Kiwi 3D industry in the frame with govt support
Kiwi 3D industry in the frame with govt support
Prime Minister Helen Clark and Economic Development Minister Trevor Mallard today announced a new economic development initiative to establish and support a world-leading 3D digital content and graphics industry in New Zealand.
A key part of the initiative is an agreement between the government and software company Right Hemisphere to work together to boost the local 3D industry.
The agreement will see Right Hemisphere retain the major part of its world-beating research and development in New Zealand in return for an interest-free US$8 million loan from the government to help its next stage of development.
"This agreement means that New Zealand brains, talent, and market experience stay in New Zealand. Without this agreement, Right Hemisphere may have been forced to move offshore to help its next stage of development," Helen Clark said.
"Seizing a unique opportunity like this means we can help our best brains and entrepreneurs in this area to stay in New Zealand, while working to gain a foothold in this high value niche global market which is forecast to be worth $10 billion in ten years.
"The Labour-led government is committed to increasing the number of firms that can compete offshore as part of our agenda to transform New Zealand into an export-led, innovative, and high wage economy - and this is part of that work.
"The agreement not only benefits Right Hemisphere, it will also have positive spin-offs for Kiwi firms and researchers who work in the highly valuable Product Graphics Management industry," Helen Clark said.
Trevor Mallard said the loan negotiated with Right Hemisphere incorporated conditions which will benefit firms and Kiwi research organisations.
"As well as setting up a research programme, we are also looking to set up a virtual cluster or ecosystem of educators, researchers, firms and others for networking, education and collaboration in this area.
"This initiative will also create linkages between US venture capital firms and New Zealand firms and researchers - in a bid to assist bright, and innovative Kiwi start-ups with potential. (See details on following page)
"With backing by two of the most prestigious venture capital firms in the world, Sequoia Capital Partners and Sutter Hill Ventures, Right Hemisphere is poised to become a firm of global significance over the next few years, aiming to take 10 percent of the $10 billion market. This arrangement will allow us to leverage off this likely success and secure wider benefits to the New Zealand economy from this company’s growth."
The spillover agreement sets out commitments by both the Government and Right Hemisphere. New Zealand Trade and Enterprise (NZTE) will lead implementation from the government side.
NZTE will establish a steering group with Ministry of Economic Development, Foundation for Research Science and Technology and Right Hemisphere to oversee the set-up phase of the research programme, working with universities and interested firms.
Once the parameters of the programme have been established, it is likely that a legal entity will be established to run and coordinate the research programme.
There will be an investor relations programme, a key part of which will be focused on increasing our local investor community’s links into US markets.
Contact: Gordon Jon Thompson (press secretary to Helen Clark) 021392571
Astrid Smeele (press secretary to Trevor Mallard) 0274 664438.
Details of the initiative including benefits
Right Hemisphere will receive a conditional loan of US$8 million (between NZ$14.03 and NZ$12.69 million) for three years. As long as Right Hemisphere keeps to the conditions of the loan, the interest of 25 per cent will be waived. The principal, however, must be repaid.
The benefits include:
• Three-year programme of research projects involving New Zealand universities and Right Hemisphere aimed at increasing New Zealand’s R&D capabilities;
• Improving international connections, particularly with the US venture capital market.
• US venture capitalists Sutter Hill and Sequoia will review at least five NZ business plans a year for three years and will also visit NZ to discuss US funding and business growth strategies with government agencies, local businesses and entrepreneurs. Both venture capital firms have a strong track-record of success. Sequoia Capital Partners has had a major role in starting some notable companies, including Apple, Google, Cisco Systems, Oracle, Paypal, nVidia, Electronic Arts and Yahoo.
• The opportunity for other firms to use Right Hemisphere’s technology to build applications across a wide range of industries, including education and training, health, design and manufacturing.
• The opportunity for new businesses to be established that provide support services to Right Hemisphere and its customers
• 97.5 per cent discount on Right Hemisphere software to universities and research institutions involved in the research programme
• A commitment by Right Hemisphere to assist in attracting relevant US R&D or educational centres or customers to participate in NZ-based research
The government believes that with its strong links into the US market and its investors and partners, Right Hemisphere can provide the business and technology coherence, as well as a proven path to market, for commercialising R&D from the group of cutting edge firms and researchers who already work in this area of graphics and digital effects. This would strengthen not only this group, but New Zealand's position as a whole in the global IT space.
Some New Zealand organisations who are considered to be world class in this area include the AUT, IRL, HITlab, University of Otago and the Media Design School. There are also a number of innovative New Zealand firms working in the area of 3D digital content.