Mallard: Celebrating the rising stars of business
28 February 2006
Hon Trevor Mallard: Celebrating
the rising stars of business
Speech to the Telecom Incubator Awards, Sky City Convention Centre, Auckland
Thank-you for the opportunity to speak at your awards tonight.
Celebrating the emerging stars of business and business innovation is something we should all do more of as a country, especially as our government works towards transforming the New Zealand economy into an export-led high value, highly innovative economy that can compete with the best of them in world markets.
Business incubators are an important part of this economic transformation.
They contribute by building a pipeline of exciting, innovative high-growth start-up and early stage businesses that can find high value niches in the global economy, particularly in our ICT, creative and life science sectors.
Incubators give fledgling entrepreneurs an opportunity to develop their innovative ideas and set up new businesses in order to commercialise them.
The reality in New Zealand is that we do not have a sufficient number of world-class management teams in start-ups. This is where incubators are making a difference.
Business incubation catalyses the process of starting and growing companies by providing entrepreneurs with the expertise, networks and tools they need to make their ventures successful.
And the approach works.
International research tells us that incubation can help diversify economies, commercialise technologies, create jobs and build wealth.
Incubation can provide New Zealand with a source of innovative, high-growth companies that will be a key driver of our knowledge-based economy.
The growth of New Zealand’s incubators - there are now 17 incubators around the country compared to just two when the programme started in 2001 – is now being matched by hard results.
Incubators funded under New Zealand Trade and Enterprise’s incubator programme have already successfully graduated 98 exciting young companies.
Of these, 39 are considered to be high-growth, that is, they have the potential to go on and become multi-million dollar international companies.
Some have already been accepted into New Zealand Trade and Enterprise’s Beachheads programme, which is also being featured in New Thinking 2006.
These companies have raised almost $37 million in external capital to support their growth.
Last year, 157 companies resident in incubators employed 743 people, and earned revenues in excess of $27 million, some of which included export receipts.
Other spin-offs are also occurring.
Incubators are also playing a major role in the development of a vibrant angel investment market.
Submissions from the incubation industry were important contributors to the recently announced Seed Co-Investment Fund, and incubator-managed angel groups have been short listed as Fund partners.
The growing influence of incubation is also being seen in university campuses and research labs, and in Crown Research Institutes and in the wider community where the celebration of business success and entrepreneurship as a career is stimulating more and more entrepreneurial activity.
Since 2001 when the Incubator Development Unit was established in then Industry New Zealand, government support has provided over $13 million in grants to 19 incubators, to Incubators NZ and to worthy industry projects.
The industry has set a goal of being financially independent from government.
Telecom has recognised the benefits of partnering with the incubation industry and getting early stage access to the future drivers of the New Zealand economy, through being the principal sponsor of Incubators New Zealand. Microsoft is also a supporting sponsor, and I'm looking forward to seeing other corporates follow their lead.
I'm very much looking forward to visiting the Incubator Expo tomorrow to see what these companies are achieving.
As a country we can be proud of the fact that New Zealand does not have a problem in coming up with ideas or generating new innovations or creating new technologies.
A barrier we have faced is in commercialising them and then taking them successfully into global markets.
Incubators provide a structure to help with this challenge. The government is also looking into other ways of supporting the commercialisation of innovation.
Incubation has developed in New Zealand as a coordinated and cohesive effort by incubators, central government, local government, educational and research institutes and the private sector.
Everyone has played their part and can share in the success that is evident at the awards.
Congratulations to the incubator industry for continuing to set some bold targets.
And congratulations to the award winners being announced here tonight.