Originally published in Advancing ASEAN in the Digital Age Book, 14 November 2017.
New Zealand’s Opportunity with ASEAN in Today’s Digitally Connected World
New Zealand needs partners in Southeast Asia to grow in today’s digitally connected world. Our high-tech nation can also contribute significantly to the regional ASEAN Community for economic development as well as political, security, social and cultural advancements.
New Zealand is a country geographically about the same size as Japan, United Kingdom and Vietnam, but on a global population scale is one of the smallest in the world. In comparison the ASEAN region is one of the top seven economies, globally. The region has an abundance of tech talent, investment capital and large markets for products and services. Singapore and New Zealand are both ranked No.1 in the world for ease of doing business. Kiwi businesses today can easily engage with member countries of ASEAN – the New Zealand Government has a strong presence in the region through the Ministry of Foreign Affairs and Trade and New Zealand Trade and Enterprise.
Why New Zealand is relevant to ASEAN
The ASEAN Economic Community is equivalent to one single economy. This economy has progressively become more integrated since the establishment of ASEAN. Trade agreements have also opened up markets in ASEAN to both domestic and international competition.
New Zealand is well advanced in knowledge and development across many industry sectors. The expertise and know-how that we have developed can be leveraged as IP to help lifting ASEAN industries to international levels in order to compete and thrive.
New Zealand is well advanced in knowledge and development across many industry sectors. The expertise and know-how that we have developed can be leveraged as IP to help lifting ASEAN industries to international levels in order to compete and thrive. This is where New Zealand has the opportunity to make a difference with our tech and business sectors.
ASEAN has plenty of tech talent, investment capital, large populations and exponentially-growing digital technology uptake across the region. All of this represent massive opportunities for its businesses to innovate locally. However, many member countries are new to the development of know-how, scientific R&D, harnessing of intellectual property and innovating with many types of technology. Also, developing nations tend to start from a smaller foundation of IP.
For the region, there is an opportunity to work with external partners who bring a wealth of both expertise and IP. New Zealand is a well-developed digital nation, with nearly 29,000 technology firms from a population of just 4.5 million. Again, this is where New Zealand has the opportunity to make a difference to ASEAN with our tech and business sectors.
Why ASEAN is relevant to New Zealand
Technology innovation in New Zealand continues to grow rapidly and is a key enabler and accelerator on all fronts for the rest of the economy. However, so far, we have only seen the tip of the iceberg. There is still room for Kiwis to achieve much more with our tech businesses and also to effect more significant impact in regions such as ASEAN.
Being a small economy, we do not have large customer markets for our businesses. Consequently, many of our companies innovate for the global market by default. This makes the large and rapidly growing markets and digital economies in the ASEAN region important to our growth.
At the same time, while aspiring to capture global demand for our innovation, we do not have enough tech talent to provide the capacity needed to speed up our development for speed-to-market. We also have a limited pool of investment capital as well as risk appetite for technology innovation. These again make the ASEAN region important to fuel our growth.
On top of this, technology has been lacking as part of the New Zealand story that we have been projecting to the world, especially in regions such as ASEAN. This must change, if we are going to gain more traction in doing business with ASEAN markets.
An example of New Zealand engagement in ASEAN
In recent years, there has been an increasing number of New Zealand businesses and tech firms establishing their presence and engaging in the ASEAN region. One example is the Kiwi Connection Tech Hub located in Vietnam, managed by the Augen Software Group.
Augen started to help Kiwi businesses tap into the large growing pool of tech talent in ASEAN by establishing its offshore base in Ho Chi Minh City, Vietnam in 2005. Since then, the company has been assisting dozens of NZ businesses across numerous industry sectors with innovation projects, in ways that accelerate development and speed-to-market with increased capacity, scalability and cost efficiency while reducing risk, complexity as well as cultural barriers.
In 2016, in collaboration with business, industry and government partners, Augen launched the Kiwi Connection Tech Hub. The group’s business model expanded to include assisting Kiwi companies to physically deliver technology offerings into Vietnam and the ASEAN region as well as provide more extensive support to international customers across more time zones and doing so more cost effectively.
Collaborators and supporters so far include the ASEAN-New Zealand Business Council, Export New Zealand, New Zealand Trade & Enterprise, Ministry of Foreign Affairs & Trade, Asia New Zealand Foundation, KEA, New Zealand Technology Industry Association, New Zealand Software Association, Canterbury Technology Cluster, Auckland Tourism, Events & Economic Development, Wellington Regional Economic Development Agency, Christchurch New Zealand, Auckland University of Technology, University of Auckland, University of Canterbury, among others.
Augen’s plan is to continue expanding Kiwi Connection Tech Hub through partnering to include supporting Kiwi businesses to access investment capital and distribution networks to large customer markets in the ASEAN region.
Some tips for Kiwi tech businesses wanting to engage in ASEAN
Technology is playing an increasingly important role in New Zealand and ASEAN trade growth stories. The ASEAN tech market is expected to be a major regional performer over the coming years due to strong growth dynamics, while New Zealand’s technology sector grew to more than US$6.5 billion dollars in 2016.
As far as the tech sector goes, we are not an island. It would be smart and important to engage ASEAN markets alongside other Kiwi industry sectors which have been doing business development in the region for much longer and therefore are bigger, stronger, better known, more visible, more active and more connected in the region.
It is also vital that Kiwi businesses do their market research and engage in rigorous on-the-ground validation of their target customers in the region, then follow-through after their visits to progress relationships into business. We have to prove to the markets in the region that we understand their needs and are capable of engaging and delivering with the scale that is needed to meet demands.
New Zealand and the ASEAN Community are highly relevant to each other.
As ASEAN continues to become more integrated as well as internationalised, its industry sectors need to rapidly lift their standards and grow capabilities to compete, and so stand to benefit from New Zealand’s expertise and know-how in the form of IP that we can share with the region. At the same time, New Zealand can also share the strengths of a digital nation and our large and constantly advancing tech sector.
Conversely, New Zealand is a small population, and as such we have limited capacity in terms of tech talent, investment capital, large customer markets and fast-growing digital economies. Our businesses need to connect and engage with the ASEAN region as part of our global growth strategy. Our companies, industries and government also need to more strongly and pervasively assert the New Zealand technology story to the ASEAN region as well as the world.
About Peter Vile & Mitchell Pham
Mitchell Pham is co-founder and director of Augen Software Group and Kiwi Connection Tech Hub, chairman of the New Zealand Technology Industry Association (NZTech) and the New Zealand Financial Innovation and Technology Association (FinTechNZ).