How effective is the Covid-19 Recovery Fund?

How effective is the Covid-19 Recovery Fund?

Two-thirds of New Zealand business leaders say they are concerned that the $62 billion Covid response and recovery funds are being used wider than initially understood.

The Government’s latest financial update showed there was just $5.1b left unallocated for any future health and economic response needed in case of a further Covid-19 resurgence.

Criticism has been lobbed at the Government for tapping the response and recovery fund for increasingly tangential “Covid recovery” spending.

“The fund itself was a great initiative,” says Cameron Bagrie managing director of Bagrie Economics.

“The deployment to where needs questioning. A major issue is how much of that fund is now permanent spending as opposed to temporary use of fiscal policy.”

“A lot of it is very low-quality spending,” says Datacom chair Tony Carter.

Many of those who responded to the Herald’s CEOs survey expressed specific concerns that the spending is not on high-quality projects.

Workplace vaccination, the carrot or the stick?

Workplace vaccination, the carrot or the stick?

In the United States, many workplaces now require their employees to be vaccinated.

In an aggressive effort to get the pandemic under control, US President Joe Biden has directed businesses with 100 or more employees to prepare to request proof of vaccination or test employees weekly for Covid-19. By the end of October, all US government employees must be vaccinated.

A significant 74 per cent of New Zealand CEOs say they can envisage a situation where most employers will require their staff to be vaccinated against Covid-19 to protect the safety of the wider workforce.

Just 12 per cent say they can’t see this happening, and 14 per cent are unsure.

Fletcher Building chair Bruce Hassall says that “increasingly we will see New Zealand businesses rolling out vaccination policies that start with ‘we strongly encourage their people to get vaccinated’, then ‘we expect people to get vaccinated’, followed by ‘we will require their people to get vaccinated — our customers will expect nothing less!”

Says Fulton Hogan group CEO Cos Bruyn: “It cannot impinge on freedom of choice requirements, however most employers will react to customer requirements.”

Beca CEO Greg Lowe says vaccination will be required for certain activities, with travel being the first.

Vaccine incentives spurring workers to get shots

To encourage vaccine uptake, 33 per cent of respondents to the Herald’s Mood of the Boardroom survey say they either have incentives or plan to implement incentives for their staff to get vaccinated against Covid-19.

Many of those say they are giving leave for employees that get vaccinated or some other allocation of additional holiday pay. Others are providing an additional carrot with extra cash payments or vouchers for vaccination, and even a lottery for the month based on the number of vaccinations done.

Westpac is providing two half-days of leave to get shots and has also given an additional day of Covid leave for staff to use before the end of the year to help support families to get vaccinated. The Warehouse Group is offering a one-off payment of $100 to all fully vaccinated employees across its businesses.

Spark CEO Jolie Hodson says her immediate priority is to encourage all staff to get vaccinated, by making it as easy as possible for them to do so. “We will look to host vaccinations on site, as we do for the standard flu shot, and will consider if we need to do anything further than this in time.”

Z Energy chief executive Mike Bennetts says, “We will ensure that staff are able to prioritise this ahead of their work responsibilities.”

Beca’s Lowe says all staff are being encouraged to get vaccinated, and Beca is working to provide on-site vaccination as well as the use of community clinics. “Our people understand the need to get protected,” he says.

A director says one of her organisation is providing minibuses and other transport logistics to help get staff to vaccine centres during work hours.

But there is still a significant number of executives — some 59 per cent — that say they have no plans to offer incentives to staff to get vaccinated, and the rest (8 per cent) are unsure.

“They know they will be the first to be laid off if another lockdown puts strain on staff numbers,” says an education provider. “We should not be incentivising, we should be waving the stick to those who place workplace and nation at risk — drop the ‘kindness’.”

Says one investment director: “Our staff are intelligent people who are used to managing their lives without a ‘big brother’ approach.”

From a food producer: “Surely the need is compelling enough.”

Business confidence on the rebound

Business confidence on the rebound

Confidence has rebounded in the 2021 Mood of the Boardroom after record low levels in last year’s election survey.

Cumulatively, respondents to the Herald survey rated their optimism in the New Zealand economy at 2.70/5 — up significantly from last year’s score of 1.36/5.

A professional director notes that 12 months ago, the forecasts of unemployment, debt and GDP were completely at odds with what has since unfolded: “The outlook is substantially more positive, and this will continue, assuming we complete our vaccine rollout by year end and start relaxing border restrictions in the first quarter of next year.”

