SciBlogs

Archive February 2011

New Zealand needs to wake up to bioenergy’s potential Peter Kerr Feb 28

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Because our brains are controlled by history and habit we tend to think about things the way we thought about them yesterday.

It means we’re missing the opportunity for bioenergy says Brian Cox.

The Executive Officer of the Bioenergy Association of New Zealand is passionate about how we could use what now is simply wasted, as well as bits of surplus land which can be used to grow sources of energy in different forms.

It should be noted that Cox is no green-tinged, environmentally and economically unrealistic airhead. Wearing his other daytime hat, he’s the director of East Harbour Energy, a consulting business with a strong strategic emphasis, and the nous to crunch pragmatic numbers.

In the first instance Cox is talking about forestry waste, in the second the ability to grow short rotation energy crops such as Miscanthus (a kind of tall grass to you and me).
To this end, the Association’s produced a remarkably readable ‘New Zealand Bioenergy Strategy’, which lays out how we can get from now to its vision; namely.

‘Economic growth and employment built on New Zealand’s capability and expertise in forestry, wood processing and bioenergy production – leading to new business opportunities which by 2040 supply more than 25% of the country’s energy needs, including 30% of the country’s transport fuels.’

But let’s back up a step or two.

The first thing we need to do is change our way of thinking (a paradigm shift even!).

Take the quantity of forestry production that doesn’t produce a log – commonly 20% of the total.
Viewed as a broader biomass resource and understanding its science, under different pressures and temperatures it can be utilised for its solid, liquid or gas components (and sometimes a combination of them).

As wood chips, or reformed into wood pellets (which also utilises sawdust), there’s opportunities to burn them directly for heat. Cox envisages wood chips or pellets replacing coal in furnaces (already happening in a number of ‘informed’ locations throughout the country).

The same chips or pellets can also be heated in a gasifier (retrofitted to an existing gas boiler) and their heat potential used in this way.

Looking at the extraction of lignin and zylose in addition to logs and lumber makes pine trees extremely valuable. The resulting cellulose residues can then be converted to ethanol or biodiesel – and their application here is something that really needs thinking about says Cox.

As a transport fuel, using what is now wasted, producing 30% of the country’s transport fuel is a quite an achievable target (in fact it is well under what is possible but Cox is careful not to overhype its potential).

Throwing in short rotation, annually harvested crops such as Miscanthus, or coppicing trees such as willows, (salix) or eucalyptus, and the ability for New Zealand to sustainably produce a fair percentage of its transport fuels becomes really eye-opening he says.

The commercialisation and use of lignocellulose from wood or grasses to produce biodiesel is realistically still 10-15 years away Cox says, “but we know we can do it as a number of plants are now being built around the world.” One huge advantage of this advanced biodiesel is that it is exactly the same molecular structure as mineral diesel.

However he is adamant that using long rotation forestry waste as well as short rotation crops will be necessary to make such biofuel quantities an achievable target.

“In the meantime we should be consolidating what we do now,” says Cox.

The cost of manufacturing biodiesel from tallow and cooking oils by esterfication is not too far away from the cost of mineral diesel.

“For biodiesel, we already have demand outstripping supply, as we’ve approached a capacity issue and investment in additional plant is now necessary.”

Added to this is that the grants available under the government’s Biodiesel Grants Scheme (which bridge the gap between the cost of production and market price) stop in 2012. “All that we’ve gained so far could be lost, we’ll be back to square one,” he says. “At about 180 cents a litre, we may not need the grants, but we’re still pushing the government not to have a stop/go approach as we transition to that price threshold. At the rate that the price of mineral diesel is ramping up that threshold is likely to be reached within the next three years.”

Cox says that Auckland company Ecodiesel has a three-quarters built plant to make biodiesel from tallow, but this is mothballed as investors need the confidence of the grants being available beyond 2012. Commissioning that plant could allow current unsatisfied demand to be met and so assist consolidate vehicle owners experience of using biodiesel ahead of the production of significant volumes of advanced biofuels from wood and grasses in the coming years. .

As somewhat of an evangelist for biofuels, Cox says there are individual and country benefits that can be gained from and investing in plant to use to use forestry waste, as well as specialist short rotation crops to produce direct heat and transport fuels, as well as valuable liquid and gas biochemical products.

