Powering up taranaki s innovation ecosystem report 2019 by Brochures

POWERING-UP THE TARANAKI INNOVATION ECOSYSTEM SUMMARY REPORT Feasibility Study 2019

Imagine a Taranaki with a flourishing, thriving, connected and cohesive innovation ecosystem. Imagine what could be if we invested in growing the capacity and capability of Taranaki via the support, activations, curation and spaces offered through a ‘powered up’ innovation ecosystem – open, accessible and inclusive to all.

Support innovation in existing businesses

Support entrepreneurs and start-ups

That’s what the ‘Powering-Up Taranaki’s Innovation Ecosystem’ study set out to do – based on best practice research, engagement, business case process and reengagement the study built a picture of what could and should be. This approach advocates for a focus on GROW, CONNECT and TELL to foster and grow Taranaki’s Innovation Ecosystem. This report is a summary of the proposition for our future – a ‘Powered-Up‘ Innovation Ecosystem for Taranaki, including the strategic themes, the actions beneath and the investment required to move from aspiration to reality. The study was led by Venture Taranaki and undertaken by MartinJenkins working closely with the Taranaki Innovation Ecosystem and its stakeholders.

Develop a signature innovation event

Deliver targeted campaigns

Develop Taranaki innovation proposition

TELL

Develop and promote a Taranak innovation brand and identity

Increase incubation and acceleration

GROW

Deliver an enhanced programme of innovation support and services

Increase networking opportunities

Create a network of innovation locations

POWERING-UP TARANAKIâ&#x20AC;&#x2122;S INNOVATION ECOSYSTEM

Facilitate collaboration and integration

CONNECT

Prepare for the future

Support the development of a connected innovation community across Taranaki

Enhance inclusive innovation outcomes

POWERING-UP THE TARANAKI INNOVATION ECOSYSTEM

CONTENTS Introduction............................................................... 3 Our approach............................................................. 5 Visualising the Taranaki Innovation Ecosystem............... 6 Economic case.......................................................... 12 Commercial and financial cases................................... 17 Management case......................................................19 Conclusion & next steps............................................. 20

SUMMARY REPORT

INTRODUCTION

BACKGROUND

STRATEGIC DIRECTION

In recent years, Taranaki has seen the emergence of an innovation ecosystem that has a critical role to play in the region’s future economy and wellbeing. With this comes recognition that across Taranaki there is an opportunity, and a need, to embrace innovation as a driver of the region’s future economic success and that enterprises, organisations and individuals are already focused on developing the region’s innovation ecosystem.

REGIONAL ALIGNMENT

This study is an important initiative for the region and one identified as a key action in Taranaki’s regional economic development strategy, ‘Tapuae Roa: Make Way for Taranaki’ and the strategy’s supporting Action Plan, A Plan to Prosper Taranaki. Powering-up the Taranaki Innovation Ecosystem will enable substantial contribution to delivering the vision and goals of the regional strategy and its supporting Action Plan, as well as the recently launched Taranaki 2050 Roadmap. A powered-up innovation ecosystem will ultimately support the creation of more employment opportunities, reduced economic differentials across the region, greater wellbeing and a more resilient economy.

As Tapuae Roa demonstrates, Taranaki has already embarked on a journey to enable and support the region’s stakeholders to identify and deliver on their regional development goals. Under the Talent, Enterprise and Innovation foundation of Tapuae Roa, which is acknowledged as the most important and ambitious of the four foundations in the strategy, there is a commitment to growing the enterprise and innovation capability in Taranaki across all sectors. The strategy highlights several challenges and opportunities that are critical to growing the Taranaki economy, many of which are directly relevant to innovation and to building an effective innovation ecosystem.