But Cathy Quinn, a director of Fletcher Building and Fonterra, says she is less optimistic about the New Zealand economy, as she cannot yet see the game plan for New Zealand to open up to the world again.

“The rest of the world is already opening up borders again — albeit with conditions as to which countries. Evidence of Covid-19 vaccination, pre-departure and arrival tests etc.,” she says. “I fear if New Zealand does not do so similarly in 2022, our economy will suffer as well as the wellbeing of Kiwis.”

Auckland Business Chamber CEO Michael Barnett says prior to Covid-19 there were some sectors that were driving the New Zealand economy. “If we are smart, we will relaunch our economy on those sectors that were doing well and be creative about reinventing those sectors that were not.

“Internationally, we need to be wary of small economies protecting themselves and introducing non-tariff barriers to do so.”

Newshub Nation panel discussion (video)

It was nice to be back on the Newshub Nation panel this weekend with Ella Henry and Dileepa Fonseka, talking about opening the border, climate change, and a few laughs about the Winston Churchill painting controversy!
As New Zealand starts its journey to open to the rest of the world world, it was interesting to reflect on technologies being implemented globally that could play a part in NZ’s response:
🎤 The increased use of micro-influencers, particularly in the United States, to reach out to small pockets of communities that are vaccine-hesitant and allay concerns.
📌Wristbands (Singapore, South Korea, Hong Kong) and geotagged facial recognition (Western Australia) for ensuring home quarantine.
📱 Linking the Covid tracer app to vaccine status so that entry requirements can be varied based on risk and are validated when you scan into a venue (such as in Singapore, which requires double vaccination to enter restaurants, but a lesser requirement for office spaces).

 

New Zealand Institute of International Affairs 2021: Prime Minister Jacinda Ardern interview (video)

Interview with Prime Minister Jacinda Ardern at the New Zealand Institute of International Affairs 2021 conference, ‘Standing in the Future: New Zealand and the Indo-Pacific region’ with co-hosts Tim McCready and Ziena Jalil.

 

New Zealand Institute of International Affairs 2021: Kurt Campbell interview (video)

Address and interview with Kurt Campbell, White House Coordinator for the Indo-Pacific, at the New Zealand Institute of International Affairs 2021 conference, ‘Standing in the Future: New Zealand and the Indo-Pacific region’ with co-hosts Tim McCready and Ziena Jalil.

 

New Zealand Institute of International Affairs 2021 conference opening (video)

Opening of the New Zealand Institute of International Affairs 2021 conference, ‘Standing in the Future: New Zealand and the Indo-Pacific region’. Co-hosts Tim McCready and Ziena Jalil.

Agribusiness Report: Why care is a consideration, according to NZTE

New Zealand has relied on tourism as a way of keeping us alive in the hearts and minds of global consumers.

Research released by New Zealand Trade and Enterprise (NZTE) in April revealed that the five major challenges New Zealand exporters are grappling with are: building brand awareness, finding the right partners and channels, dealing with strong overseas competition, understanding how destination markets differed from New Zealand markets and each other, and determining the right export pricing strategy and product-related costs to remain competitive and profitable.

All these challenges have been heightened during the Covid-19 pandemic, particularly brand awareness and developing the right business connections, given there is no international travel.

NZTE’s “Made with Care” campaign aims to help lessen these barriers. Launched in October 2020, the campaign has been designed to grow awareness, preference and demand for New Zealand food and beverage products in key markets offshore, and share New Zealand’s commitment to being a trusted, sustainable global food source. It provides New Zealand food and beverage exporters access to a suite of free, ready-made marketing assets to use in their own sales and marketing efforts.

The campaign is part of a wider “Messages from NZ” country brand campaign — a New Zealand Inc effort to raise our international profile in key markets across trade, education and tourism with international consumers, buyers, and investors to help rebuild our economy.

To establish the Made with Care campaign, NZTE joined forces with Tourism New Zealand, Ministry for Primary Industries, Education New Zealand, and New Zealand Story, building on the positive sentiment felt toward New Zealand and raising the international profile of the New Zealand brand across priority markets.

NZTE’s lead for food and beverage, Craig Armstrong, says the openness of all organisations to work differently has been the key to the campaign’s success.

“We have borrowed a lot of tourism people for the last 15 months to make this work — it’s been fantastic,” he says. “It really became a partnership to say: ‘Well, how can we promote New Zealand products, as opposed to promoting New Zealand as a destination?'”.

Armstrong says businesses were telling NZTE the biggest issue for them was not being able to be in market to talk to buyers and consumers.

