Raft of tech companies breaking out from ‘hotbed of innovation’ New Zealand

It's not just the 15 warriors of the All Blacks that are putting New Zealand on the map these days: a refreshing approach to business and an ability to innovate means the country’s tech scene is also punching above its weight

When you think of the top hotbeds of innovation across the world New Zealand may not be one of the first names to come to mind. But those in the know have been aware of its tech scene for a while. And on its current trajectory the rest of the world may soon be about to catch up.

Without realising it, you come into contact with technology developed by New Zealand companies every day. Much like London’s tech scene, accounting and wider Fintech solutions are high on the agenda – only they were doing it before it was cool.

Accountancy innovation business Xero was voted the most innovative growth company by Forbes in both 2014 and 2015. And Talking Tech is at the forefront of incorporating digital technology in the payment systems for business.

Flat management styles

In fact in many ways the nature of New Zealanders’ typical approach to work (and life in general) means it was perfectly placed to welcome the modern management styles agile tech companies have brought into the mainstream.

“New Zealand culture is very egalitarian, unlike other more hierarchical cultures,” explains New Zealand Trade & Enterprise (NZTE) general manager for services David Downs.

“We tend to treat everyone the same regardless of their rank or position. This leads to fairly flat management structures within our companies and a sense of everyone contributing and giving feedback regardless of their level.

“It’s definitely an advantage for our kiwi tech start-ups because they’re not building a company culture from scratch – they’re hiring New Zealanders who innately have a collaborative, flexible work style.”

One New Zealand business that quietly provides crucial technology for our nation’s infrastructure is surveillance company iDefigo. Its customers include the Environment Agency and Network Rail.

Since it foundation seven years ago it has expanded via Australia (understandably the first foreign venture for the majority of New Zealand ventures) and Silicon Valley. But after spending six months in the California sunshine the board decided that Europe and the UK were a more viable option for sustainable growth.

Cultural synergy

iDefigo commercial director Scott Wattie explains that while the company established some “great partnerships” in the US, the overall market was more complex than they first realised. That’s when they turned they attention firmly to these shores.

“Even before we’d landed we secured a beachhead customer in the UK, so that gave us some leverage and some understanding,” he continues.

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“And we saw there was a huge opportunity here for us. For about two and a half years we did the commute from New Zealand to Heathrow every few months. That’s pretty painful as anyone who’s done it will tell you. So after that period we established ourselves properly over here.”

When the transition to the UK was complete Wattie was pleased to find that “the culture here was very much akin to what we wanted”. He says that the key to successfully integrating with the market here was “how we could immerse ourselves in the culture”.

“We had to kind of leapfrog through Silicon Valley to get here,” he continues. “Often English people themselves think Silicon Valley is so much better, but coming from New Zealand I can say the UK is a very diverse and exciting ecosystem for early-stage companies. There’s everything you really want here.”

Another New Zealand tech company that has made the antipodean leap is website development business Rocketspark. In a case of Kiwi on Kiwi success the business won the Add-On Innovation prize at the Xero Awards 2015.

Director Grant Johnson echoes Wattie’s general positivity about the experience of establishing a foreign business on British soil. He does, however, have one warning for others looking to follow suit.

“Opening a bank account for a business here is a terribly slow process, but generally we’ve found it straightforward to set up our business here,” he says. “There are some good schemes to encourage private investment in new businesses here, such as the EIS and SEIS, that we don’t have in New Zealand.”

“I think that businesses in the UK are also really open to adopting digital technology from abroad, which is great for a new player like us.”

Johnson also believes that, both in business and socially, being from New Zealand does bring certain advantages.

“I might be a one eyed kiwi but I find that wherever I travel people are positive about NZ as a country and as people,” he says.

“There are plenty of us here in the UK and most brits have a kiwi mate or work colleague so we’re not unfamiliar and generally well-liked. The cultural differences are generally a positive too. We tend to be a little more direct speaking in NZ and while we do sometimes risk offending, the straight talking is generally appreciated.”

As well as the general sense of bonhomie, there are more specific technical advantages to having a base close to the majority of global clients.

“For a web business the time zone is a real advantage. Before we focused our business onto our DIY website builder, we did web development for larger companies too,” Johnson continues.

“A UK marketing team would have all day to get sign off on a project from a busy marketing director and then the team in NZ had all day to implement the changes. Similarly with our DIY website builder product we can provide almost around the clock support due to the time zones.”

Isolation breeds innovation

But new Zealand being so far from other technologically advanced countries has brought benefits that us Europeans, having been so connected for centuries, may not even have considered.

Johnson explains: “I think our isolation encourages innovation. We are not used to sticking with the status quo and world-class inventors in NZ are national heroes. Not quite like the All Blacks but very well regarded, so we grow up admiring innovators.”

And history supports claims of New Zealand’s zeal for innovation. Inventions from the country include the electric fence, jetboats and, appropriately enough for this weekend, the referee’s whistle. Perhaps the fact that it’s a Kiwi invention explains why their rugby captain Richie McCaw appears to be completely impervious to it.

David Downs experiences both the advantages and challenges this unique approach to invention brings when promoting the country’s export businesses across the world.

“Our international customers and allies often tell us that New Zealanders think differently and aren’t constrained by history and tradition like other cultures,” he says. “We’re actually really proud of that. We are a problem-solving nation – we don’t just accept that it can’t be done.

“Yes it can create challenges when operating in other countries where process and formalities are prevalent. Kiwis are used to working in a low bureaucracy environment where innovation flourishes and things move quickly, so it takes time for us to adjust to high levels of bureaucracy and to learn that in some countries it takes longer to get things done.”

Overall the future appears bright for New Zealand’s tech scene. As befits the character of the nation, the businesses are generally not ostentatious but innovative and effective. They are quietly going about making a name for themselves and establishing themselves in the top markets in the world. Soon the All Blacks will be able to stop ploughing a lonely furrow as the nation’s main global ambassadors.


Hywel Roberts

Hywel was editor of Growth Business in 2015 and then moved on to be deputy editor at Works Management.

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