Foreign Policy magazine says aspirations for a less oil-dependent world, and for a more prosperous one, are colliding in a global race for a better battery.
The battery could be part of a half trillion US dollar electric-car industry capable of spawning companies on the scale of ExxonMobil, General Electric, and Toyota.
This, as Foreign Policy points out is the stuff of creating or remaking whole economies and the rebalancing of political power.
As you’d expect the Chinese are on to it.
FP says that China, starting virtually from scratch, wants to become the world’s largest producer of battery-powered vehicles within the next few years.
This is based on the recognition that “the world doesn’t just need a better car — it also needs a better means of building and sustaining economies”.
And as usual you need to take Chinese ambition seriously – very seriously.
Similarly with the Singapore Stock Exchange’s A$8.1 billion offer to buy its Australian counterpart, the ASX.
As the Sydney Morning Herald points out “The real issue is ambition”.
Build it and they will come is a common fallacy among NZ businesses.
How come?
Owen Scott from technology marketing company Concentrate says in a look at Energy Mad and their low-energy light bulbs: “If being brilliant at making bulbs was all [they] could do, it wouldn‘t have been enough to so comprehensively defeat huge companies such as Philips in the NZ market”.
Scott’s Dom Post piece says Energy Mad have grasped the “elusive marketing truth that business success is not about what you produce, but what you deliver for the customer.
“More Mad Men of this ilk … are what NZ needs to prosper as an exporter of smart products.”
But why’s this truth so ‘elusive’?
BigCake’s theory is that there’s a cultural thing going on.
A while back I did a series of posts on the Kiwi cultural legacy comparing the founding of the US and European settlement of NZ.
The Pilgrim’s first ship, The Mayflower’s short manifest included tailors, a merchant, a doctor, printer and people of learning.
One of the early Pilgrims wanted to create a colony “as a city upon a hill”. New England went on to become a centre of learning, commerce and trade.
So we come to New Zealand – who are our immigrants and what’s their cultural legacy?
Famously our dream was not “a city upon a hill” but to become “Britain’s farm”.
BTW – there is evidence that by international standards we are not very good at marketing.
The World Economic Forum’s Business Sophistication index (2008-09) which looks at the sophistication of marketing tools and techniques of various countries ranks us 21st in world with a score of 5.3 versus a mean of 4.2. (Australia scored 5.5.).
Geoff Ross has once again nailed the importance of ‘clean and green’ to the branding of NZ products and services. Over in the other corner, mixed messages again from the farmers.
“Provenance matters in brands more than ever,” the founder of 42 Below says in yesterday’s Dominion Post.
“In 2 weeks time I will be in the US selling Natural Home Fragrance and Bath products [nice product placement Geoff]. I can tell you, in doing this, I am glad I am from NZ and not China or India. NZ’s environment gives us an advantage. It’s time to make this advantage bigger.”
In the same piece, which looks at Department of Conservation head Al Morrison’s call for a wider measure of our country’s progress than just gdp, Fonterra’s group director of external relations, Kelvin Wickham describes farmers as “caretakers of the land for generations”.
Now caretaker is a good word. It implies the farmers are only temporarily in charge of the land and have a responsibility to look after it for those who follow.
Most farmers are great at this, but what are they seeking to pass on? – It’s the farm as a profitable business.
Like Morrison said – “Creating an environmental mess is good for gdp.”
Or like the other Morrison – Jim – wrote more poetically:
What have they done to the earth?
What have they done to our fair sister?
Ravaged and plundered and ripped her and bit her
Stuck her with knives in the side of the dawn
And tied her with fences and dragged her down
[When the Music’s Over]
Okay, a bit extreme but I saw the result of this attitude to the land when I recently drove from Wellington to Turangi and saw the massive scars from slips on farmland. Farmers had been sacrificing the land for the extra dollar.
Some brands don’t implode because of a big cock up like BPs, they die a slow death of a thousand cuts which is what NZ’s clean green image is in danger of doing.
And the farm leadership, well Federated Farmers anyway, doesn’t get this – not really, like deep down. They say they do, but judge them by their actions.
The Fed’s President Don Nicholson for one appears antagonistic towards clean and green.
Given the opportunity to ask PM John Key any question he liked, Nicolson came up with:
“Do you categorically know if our assumed ‘clean and green’ and ‘sustainable’ brand is a primary reason why consumers in the growing markets of Asia, the Middle East and Africa buy New Zealand food products and if not, why not?”