“What we realised was that we could use this budget to talk to shoppers and buyers at a time when New Zealand businesses could not get there and do it themselves.”

The Made with Care campaign includes paid media, social campaigns, and a suite of creative assets including templates, logos, stories, videos, and vignettes that businesses can use as part of their own marketing.

Since its launch, over 340 companies have been involved in the Made with Care campaign — by using the free marketing assets made available, or by participating in promotions managed by NZTE in Australia, China, East Asia, the United Arab Emirates, the UK and North America.

NZTE says because of the campaign, preference and appeal measures for New Zealand food and beverage are trending slightly upwards. As an example, after a short burst of promotional activity in the UK, spontaneous awareness of New Zealand as a country that produces premium quality food and beverage increased 5 per cent, with 57 per cent of research respondents stating they have either bought or are considering buying food and drink from New Zealand because of seeing the campaign.

In North America, awareness of New Zealand food and beverage increased by 10-14.5 per cent across seafood, wine, meat, and honey.

Armstrong says he has been surprised by the results and the cut through the campaign has had with consumers internationally.

“When you reflect back on it, we managed to get what can be at times a very competitive industry to work together and agree on something.”

Underpinning the Made with Care sentiment, and what distinguishes New Zealand food and beverage products from others, is the principle of Taiao — the interconnectedness of our people and the natural world.

The values of Kaitiakitanga (guardians, caring for people, place and planet, now and for future generations), Manaakitanga (caring for others and showing hospitality, kindness, generosity, support and respect) and Ingenuity (challenging the status quo with original and bold solutions) are also woven throughout the campaign messaging.

This interconnectedness of people and the natural world, and the desire for sustainable, safe and innovative products are all aspects of the megatrends that are currently shaping the industry, and Armstrong says the desire for these attributes have all been accelerated due to the pandemic.

“What Covid has done is really bring forward consumers’ changing preferences by years — whether that is five years, six years, 10 years… I’m not quite sure,” he says. “But what we are seeing now is a need or a preference from consumers that is playing into New Zealand’s hands. We are a very ethical producer of food, treat our people well, treat our animals well, and generally treat our land well.

“We have got to be able to tell that story and be able to capitalise on what most advanced and developing economies now care about.”

He says telling that story is critical, and that most of the growth from exporters is not hampered because we are not in the right markets or don’t have the right product, but rather because people don’t spend any money on marketing and telling their story.

“Look at the results we are getting through the Made with Care campaign,” he says. “Those kinds of numbers should give you an indication that if you invest in marketing and look at it as an investment, rather than a cost, you will get a return out of it.”

Insights into key purchase drivers from 14,000 international shoppers

NZTE partnered with global research and insights company Kantar to identify key purchase drivers, supported by insights into behavioural and emotive needs of the primary household shoppers in Australia, China, Singapore, Japan, United States of America and the United Kingdom.

With Kantar, NZTE conducted an online survey with household shoppers in January/February 2021 to examine what’s driving purchases within eight different F&B categories and 29 sub-categories, including meat, fruit and vegetables, dairy, seafood, alcoholic beverages, non-alcoholic beverages, sweet snacks and vitamins, minerals and supplements/mānuka honey.

“We learned that eight attributes drive consumer purchases: tasty, affordable, trusted brand, safe product, healthy, fresh, ethical and on-trend,” says NZTE’s Craig Armstrong.

“Those may sound obvious, but we must understand our consumers rather than base what we do off assumptions. Plus, there is a huge amount of depth and data behind these insights.”

Armstrong says the research found five key paths that companies could take to capture a premium: ethical, on-trend, health, safe product and trusted brand. However, he says these vary depending on the market and category, so how businesses construct and communicate their offer needs to be tailored.

“For example, China is influenced by health and safety; Japan by health, taste and freshness; Singapore contains a broader spread of drivers; while Western markets are more driven by affordability, taste and trusted brand.

“However, affordability and taste do not pull in a premium whereas there is real potential for ethical and on-trend purchases to do so, particularly in the US.”

Locking in brand sustainability

David Babich, chief executive of Babich Wines says they have seen a 4 per cent lift in website traffic over the time Made with Care has been running.

“While not double-digit growth, it is off good base traffic and in an environment where the investment (hence competitiveness) in this area has been intense due to the global constraint on face-to-face.

“As an exporter you have to make an investment in travel and visiting customers. While people understand the reasons why we can’t visit, the time that you can get away with not doing that is fundamentally finite.

“We are going to hit two years without visiting our customers, and meanwhile other competitors are either domiciled in the market or have face-to-face market access because of their own infrastructure — especially the large players.

