Opinion: Shrinking world highlights challenges for Kiwi innovators
Global opportunity for New Zealand innovators is tempered by the challenge of conducting appropriate communications and finding the best distribution solution. Cultural influences play a sizeable role in communicating messages through modern mediums and supply chains can dictate the success or failure of products irrespective of quality.
Today we are increasingly connected with people around the world thanks to changes in technology. The tyranny of distance not only appears to have been defeated, but at a very low cost.
Once, Kiwi innovators seeking to build relationships with overseas partners and customers did so gradually, learning how to negotiate local laws, tastes and customs, possibly with the help of New Zealand Trade and Enterprise on the ground. Managers at the front end often visited partners and customers to understand foreign markets, develop trust, cement reputation, and communicate the value that their products and services offered.
Technology has made processes quicker and cheaper, lowering the costs of information gathering and allowing anyone, anywhere to contact each other directly and spontaneously but quick is not the same as quality communication. ‘Lost in translation’ experiences can damage months or even years, of careful relationship building in an instant. Whilst Kiwis generally have low tolerance for hierarchy and formality, ignoring the importance of these with some overseas partners can be damaging.
Whilst video conferencing lowers the costs of meetings, some cultures still expect an investment in relationship building, and the form of the contact can be more important than the content.
These changes bring new opportunities for internationalisation, with ‘born global’ innovators finding their first customers overseas, and identify foreign contract manufacturers offering low cost opportunities for Kiwi entrepreneurs to enter markets.
In addition to the risks of multi-cultural communication, exporters also need to be wary of a second problem, this one posed by hardware. Global supply chains are increasingly packaged as end to end information systems, giving the majority of power to the provider. Although joining a system can allow rapid expansion through expanded distribution, powerful players can strip out the value for their own profit. For example, Apple and European supermarkets can dictate their terms, driving down the profits of suppliers. On the flip side, these powerful network controllers are willing to pay for value and innovation. Weaknesses will be exposed quickly and ruthlessly in the global arena, but partnering with the right provider can pay dividends. Being aware of potential pitfalls should make innovators think more carefully about their value proposition, and the importance of communicating this carefully.
More than ever innovative Kiwi companies looking to internationalise need to study how to overcome these issues, but the potential payoff can be global success.
By AUT University Associate Professor of International Business Simon Mowatt. Simon Mowatt appears this week at Project15 at AUT. The theme of the conference is ‘Taking New Zealand innovation global’.
Project15 is a collaboration between founding partners AUT University, The US Embassy and Social Media New Zealand.
For more information, to purchase tickets or for speaker bios, visit www.the-project.co.nz.