Key gave a pretty much standard (and correct) answer about ignoring environmental concerns of customers at our peril, citing the UK, US and Europe, then saying the customers in the markets Nicolson mentions will eventually have similar concerns.
To be fair, not all farm leaders see the world in same way as Nicholson. Fonterra CEO Andrew Ferrier predicated his question on the need for an international consensus on how to increase economically and environmentally sustainable production. He asked how can we do both?
Which is a much better question.
The questions in the Sunday Star Times’ “Dear PM” piece in yesterday’s paper revealed more than John Key’s answers.
Brian Tamaki asked him about getting advice from spiritual leaders, Oscar Kightley about the future of Pacific peoples and John Banks asked if the PM saw Auckland as the “aspirational capital of New Zealand?”
Presumably the questioners could ask PM whatever they liked, so what does Fed Farmers President Don Nicolson ask? A loaded question about clean and green:
“Do you categorically know if our assumed “clean and green” and “sustainable” brand is a primary reason why consumers in the growing markets of Asia, the Middle East and Africa buy New Zealand food products and if not, why not?”
Key gave a pretty much standard (and correct) answer about ignoring environmental concerns of customers at our peril, citing the UK, US and Europe, then saying the customers in the markets Nicolson mentions will eventually have similar concerns.
Consumers in Asia (not sure about the Middle East and Africa, but it’s a fair bet it’s the same) don’t particularly buy our food and beverage products because they are seen as clean and green, they buy them because they are regarded as safe.
Food safety is the big issue. But it’s wrong to see clean and green and food safety as somehow two different issues.
Food safety is hugely tied up in clean and green. You can’t be dirty and safe.
And New Zealand’s brand is clean and green in these countries – this is not assumed.
And as countries in Asia, the Middle East and Africa become more wealthy, they’ll become less concerned about food safety (like Kiwis now, they’ll regard it as a given), and will be following Western countries in concerns about carbon foot prints, how water is used and other sustainability issues.
New Zealand’s farmer leaders – well mostly dairy ones actually – seem determined to stay in (and win) the race to be the world’s lowest cost producer, cramming more cows into every available hectare, regardless of the consequences to the environment and the clean and green brand.
It’s not a war they are going to win.
Clean and green is not seen as an asset to be protected and built on, but one to be shat on on the way towards an imagined farmer salvation in land where the cow rules.
To be fair, not all farm leaders see it this way. Fonterra CEO Andrew Ferrier predicated his question on the need for an international consensus on how to increase economically and environmentally sustainable production. He asked how can we do both?
Which is a much better question.
These guys (are there any gals?) apparently don’t believe the 100% Pure brand is something less than 100%.
Geoff Ross (Ecoya and ex 42 Below) and Phillip Mills (Les Mills) have pulled together business leaders into the “100% initiative” to push sustainability as a Kiwi business strategy.
Apparently they want a cleantech taskforce – why not, every man and his dog has one.
Anyway, Idealog have more on the 100% initiative here.
Look forward to hearing more from 100%, though interestingly they’ve been operating below BigCake’s radar at least.
Ross doing something without a publicity angle?
An interesting way of looking at climate change, mining, dirty dairying and other economic debates of the moment is to see them in terms of ‘expanders’ versus ‘restrainers’.
Dunno if this guy was the first to see the world this way, but UK Guardian correspondent George Monbiot sees climate change as the first great battle (and by the way, a battle to “redefine humanity”) between these two camps.
BigCake thinks seeing the world like this is both useful and a waste of time. Useful because at simplistic level it captures the guts of the debate.
But in the end it’s about as much use as capital versus labour, left v right, good v evil, black v white.
In the real world there are grays. Like BigCake you can be a restrainer and a expander at the same time.
Technology allows us to expand and restrain at the same time. This is what clean technology such as wind, solar and tidal power does.
The Global Research Alliance which aims to produce more food with fewer emissions is another example.
The real battle is over whether there is enough time for this type of technology to establish itself in sufficient size to stop the world’s climate entering a death spiral.
In this battle there are restrainers in the expanders camp.
Anyway, surveying the battlefield ahead of Copenhagen, Monbiot saw the armies drawn up for the “first great global battle between expanders and restrainers”.
