How to unlock global growth: insights for NZ businesses
How is the way we think about growth limiting our global impact?
It’s May 2024. The government’s budget is revealed in a few short weeks and how NZ can double its exports is stimulating debate. That’s encouraging, because trade and exports are part of the economic base that funds our well-being. But as a percentage of GDP, exports have been trending downwards and it’s a number that’s historically been stubborn to move.
In my work with New Zealand Trade and Enterprise over the past three years, I’ve focussed on this too: how to grow companies bigger, better and faster. I look at this in two ways: what can individual companies do to grow, and how does the overall system either support or hold them back?
Going global vs being global
When kiwi businesses talk about “going global” they have usually tapped their potential customer pool in New Zealand and feel their natural next step is to move into other markets. But is this way of thinking limiting our true potential?
Even the words 'going global' or 'exporting' are loaded, implying a linear approach - build here, ship it off or expand outwards. Success can happen when - by chance rather than design - your product or service is a response to a domestic (NZ) problem that is also a global problem, and happens to also work globally. What’s less common is a New Zealand business that starts with a global problem and works back from that point - and this is where we are constraining our thinking and our opportunities.
Being there is everything
The reality is there’s only so much that can be learned from here - even with the plethora of information available online. The best insights come from experiences that fire up the senses, and inspire critical strategic thinking. I recently led a Discovery Tour for New Zealand Trade and Enterprise through Spain, exploring agritech and hort-tech innovation with a group of leading NZ organisations. The focus was very much on the macro forces grouped into six themes:
How can we align ourselves with global trends?
How can we understand customers and their needs across multiple markets?
How can we find our place and potential collaborators?
How can we make our brand stories resonate with customers and set us apart from incumbents?
How do we use data to embrace pace and scale without causing the wheels to fall off the core business?
What are our blind spots in relation to customer expectations, regulation and sustainability?
These questions are all about context and understanding your customer - difficult to grasp by watching YouTube, going to a seminar or reading a report. Difficult to do remotely. Compare this to many of our international counterparts co-located within a massive consumer market (Europe - 450m consumers, Asia - 4-5 billion). They’re (figuratively) sharpening their axes by coming face-to-face with each other in competition. The issues they’re facing are often the same as ours in NZ (climate change, water, shifting consumer demands), but they’re more pressing than they appear to be here and therefore the drive to innovate is stronger. For example Almería, in the southeast of Spain, is a rocky wasteland where it rains for a week or so per year and desalination plants abound. In this incredibly harsh environment drip irrigation, biological controls, circular irrigation and fertigation systems have been created to support surprisingly lush, productive and sustainable growing environments. 60 years ago, this was Spain’s poorest region, 70% of the population was illiterate, and biodiversity and sustainability were totally irrelevant. Today, 80% of capsicum growers use biopesticides and billions of Euros are funding research and innovation through government channels (the €96bn Horizon Europe fund) and other private capital. What opportunities or barriers does this create for New Zealand businesses?
A social innovation challenge
Despite today’s very inter-connected world, our geographic isolation can make us a little sheltered when it comes to understanding what consumers need and value in other markets. Perhaps it’s also a product of our hyper-independent, ‘Number 8 wire’ thinking - we’re used to getting stuck in and making something work, rather than asking around. Or perhaps we’ve got sucked in by our own hype - the persistent catch-call of the little country punching above its weight in the international arena.
Shifting from simply ‘taking our ideas to the world’ to a more collaborative, globally-focused problem solving approach is the change that needs to happen. One executive on the Spain Discovery Tour summed it up by saying, “New Zealand does not have a technical innovation challenge, but a social innovation challenge.” It’s about refocusing our cultural perspective, orienting ourselves globally, and building or strengthening connections in our innovation ecosystem from policy, through to funding, science and research, commercialisation and growth so we remain competitive.
Exporting is not a cheap exercise, and it can be a hugely risky step for firms, who face large fixed costs when entering foreign markets and are typically doing so when they’re relatively small. Despite the risk and cost, I’ve noticed many NZ companies are hesitant to spend money on market immersions or study tours, viewing them as time away from core business rather than a vital investment in market research that could multiply your impact, or stop you from going down a rabbit hole.
So what’s really going on? I would suggest the hesitancy to invest in them is related to a linear way of thinking about opportunities for the existing business (such as securing a new trading partnership, supplier or distributor). Those are absolutely important. But what’s missed is the possibility of a new idea or perspective that might leapfrog thinking or strategy, transform the business and enhance its chances of international success.
Get it in the budget and on the risk register
It’s possible to be in a market, to understand it and build relationships without a permanent setup. The organisations I’ve seen who nail market entry, achieve product market fit, and sustain growth, prioritise market and customer insight in their annual budgets including direct engagement with target audiences. They also use ‘brand NZ’ as a door-opener, but recognise our geographical distance is a potential risk and develop strategies to mitigate as part of business planning.
Our perspective and understanding of the context in which we operate influences everything we do in our businesses. It's more important than ever to be where your customers are.