“But let’s start doing it now,” he says.

“Beginning the process in 10 or 15 years will be too late, and a total waste of a resource that we currently, literally, throw away.”


The connection between innovation and football — they both require balls Peter Kerr Feb 25

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There’s no connect between football, as in soccer, and innovation – right?

Wrong, according to Innovationfixer (and my apologies for not being able to give an actual name).

The writer’s passionate about sport, particularly football, and loves the use of sporting analogies and aphorisms business. The original article is here.

Heck, even non-basketball players know what “it’s a slam dunk” means.

He (I’m presuming it’s a he) poses and answers the question of why innovation is like football, and it’s a pretty good analogy. Even non-sports people will probably be aware of what he’s talking about.

1. There is a big role to play for disruptive innovation. Real Madrid in the 1950s, Brazil in 1970, the Johan Cruyff turn and Dutch ‘total football’, the current Barcelona team. All these changed the way the game was played, and in most cases won big trophies. Apple and the iPod, mobile phones, the internet, numerous pharmaceuticals – all of these have disrupted and created markets and are famous in their own right

2. However most goals are scored and most games are won with simple, well-practiced and instinctive play. In other word, most business growth comes from incremental innovation, looking after the core business

3. It’s a team game. Innovation is a contact sport that is driven by people who work well together. In companies where innovation is successful, there is strong leadership, talented people intensive training, no complacency and a laser-like focus on results. It’s the same with soccer. The attention may often be on the big names like Steve Jobs and Lionel Messi, but they are nothing without their teams

4. The best teams are highly organised but flexible. They play to a system, but not a rigid one that stifles individual creativity and initiative. They put people in the right positions. They tolerate the right kind of failure. They know their competition and their market place

5. Finally, there’s a chance for everybody, it’s not a guaranteed outcome. Get it right on the day -or in the market place, and you can win

He believes we can learn a lot about innovation by looking at analogous situations, and sport, particularly soccer, is a great place to start.

He leaves with a quote by French writer and philosopher Albert Camus – “all that I know surely about morality and the obligations of man, I owe to football.”

If Camus can derive analogies about morality from soccer, the writer reckons he’s comfortable using it for innovation.

Perhaps we could get him to look at the All Blacks.

Innovative sure, just can’t hold it all together to do it at the World Cup!


The business of learning about business a state of mind for pyschologist Peter Kerr Feb 24

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Any start-up business is a work in progress, an environment where the founder is driving whatever the business sells as well as the business itself.

And in spite of the thousands of textbooks written on the subject, like a sport, it is only when you’re on the playing field itself that you learn how to play the game.

Such is the case for Umbrella Health and Resilience director Gaynor Parkin. The registered clinical psychologist is used to working with individuals and teaching to a university class. Her experience of running a business and driving it forward is much less, and is a situation where she’s often had to apply her own training.

UHR provides business training modules that help employees (and managers for that matter) better deal with stress and make ongoing changes to their behaviour. (see story here).

Running the eight month old business has been “a learning curve of a thousand percent,” Parkin says.

“It’s fun, exciting, very satisfying and rewarding, and also slightly scary. I’ve had to practice what I preach about staying calm, watching what I’m thinking, and how I’m looking after myself.”

Parkin’s been assisted by Viclink as an equity partner and business mentors, and also completed Grow Wellington’s Activate course. From them she’s had help developing business plans, a marketing plan, financial plans and aspects such as employment contracts and managing staff.

‘The best advice I have been given is to consult with experts,” she says. “It is much faster and more effective than trying to learn all the essential skills yourself.’

Life’s been an even bigger juggle since starting UHR, an attempt to balance a home and family life with the incessant need to drive the business forward.

‘With a start up business there is a constant juggle of competing requirements for your time, the trick is learning which tasks are urgent and which ones are slightly less urgent,’ she says. “Then trying to maintain a life outside the business is equally important”.

Her current dilemma is how to protect the intellectual property of her resilience training modules that are delivered over either a day or two half days – with a follow up review a few weeks later.

The vision for UHR is to have a team of experts, and one way she achieves this is by having the course facilitated by a clinical psychologist. To be scalable (and Parkin’s envisaging that her resilience courses will be available in Australia and the UK in the near future), she’s got to figure out a way to protect the knowledge packages.

