UpStart Nation 2023: A roadmap for NZ’s thriving startup ecosystem

OECD New Zealand

The Ministry of Business, Innovation, and Employment has released a significant report, UpStart Nation 2023, which outlines a comprehensive strategy for New Zealand’s startup ecosystem.

The research, which underlines the country’s distinctive entrepreneurial landscape, provides strategic insights and suggestions that have the potential to influence the future of startups in Aotearoa/New Zealand.

The Startup Advisory Council, which authored the report, was established to develop a coordinated and comprehensive approach to supporting the startup ecosystem. The council’s objective, comprised of industry leaders, investors, mentors, and other stakeholders, is to give expert counsel, support, and suggestions to build a robust startup environment.

The startup ecosystem in New Zealand is unlike any other, and it is this uniqueness that the research seeks to maximise, rejecting duplicating models like Silicon Valley and emphasising the country’s distinct assets, advantages, and cultural values. The goal is to maximise the ecosystem’s potential by encouraging growth, innovation, inclusivity, and collaboration.

According to the analysis, there is the potential to treble the number of startup companies in New Zealand, necessitating an additional $2 billion in new funding sources. However, the vision goes beyond numbers. It encourages the emergence of underrepresented communities, such as female-led enterprises, Māori, and Pasifika communities, recognising their untapped potential and distinct viewpoints.

The paper also emphasises the need to boost ecosystem connectedness, which may accelerate startup growth by 2.1 times. This includes addressing issues such as needing more relevant mentorship and challenges in seeking help. Furthermore, it also emphasises the need to overcome fragmentation and the need for coordination and solving issues in establishing spinout enterprises with research institutes.

In exploring these opportunities, the report paints a picture of a thriving, inclusive, and forward-thinking startup ecosystem that capitalises on New Zealand’s distinct assets and cultural values.

The research also gives insight into the extent of government help startups receive, notably in public service procurement. According to the data, founders identified a need for greater participation in public sector procurement processes. They found that Government contracts are frequently awarded to established and international corporations, making it difficult for startups to acquire government contracts, contribute to public sector innovation, or even gain legitimacy in their field.

This problem affects several industries, including software services, deep technology, and healthcare procurement. Significant potential exists in deep tech for the public sector to collaborate with the startup sector to effect meaningful change. For example, the council found that many items of medication and medical equipment are developed by startups in the health industry but are only available in New Zealand after establishing themselves elsewhere.

The paper suggests that the public sector be required to actively invite and assess bids from New Zealand entrepreneurs to improve government support for startups. By strengthening the policies and expanding opportunities for entrepreneurs to contribute to government projects, startups can gain legitimacy, allowing them to more quickly grow and encouraging a culture of support and creativity inside the public sector. This idea is part of a larger strategy to incorporate startups into government operations and capitalise on their potential for public benefit.

The recommendations are broken down into four primary categories. “Connectivity” refers to building bridges between startup ecosystem members, such as founders, investors, and mentors. Second, “Capital” delves into investment tactics, such as startup tax credits and venture capital programmes. The third heading, “Capability,” focuses on pivotal know-how and encourages actions that boost the attractiveness and viability of new businesses. Last, the “Culture” section stresses the value of diversifying the business community and involving the government in new ventures. Collectively, these suggestions amount to a far-sighted road map that captures New Zealand’s distinctive advantages and sets it up to become a frontrunner in the entrepreneurial world.

“UpStart Nation 2023” is a call to action for government, industry leaders, and the broader community. The Startup Advisory Council concluded that by accepting these proposals and cooperating, New Zealand could position itself at the vanguard of global entrepreneurship, providing founders and companies with the resources and support they need to influence the world.