A draft report submitted to the Ministry of Foreign Affairs and Trade may be the first step towards a New Zealand "Innovation Market" (IM), a private stock market designed to attract venture capital for New Zealand companies.
John Blackham of New Zealand Intellectual Capital Foundation (NZInc), which is proposing the IM, says the ministry asked for a feasibility report on the system and "our findings are favourable — it certainly looks like it would work".
There are two components to the proposal, based on a successful Swedish venture — IM managers who would help high-tech ventures get to a point where they can justify asking for investment, then an IM market where the stocks could be traded. "It would give the public the opportunity to invest in our high-tech companies," he says. "They would be high risk investments but the potential's there for high returns too."
The government has to show its support for the venture if it is to work, he says. Intel's recent announcement of its' first Australian investment, in document management specialist 80/20 Software, "was possible because the prime backer, Allen and Buckeridge, is a government-backed investment fund. That made Intel comfortable enough to go ahead," says Blackham. "Intel has a $US1.5 billion venture capital fund and if New Zealand wants to attract any of that, we have to make it easy for them."
Acer's recent visit to New Zealand with Taiwanese venture capital company Ho Tung, when representatives met 15 -technology companies looking for capital, is an example of what can be done — Trade New Zealand was quick to help, says Blackham. Ho Tung has since said three proposals are being studied further "and Acer is coming back in March, which is hopeful. But Acer is relatively small compared to the likes of Intel and Microsoft. If we could attract them, that would be nice." The New Zealand government will have to realise sooner or later, he says, "that it's probably the only organisation that can be the catalyst. It doesn't even have to provide any money — it just needs to show its support," he says. "I think the message will get through eventually, either to this government or the next."