Archive January 2011

High cost Germany shows how to succeed in exporting Peter Kerr Jan 31

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In theory, as an old-world type economy and like most of its contemporaries, Germany should be struggling out of the after-effects of the global financial crisis.

But the ‘strongman’ of Europe has been thriving while its competitors are scrambling, and a recent study suggests its ‘Hidden Champions’ of small medium enterprises (at least by German standards) is a large part of the reason for its ongoing success.

These companies have defied a strong Euro, even while ‘Made in Germany’ has made its products expensive on world markets.

An analysis of about 1,130 Hidden Champions reveals important lessons – many of which New Zealand could well copy.

1. Hidden Champions strive for world market leadership to become No. 1 in the world in their markets/segments
2. Market definition is an important part of strategy development, usually leading to narrowly defined markets, both from a customer and technology perspective and a highly focused strategy
3. Specialisation in product and know-how is combined with global selling and marketing. They serve the target markets through their own subsidiaries and do not delegate the customer relationship to third parties
4. Hidden Champions are very close to their customers, in particular their top customers. They are value, not price oriented
5. They are highly innovative in both products and processes, not only confined to technology. Innovation activities are globally oriented and continuous
6. The overall company orientation is not one-sided but both technology and market driven
7. Hidden Champions create competitive advantages in product quality and service. They are close to their top competitors and defend their position ferociously
8. They rely on their own strengths. They mistrust strategic alliances and outsource less than other companies. Their value chains are deep. They see the foundations of their competitive superiority in things which only they can do. Together with lesson 2, their strategies could be defined as “deep rather than wide”. Deep in their value chain, not wide in their coverage of different markets with different needs
9. Hidden Champions have very strong corporate cultures associated with excellent employee identification and motivation. Selection for jobs is sharp
10. Their leaders are very strong and stay at the helm for decades

Some of Germany’s unique embedded cultural and educational attributes would be impossible to replicate in New Zealand.

Yet, its export orientation to other rich countries is worthy of replication by this country.

This also includes value-added food products, which as reported in an earlier sticK story (see here), is one small feature of German success.

The Hidden Champions are characterised as being ‘global medium enterprises’, positioned between the widely researched big publicly-listed multinationals and the traditional privately-held domestically-focused SMEs.

The study concludes its assessment of the Hidden Champions with a summarisation of their management model:

• Family ownership and cooperative corporate cultures combined with outside professional management
• Global market dominance through positioning in niche markets and thus exploiting and enhancing resources and capabilities on a global scale
• Continuous endeavour to raise operational effectiveness of all major processes and functions

New Zealand needs one place for everything innovative — NZ Institute Peter Kerr Jan 28

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Though he’s loathed to call it a ‘one-stop-shop’, NZ Institute director Rick Boven reckons something similar is required as one measure to boost this country’s innovation rate and output.

The institute recent discussion paper ‘Plugging the Gaps – An internationalisation strategy’, suggested as one of its 14 policy directions that an “Information Clearinghouse” be established in New Zealand.

Boven says NZTE has a website that provides some of the functions he envisages such a clearinghouse could have.

However, “at the moment, if you want to find out something, it’s mostly about connections and word of mouth,” he says.

“We need to provide a venue for people to make offers, look for answers and make those connections.”

He says one example is open innovation, where seekers (or those with a challenge or problem) and solvers (someone with an answer), can be put together.

“You could be working in a lab, have a particular thing you need answered, put it up there, and low and behold, you have a solution,” he says. Such a clearinghouse would work for both the research and development side of things, as well as commercialisation.

Boven says he often meets overseas-based people who would like to help innovating New Zealand businesses; and while there are a number of different forums, “there’s no, one, dominant place for them to go.”

He provides an aligned example, where the ability to find a skill would be extremely useful.

“We’re looking for a chairman for one of our companies,” he says. “How do you go about that?”

The ability to put such a request up on a website, and for those who are interested to then be able to get in contact is a facility which would be extremely useful Boven says.

He is agnostic as to whether such a clearinghouse would or should be government or privately run but makes the point that it would need to have a service purpose and not just a commercial purpose. It might even be an NGO he says.

“What you really want is something and some way for people to very easily to be able to make connections,” he says.

