Cultural renewal lifting Maori business confidence

Maori are among the big success stories in the global GEM study countries with a bigger proportion of entrepreneurs in their midst than is the case for 30 of the 37 surveyed countries.

The Maori cultural renaissance, entrepreneurs bringing together a growing number of visionary joint ventures and growing expertise in management, are factors that are all listed as strengths by the Maori experts who were assigned to the report.

The report also pointed to the benefits from the reconsideration of history from a Maori perspective complemented by Government capacity-building, regional development policies and programmes that support Maori education.

These developments had fostered alliances between Maori, Government educators and business, said the 16 Maori experts who were part of the 39-person panel that contributed to the report.

The global GEM study is designed so that different groupings such as regions or ethnic groups can be compared.

It found that at 11.9 per cent, Maori entrepreneurship would rank seventh in the world, compared to the 8 per cent average among the 37 countries participating in the study.

Maori entrepreneurial activity surpasses that of the United States, the home of entrepreneurial culture, which had 10.5 per cent of its population involved in entrepreneurial activity.

Maori also scored higher than Ireland (9.1 per cent), Canada (8.8 per cent) and Australia (8.7 per cent).

The Maori result is slightly below the 14 per cent recorded for New Zealand as a whole but when it came to nascent firms - companies that were up and running less than 12 months - they were level-pegging with others.

The report's executive summary noted that: "Maori were every bit as entrepreneurial as European New Zealanders.

"Maori entrepreneurs were three years younger than non-Maori entrepreneurs, had less higher education, made less use of technology and had less of an export focus.

"But they exceed non-Maori in believing their product or service will be new and unfamiliar and that there is limited competition in supplying it."

The Maori development agency Te Puni Kokiri assisted Unitec researchers and 16 of the 39 experts on the local study were Maori.

However, the report on the Maori cultural dimension of entrepreneurship was focused on the advice of seven Maori experts.

They included four Auckland Maori: Rhonda Kite, director of the media company Wai Ata, Christine Parapa, a director of photographic company Supa Prints, Mika Torotoro, a director of Torotoro Dance company, and Teresa Tepania-Ashton from the Maori Business Development arm of Enterprising Manukau.

The other experts were Emma Henare the chairman of the Ngati Hine Health in Kawakawa, John Kape, Maori manager at the Foundation for Research, Science and Technology in Wellington and Tahu Potiki, who is chief executive of Ngai Tahu Developments.

Although largely positive, the report did not shrink from declaring the factors seen to be hindering Maori development.

"Maori society, particularly in tribal social service and charitable organisations, lacks business expertise, financial skills and experience in acquiring capital, the experts concluded

"Maori businesses are undercapitalised and hampered by a lack of experience in governance and management.

"They are often less capable of meeting high compliance requirements and impeded by high compliance costs associated with Maori organisations.

"This is particularly true of trusts and incorporated societies tendering for or meeting requirements for Government contracts."

The Maori experts contributing to the report also pointed to another set of weaknesses.

These related to Maori culture itself and to the long-term impact of colonisation.

"The first and most serious impacts are the high levels of poverty, due both to loss of land and economic resources after the signing of the Treaty of Waitangi, and, more recently the economic reforms and corporatisation of organisations and industries that traditionally provided work to Maori," the report said.

"The lack of capital for Maori organisations is considered serious as is the perpetual changes in Government policies and programmes for Maori often underpinned by notions that Maori cannot make their own decisions or chart appropriate courses for tribal development."

A lack of tax incentives was seen as an impediment to all entrepreneurs but particularly so in the case of fledgling Maori initiatives.

"Finally those Government programmes that are in place have at various times been hampered by general inadequacy or lack of skills at dealing with Maori displayed by some consultants and advisers."

One aspect of the GEM report that the layman might find surprising is that people can be unemployed and still classed as being involved in entrepreneurial activity if, for instance, they are involved in putting a business idea together but are not currently working.

Maori made up a disproportionately high percentage of entrepreneurs who were currently unemployed - 25.8 per cent compared to 8.8 per cent for non-Maori.

A higher proportion of Maori than non-Maori were "necessity entrepreneurs" involved in entrepreneurial activity because they had no other work opportunities, as opposed to "opportunity entrepreneurs" who did.

Although New Zealand as a whole had 84 per cent defined as opportunity entrepreneurs, the highest proportion among OECD countries, Maori were slightly higher than the global average.

The GEM report found Maori were more confident than non-Maori that their product or service would be considered new and unfamiliar.

Of those surveyed 75 per cent thought that there was little competition for their business compared to 55 per cent of non-Maori.

They were also less export-oriented and only eight per cent of Maori thought more than half their customers would be over-seas compared with 14.5 per cent of non-Maori.

Maori entrepreneurs were shown to see just as many good startup opportunities as non-Maori but they had a higher fear of failure - 33.1 per cent compared with 28.7 per cent for non-Maori.

The report concluded there were a small but influential group of "intrapreneurs" (entrepreneurs operating within large corporate entities) with strong tribal links.

It also noted that some tribes were committed to providing scholarships for their best and brightest youth.

There was also a significant group of urban Maori entrepreneurs running companies with a national and international focus. "Interestingly the former group were almost exclusively male and the latter includes a large proportion of women," the GEM experts said.

Of entrepreneurs surveyed 37.9 per cent had a tertiary qualification compared with 49.4 per cent of non-Maori.

The Maori Business Facilitation Service mentoring and support services helped creation of 405 new businesses and 38 business expansions from its launch on September 1, 2000, up to June 30 this year.

The service does not provide funding and its statistics are distinct from Maori businesses that may have been helped through other mentoring schemes that were not specifically available to Maori.

Herald feature:
Global Entrepreneurship Monitor Report - 2002