Innovation: Maturing economy sees Maori tap potential

Callaghan Innovation general manager Maori economy Hemi Rolleston son of Mitai Rolleston. Photo / Stephen Parker

Callaghan Innovation general manager Maori economy Hemi Rolleston says until now the Maori business sector has been largely conservative but that's changing. "We've tended towards acquiring safe assets. We've invested in term deposits and property. Much of our business is involved in primary production.

"The Maori economy is an important part of the wider New Zealand economy and it's growing. It is poised for take-off and not just because of treaty settlements."

There's already a significant asset base and a growing maturity. As they go through the business cycle, Maori-owned enterprises will move further up the value chain and head towards taking a more innovative approach. We're already seeing a spotlight on research and development and there's increasing government support.

Leon Wijohn, who has affiliations to Te Rarawa, Tuhoe, Ngati Tahu and Ngati Whaoa, is a lead partner at Deloitte New Zealand and a specialist in Maori business development. He says the Maori economy is now worth $40 billion. It's a sizeable slice of the wider New Zealand economy and one that's likely to become larger. "Maori organisations are important to New Zealand. They are growing faster than the overall economy and they predominantly reinvest in the country. They will be New Zealand organisations for ever," he says.

That explains why a business like Deloitte has invested in the sector. There are 20 partners working in the Maori area, five have whakapapa. Another 100 or so staff members support the partners and 40 of them are Maori.

Like Rolleston, Wijohn believes the Maori business sector is gathering momentum and fresh thinking is needed to unlock the potential and help the Iwi owning the businesses to serve goals that go beyond simply building wealth. "There are four pou or pillars: economic, environmental, revitalising Maori culture and the well-being of the people."

Another aspect sets Maori economic activity apart from the mainstream: long-term vision.

Wijohn says his work at Deloitte has seen him help develop business strategy for mainstream companies: "Usually they write plans that look one year ahead. Some might write five year plans. Maori organisations often plan 100 years ahead. They take an intergenerational approach."

While long-term perspective is at odds with the kind of fast-moving innovation you'll find in technology start-ups, it fits well with more traditional research and development. "Successful innovation in the tech world is often about building, acquiring and then exiting. Maori rarely look for an exit. However the patient approach is a natural fit with R&D." says Rolleston.

He says the first areas to look for innovation are those where Iwi-owned businesses are already strong. "The natural ones are in the primary sector. That's where our assets are.

"There's a propensity to look at high end products, deeper in the value chain. Fish would be an example. We need to look at the whole of catch, not just the fish, but all the product including the waste streams. Ironically these days the waste can more valuable than the main catch. The challenge is to get nutraceuticals and pharmaceuticals out of this product. It could be fish or it could be honey."

Another natural starting point for Maori innovation is in the indigenous product area. Rolleston says: "These are the ingredients that are set in our land: the kawakawa, the harakeke, the kanuka and the manuka. These are an important niche for us. "

Indigenous products link to another area where Maori have a head start: story-telling. He says: "We have an amazing story, in general the world loves to hear it. The way technology is changing the world at the moment is opening up a whole new opportunity for Maori to tell these stories using new, modern tools.

"The world wants to hear about food-safety, sustainability and traceability. It wants to know about provenance and people are looking for social responsibility when they buy. Maori tick all those boxes and there's a great story to tell about the people and the land", he says.

"This works well with innovative business like Ian Taylor's Animation Research who use digital technology to tell a really powerful Maori story. In most cases our products can have a similar taste or offer more or less the same profile as non-Maori products.

"You might have two very nice bottles of wine sitting next to each other; they both taste similar and sell for the same price. One has a good story about where it came from and how the money made from selling it goes back in the community. It's going to sell better and that's one area where Maori businesses are ahead of the game."

Wijohn says though Maori organisations continue to invest mainly in land and primary industry assets, there's a growing realisation they need to take a broader approach.The challenge is to find ways to make the best of the assets to generate free cash flow and create jobs for iwi members. This generally means moving up the value chain.

Rolleston says his role at Callaghan Innovation is partly about helping to build relationships between Maori bodies and potential partners. He says like Asians, Maori organisations are more interested in long-term relationships than one-off deals.