For the record, and taken from the ‘Plugging the Gaps’ document, a single utility information clearinghouse should be the preferred service provider or access point for:
• Access to public good information such as standard solutions
• A directory of expertise, providers and advisors in science, engineering and commercialisation
• Problem solving forums in research, development, business development and internationalisation
• Provision of useful research findings to commercialisation providers and businesses
• Matching of entrepreneurs with business opportunities
• Matching of investors with investment opportunities
• Matching of specialist staff with employment opportunities
• Connections to New Zealand networks overseas, and
• Connections to relevant international solution and resource providers

Which sticK reckons would very much be a ‘one-stop-shop’ in the New Zealand innovation context…..but we won’t call it that!

Story marketplace makes its play in internet-dominated media space (allaboutthestory) Peter Kerr Jan 27

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Hands up those people who know how the world of newspapers and magazines and journalism and writing’s going to play out in the internet world!

Lots of information’s free, newspapers no longer have the same quantity of advertising revenue to subsidise their subscription prices, writers don’t have easy ways to tout their missives.

Enter “All about the Story”, a year old ‘marketplace’ for writers and journalists to offer their stories and for editors to pick a piece that suits their publication. The story fee is determined by the writer, and AATS clips a 20% transaction fee and pays it into a nominated account once the publisher has paid.

AATS grew out of an idea by Julie Starr, a journalist and editor who returned to New Zealand in 2007 from more than 10 travelling, including newspaper work in Britain. One of her gigs was at the Daily Telegraph five years ago (a lifetime in internet years), where along with then-Editor Will Lewis, Starr was heavily involved in a project to integrate the newsroom into the online world.

“That was a very future-looking experience, particularly around how people use and share online information,” she says. “It showed how the economics of an online publication is completely different to print. It was obvious though that the new media was going to need an infrastructure.”

Arriving back in New Zealand, and experiencing frustration at attempting to sell a Kashmir-oriented travel story, Starr attended the Webstock event in Wellington in early 2009. This is a web-design, internet exploration ‘do’ for geeks and others interested in the whole online world.

There she got talking with Lance Wiggs and Joshua Vial. They kicked around her idea of creating an online marketplace for writers and editors, and along with Michael Koziarski and Natalie Ferguson, AATS was launched in November 2009.

At the moment the site doesn’t have any fulltime employees, though Starr’s constantly “cranking up the time I have to spend on it,” servicing what is now hundreds of writers (and cartoonists and illustrators) and publishers – matching sellers with buyers. The team’s happy with its growth she says.

The concept has taken time to build awareness among potential users, and for people to get used to doing business this way. At the same time, the rapidly changing media environment means AATS is also having to constantly change the way it does business.

From editors’ points of view it saves them having to have a (often long-winded) conversation with a writer; they simply find a story they like, that fits, buy it, download it and put it in the publication.

Particularly as an editor approaches a deadline, needing something to fill a gap, AATS is perfect. Editors can search by category, author, topic and key words to find the right article; as well as being able to commission a story via the site.

A writer only is charged if a story is bought – contributors don’t have to pay to use the site as such, only needing to spend a small amount of time uploading their words to AATS.

“We’ve started in New Zealand to prove the model,” Starr says, “and we’ll be expanding overseas as we go.”

“If you wanted to characterise our first year, you’d say we’ve learned a lot and built our presence. We have the foundation to move forward. We have all kinds of people using it, and have clear ideas of how to build it further and go ahead.”

Starr says there are similar, but different overseas models to AATS. Some tend to be more speciaslist, providing say videos only, while others, say India, are country specific.

There are also sites that ask contributors to write tight, keyword-rich stories for websites — usually in volume. However, in her opinion, most of these sites only pay small amounts, and “some are quite disappointing for writers, especially those wanting to retain journalistic integrity.”

While getting AATS up and running, Starr spent a couple of years as editor in residence at the Waikato Institute of Technology (Wintec), then created an online version of the National Diplome in Journalism for distance learners which allows students to study the craft at home. As well as running AATS on a day to day basis, Starr also consults on newsroom design and workflows, as well as other related projects

AATS’s future direction, while necessarily somewhat secret, is to build greater use of the site, and add more functionality to its nicely simple (sticK’s opinion) layout.

“We’ve got a development list that’s miles long, most around serving our customers first and things the site needs to be able to grow,” Starr says. “That’s one of the benefits of working with this bunch of guys. Their perspective is invaluable, they ask direct, probing questions. We challenge one another, figure out what the priorities are. Collectively, we do it better, together.”