“Basically, we have to brand it to within an inch of its life,” she says. “But it’s very difficult to stop people saying ‘that’s a good idea, I could run that sort of training’. A service business is very different from a technical business.”

One aspect she hopes will help is that trainers or people delivering the course “need our facilitation to learn these skills and how to apply it,” Parkin says.

However, because the workshops are based on scientific research and are evidence-based to produce best practice, the courses have the ability to be changed.

“It’s about adapting quickly, changing the material or what’s on offer whenever new research comes out,” she says.

“What someone learns at a workshop could be different in three to six months if we discover that something else is more effective.”

Parkin’s also determined to ensure that UHR develops beyond herself.

“I want to grow the brand beyond me,” she says. “It’s not about Gaynor Parkin resilience training. I want the value to be in the content and training that our facilitators are able to provide for people.”


Angel Association comes out with some ‘New Year’s revolutions’ Peter Kerr Feb 23

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Angel Association chairman Phil McCaw’s got a big year in front of him – and echoing his daughter’s misheard words, has made some late New Year’s revolutions.

His wide-ranging thoughts are available here, and among one of his goals for the year is to support the government’s wealthy migrant programme.

“I truly believe it to be a game changer,” McCaw says. “There are some significant world leaders looking to invest in New Zealand and their real value will be in their ability to accelerate the companies they invest in, into their local markets.”

McCaw gives the example of Peter Thiel, the Paypal founder and recent investor in Xero and Pacific Fibre.
He’s also out to fix the ‘equity chasm’ – something that’s REALLY IMPORTANT (his capitals, but sticK couldn’t’ agree more). McCaw’s upfront too that his investment vehicle Movac is currently raising a new growth fund, so has a direct exposure and interest in these issues.

However, given the paucity and shallowness of those New Zealand vehicles capable or interested in investing in good ideas, that’s the least of the country’s worries.

McCaw wants to see some more success stories like Trade Me, Hyperfactory, 42 Below, IceBreaker, and Phil & Teds. This will encourage capital flows into the equity sector.

Without going into the depths of how the NZ Venture Investment Fund operates, McCaw is keen to see it morph from essentially a $2 private money matched by $1 public money (via NZVIF) to a $1:$1 ratio.

“The problem is that we have a very, very limited pool of private and institutional money in New Zealand and a poor overall story to tell about venture returns,” he says. “We’re stuck in a perfect storm and need this sort of bridge.”

He wants to confirm the tax free status of capital gains, as the current rules are vague and subject to interpretation, and to also enable tax deductibility on ‘early stage investments.

His thought piece says that the government should require institutional funds like ACC and NZ Super to allocate capital to the growth economy.

“I cringe as a write this, as any investment should ride or fall on the results it delivers,” he says. “The reality is, however, that the sector is immature in New Zealand and requires a long term commitment to the development of capability. These institutions have significant experience in the selection and oversight of fund managers and can bring capital, process and experience to the table.”

McCaw’s also worried that increased securities regulation will make brokers and advisers even more conservative (i.e. not look at early-stage high risk class of investments), and that Kiwi Saver Fund Managers should be encouraged to allocate capital to this class.

Finally, he wants more people with money to become part of Angel investment groups. While there’s nothing wrong with high net worth individuals investing on a case by case basis, “the challenge with this approach is it doesn’t scale and doesn’t build investment capability for New Zealand,” he says.

“In my view we need to have a quid both ways to manage risk.”

In actuality, McCaw’s daughter’s right – this would be a New Year revolution.

All power to him, his team and wider networks. Check out the original article, here.


LanzaTech keeps gearing up and seeks the holy grail of CO2 conversion Peter Kerr Feb 22

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It’s not difficult to be a fan of LanzaTech, the Kiwi company that uses proprietary bacteria to convert smoke stack waste gases into useful products such as ethanol.

Having got its technology up and running at the Glenbrook steel mill, LanzaTech’s just signed its third deal with an Asian partner to develop and trial new plant.

This time it is with Posco, a Korean conglomerate that produced 33.7 million tonnes of crude steel last year. LanzaTech signed a last year with Baosteel, a leading Chinese producer, and earlier this year with Indian Oil, the subcontinent’s largest petrol seller.