It was one that must be won, he said along with the ones that were to follow: rising consumption, corporate power and economic growth.
Guess George is in the restrainers camp. “If governments don’t show some resolve on climate change, the expanders will seize on the restrainers’ weakness. They will attack – using the same tactics of denial, obfuscation and appeals to self-interest – the other measures that protect people from each other, or which prevent the world’s ecosystems from being destroyed.
“There is no end to this fight, no line these people will not cross. They too are aware that this a battle to redefine humanity, and they wish to redefine it as a species even more rapacious than it is today.”
Has this guy been reading Churchill or what?
The Copenhagen climate change talks were messy, chaotic and the results underwhelming, but from New Zealand’s perspective they coughed up a huge opportunity which if we fully exploit could be game changing for our economy.
Tomorrow and Thursday 80 international scientists and policy analysts (yeah, that bit is scary) meet in Wellington for the first gathering of the Global Research Alliance which aims to produce more food with fewer emissions.
New Zealand is becoming less green, and that’s a big danger to our clean and green brand. The alliance is an opportunity to become a whole lot greener.
Our cows, sheep and other farm animals are responsible for about half of our green house gas emissions. Worldwide agriculture represents about 15% of emissions, but at the same time along with forestry, the sector can also help off-set emissions.
Reducing our agricultural emissions and having the ability to increase stocking rates without sh!tting on the environment matters to New Zealand big time.
Our food exports (not entirely, but mostly sourced for farting, belching cows and sheep) are worth more than $20 billion.
Get it wrong, as many in the farming community appear intent on, and our dairy, beef and sheep products will be shut out of markets, not necessarily by governments putting up trade barriers, but by supermarkets only stocking products that tick the right environmental and social boxes.
Recent publicity appears to downplay New Zealand’s role in setting the Alliance up, but our current Government can take much of the credit.
We need to continue this leadership when the research gets underway.
The alliance represents a once in a lifetime opportunity for New Zealand to be at the centre of world-leading research.
The Government has announced a $45 million investment (over 4 years) in the Alliance.
It has also investing $5 million a year in Palmerston North’s Agricultural Greenhouse Gas Research Centre.
The US has announced it will contribute US$90 million (NZ$127.5 million) over four years to the Alliance.
So while our contribution looks small, there’ll be big bucks to play with.
This week’s meeting hopes to sort out working groups, develop a process for a stocktake of existing research and discuss priorities.
Dunno if the Government sees the Alliance this way, but here’s hoping that behind the diplomatic talk of “international cooperation and collaboration” there’ll be a hard sell of New Zealand’s abilities.
In the Dominion Post, Phillip Mills, executive director Les Mills International, talks up the prospects of New Zealand’s clean technology sector.
Not sure where and when the head of the purveyor of the “world’s best group fitness formulas” got converted to cleantech, but he’s right about the opportunity such technologies represent for New Zealand.
He sees the sector as “an entirely new economic engine to power us into the future.
“This isn’t just another short-lived green fad. It’s commonsense capitalism that benefits us all.
“Cleantech is an area in which New Zealand has many comparative advantages – if we move fast enough.”
Mills believes New Zealand agriculture and renewable energy cleantech businesses have an opportunity to “do a Denmark”. The Scandinavian country championed wind energy and now supplies more than half the world’s wind turbines.
But there are challenges for New Zealand cleantech companies even in dirty countries like China which are spending a lot of money on the problem. I recently wrote a piece for the Asia New Zealand Foundation on this:
“Massive official funding of environmental projects in China presents huge opportunities for New Zealand clean-tech companies on the one hand and significant challenges in realising them on the other.
“The financial risks also are in some ways even greater than for companies exporting more traditional goods and services, because of the long lead-times before investments generate revenue. This has not, however, deterred a small band of trailblazing New Zealand companies from taking up the challenge.
But… “As at the end of 2009, some of these projects had only generated costs of the six figure variety…”
We haven’t always been very good at leveraging our competitive advantages into worthwhile international commercial enterprises (talking billion dollar businesses here, so wine’s one honourable exception).
Maybe this time.
One opportunity is through the Domestic Centre for Agricultural Greenhouse Gas Research and in the Global Research Alliance to lead the world on reducing agricultural greenhouse emissions.
Time to leverage all that sh*t.
