Innovators must chart a course through an array of agencies, says KEVIN TAYLOR.
The Government wants to help innovative Kiwis with bright business ideas.
But first, budding entrepreneurs must work out where to go.
Over the past two years, existing state agencies have offered a steady stream of new funds and initiatives, and some big organisations have been created as well.
All are aimed at boosting economic development in some way - either by offering businesses help or giving advice on Government policy.
Take publicly funded grant schemes. Among them are the Incubator Awards, Enterprise Awards, Business Growth Fund, Major Investment Fund, Regional Partnerships Programme, Sector Initiatives Fund, Regional Initiatives Fund, New Economy Research Fund, Research for Industry Fund, Techlink and Technology Industry Fellowships.
Many are creations of the past 18 months.
The former National Government generally had a more hands-off approach to economic development, but Business New Zealand chief Simon Carlaw notes that the proliferation of agencies and initiatives began towards the end of its last term.
The Coalition Government increased the tempo, led by Deputy Prime Minister and Alliance leader Jim Anderton.
As Minister for Economic Development and Minister for Industry and Regional Development, he works with other ministers, most importantly Pete Hodgson, who is Minister of Research, Science and Technology and of Small Business.
But does business just want a freer environment and the right conditions - such as lower compliance costs - rather than an array of agencies and services? What do they hope to achieve - and does business know what they offer?
Research by the Auckland-based Independent Business Foundation suggests few small and medium enterprises (SMEs) do know.
The foundation commissions quarterly research of 800 SMEs nationwide by Waikato University's management development centre. The June quarter survey asked the firms if they knew of services offered by Government business development organisations.
Of those surveyed, 71.6 per cent were unaware what Industry New Zealand does. It is supposed to be the Government's main business development delivery arm.
Eighty-four per cent were ignorant of the services offered by the Foundation for Research, Science and Technology and 57.3 per cent did not know what Trade New Zealand does. And 83.5 per cent had not heard of the Electronic Commerce Action Team.
The foundation's executive trustee, Ralph Penning, says too many Government organisations and initiatives are now running side-by-side and it is all becoming too complex for the average business person to follow.
"It's even confusing their professional advisers."
Mr Penning also says that the agencies are not delivering. "Jim Anderton is throwing big money at it, but they are not clocking up the runs."
He blames the lack of awareness partly on the complacency and non-performance of some industry sector organisations, which have failed to communicate what help is available.
Mr Anderton's response to the foundation is scathing.
"That's the Business Roundtable in drag. They are just a right-wing think tank who don't like any sort of intervention.
"I would say to them, explain to me why from 1984 to 2000 with all the things that were done to New Zealand's economy to suit the new right ideology, why are we demonstrably so far behind the rest of the world?"
Industry NZ and the Ministry of Economic Development were set up last year with a budget of $332 million over three years.
The Government has also ploughed more into science and technology through the Ministry of Research, Science and Technology, the Foundation for Research, Science and Technology and Technology NZ.
Mr Anderton favours intervention and says the Ministry of Economic Development is learning, but the drive still has to come from him.
"If you want to change the direction of policy and commitments of individual bureaucracies, you had better be prepared to stand at the head of them and give them a great pull or shove," he says.
The obvious example is the intervention of his ministry in the luxury Canadian yacht-building firm Sovereign at Hobsonville.
Clearing a path through the red tape, he and his officials ensured the project was approved in five months rather than the years it could have taken under resource management and other rules.
But other businesses - especially other boatbuilders - have looked on with concern at the special fast-track treatment.
Mr Anderton says picking winners is "a hell of a lot better" than picking losers.
Industry NZ communications manager Debbie Gee says the organisation fills a gap between what the Foundation for Research, Science and Technology does - paying for research and new technology - and Trade NZ's role.
She gives an example of how the Government's agencies might work together to help a new business.
Initially, a new product with potential might get money from the research foundation.
Once the product has been developed, Industry NZ may put the fledgling business in an incubator, where it will share facilities with similar business start-ups.
There the business can access the BIZ brand of services, such as the BIZ investment training scheme, if private sector capital is being sought.
Once the business has started, Industry NZ may not be involved for a while - but if it gets big and is ready to expand, the firm can obtain a grant from the Business Growth Fund.
That in turn may make the firm ready to export, which is where Trade NZ comes in to identify foreign markets.
Ms Gee says what is important is not the number of organisations but that they talk to one another to avoid duplication.
But are more agencies and initiatives the answer or does business simply want a freer environment?
Mr Carlaw gives qualified approval for the Government's moves, saying the previous hands-off approach has not delivered high growth rates.
But he says the jury is still out on whether the proliferation of agencies and initiatives is a good thing.
"Next year has got to be a judgment year for these agencies. I don't think we can delay it further."
But Mr Anderton has no doubts. "There's one thing worse than having too much help available, and that's having none."
He agrees that there could be better coordination between agencies, but argues that they have to get established first.
* A national regional development conference - paid for partly with $280,000 of Government money - is being held in Rotorua on Wednesday and Thursday.
* In Forum on Tuesday, Mr Anderton and Mr Penning give their views.
Where to go for help
Government bodies involved in economic development:
* The Ministry of Economic Development: Formerly the Ministry of Commerce, it is the flagship of a hands-on economic development drive. www.med.govt.nz
* Industry NZ: Started in October last year and dubbed "Jim Anderton's jobs machine", it helps businesses and regions by co-ordinating access to resources, information and training.
Within Industry NZ are:
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A one-stop business information and training service set up in 1998 through 34 nationwide BIZinfo centres, an 0800 number (0800 4 BIZINFO - 0800 42 49 46).
- Incubator Unit: Started in May to facilitate and pay for business incubators.
- Business Growth Service: Administers the Business Growth Fund, to help firms to implement growth strategies.
- Major Investment Service: Develops links between prospective major investors and opportunities in New Zealand.
- Regional Partnerships Programme: Brings the Government and regions together to help make the most of a region's strengths and competitive advantages.
*
Electronic Commerce Action Team (ECAT):
Started in July, it is described as a "virtual community" of organisations, individuals, communities and businesses keen to promote the use of electronic commerce.
*
Ministry of Research, Science and Technology:
Develops research and innovation policy and manages the publicly funded part of the research, science and technology system.
*
Foundation for Research, Science and Technology:
The Government's largest "investor in innovation", it has $237 million available.
*
Part of the foundation, it helps businesses to develop and adopt technology.
*
New Zealand Venture Investment Fund:
Started in August with $100 million of Government capital, it aims to accelerate the development of a venture capital market.
*
Helps exporters and importers by providing information and consultancy services.
*
A division of Trade NZ, it helps foreign companies and investors relocate here or participate with New Zealand companies in global ventures.
*
Science and Innovation Advisory Council:
Advises the Prime Minister on the strategic direction of research, science and technology.
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