Agribusiness Report: Insights from Māori frontier firms

The planned Rocket Lab Onenui station site at Mahia includes a concrete pad, a launch tower for the carbon composite rocket, and a hangar.

Māori firms have unique features that support innovation, according to the Productivity Commission's frontier firms inquiry.

The commission's report said the Māori economy exhibits many of the characteristics needed for firms to innovate, grow and support improved wellbeing.

Figures from Stats NZ show that employment in Māori authorities and SMEs has been growing faster than in the wider economy.

Māori authorities and SMEs are more likely to export, and have higher rates of innovation and R&D, than other New Zealand firms.

Research for the inquiry found that Māori frontier firms are able to leverage features of their business to create opportunities for innovation and growth.

For example, the need of Māori firms to serve multiple bottom lines (such as commercial, environmental, social and cultural objectives) can be a strong driver of ambition, which can also flow through to expectations placed on suppliers.

Further, high shareholder ambition, together with a long-term view, can spur innovation and experimentation, provided the underlying assets are not put at risk.

Māori values help differentiate Māori goods and services and provide added brand value overseas.

The values also closely align with the growth in consumer demand for products with strong environmental and social credentials. This presents growth opportunities for kaupapa Māori firms.

Common values and features also help bring Māori firms together around shared goals.
Formal and informal networks among Māori firms are important mechanisms for diffusing knowledge, exploring innovations and enabling collaboration.

Success breeds success

The successes of Māori frontier firms build their confidence and ambition, and can help light the way for other Māori firms.

For example, the Tawapata South Incorporation is a Māori entity that runs Onenui Station, a 10,000 acre farming block on the Māhia Peninsula.

Tawapata South formed a partnership with Rocket Lab, setting aside land for Rocket Lab to use as its launch site.

A multiple bottom lines approach played an instrumental role in developing this partnership. The success of the partnership has built the confidence of Tawapata South's committee and owners.

It has led to further opportunities for the farm's business, including conservation initiatives, infrastructure developments and R&D with a neighbouring farm to identify agricultural innovations.

Learning from Māori firms

Māori firms also offer valuable lessons for other New Zealand firms. Taking a long-term view and managing multiple bottom lines do not need to be traded off against innovation and productivity.

Rather, they can be complementary.

Long investment horizons are important for supporting experimentation and innovation, and long-term value creation.

This contrasts with a short-term focus on financial performance and shareholder returns that can dominate the focus of company boards and management.

www.productivity.govt.nz/inquiries/frontier-firms