She says AATS has a number of possible future business models. One version may be as a ‘white label’, with other businesses in other countries perhaps able to put their own name on the whole AATS ‘engine’. Alternatively, AATS could become a type of global mini-Bloomberg.

“We’re looking at a few options, acquiring information on what and which we should do. It’s full steam ahead.”

Starr says one innovation she’s pleased that AATS is able to offer is a scholarship to attend this year’s Webstock in Wellington. Considering that ‘proper’ tickets cost more than $1000, the opportunity to write about and mingle with those at the cutting edge of internet developments is something that’s attracting considerable attention from the site’s wrangle of writers.

“This is fun,” she says. “Having a site like this enables us to do great things.”

In a world of generic websites, bespoke solutions often a better deal Peter Kerr Jan 26

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In a world where you can pick and pluck generic pieces up from the internet and other places to produce your website – often for free – there’s increasingly a place for a bespoke web solution.

Ironically, such a tailor-made result can be cheaper, iteratively produced towards a final product, rather than being prescribed at the beginning of how it will look/feel/be.

This realisation by 10-year old Wellington web solutions company 3Months has seen it change tack, so much so that “we’ve essentially walked away from content management systems,” says its client relationship manager, Nick Rowney.

A content management system (CMS) is a website feature such as the ability to upload a photo, add a page, change detail. Fully loaded CMS systems can look like the obvious answer, but often a customer will only use 20% of its potential.

The alternative, which has become more apparent as the web has aged, is that a one size model doesn’t fit all. In fact, often the need to be able to add something different to a generic template is more difficult and time consuming and costly than starting from scratch with a purpose built solution.

A bespoke (as opposed to a CMS-oriented or driven model) website, is not just about the website. It is for a client who understands that the requirements need to be answerable to a business case, vision, and know what they’re hoping to achieve and who understand their clients’ needs.

3Months uses and Agile methodology, with every job being a journey, where adaptation rather than a set development path is called for.

Even a 3 year project can be split into phases, the “idea being it forces a business to really understand what they’re trying to achieve, and lessens their risk,” says Rowney.

“It forces the business to prioritise the site’s requirements, and to understand the business value attached. Instead of viewing a website as a standalone part of the business, the bespoke approach puts the client in the position of a customer. “You need to understand where your customers are, what they look like, where they hang out,” he says.

“We want to have our own area of bespoke web development,” says Rowney, who had an extensive movie industry background before morphing into a client engagement role at 3 Months. “We don’t take every customer on, our approach may not be suitable for some businesses.”

Some web development companies built a website and walk away, but the fast moving world of the internet means websites need to keep up to date to take advantage of new opportunities.

“3Months believes in becoming your web partner, so we are always looking for new solutions for our clients,” he says. Apple’s iPhone and iPad are changing peoples’ perceptions of what is possible over the net; they’re game changers. The use of smart phones and location based sensors, and the mobile web we see as the future.”

Rowney says that just as the internet is only for those who can afford it, for those technically and financially savvy people who will use mobile technology, “it is the sweet spot for the next lot of internet businesses.”

Where’s there’s a wool there’s a way — $17.25m kickstart for renewed research Peter Kerr Jan 25


It could be wool’s last hurrah, it could be the start of a whole new ball game.

The government’s recent decision to invest $17.25 million in a wool research consortium will allow the exploration of possible new products and applications for the fibre and its raw constituent, keratin.

AgResearch is keen on the new funding. It reckons that many opportunities have not been followed up in recent years because of a lack of funding. Farmers’ increasing disenchantment with the product that 60 years ago provided over 80% of their income is somewhat understandable.

Wool is now lucky to cover the cost of getting it off a ewe’s back for some farmers, so it is not surprising that last year’s vote by cockies was to essentially forget about the fibre.

Using counter-intuitive logic, now’s probably a good time to explore new uses and opportunities.

After all, wool’s back story is pretty difficult to beat – there’s not many products that can claim to be created by sunshine, soil and fresh air (only a slight exaggeration!).

Compared to the hydrocarbon-derived alternatives, there’s a whole romance that can be laid alongside its physical properties – which are sure to be re-examined closely by more than 20 fulltime scientists at AgResearch’s Lincoln campus.