“We have four people in the US, three in China, one in the UK, so we are not without representation in our key markets, but we don’t have an enormous team to continue to push our message relentlessly. A lot of other NZ companies are in that situation.

“Since we can’t put a billboard in Times Square, social media has worked particularly well for us to market to the world and get our brand messaging out.

“What has resonated for us in the Made with Care Campaign is that one of our brand platforms is sustainability.

“We lock right into that.”

Agribusiness Report: Plant & Food working to increase fish production

Open ocean aquaculture

Plant & Food Research, a Crown Research Institute, is working on ways to increase fish production through open ocean aquaculture.

Global demand for seafood continues to grow, but if production remains static, supply will fall massively short of demand. Managed sustainably, mobile oceanic fish farms off New Zealand’s coastline may soon provide a means to supply nutrition and sustenance to the world.

Suzy Black, Open Ocean Aquaculture Direction leader at Plant & Food Research, says the research programme is taking a unique approach by looking at the idea from the point of view of fish. “We are asking ‘what do they need to be at their best?’ This means understanding fish needs and behaviour and incorporating that into the design.

Black says the team is taking the knowledge it already has about near-shore aquaculture and making it more sustainable for the ocean.

“Our approach is a bit different from what you see overseas where ocean aquaculture systems are mostly enormous structures built to withstand harsh ocean conditions.
“We are taking a mobile approach and trying to work with the environment, rather than against it,” says Black.

The mobile prototype is still in development, and it is too early to know what it might look like. But Black says the aim is to move the systems around the ocean autonomously so fish can experience the temperatures, currents and water quality to ensure they are in the best environment year-round.

“If this takes off, there is so much opportunity for Aotearoa,” she says. “This has the potential to create a whole new sector with new technologies, new industries and regional jobs”.

The open ocean aquaculture work is being done by scientists at Plant & Food Research in collaboration with science organisations overseas and in New Zealand, including Cawthron Institute and the Universities of Auckland and Otago. The programme is funded by the Ministry of Business, Innovation and Employment and Plant & Food Research’s internal Growing Futures investment.

Extracting protein from pasture

Generations of New Zealand farmers have excelled at growing pasture for livestock. The leaves of these crops are rare examples of plant proteins with a full complement of essential amino acids — the building blocks of proteins that humans need to keep their bodies functioning.

In response to the increasing population of people looking for plant-based protein, Plant & Food Research is looking into different ways to harness the goodness of plants.

“It’s important for Aotearoa New Zealand’s economic future that the food industry develops new plant-based food options for consumers, creating a wider portfolio of products and reducing our reliance on animals for both our own diets and for export,” says Dr Jocelyn Eason, GM Science Food Innovation at Plant & Food Research.

“The challenge in being so far from our major markets is that our export products need to be of high value, compared to alternatives. We can’t produce commodity plant protein ingredients, like pea or soy protein ingredients, for export as our competitors operate at scales we cannot achieve.

“We need something extra, something we can market as uniquely Kiwi, such as ingredients from plants that offer more or capitalise on our reputation for innovative sustainably-grown foods.”

Eason says by incorporating these crops into rotational farming practices, we could create a food protein ingredient with the unique characteristics needed for the New Zealand food industry and with positive sustainability credentials.

Proteins from plants could be used as foundation ingredients in a range of different manufactured foods, such as protein-fortified beverages, nutrition bars or healthy foods for seniors. They could also be used to create new vegan-friendly meat alternatives, providing the full range of essential amino acids in one product.

A side-benefit of extracting protein from plants traditionally used in animal feed is reducing the amount of protein in the diet of stock. The by-products of the isolation process still have nutritional benefits for animals but, by removing some of the protein — the compounds responsible for the nitrogen expelled in urine — the amount of nitrogen leaching into soils and waterways is reduced, improving the impact of animal farming on the environment and enhancing New Zealand’s clean green reputation.

High value marine molecules

Cyber Physical Seafood Systems (Cyber-Marine) is a research programme led by Plant & Food Research that is looking at extracting high-value molecules from seafood during processing. The idea is to create automated multi-operation flexible factories, monitored by artificial intelligence (AI) sensor systems. These factories will analyse seafood as it enters the factory and determine the best way to process it to achieve 100 per cent utilisation and maximise the value for all harvested wild and aquaculture seafood.

By making use of all raw material, this will allow the industry to achieve growth targets without increasing catch volume from wild-capture fisheries, as well as maximise value from increasing aquaculture. It is envisioned that once established for the seafood industry, the technology could be adapted for any bio-industrial process.

