The recent Te Hekenga conference held in Tauranga was the third of the bi-annual events that bring together representatives of Māori Business Networks from around the country. Their objective is to share ideas, issues, successes and war stories about the challenges of encouraging Māori to set up their own enterprises and establish supportive networks.
The Māori economy contributes at least 11 percent to the wider Bay of Plenty GDP, according to Bay of Connections data. But despite the undoubted potential and capacity of the Maori economy, more needs to be done to encourage Māori to create successful small and medium enterprises (SMEs), said sources interviewed by Bay of Plenty Business News.
Te Hekenga organiser Buddy Mikaere pointed to the need to build up the numbers of successful Māori-run SMEs.
“There’s a big gap in the economy as far as Maori are concerned,” said Mikaere.
“We have a reasonable presence at the upper end with some of the larger iwis, and we’re over- represented down at the bottom level where there are all the manual workers. Where we’re missing out is in the middle with the SMEs. That’s where most of New Zealand business is done, but we don’t have a really strong presence there.”
The Te Hekenga conferences were aimed at helping Māori to start up businesses that would help create high value employment opportunities, he said.
Key speakers included Ian Taylor, who founded Animation Research Ltd. ARL’s innovative America’s Cup and sporting events software has been developed into a global business from its base in Dunedin.
Taylor said there was no lack of Māori technology smarts, with the Māori division introduced two years ago at the New Zealand Hi Tech Awards attracting the highest number of application for any category in its first year. He cited the success of entrepreneurs such as the Bay’s Steve Saunders of Robotics Plus, and he also noted the support ARL itself had received, with Ngati Kahungunu Iwi acquiring a 40 percent stake in ARL last year.
“One of the things we’re saying to iwi is that if [Māori] have a multi-billion dollar economic engine, then it’s time you started making investments in industries that will create high value jobs for young people,” said Taylor.
“At the moment [the Māori economy is largely in]primary industries that don’t create high value jobs. But the opportunity is not in investing in companies like Uber or the like, that’s not growing the economy. It’s about investing in the bright Maori ideas that are coming and getting them to grow.”
Awhina August, who leads the implementation of Bay of Plenty’s He Mauri Ohooho Māori economic development action plan within the wider Bay of Plenty Regional Growth Study, says there is a growing Maori business sector in Tauranga and the wider region.
“The opportunity is that Māori own a large portion of significant assets across key sectors and comprise a high proportion of young people across the region,” said August.
“There are amazing businesses out there and we need to be promoting them. But we need to be better connected with one another as Māori businesses, and also to networks and partners who aim to drive economic growth and better social outcomes for our people.
“We’ve come from very entrepreneurial backgrounds from our ancestors – and there’s a lot of gold and gems out there. We just need to be promoting and connecting them more. Events like Te Hekenga are important and provide opportunities to share, to learn and to network. Collaboration at all levels is key to creating the scale that is needed for meaningful change in the region.”
Steve Bird, founder of Bay-based Steve Bird Wines, who also addressed the conference, echoed the collaboration theme.
“My message was that, for an SME proposition, don’t ever underestimate the power of collaboration,” he said.
Steve Bird Wines collaborates with five other small wineries that identify themselves as being in the Māori space to improve access to distribution, reduce costs and help present themselves as a meaningful critical mass of business.
“It has got to a point where that is more or less a necessity for the long term survival of our businesses,” he said.
“The domestic wine trade is characterised by quite low value, low returns. We smaller producers see the future for our companies as export, and exporting is horrendously expensive in terms of establishing market.”
By collaborating, they had formed a like-minded group that could operate within the same umbrella, and the extra critical mass had helped attract NZTE support, he said. In addition, the winemakers were currently exploring working with a larger food and beverage collective that included honey, dairy and seafood, he said.
Anthony Olsen, a representative on the Bay of Connections Māori Advisory Group, said there were a number of projects being undertaken that were really good.
But he noted that recent data produced on behalf of Bay of Connections showed that Māori on average earned $116 per week less than non-Māori.
“The issue for me has always been about where do the benefits flow down to Māori people – can you show me how this is actually increasing employment opportunities and increasing the hourly rates for Māori.”
“Predominantly, the data showed that Māori were in more lower paying hourly rate jobs than non-Māori, which was not what I expected. That changed my whole perspective. So you can either encourage Maori to enter into working for themselves as a means of increasing their hourly rate, or encourage them to take on work that gives them a higher hourly rate, but may require some upskilling.”
Olsen said that although Māori were encouraged to feel the Māori Business Networks were an avenue to develop their own businesses, they also needed to be sold on the idea that non-Maori business networks were also available to them.
“A lot of Māori think the Maori business networks are where they need to go and that the other networks aren’t available to them. That’s a complete fallacy, but it’s a perception.”
The Bay has a number of organisations that encourage startup businesses, including the country’s biggest early stage funding group, Enterprise Angels, and groups such as the Venture Centre, which facilitate a number of mentoring and training programmes.
Executive director Bill Murphy said there was “a bit of a chasm” between Enterprise Angels and the Māori Business Networks.
“Although there are some individual exceptions, in my experience there is very weak engagement between iwi representatives and groups like ours,” said Murphy.
“I always make it clear to anybody I talk to in Māoridom how open we are, and that we would enjoy working more closely together, and helping with training and inviting them to bring along some of the young people, but it just doesn’t happen.”
Ian Taylor emphasised to conference delegates the importance of iwi becoming more open in their investment policies, citing ARL’s experience with Ngati Kahungunu. He said the iwi’s investment came about because it believed in what ARL was attempting to achieve.
“Our business plan is 250 years long and it’s driven to a certain extent by being concerned with what the social return is for our people,” he said.
“Other businesses don’t think like this. Everybody thinks that if you’re going to have a social return that means you aren’t going to make money. But actually to make a social return, you have to make money.”
As an example, ARL is currently working with the Methodist Mission in Dunedin to build an application in 360 degree virtual reality that will provide a new way of teaching numeracy and literacy in prisons, where Maori and Pacifica people are over-represented as a percentage of the general population.
“We would find it very difficult to prove the business case,” he said. “Ngati Kahungunu said this is going to make a difference to our people… so let’s do it.”
Taylor also emphasised that the concept of technology was not new.
“If we look at [Maori] history, our ancestors sailed across one-third of the planet in state-of-the-art boats.
They were designers, they were engineers, they were building the leading technology of their day. And when they arrived in New Zealand, the country was nothing like the one they left behind so they innovated ways to survive.”
Taylor said that growing up, he never learned at school about the achievements of his Maori ancestors.
“Our education system has failed. We talk about our young Maori and Pacifica kids being at the bottom of the ladder education. Maybe that’s because they don’t know that the stuff they need to survive today is already in their DNA… so let’s get on with it.”