Each of these are JV’s and a trial – not the least because each plant has slightly different output gases, and different requirements.

Word has it that these may be the last development and experimental type operations – you can’t go on trialing forever.

But LanzaTech, whose goal is to become a billion dollar company within the next seven to 10 years, isn’t resting on its laurels.

It’s present technology base converts carbon monoxide, requiring not outside energy source to start or maintain the bacterial conversion, to the before-mentioned ethanol, as well as high value chemicals such as 2,3-Butenediol (2,3-BD), a key building block used to make polymers, plastics and hydrocarbon fuels such as jet fuel.

It’s use of renewable, non-food resources as the feed stock is one of the reasons it has been voted as one of the globe’s top 100 cleantech companies, as well as the target of investment from Stephen Tindall’s K1W1 venture capital fund and Silicon Valley’s Khosla Ventures.

As BusinessDesk colleague Pattrick Smellie writes in Stuff, (see here), LanzaTech’s next target is the holy grail of greenhouse gas conversion, carbon dioxide.

Such a process would provide a globally important step to minimise the impact of CO2 emissions. Apparently 60% of the USA’s CO2 emissions are from the production of electricity. Imagine the environmental benefit, let alone the economic returns for LanzaTech of being able to fix this form of carbon in everyday items.

LanzaTech’s possibly one of the most exciting tech stories in New Zealand, one that flies under the radar because it isn’t listed on the NZX.

It may list, but more likely in China.

However, it wants to retain it IP base in New Zealand – and given firstly the excitement of its science, and secondly the attraction of our place for clever researchers and engineers as a place to live, let’s hope it doesn’t get forced overseas.

There’s plenty of precedents overseas for what have become large corporate players in different business segments beginning, and remaining in way out the back of who knows where it is.

Sure, New Zealand’s right at the edge of the world.

But, as an edgy place, New Zealand’s not too bad in the scheme of things to raise a family and have a life, and the desirability of our location may be enough to continue to attract the seriously smart people it will need to continue its development.


Helping people help themselves — a start up enters a new mind space Peter Kerr Feb 21

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There’s money in stress, or at least in helping people deal with it.

That’s the business plan of eight month old Wellington start-up company Umbrella Health and Resilience, whose workplace oriented training package is set to expand into Australia and Britain.

UHR director and founder Gaynor Parkin is a registered clinical psychologist and two days a week lecturer in psychology at Victoria University. She has attracted Viclink investment to her business and is using their expertise to help develop her fledgling start up.

She’s also the author of a book published in 2008 in conjunction with Consumer called ‘I’ve had it up to here: From stress to strength’.

From that she “received a lot of phone calls and emails, asking if I could come and talk, give a workshop, present something,” she says. “The business has grown from that.”

Parkin also has a passion for psychology and working with people to make changes for the better in their lives. Seeing her own children’s development and the intersection of nature versus nurture is also a driver to help them grow in a resilient way she says.

Resilience can be described as a way of acting, thinking and feeling where you can stay strong and calm and cope with life even when under pressure says Parkin.

Much of the evidence-based and best practice research around resilience developed from observing groups of peoples’ reactions after natural disasters or other traumatic experiences. Some cope well, some fall to pieces.

Understanding why, and what people can do differently to cope with difficult circumstances has been built into the Umbrella training package.

She’s aimed the business at workplaces in particular, as this is where many of us experience the most stress and feel under the most pressure.

There are five key modules delivered in either a one day or two half day sessions, with an all-important follow up review (may be individual or small group) a few weeks later.

The aspects covered are:

• Physical health – looking a how to start and maintain essential health habits, as the cornerstone of building resilience. If a person’s not physically well, maintaining resilience is a challenge.

• Managing thinking, this is called ‘flexible thinking’ in the Umbrella training – telling yourself things that are helpful compared to unhelpful thoughts

• Emotional intelligence, managing your emotions — learning how to deal with strong emotions, especially, how to stay calm, remain productive, and maintain relationships when under pressure.

• Realistic optimism, staying hopeful – realising that even if things go pear-shaped, it won’t be forever. Those who are good at being optimistic are generally better at coping, and are more likely to problem solve and to ask for help.