The CRI’s pretty confident (as you would be having just secured investment!) it has some woolly answers, namely:

• Addressing historical obstacles to wool’s use and performance. It can produce woollen fabrics which perform as well as, if not better than synthetics in many respects.
• Finding new added value uses that exploit positive intrinsic characteristics

Let’s hope AgResearch is right. Wool in total makes up less than 2% of the total fibre globally produced.

AgResearch’s Wool Research Organisation Inc (WRInc) will work alongside universities and other research organisations it says. Collaboration’s the big new, brave new concept in New Zealand research – from the top down. It will be interesting to see how it pans out in reality.

Because the processes involved in taking the raw wool off a sheep’s back and turning that into a yarn which in turn is used in carpets or clothing is long and relatively expensive.

The majority of the wool New Zealand produces is coarser than the fine merino fabrics enthusiastically worn by urban-trampers. Our sensitive 21st century skins aren’t keen on the prickle factor inherent in coarse wool blends.

Finding a way to utilise these types of wools, in ways other than carpet, is the challenge in the first instance.

Finding a way to get consumers to either happily pay more for a wool product (with presumably better characteristics than a cheaper, synthetic product) and getting some of that profit back down the value chain to the farmer’s going to be a another major challenge.

But, as a renewable, raw resource, we owe it to ourselves, our forebears and our farmers to give wool research one last crack.

Any later and the scientists capable to passing on their wool knowledge to their younger colleagues, will be gone.

Any later and there will be no one left in the country who remembers the fibre at all.

AgResearch has a pretty good public relations team, well-versed at promoting good news.

One of wool’s advantages is that it will lend itself to picture-worthy stories of the ‘look what we’ve discovered’ variety. It isn’t something buried down a microscope, all big-picture environmental, or gene-manipulation, 20 years down the track type of story.

There will be some interesting new products pumped out by the big dollop of cash being thrown at discovery and refinement.

Producing these new products will be the easy part though. Convincing others to tool up and help take the products to market will be the real trick.

Disclaimer: in a former life, sticK attempted to commercialise a felted wool ball (based on simple technology perfected by the old WRONZ (Wool Research Organisation of NZ). The ball is pretty round, bounces and is a great colourful indoor ball, perfect for office games of cricket. It accepts a permanent logo too.

sticK couldn’t get it into a form or product that tourists were prepared to purchase however. Any person who thinks they might have a market for such a ball, give me a yell!

Being shown the money, MusicHype heads to America to make its play Peter Kerr Jan 21

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A key moment for any start-up business is receiving the first tranche of investment from someone outside the original backers.

MusicHype’s announcement of a $600,000 input from Christchurch-based NZ Capital Strategies’ Rutherford Innovation Fund is, at the very least, a serious indication that an outsider thinks its idea is good.

The one year old Wellington company’s ‘offer’ is a way connect music fans and bands – rewarding fans for their love of a particular artist(s), and enabling the musicians themselves to make money from exclusive merchandise, tickets, digital downloads and other products.

Relatively unusually for a start-up, the company nudged itself into a breakeven position towards the end of 2010.

initiative is a play in the mixed up world of music, where ‘free’ is ubiquitous, new bands struggle to be noticed in a crowded internet space, and their ability to survive while being able to produce music is a completely different game compared to the past.

sticK profiled the start-up late last year (see here), including the news that it has been invited to the world’s largest digital music event MIDEM, at Cannes, France, later this month.

MusicHype’s chief executive Jeff Mitchell is to pitch to MIDEM’s live audience, as well as a panel of international judges. The six day event attracts over 7,000 delegates, across 60 pavilions, with 120 conferences, 3,200 companies and over 400 journalists.

The event will be another opportunity for MusicHype to showcase its ‘social commerce’ platform. Almost concurrently, Mitchell and fellow founder Annabel Youens are setting up a permanent office in Los Angeles, using the $600k investment to help scale up its web-based platform in North America.

MusicHype’s ‘secret sauce’ is its proprietary ‘Appreciation Engine’. This tracks fans’ activity across social media services like Facebook, Twitter and Last.FM, rewarding them for promoting bands they love. In turn MusicHype increases the direct revenue for artists and labels through ticket sales, merchandise and other music related products.

