New Zealand's Economic Might

BHAG, one of those acronyms that may or may not mean something to the average Joe, "Big Hairy Audacious Goal." We all have them, the average Joe included; to some degree, it is part of being human, we all have goals, things we want to accomplish, for some of us it is based around family and others around community or human enrichment.

The context of my personal BHAG is around New Zealand and the ability to contribute to the world economy as a country through the IT business sector at levels substantially larger than current levels. I would like New Zealand to contribute at the same level as the "Four Tigers," having New Zealand be recognized as the "Fifth Tiger" would accomplish my BHAG. For those who don't know who the "Four Tigers" are; Hong Kong, Singapore, Taiwan, and Korea.

There are at least three planes where corrective actions must be applied.

* Government

* structural impediments

* Business

* adoption of industry best practices
* successfully entering external markets

* Individual

* adoption of professional best practices
* cultural shifts from counterproductive behaviors

Government

New Zealanders have tricked themselves into a false sense that it is easy to start a business in New Zealand. This is a true statement however it falls short. It is easy to register a company and start trading, the cost is only; answer a few questions on a web page, NZ$170, and two or three days wait that's it. However that is only half the story, this new legal business entity works well if you are a sole trader who wants limited liability. The problem is those businesses don't live beyond the local market and will never scale to anything necessary to be a global player in any market sector.

This legal business entity has none of the flexibility of an United States S-Corporation, or C-Corporation. There are tax laws that are disadvantageous to IP exporters, and there are share/stock restrictions that prevent New Zealand companies from the distribution of employee vested equity. This equity distribution is at the kernel of Silicon Valley and the success of those world changing businesses.

Being able to establish a company and get an IRD number is not enough if the laws handcuff businesses from; growing, trading internationally, and attracting and retaining the best talent.

Business and Individual

Business and individual behaviors are one in the same because the business is made up of people. It really starts with the individual having a mind shift toward looking ahead with the business strategies, seeing external markets at product inception not after the product is starting to mature. By that time the product has too many limitations baked into the offering. Many great Kiwi ideas are only fit for Kiwi markets because of this lack of planning. Similarly some cultural shifts need to happen, the "number 8 wire" is fantastic, however not in every business activity, it just limits the possibilities at the very beginning and most often prevents scale from ever being achievable.

With New Zealand business owners; thinking beyond local markets, driving scale in their planning, and building teams that are executing scalable plans; New Zealand will be a force to be reckoned with. Oh we also need to remove the structural barriers the government has put in place.

The first step we need to do is tell the government that a sole proprietor business with limited liability will not export many goods off shore. The New Zealand government states that, "New Zealand is moving toward wage and pay parity with Australia," we need to help articulate how to effect that desired outcome, otherwise New Zealand businesses are starting from a disadvantaged position and will never catch up.

- Tim Bertheau


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