• Making use of social support networks and nurturing professional and personal relationships – it is easier to stay resilient if you’re connected to others, it’s much harder to be resilient on your own

• Working smarter – ideas for improving work-life balance, time tips, and improving recovery from work.

Parkin says that while other organisations may provide similar advice and training, or have motivational type speakers, as far as she’s aware, UHR is the only one that employs clinical psychologists.

“We’re trained to know how to help people make lasting behaviour change,” she says. “For us, the litmus test is do the participants make and maintain changes.”

The workshop training modules are also all developed from scientific research. ‘If the research indicates new best practice, it can immediately be incorporated and adapted to the course material’ says Parkin.

Based on qualitative feedback, UHR is achieving positive changes in participants’ lives, and the company is currently collecting data to demonstrate this quantitatively.

Parkin prefers to have about 15 people in each course which is a good number to share experiences as well as provide individual help during the workshop. It is also more manageable from a follow up point of view.

Follow up reviews are a critical component says Parkin, as participants are asked how they’re going with making changes to their lives.

• What’s working, what’s not?

• What else is needed to do better?

• What is getting in the way of further change?

• Has there been lasting behaviour change?

Its cost is presently $500/person/day (including follow up), which she says from market research is at the low to medium end compared to some professional development courses which charge from $1000 – $1500/person.

“Our business advisers want us to bump it up,” she says. “In my view we’re still growing, testing, getting feedback about how we can do better and improve. Also, it is important to me as apsychologist, that we’re offering training that is affordable.”

About 1000 people have been through the courses so far. These have been provided by Parkin herself, and having trained other trainers UHR courses can also be run by a South Island colleague, others in Wellington and an Auckland based associate.

The goal is to have UHR as a broad team of expertise, based in different locations around the world. Based on her training modules, and a trainer’s manual that outlines a step by step workshop, Parkin sees the concept as being scalable.

She’s still working on how to protect her intellectual property.

“We’re not sure yet,” she says. “A service business is very different from a technology business.”

Parkin says running a business is immensely different from her work experiences so far.

“I have to apply my own training at times,” she says. “It’s about staying calm, watching what I’m thinking, what I’m telling myself and making use of my support networks. I’m trying to practice what I preach.”


Natural, sleep-enhancing product’s story a great yawn Peter Kerr Feb 18

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The almost instant sell-out of New Image Group’s sleep-enhancing milk product in Taiwan late last year might at first glance be considered a bit of a fluke.

But that success with one of milk’s ‘good bits’ had its genesis a number of years before when Guy Wills and his colleagues commercialised a research project with an investment ready framework already in their mind.

As a previous new venture/start-up creator, as well as a planned exiter (if such a word exists), Wills knew the development of any product had to tick a certain number of boxes.

“My view is that before any science R&D with commercial aspirations in mind starts, it should be linked to a strong market and commercial proposition,” he says. “If the business needs funding, it is then able to attract investment.”

Some of the key requirements were:

• Is it something that could attract investment?
o Is the business desirable, does it have a ‘wow’ factor, does it have a clear and strong             value proposition?
• The right people involved
• Sustainable competitive advantage with an attractive and global scalable business model
• The ability to ‘shape up’ a solid business platform

Dairy based products have been incredibly successful as health and functional foods he says. They already have a strong association with sleep, sleep is a problem for up to 50% of the population, and the market itself is increasingly after natural solutions.

The product had a strong potential to hit the proven rules in functional and health beverages. There was an easily understood association of milk and sleep, it was natural-based, provided a clear benefit that is a highly prioritised need Wills says. Consumers can feel the difference and it can be delivered in tasty, convenient and novel formats.

From an investment point of view, whatever was to be developed also had to have a strong commercial platform including IP protection, whose production could easily be scaled through different modes such as manufacturing, licensing or franchising.

The right team is vital “since it’s all about execution, especially in the early stages,” Wills says. “You have to be able to adapt, and self-correction is critical.”

Having the right people to open doors, as well as provide good governance and ensure it is well managed was another important aspect.

It’s business model made it clear how the product was going to grow; again around a strong IP position, proven product and scalable business model.

From these points of view the science that the then Somnaceutics Ltd. decided to pursue was market driven (a pull) rather than a research push he says.

