Waikato Business News April/May 2019

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4 WAIKATO BUSINESS NEWS April/May 2019 Did you know there are 15,000 businesses in Hamilton? But, why are they cool? Chris Simpson How do we make Hamilton cool? Well, economically anyway, it’s already becoming cool. But we don’t tell our economic story in a way that oozes confidence about just who we are, and who we are becoming. So let’s for a moment ignore any advertising hype of how to make a city cool and just look at the numbers of what’s happening in Hamilton regarding business and the skilled people employed in those businesses. Firstly, Hamilton is an $8 billion economy, we are the fourth largest city, with growth of 3.45 percent last year. But that’s a number which doesn’t really illuminate where true business opportunity and growth is. So, what is opportunity? Well, 11 percent of Hamilton’s economy is in manufacturing. It’s number 1! But the two other big players are health care at 10.6 percent and professional and scientific services at 8.3 percent. And it’s that face of our changing economy where Hamilton is becoming increasingly sophisticated. Our need as a city of sophisticated workers with the right skills is growing. We have more professional and technicians employed as a percentage of our workforce compared to New Zealand. In fact, of the 90,000 people working in Hamilton, just on 40 percent are in knowledge-intensive jobs, compared to 32 percent for the rest of New Zealand. A knowledge-intensive industry is one where you need to be well-educated and trained to create and make things. As a city, we have 25,000 people in professional employment with another 15,000 as managers. And there has been a 4 percent increase in the number of chief executives and general managers in the past year, compared to only 3 percent in New Zealand. And that’s the point. Hamilton is becoming cooler because our economy is heading in the right direction through the employment of people with the right skills, in the right industries. It means we become more attractive to other people with skilled ideas and knowledge. And we become more attractive to business and industry locating here. That’s opportunity. So, there you go Hamilton, you are already a cool place to be! Exciting, challenging, scary world full of opportunities From page 3 Apart from climate change, access to clean water was also a major problem, as was plastic pollution, while the planet was being “used up” at three times the rate it could sustain. The world couldn’t continue in the same way. However, he also saw grounds for optimism. “The good thing, and I really believe, is that the world is waking up. I think it was a milestone moment when most of the countries around the world signed up to the 17 sustainable development goals. “I’ve seen a lot of boardrooms, I've seen a lot of senior management, and it's on every big business's agenda to really drive the sustainable development goals. “Increasingly, even investors, pension funds, big mutual funds are starting to say, hey, what is your company doing? Because they realise that if your business model is based on the old world of destroying and using up this world, it is not a great investment. Your company is not going to be around in 10 or 20 years' time.” Zijderveld said the third big shift is technology. The pace of change faced by businesses and workers came not from a single factor, but from a combination of data, computing power, AI and connectivity. “It's not one thing that creates the fourth industrial revolution, it's the exponential effect of these four forces all coming together. “This is a super-exciting development but it changes literally everything that we do.” He was an optimist about the changes, citing early transformations in the nature of work, from rural to factories and then to offices, each of them unimaginable at the time. “The question is how do you transition to the next economic model to make it fair. It will be a more open economy. It will be a more gig economy.” Being big is no protection in itself, he said. “I like the word ‘relevance’. Am I still relevant as a company?” Profound questions were raised, including whether the economic model was still working and how it could be evolved. For young people, he said, the search for meaning becomes important. The change is from success to significance, with Goldman Sachs representing the former and Tesla and Patagonia the latter. “The world we live in, it's an exciting world, it's a challenging world, it's a scary world, but it's also a world full of opportunities and if you ride the waves well it can be very, very exciting,” he said. Jan Zijderveld Avon: a case study in change Business Floor, Wintec House Cnr Nisbet and Anglesea Street, HAMILTON 07 839 5895 | help@waikatochamber.co.nz www.waikatochamber.co.nz Avon was the original gig economy company, 130 years before the phrase became vogue, its beauty products sold by self-employed women. But it was faltering when Jan Zijderveld joined as chief executive last year with the knowledge it needed to be turned around. That happened, he says, because the company missed two S curves: digitisation and premiumisation. Ten years ago, the executive team planned for a doubling of sales to about $20 billion, Zijderveld said. But instead of doubling, sales halved. The stock price fell from $44.50 to $1.50. “It's not that we changed anything. We stayed the same, we didn't move, we missed a couple of big movers.” He says the company kept selling using the traditional brochure and failed to create a “high-touch, high-tech” business which would see them selling from both the brochure and the mobile phone. It also failed to make sure the brand keep up with the latest trends. “This was one of the biggest beauty brands in the world and one of the biggest beauty companies in the world. It was on the verge of bankruptcy. Three years ago they ran out of cash, and had to go to a private equity company for an injection of cash. We are fighting for our survival.” Turning it around involves “new blood, new energy, new vision, but also totally new capabilities”, he said. “I always look for people that have lots of ideas, that have lots of ambition and drive to do something because those are the people who are going to change your organisation.” He said Avon needed to repremiumise and increase access through digitisation. “I believe in high touch, I think we are social animals. How do you capture the best of that and unlock it with technology? That, I think, is where the holy grail is. “Through digital I can reach everyone. I can sell Avon to anyone, any time. The digital revolution allows me to lead this huge brand awareness to more and more consumers.” As well as consumers, companies also need to think about citizens, he said. “Just making a better widget is not good enough any more. People now say: how is it made, what are the ethics and values of this company?” Part of his answer when it comes to Avon is that 6 million women around the world support families by selling its products, and part relates to its support of women’s causes including breast cancer awareness and opposition to domestic violence. “As an organisation not only do we feel we have economic empowerment, but we also have huge opportunities to help women's causes, women's lives.”
