Mark Fowler: Technology will drive NZ growth

Tourism Holdings has highlighted the benefits of the vehicle tracking devices they deploy in their RVs, writes Mark Fowler. Picture / supplied.

Investors will be finding it increasingly difficult to identify what we would describe as 'growth opportunities' within equities markets.

While the NZX50 index seemingly reaches record highs on a daily basis, growth prospects remain elusive for many listed companies.

That said, there are undoubtedly some key thematic drivers which, while not unique to New Zealand, are helping to provide innovative Kiwi companies with the opportunity to foster growth and performance in this changing environment.

For most of us, the relentless talk around Amazon's pending Australasian expansion is starting to become a little monotonous (to say the least) - but the company's approach to business, and its use of robotics and delivery efficiencies stand to have a very real impact when it finally reaches our shores.

In the mainland US, when you order something online you can expect delivery within two hours. Once set up in Australia, Amazon's NZ customers would reasonably expect overnight delivery - a shift which means local businesses will have to change the way they think and operate.

Establishing key distribution centres in gateway cities (the likes of Sydney, Auckland and Melbourne) is a well-defined strategy for businesses like Goodman Property NZ. Their commitment to effectively only owning industrial properties in Auckland is a direct outcome of this strategy, positioning assets in the main urban centres where they're most likely to see growth.

Digital transformation is often considered just another industry 'buzz' phrase, but cannot be underestimated in terms of its potential for creating productivity efficiencies. Heartland Bank, one of the real success stories of our domestic financial sector, articulates its digital strategy simply as a 'no branch, no queues' model.

It can only be implemented with a digital front-end that enables Heartland to approve loans online through platforms such as your smart phone or tablet. This digital point of difference is a key driver of shareholder value and has undoubtedly helped differentiate them from some of their larger, less agile competitors.

Tourism Holdings (THL), another innovative New Zealand firm, has recently highlighted the benefits of the vehicle tracking devices they deploy in their RVs, as an example of their own technological advancement.

Customers benefit from all the standard features of GPS, but are also able to receive bad weather warnings and updates, or 'no go' notifications regarding off road destinations. This technology has resulted in a notable drop off in maintenance costs, as well as a raft of obvious safety benefits for travellers.

THL knows that the biggest barrier for clients is often the thought of having to drive a large vehicle around a foreign country with no previous experience. This could potentially be eliminated with the advent of autonomous vehicles - a technological change that they see as being hugely advantageous to their business model, and one they're open to adopting.

The rate of technological change we're experiencing across various business sectors can be difficult to keep up with - but it's those businesses that embrace and adapt to these advances which are undoubtedly the most likely to succeed and grow.

Mark Fowler is head of fixed income at Hobson Wealth Partners.

Disclaimer: This article does not consider objectives or situation of any particular investor. It should not be construed as a solicitation to buy or sell any security or product, or to engage in or refrain from engaging in any transaction.