“We looked to link what the market and customer wanted and what we thought might work, and directed our resources to the right area,” says Wills.

From that fundamental basis capital was raised by shareholder partners Pacific Channel and in 2007 Somnaceutics set about clinical trials and patent protection.

Obtaining commercialisation and expansion capital in 2009, Somnaceutics got the right people onboard, and about the same time entered into a partnership with the New Image Group, jointly leveraging their capabilities.
“With any start up, you want to get a customer as quickly as possible,” Wills says.

The market validated that the sleep-inducing product would be well-received.

Late last year, using NIG’s direct selling model in Taiwan through a raft of distributors who identified their own customers with sleep issues, the ‘Sleeptime’ product sold out very quickly.

“It was clear from that we had a multi-million dollar product on our hands,” Wills says.

NIG’s purchase of Somnaceutics’ patents and intellectual property was in itself a natural move for the NZX-listed company with increasing interests in the natural bioactive and nutraceutical business.

With its particularly strong distribution networks in Asia and the United States, NIG is the perfect vehicle to expand the product he says.

As well as tasting great, and being healthy and natural, the fact that New Zealand milk products are regarded through Asia as being of high quality because they’re from clean, green, pasture fed and safely produced sources says Wills.

“One of New Image Group’s strategies is to have unique and proven products that leverage New Zealand’s advantages to the world,” he says. “This strengthens their portfolio, and they bought it because they believe it can be a significant part of their business.”

‘Sleeptime’ is just one of the brands for the product, “one of many different executions.” Sleeptime itself sells at retail level in Asia for about NZ$3 a satchet – less than the price of a cup of coffee as Wills says.

Different partners and distribution routes can have different formulations, for example, a ‘shot’ or alterna
tively in a capsule. NIG intends phasing the release of the product, positioning its value as a relaxing, nutritious bedtime drink.

“We can change the flavour profile, adapt it for different markets,” Wills says. “For more traditional markets for example, we might add Chinese herbs.”

Wills says that in a sense, the unique set of benefits leaves very little direct competition for the sleep-enhancing product. It depends on how competition is defined, especially from the point of view of natural, healthy, efficacious, nutritious and enjoyable.

Some herbal concoctions have varying degrees of efficacy, and synthetic melatonin requires a prescription in many countries and not recommended for regular use.

More the point though is that the NIG product is natural, and can help as part of a nighttime routine.

“Ours is a significant opportunity,” says Wills. “We can see the emerging trends towards natural and functional products in the targeted nutrition areas such as mood, cognition, anti-anxiety, immunity and rejuvenation, and we’re offering innovative and unique products in that space.


China’s second wives, and its luxury goods culture — a couple of surprises Peter Kerr Feb 17

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From the perspective of ‘I didn’t know that’, and what will I write about today, a minor re-write of a Canvas8 report.

Canvas8 has previously been given a plug by sticK, most notably for its TABS (trends + anthropology + brands + strategy) document. (see here)

It talks about China’s Second Wives, which is a relatively accepted part of the culture. In essence, as long as a husband is materially looking after the first wife, and can afford a second wife (or er nai = second breast), it is OK-ish.

Under Chinese traditional culture in order for a man to ‘fulfill his mandate to heaven’, he needs to produce a son. Come in first wife.

The addition of an er nai, is a type of status symbol. Understated for sure, but an indication of success non-the- less.

In the scheme of things apparently, the second wives, whose position as you can imagine is pretty insecure, like to receive and display high class luxury goods.

Yes, stands to reason.

The surprise however, is, unlike most western cultures, it is not women who do most of the luxury good buying in China.

The vast majority of luxury brand gift culture is man to man – a trust facilitation in a business environment. This is largely to smooth business transactions.

“Sometimes these payouts are ill-gotten, and a way of siphoning profit into non-measurable ways,” the Canvas8 report says. “Sometimes it is just a way of currying favour. But the fact is that the majority of gifting in China is men to men.”

The second biggest is men to women for the second wife, and these tend to be much flashier brands. Er nai have to display that their man is dedicated to them, and being non-independent, need to advertise the fact they have a sponsor.

The article also says how luxury brands have to be both elegant and conspicuous, but also inconspicuous at the same time.