NATIONAL POLICY ALIGNMENT There is also a need to consider how regional priorities fit with national policy. The New Zealand Treasury has led the way, globally, in focusing its attention on enabling higher living standards for New Zealanders. One of Treasury’s

POWERING-UP THE TARANAKI INNOVATION ECOSYSTEM

key outcomes for the country is improved economic performance with the objective of growing the economy and increasing living standards for New Zealanders. This includes commitment to wellbeing, which recognises that natural capital, social capital, human capital and financial/physical capital all contribute to economic capital. In terms of what is holding the country back from realising these outcomes, one of the most significant challenges is raising productivity levels across all regions. The productivity challenge is well documented in the work of the New Zealand Productivity Commission and there is a clear acknowledgement of the important role that innovation plays in raising long-term productivity growth. For Taranaki, these national issues are evident at the regional level. While the regional economy has several recognised strengths and has particularly benefited from the strength of the oil and gas sector, growth has not delivered for all parts of the region and there is a need to diversify and enhance the existing economic base. Innovation is critical to future success and partners across the region have acknowledged the need to support Taranaki’s emerging innovation ecosystem and foster the conditions that will support productive, sustainable and inclusive growth.

TRANSITIONING TO A LOW-EMISSIONS FUTURE 4

The recently launched Taranaki 2050 Roadmap sets out the vision the region has for a low emissions future. Innovation has a critical role to play in supporting and enabling successful achievement of that vision. The National New Energy Development Centre to be established in 2020, and other sector-based initiatives, will also play a key role in the region’s innovation ecosystem and vice versa.

WHY INNOVATION MATTERS TO TARANAKI While Taranaki has one of the strongest regional economies in New Zealand, the region’s economic base is relatively narrow. Performance and growth has not been evenly distributed and some of the region’s key industries that have been driving GDP and employment growth face disruption. There is a recognised need for transition to a more diverse and future-proofed regional economy. There is an opportunity to grow the region’s emerging innovation ecosystem to support that transition. As this ecosystem develops (driven by a combination of forwardlooking businesses, entrepreneurs and social enterprises, supported and enabled by iwi, the public sector and local authorities, the regional development agency and a network of enterprise support providers, mentors and investors) there is a need to ensure the ecosystem engages all parts of the region. Innovation and entrepreneurship facilitate local employment growth and can play a key role in place promotion and the attraction and retention of talent. Where the innovation economy is physically expressed in the form of location, it can stimulate collaboration, the formation and extension of industrial clusters and can facilitate area-based regeneration through the re-use of vacant sites and premises, or through enabling the development of new employment spaces. Innovation and entrepreneurship are both critical drivers of regional competitiveness and are important in the context of enhancing productivity, a key challenge for the New Zealand economy. There is a general recognition that innovation, across all industries, is critical to competitiveness and to long-term economic growth. Stakeholders and businesses across Taranaki have already identified the importance of these issues, understanding innovation is critical to the long-term success of Taranaki’s businesses and its people. Innovation has long been recognised as a key driver of economic growth and competitiveness. Innovation comes in many different forms but at its heart, innovation is about finding new ways of doing things that generates value, for customers and businesses alike.

SUMMARY REPORT

OUR APPROACH The study took an inclusive approach in developing the innovation ecosystem proposition that Taranaki requires to achieve its aspirations, and sustainably and successfully prosper. Recognising that Taranaki has seen the emergence of a nascent innovation ecosystem that has a critical role to play in the region’s future economy and wellbeing, Venture Taranaki commissioned MartinJenkins to work collaboratively on the feasibility of establishing a network of innovation hubs and precincts across the Taranaki region (as per the recommendation in Tapuae Roa), set in the wider context of powering-up the regional innovation ecosystem. Specifically, this work: • set out the strategic case for Powering-Up Taranaki’s Innovation Ecosystem and the growth and establishment of innovation locations across the region • identified a series of investment objectives that have been agreed by stakeholders, together with critical success factors and suggested criteria for a network of innovation locations • assessed a range of options to deliver the investment objectives and sets out stakeholders’ preferred option • provided details of the programme themes and actions contained with the preferred option and considers how these will be delivered, measured and the associated costs • considered the financial and commercial aspects of the preferred option • identified issues relating to the management and implementation of the preferred option. A criteria-based approach was adopted, which recognised that for stakeholders a failure to take active steps to develop the Taranaki Innovation Ecosystem was not an option, it was more a question of focus, scale and pace. The assessment and prioritisation approach considered a range of strategic and implementation factors that have been used to assess each of the identified options. In applying this model, we have also: • considered the regional context and circumstances, including the prior strategy development work • reflected good practice and lessons from elsewhere • adopted a flexible and pragmatic approach based on practitioner insights and direct delivery experience • considered input and feedback from Venture Taranaki, the project advisory group and stakeholder input to the process.