And while MusicHype’s pitch is initially in music, the intellectual property behind its ‘Appreciation Engine’ applies across other sectors as well.

Being able to firstly understand, and then tap into social media and its influence on consumer behaviour is one of the goals of literally hundreds of internet start-ups around the world.

MusicHype’s convinced an initial outside investor it has the particular key to unlock that treasure chest.

In the world of the web, a year’s a long time.

That may well be all the time required to see whether MusicHype takes off and can mine the mother lode.

Watch this space.

ShowGizmo to take expo app to smart phone world Peter Kerr Jan 20

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Ever gone to a business expo and been overwhelmed with the number of business cards you’ve collected or given, or the physical quantity of information you end up with the end of the day?

Well, a potential solution’s lurking in your pocket.

A mere eight months after the idea was first mooted, a Wellington company’s smart phone event application is being taken to the world.

ShowGizmo is currently a downloadable app for Apple’s i-Phone as well as the Blackberry, with an Android version due out soon for other smart phones.

The app enables show attendees, as well as exhibitors, to receive important data such as contact details and website information direct to their phones – allowing either party to follow up at a later date.

The data swap is based on a QR (quick response) code assigned to both the exhibitor and the attendee, and carried out when the phone is pointed at the QR tag itself. Follow up discussions can be carried out later in a less frenzied manner.

“You click on that code, and effectively you get their business card, and they capture your information as well,” says ShowGizmo business development manager, Reuben Metcalfe.

The app is aimed at show organisers, who in turn offer it to exhibitors and attendees – both of whom can sign up and sign in at the event’s website. It has been designed as a multi-event platform meaning producers can use it for one or many shows and there is the potential to create a ‘white label’ product for larger venues and international event producers.

As soon as registered attendees log-in to the system, they have access to full event information, the exhibitor list, including any documents they’ve uploaded, the presentation schedule and any other information – before they turn up to the event. This means they can plan their time effectively in advance, but use their phones for real time information and updates during the event itself,” says Metcalfe.

And while attendees and exhibitors can both easily exchange information about each other, the show organisers are also able to track performance and access statistics about their event in real time. This includes interactions that are taking place around the event, what people are looking at, what they’re not looking at and who they’re engaging with.

Metcalfe says the integrated reports provide valuable information from the organiser’s point of view to help them demonstrate why certain show locations justify a premium pricing.

The idea for the app grew out of the ShowGizmo founders’ experiences in producing virtual events using a US software platform . This enabled an ‘organiser’ to host a web-based exhibition, where viewers could ‘walk’ around a show.

Establishment directors Marie-Claire Andrews and Frances Manwaring understood the sophisticated analytics generated by virtual events could bring to real world events, particularly at a time when the international recession had been battering the industry around the world and even producers were crying out for technology solutions to demonstrate value to participants and offer them connected experiences more closely aligned with how people do business today.

Their company Virtual Expos NZ was possibly ahead of market readiness says Metcalfe, but the relatively recent introduction of smart phones has opened the opportunity for a new type of exhibition information sharing.

The rapid development of the ShowGizmo platform, which is variably priced depending on the itself event as well as number of attendees expected, has also been matched by its founders’ belief in its utility.

Marie-Claire Andrews recently made a telling phone call to the organizers of International Confex in London. Confex is an expo organisers’ expo, with over 140,000 delegates and 1000 exhibitors expected to attend at the beginning of March.

As a result of that call, ShowGizmo is now to power the whole thing, providing a perfect launch pad for its business-to-business sales pitch to event producers.

Following it’s appointment of a channel partner in the UK in October, Metcalfe says the company is in the process of signing up it’s first re-seller in the United States to launch ShowGizmo there later this month .

“This model enables us to partner with people already in the event business for whom there is a lot of logic in including ShowGizmo as part of their offer,” he says.

Metcalfe says there are a few similar, products to ShowGizmo currently on the market, but we don’t believe they quite hit the mark in terms of breadth of funtionality we do–”at the moment ShowGizmo’s in a league of it’s own,” he says.

Naturally, he would say that!

Whatever the truth, there certainly appears to be an intersection of an expo market need matched by a solution.

If ShowGizmo’s still around in a year, its fit for purposeness will have hit a sweet spot of uptake.
If not, it won’t be for want of trying.