So, if you’re an NZ producer of luxury goods, how would this knowledge impact on your production and distribution……if indeed we have goods in that category?

Tom Doctoroff, an American who took a detour to Hong Kong in 1994 and never quite made it back to the States also asks the question of what love has to do with all this.

That’s a bridge too far for sticK‘s mandate. You’ll have to go to the original article here for his answer.


Here’s one way to make New Zealand a visibly ‘smarter’ place Peter Kerr Feb 16

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Over the past decade the number of R&D staff transferring into New Zealand’s private sector has reduced according to IPENZ.

There has been a corresponding reduction in upskilling says the Institution of Professional Engineers NZ, and the low absorptive capacity of the private sector to R&D and other new technologies remains a major issue.
IPENZ recently launched its document and thought piece, ‘Catalysing economic growth – boosting innovation expertise in the private sector’. (See other sticK stories, here and here).

One of the reasons for this it says is that until very recently, the criteria for obtaining and retaining public research investment in the CRIs and universities has led them to operate very strong retention policies.

The same bodies are also rewarded for a track record of scholarly publications more than commercial outcomes.

In what might be a provocative document (at least for some scientists), IPENZ makes two proposals.

• A much greater encouragement/incentivisation for academics to go out into industry and build strategic partnerships with companies, and to transfer skilled people to the company at the end of the project

• Incentivise small private businesses to take on R&D staff (essentially through government co-funding)

As Science Media Centre director Peter Griffin commented on the IPENZ proposals, the ideas went down like a lead balloon when he raised it at a recent science communicators’ get-together.

However, IPENZ contends that its two proposals would be better than other policies because:

• It would focus on building innovation expertise and building skill pools to make NZ ‘sticky’ to high technology manufacturing technology manufacturing. Companies would build local skills networks and want to keep close to their university and CRI collaborators. The smart university academics or CRIs would be incentivised to keep close to their company and build clusters to retain the client for the future

• Research providers would be incentivised to shift their focus to developing innovation potential potential in industry, not just to obtain investment from industry for work carried out at the research provider’s site

• It would provide expanded career paths based on science, mathematics, technology and engineering study. This would rebalance NZ’s tertiary education investment much closer to the OECD norm

• The decision point on what research to perform would be taken away from a centralised bureaucratic process to a distributed decision making point close to market information

• Companies would be incentivised to increase their investment and grow their potential to adopt, adapt and use new technology for commercial benefit

• Barriers would be reduced for small businesses wanting to get R&D going in their own premises

• New Zealand would be made a visibly smarter, leading edge, technology-based society

Yes, there might be howls in the halls of academia to such proposals.

But the point is, we need to get more bang from our R&D buck.

Let’s hope the document and the thinking behind it doesn’t disappear too quickly.


Where’s our middle ground between laboratory and large scale? Peter Kerr Feb 15

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There’s a bit of a scale-up conundrum in New Zealand for people wanting to produce value-added bioactive products from a biological base.

Yes, the small(ish) laboratory-scale work can be carried out OK.

But where do you go for that next level of production – where you need more product to validate the market, but aren’t yet confident enough that the market exists?

Such pilot processing capacity is something the dairy and meat industries could well do with says New Image Group general manager health sciences, Guy Wills.

“The industry’s well set up for large scale production, not for small scale,” says the team leader who initiated and is now developing the market for a natural dairy-based sleep-enhancer (see sticK story here).

“It’s something the industries and government could well look at from a platform and capability point of view. It’s a real challenge for the industries looking for innovative, value-adding products.”

Wills mentioned that the good people at Enterprising Manukau, as part of the Food Innovation Network were extremely useful in the original scaling up for their product.

sticK would’ve loved to talk to them, especially as a new facility is being built right now – something that would address some of what Will’s is talking about.

But, Enterprising Manukau’s now come under the conglomerate and amalgamation known as Auckland City. It even has a new name – Auckland Tourism, Events and Economic Development Ltd. Let’s hope the order of its names doesn’t reflect the importance assigned to its components.

The number of new hoops, and ticks to be put in boxes by bureaucrats further up the line by the person I’d need to talk to about this necessary and exciting initiative makes reporting on it problematic to the point of ‘forget it’.

To employ a well-know beer’s pre-Christmas billboard comment – Auckland’s super……yeh right!


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