21st century. But this country will only see sustainable growth and jobs if entrepreneurs can more easily access long-term local capital, and enjoy better exporting conditions and assistance to become global players, instead of selling out as ‘bright babies’.

“The potential takeover of Fisher and Paykel and the real threat of losing those skilled jobs overseas shows the importance of taking action now.

“Labour is proposing a package of measures to help reverse the great sell off, including”

1. Creating more local savings available for positive local businesses to grow and employ Kiwis who might otherwise jump the ditch, through measures like universal KiwiSaver and pro-growth tax reform, and improved venture investment funding,

2. Monetary reforms that will help drive a more stable and realistic exchange rate,

3. Revving up our innovation engine through R&D tax credits, increased direct investment, and better linking research institutes, universities and businesses together,

4. Actively partnering with regions and industry sectors to create sustainable growth and strong communities all around New Zealand,

5. Ensuring adequately funded, well managed economic development and export promotion assistance for smart young Kiwi companies – not cutting budgets in key markets as the current government has done.

“Unfortunately the National Government’s hands-off policies have the effect of speeding up the sell off, by making it harder for smart young companies to grow their own wings and fly the Kiwi nest on their own terms,” David Cunliffe said.