Potato supply threat turned into crisp opportunity Peter Kerr Jan 19

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The classic case of turning a threat into an opportunity applies perfectly to Orari cropping farmers Raymond and Adrianne Bowan.

The couple, who farm 1375ha near Geraldine, just off State Highway 1 north of Timaru, found out in late 2008 that the local Bluebird crisp making plant which took a third of their potato crop, was to close.

Instead of throwing their hands up in the air, Bowan went and had a yarn to key people in the potato processing industry as well as an engineer.

“We were fortunate to get some key men involved with us, especially Bill Cockburn who brought a wealth of knowledge in chip making,” says Raymond Bowan. “It was an opportunity for them too, and they never thought they’d have something like this be able to happen.”

Once they found that they were all interested in creating a new potato crisp business, in February 2009 the Bowan’s, through an agent bought the empty shell of the main building, a warehouse and potato storage area. Their purchase of an existing manufacturing plant also meant that consents were already dealt with.
This was just the beginning of a huge learning curve however.

New crisping plant had to be sourced from Holland, colour sorters (for the crisps themselves) were bought from America and packaging equipment purchased from around New Zealand.

The production side of things was just one aspect however; the branding and design of their ‘Heartland’ brand was an entirely separate issue.

Getting the name itself registered took a while, with the final design being an iterative process. The company was fortunate to have a co-operative local supermarket owner who allowed Heartland to test whether the packaging stood out when on the shelves.

An initial design didn’t do the trick, so it was back to the drawing board.

Bowan says this was a big part of the development process, “but we used people who were able to help get us to that stage.”

As well as the design, aspects such as bar-coding and “getting the ingredients right, justifying what you put on the back of the packet,” were all things that needed to be considered.

Being able to get food products onto supermarket shelves is often a difficult job for a new entrant, but Bowan says Heartland was fortunate that salesman Brian Kirby was respected within the industry.

“He said from the word go that it wouldn’t be easy; we had no disillusion with that,” says Bowan.

Since beginning crisp production in October, Heartland crisps have been mostly only available in Foodstuff’s South Island supermarkets. The Auckland Nosh food outlets have also stocked the crisps, but the company intends to slowly expand into new markets.

“Our crisps are pitched at the middle, and the reports coming back are that for the quality, they’re good value for money,” Bowan says. “Pricing’s a fine line. If we put a dearer price on them, we mightn’t get them out the door.”
He makes the point that the company’s learning to crawl before it walks (or even runs), and the plant is nowhere near capacity. It doesn’t run every day of the week, yet, while a second shift could also be added if required.

A range of kettle crisps will also eventually be added to the line up, but again, the company’s getting all its ducks in a row first.

Bowan says the major lesson for the couple has been to make sure “you have good people onboard, and get good advice.”

“I wouldn’t have changed a thing about the way we’ve done things, but without the two key people [from the previous crisp business] and the engineer, it wouldn’t have been easy.”

A financial advisor has also become a trusted ally, and he helps run the now monthly board meetings that Heartland has.

“He thinks outside the square and has been very valuable,” Bowan says.

“We’ve enjoyed this challenge. We’ve no regrets at this stage.”

LanzaTech’s clean technology ticks all the right boxes for rapid global growth Peter Kerr Jan 18

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Yesterday New Zealand, today and tomorrow the world…..literally for clean technology company LanzaTech.

The Auckland-based firm that uses proprietary bacteria and fermentation to produce useful products such as ethanol from industrial gas waste streams, is on a heck of a roll.

Having tested and partly scaled up Auckland University laboratory methodology at the Glenbrook Steel Mill, the venture-capital backed company (including USA-based Khosla Ventures) doesn’t seem to be able to stop signing deals.

It has just put pen to a memorandum of understanding with IndianOil to evaluate the technology to produce ethanol at one of its refineries. IndianOil sells almost half of the subcontinent’s petrol, and last year was ranked 125 in Fortune’s Global 500.

In the middle half of last year LanzaTech signed key technology development partnership deals with China’s Baosteel, Henan Coal and Chemical Industrial Corporation and the Chinese Academy of Sciences.

India’s crude oil imports are soon expected to be more than 80% of its total needs, and the nation’s biofuels policy is to increase the use of alternate renewable fuels from sustainable, non-food sources. The law new requires oil companies to blend petrol with up to 5% ethanol.