WAIKATO BUSINESS NEWS April/May 2019 5 Making a change for the better A unique Waikato organisation will play a key role when an initiative to support young unemployed into jobs starts in the region this month. By RICHARD WALKER The Ministry for Social Development will tap into Waikato Engineering Careers Association (WECA) when it rolls out its trades-based Mana in Mahi programme. WECA, a membership-based organisation including engineering businesses, tertiary providers and ITOs, will work with the ministry to get 18 to 24-year-olds into employment and apprenticeships. “It’s about getting them into meaningful work that is going to provide them the opportunity for progression,” says WECA coordinator Levinia Paku. WECA will reach out to its members, many of whom are in the manufacturing sector, and encourage them to take on a young person. Paku hopes to see about one person placed a month into jobs that offer 30 hours minimum per week, with the aim of being permanent. She will provide crucial pastoral care. For people who have been out of work for at least six months, challenges might be as basic as struggling to get to work because of a lack of transport. “We are hoping that wrap- ping pastoral care around them will help support them through this journey,” Paku says. “If it means we can make a difference in that space it’s pretty exciting and really rewarding.” I like this team because it gets things done. We're all in it for the same reason and it's because we are passionate about our youth, we're passionate about our industry here. Wearing another of many hats, Paku pays tribute to the team she works with at Smart Waikato Trust, which is proving highly successful with its focus on empowering young people through real education to employment pathways, working through a number of school-based programmes. Like others in the Smart Waikato team, Paku has many strings to her bow, including working with schools as part of Smart Waikato’s SSEP programme, which sees Year 9 and 10 students linked to workplaces at more than 20 schools throughout the region. It also sees her coordinating the Lion Foundation Young Enterprise Scheme Waikato – King Country, a nationwide initiative delivered by Smart Waikato in the region. YES gives Year 12 and 13 students the chance to set up and run a business, with each company creating their own product or service and bringing it to market. Paku runs events throughout the year, including a business pitch and a trade fair in August at which 25-30 teams set up stalls and sell their products. Also wearing her WECA hat, Paku project-manages EVolocity in Waikato, a programme in which secondary school students design and build electric vehicles. They compete at a regional level, with winners going on to the national finals. She says a metal technology teacher at Fairfield College has commented that introducing EVolocity to the classroom has brought about massive change. Disengaged students see their mates getting involved and join in themselves. At Fairfield the programme is run in metal technology, years 11 to 13, with the class typically contributing two teams of four to six each year. The electronics teacher also gets involved in what Paku describes as a “very future-focused combination”. Paku is particularly pleased that EVolocity is attracting a lot of female students - about 30 percent last year, boosted by Waikato Diocesan School for Girls coming on board. There is also a high proportion of Māori students, at about 20 percent last year, and likely to be more this year with Hamilton kura Nga Taiatea coming on board. “It’s exciting students about engineering. We are tracking them and a lot are considering engineering careers.” Paku is the right person in the right job to bring about change. She grew up in “beautiful” Wairoa where she attended Wairoa college, a decile 1 school with about 80 percent Māori. She then attended Waikato University, where she gained a Masters in Geochemistry, with a focus on water quality. She realised working in a lab was not for her, and her first job was as a Māori science support coordinator at the university, following which she stepped into the Cooperative Education Unit, which involved placing science and engineering students into industry to complement their degree, a trail-blazing programme at the time at the university. A short stint in recruitment made her realise what drove her was empowering youth, which led her to Smart Levinia Paku Waikato where she has been since 2015. “I like this team because it gets things done. We're all in it for the same reason and it's because we are passionate about our youth, we're passionate about our industry. “We have an amazing community. People are really giving, and they make my job easy.” AUDIT · BUSINESS ADVISORY · CORPORATE ADVISORY · TAX New name, same great team “ Having global connections is more important than ever and we are celebrating ours by taking on the Baker Tilly name.” David Heald Managing Director, Waikato Baker Tilly Staples Rodway It’s time for us to take the next step. www.bakertillysr.nz After 30 years as a member of the Baker Tilly International network, Staples Rodway is putting the Baker Tilly name on the door. We’re still us, locally owned and globally connected to build a great future together. Now, for tomorrow
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Waikato Business News April/May 2019

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