Agriculture is the vital core of New Zealand, driving its economy and shaping its stunning and diverse landscapes. It serves as a prominent link connecting New Zealand with the rest of the world, forming a significant bond between international communities.
New Zealand embraces an inherent culture of innovation, drawing inspiration from its indigenous roots, fostering on-farm creativity, and embodying the entrepreneurial spirit of every Kiwi striving to pursue their own ventures.
By merging agriculture and entrepreneurship, New Zealand has built an agri-innovation ecosystem that capitalizes on a diverse pool of technical expertise, extensive support from public and private entities, and a range of competitive advantages such as abundant resources, favorable climate conditions, and a robust global reputation.
What factors are preventing New Zealand from fully realizing its potential as an agri-innovation ecosystem?
An agri-innovation ecosystem in need of structure and guidance
Navigating New Zealand’s start-up ecosystem can feel like boarding a moving train through a window. Entrepreneurs have access to various opportunities, represented by different carriages, but must rely on self-navigation. Moving between carriages can be risky, especially for early-stage innovators. However, the lack of clear directions adds another layer of uncertainty, making it difficult to determine the ultimate destination and the path to get there.
The train carriages represent the comprehensive national innovation support framework in New Zealand. This framework encompasses various organizations and funding sources that contribute to the entrepreneurial ecosystem. For instance, AGMARDT offers seed funding of up to $30,000, Callaghan Innovation provides grants for summer internships, post-graduate student salaries, and innovation initiatives. Additionally, the Sustainable Food and Fibre Future’s Fund, New Zealand’s largest co-investment fund, allocates $40 million annually to support projects of different scales, ranging from smaller initiatives under $100,000 to multi-million dollar ventures.
In addition, the agri-innovation ecosystem in New Zealand benefits from a range of valuable resources and support. One notable example is Sprout, a specialized agrifoodtech accelerator that provides excellent opportunities for startups in the sector. Moreover, government agencies like New Zealand Trade and Enterprise and New Zealand Story offer access to marketing and export resources, enabling entrepreneurs to promote their products and expand into international markets. Furthermore, industry hubs like FoodHQ and the Food Innovation Network play a crucial role by providing access to state-of-the-art product development facilities and expertise in the field.
However, the challenge lies in determining where to begin among the multitude of organizations and agencies involved, how to effectively navigate through them, and, most crucially, what lies at the end of this journey. Presently, there is a lack of seamless integration and a lack of clarity regarding the next steps beyond the initial stages of receiving research support amounting to a few hundred thousand or million dollars.
This creates a significant challenge in terms of scaling success, especially when it comes to accessing the larger amounts of capital necessary for building a globally successful agri-innovation business
New Zealand has the opportunity to address this by establishing a well-defined agri-innovation journey that includes strategic entry and exit points within the innovation ecosystem. This would involve seamless connections with both domestic and international investment communities, creating a clear pathway along the entire innovation pipeline.
The Challenges of New Zealand’s Agri-Innovation Ecosystem
The innovation ecosystem in New Zealand predominantly relies on a network of railway tracks, limiting its potential for international collaboration and connection. The emphasis is primarily on addressing domestic challenges using local solutions, research, talent, and funding. When seeking global insights, the approach often revolves around replicating existing models rather than embracing the opportunity to establish a unique international innovation identity. This self-imposed limitation extends to funding grants that prioritize risk-averse approaches and scientific analysis, often overlooking the importance of considering the end market or consumer.
In the current landscape, entrepreneurs in New Zealand often face challenges in securing funding for in-market research, despite access to substantial amounts for compositional analysis and product development. This funding model needs to be reversed to align with the evolving demands of discerning consumers. The opportunity for New Zealand lies in fostering genuine and meaningful connections between every entity in the innovation ecosystem and its international counterparts. By doing so, the domestic ecosystem can be transformed into a truly integrated global network, enabling seamless global market connections and facilitating the bi-directional flow of entrepreneurial talent.
Running a High-Speed Train on a Limited Budget: Bridging the Gap in New Zealand’s Agri-Innovation Ecosystem
New Zealand’s investment in research and development (R&D) falls significantly short, with only approximately 1.4% of its GDP allocated to R&D. This is considerably lower than the OECD average of around 2.4% and lags behind leading agri-innovation countries like Israel, which invests a remarkable 5% of its GDP in R&D.
The deficiency in R&D funding is evident not only in the limited support from the government but also in the relatively low level of investment in internal or venture capital by major agribusinesses that hold a significant presence in the New Zealand agricultural sector.
Despite the constraints of limited funding, New Zealand has managed to achieve noteworthy outcomes in terms of research papers published, product development, and the establishment of startups. However, the country is not fully capitalizing on the potential of its R&D impact and the growth potential of businesses that could make significant economic contributions and have a greater positive influence on the international stage.
New Zealand has a unique opportunity for both the public and private sectors to purposefully increase their investment in innovation to a significantly higher level of ambition, aligning with its peer nations. With agriculture at the core of the country’s identity, New Zealand possesses several elements of a world-leading agri-innovation ecosystem. By fostering strategic collaboration, strengthening international connections, and demonstrating a commitment to investment, New Zealand can unlock its full potential and emerge as a global leader in agricultural innovation.