In addition to its role as a food source, seafood contains a range of marine molecules with special properties. They range from big structural proteins for biomedical scaffolds, through to anti-inflammatory omega-3s, and blood pressure-lowering or anti-aging peptides.

“Many of these molecules can be found in marine by-products and by-catch, so by extracting them for new products our seafood industry can grow without affecting seafood availability or needing more fish to be caught,” says Dr Susan Marshall, leader of the Cyber-Marine programme.

“It also ensures that we can use all of the biomass grown through aquaculture, not just focus on the food portion. The challenge is how to efficiently extract everything from really diverse marine organisms that contain different types and combinations of the molecules, whilst not destroying one component to recover another.”

● Case studies supplied by NZ Plant and Food Research

Tapping into the Multinational Opportunity (Callaghan Innovation)

Originally published on Callaghan Innovation’s Healthtech Activator website

Tim McCready from BioPacific Partners spoke with healthtech multinationals about changes in the industry and why they are interested in NZ innovation

The healthtech sector is broad, and big corporations in pharma, consumer health and medtech all have slightly different attitudes toward accessing external innovation – but they all share an increased reliance on external innovation to supplement and bolster their pipeline.

Multinational corporations can bring with them strong investment, a powerful workforce, and access to global markets for local New Zealand (NZ) innovators. But regardless of whether a partnership or investment happens or not, there are always insights to be gained from them. Even a 15-minute conversation can reveal insights that might help reshape a product to be more suitable or better accepted by the market, or perhaps adapt a business model to one that had not previously been considered.

Most of these multinationals are not embedded within the Australasian region. They might have sales and marketing teams here, but there are few business development personnel. While it can be a challenge identifying and reaching relevant decision-makers within the confusing hierarchies of multinationals, there are many reasons why it can be a worthwhile activity.

Strong desire to access good innovation

“Innovation does not have a boundary. There is no border limit, wherever there is good science, we go for it,” I was told by a business development executive at a healthtech multinational. It helps that generally these companies are positive about NZ innovation – thanks to our well-regarded education and science, robust regulatory environment, and diverse population.

“If something is making headway there, there’s a whole lot of hurdles it has overcome and it makes me think I can pick it up and run with it elsewhere,” they said.

For the pharmaceutical industry, the cost of research and development for new drugs, the high risk of failure, and the significant exposure many have due to the expiry of blockbuster drug patents means they increasingly look to external innovations for their product pipelines. If the technology fits a gap in the company’s pipeline they will be interested – and are largely ambivalent about the stage of development.

But for medical technologies this is slightly different. For traditional medical devices, multinationals will often prefer to wait until a technology has regulatory approval and can demonstrate strong sales. This is because some of the most challenging aspects of bringing a device to market are the registration of the device, and the considerable work required to convince physicians and surgeons that an innovation is worth considering (and often retraining for) over existing alternatives. Multinationals prefer to see a technology that is proven to mitigate these risks.

Digital innovation

There has been a rapid shift in digital innovation in healthtech, and the development of technologies for a consumer market, including mobile phone sensors, smartwatches, fitness trackers, apps and the use of big data for diagnostics and treatment. This is causing huge concern in the medtech and consumer health industries about where future revenues will come from.

I was told by a business development executive in a medtech multinational: “I joke that I’m glad I am closer to the end of my career than the beginning because I’m not wired to think this way. My gut feel used to be pretty good, but I don’t have that for the future… I think it is incredibly naïve to think that technology and digital won’t fundamentally change the sector.”

The onset of digital giants entering the healthtech space has made traditional medtech multinationals nervous. They are hesitant to enter the consumer market since the big players – the likes of Amazon, Samsung, Apple, Google and Huawei – could quickly wipe out the market share of new technologies that begin to gain traction.

A business development director joked with me that “One day I will need a new hip. I’ll go onto Amazon, where there will be a base one, and then ones with extra features… I’ll select my hip, pick my doctor, choose a hospital – after checking their reviews – and take my basket to the checkout. Somebody is going to figure that out.”

Making the connection

Before the pandemic, these big players were reluctant to travel the 12 to 24 hours required to visit NZ and saw the significant time zone difference as a barrier.  This meant that costly visits to the big conferences – the likes of the BIO Convention or The MedTech Conference – were the only places to sit down for 15 minutes with the relevant people in these companies.

But over the past year these interactions have moved online, and with it so has a growing acceptance from large corporations that new technologies can be discovered using digital platforms – no matter where in the world they might come from.