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26
SEP 10

Culture Matters




The dog days of the global financial crisis are slowly forcing a realisation on the world that the liberalisation agenda captured in the Washington consensus is open to question; and that chasing lowest cost comparative advantage might not be the best answer particularly for small economies.


http://www.johnwalley.co.nz/71-imf_says_more_to_growth_than_i.aspx


In the New Zealand context; low productivity, absent leverage of innovation, low levels of intellectual property resonate at aggregate levels but how do these comments translate at the level of the individual firm. Any firm that can stand in a global market demonstrates world class ability in that market – there are such firms in New Zealand sadly they are the exception. Innovation takes time, growth takes time: innovation and growth exists in the context of the firm, the local and the global market.


http://www.mea.org.nz/documents/38-innovation_growth_and_the_high.pdf


Innovation is intensely context specific, small domestic markets, inimical policy settings, shallow capital markets, customer quality, government intervention and tertiary sector structures form a complex innovation ecosystem.


The best firms play the game inside that ecosystem, making the most of rules from one jurisdiction to the next. One example if a New Zealand firm has a product that needs a huge population base to succeed, needs an effective science system to develop, needs a supportive science funding system choosing the right jurisdiction, approach and partners might be the most important steps in that commercialisation trajectory.


Given a product, the market access and cultural fit become important. In the electrical product area culture might be nominal mains voltage and what that implies in product design and standards development and harmonisation, they makes Europe a closer cultural fit to New Zealand than say the USA. In terms of open markets the creation of a single market in Europe has (for internal reasons) dealt with technical barriers to trade from outside Europe. Mutual recognition agreements, standards harmonisation and self-certification have long opened market access to New Zealand products into Europe.


Where next, how next will be questions that confront ambitious exporters, the answer depends on the product or service – the answer, as always, is it depends. For a mains electrical product Europe is likely to have fewer problems than the USA in terms of technical fit, Europe is likely to have fewer problem is terms of technical barriers than Asia. On the other hand selling software as a service from New Zealand the USA has an easier time zone overlap than Europe and sales can all be in English.


Generally free trade is not free, agricultural products see massive subsidy in the developed world and elaborate products see significant tariff barriers in the development world. Services face a patchier picture – picking your way through can make the difference between success and failure. Step one is complete once it is understood that each market will present different issues and the trick is to begin with the easiest set of problems first exploiting any opportunity that exists in the rules at home and the rules offshore.
 


tags: culture, innovation, policy, export growth
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