LanzaTech has been increasing the products produced by its specially-selected (and patented) bacteria, using smoke-stack waste gas streams as a source stock.

It recently announced the bacterial production of 2,3-Butanediol (2,3-BD), a key building block in polymer, plastics and hydrocarbon production.

Late last year LanzaTech and its senior management were ranked as one of the globe’s top 100 clean tech companies. (See sticK story here: )

The company’s on a rapid growth path, ticking all the boxes that venture capitalists (among others) love to see in estimating future earnings potential.

The waste gas streams that its technology utilises would otherwise be a pollutant, and increasingly governments around the world are legislating (and offering incentives for) clean tech solutions, particularly from non-food based resources.

Just as importantly, there’s huge scale in the world’s clean energy requirements, and there’s no shortage of industrial waste gas streams (i.e. ‘smoke stacks’) for it to, almost literally, plug its technology into.

The recent LanzaTech deals won’t be the last.

Watch their space.

If they’re not already the darlings of all who like their energy clean and strongly green-tinged, they soon will be.

Is social enterprise about to come out from the shadows? Peter Kerr Jan 17

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Mention the term ‘corporate social responsibility’, and you’ll often get a “yes, but” type of reply.

Yes, it’s a good idea, but doesn’t work in practice. Yes, we should be doing it, but don’t know where to start. Yes, we’ll do it when everyone else starts doing so.

Of course 2008′s global financial crisis hasn’t helped, with companies intent and focusing on pure survival, and any thoughts about triple bottom line reporting and/or greening up of the image and actuality well and truly on the back-burner.

Under that 2008 collective mental model of corporate social responsibility, being ‘good’ was defined as not being bad, and most company strategies were defensive risk management plays never designed to produce new value or to solve social problems says Fische Consulting director, Peter Salmon.

“In 2008 there was an expansion of some of the shortfalls of CSR 1.0, and a growth in social cynicism,” Salmon says.

However, the 2011 version of corporate social responsibility, now perhaps better defined as social enterprise, is a new beast providing opportunities for innovation and income. Salmon says his thinking on the subject has been influenced by his reading, observations and meetings with people involved in this social enterprise, a “mash up” of ideas.

“Social enterprise is about how businesses align their values and behaviour with the expectations and needs of their stakeholders,” he says. “The model for CSR has been shaken in the past couple of years.”

From that point of view, both innovation and kick-starting the economy is about finding social needs and finding solutions to them. As governments around the world remove themselves from providing different types of social services, the ‘community’ is expected to fill the void, and the whole notion of community itself is being reinvented says Salmon.

He notes that many of today’s (especially young) entrepreneurs see the world differently to their forebears.

• Blend social and commercial objectives
• Creatively align public, private and NGO resources
• Leverage communities and collaboration
• Are well adapted to young world environments
• Embrace the globalisation of the knowledge workforce
• Are solving systematic problems while meeting market needs

Within this context, Salmon says business schools (including Harvard) are racing to meet the demand for social entrepreneurship programmes.

He says the whole notion of ownership (of knowledge and products) is changing, and “access trumps ownership.”

Within this community and social enterprise framework, the Havard Business Review says business is re-booting itself through shared value. To quote from it:

“Shared value is not about personal value. Nor is it about sharing the value already created by firms – a redistribution approach. Instead, it is about expanding the total pool of economic and social values.”

Under this philosophy, CSR is a growth platform says Salmon, with new entrepreneurs looking for a sweet spot of social enterprise opportunity by asking the following questions.

• What trends are driving the gaps to widen and grow?
• Where can we make a difference? What are the unmet social needs?
• How can we make a difference? What resources, capabilities and networks can we deploy?

Salmon, who has designed a product (called NextPlays) to help people navigate in the brave new world of corporate social responsibility, says social enterprise can be thought of as CSR 2.0

“Social innovation is designed to help companies evaluate their social strategies beyond moral obligations,” he says. “It allows them to generate real business value and deliver positive social change or shared value.”
“Social innovation should hold up to the same level of business scrutiny and return on investment expectations as any other corporate strategy.”

Salmon says there is a requirement to understand the metrics of social enterprise and innovation, which aren’t necessarily the same as business metrics.

Social innovation and enterprise solutions tend to be small, tactical and easy to do.

“But there’s no silver bullets as far as these solutions are concerned,” he says.

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