Through this process, partners and stakeholders from across the region have been closely involved in developing, iterating and refining the proposals contained in this report. This report presents the project’s findings and recommends a preferred option, a programme of support and a series of next steps.

STAKEHOLDER AND PARTNER ENGAGEMENT Significant attention has been paid to the views of stakeholders and partners across the region, with an extensive number of individuals and organisations regionwide approached to participate and share their views. Over 60 stakeholders have contributed, through individual meetings and workshops covering a range of parties. During this process, the vast majority of stakeholders have been involved in more than one discussion, and the recommendations represent what we heard from these stakeholders and partners. In addition, the development of the proposition has been guided by a project advisory group, which includes representatives from Venture Taranaki, New Plymouth District Council and Ngāti Ruanui, on behalf of Ngā Iwi o Taranaki. The majority of members have governance roles with many other Taranaki organisations, including WITT, TSB Community Trust and private sector, and bring that perspective to their role with the advisory group.

THE NEED FOR ONGOING INVESTMENT Stakeholders, in both the public and private sectors, are already allocating more resources to support innovation and ecosystem development; however, powering-up the ecosystem to a sustainable, effective and efficient level will require a step change in the resources allocated to this shared endeavour. A collaborative, co-ordinated approach is essential. It’s also important to recognise the development of Taranaki’s Innovation Ecosystem doesn’t sit in isolation. There are important connections and synergies with the National New Energy Development Centre (NNEDC), the proposed Food Futures Centre and other Tapuae Roa and Taranaki 2050 actions and initiatives. There is a shared aspiration to use this ecosystem analysis and related propositions or identified needs, to seek funding and investment for eligible activities from national and local government sources and the private sector. An initial assessment against New Zealand’s Treasury’s Living Standards Framework has also been undertaken.

POWERING-UP THE TARANAKI INNOVATION ECOSYSTEM

VISUALISING THE TARANAKI INNOVATION ECOSYSTEM The starting point is the recognition that across Taranaki there is an opportunity, and a need, to embrace innovation as a driver of the region’s future economic success and that organisations and individuals are already focused on developing the region’s innovation ecosystem.

THE IMPORTANCE OF PLACE There is a clear opportunity to develop and promote a Taranaki Innovation Ecosystem and several key opportunities have emerged for the network to encompass several different types of innovation spaces and locations across the region, tailored to local circumstances and market conditions.

While technology, and how businesses respond to technological change, has an important part to play in stimulating an innovation ecosystem, it would be a mistake to overlook the importance of place. Over the last decade, spatial considerations and the critical role that location factors hold in innovation ecosystems have become much more prevalent in the policy and practice of innovation. Significant work has been done to describe and understand this new geography of innovation, and what has become clear is that innovation locations can come in a diverse range of formats, reflective of different placebased factors and characteristics. Although place matters, locations for innovation come in many forms. Some have grown organically, and others are a result of careful spatial planning and deliberate actions. Consequently, in assessing the feasibility of developing innovation locations across Taranaki, it is essential to consider whether the conditions and locations are viable to support a network of spaces and to acknowledge the different market and community dynamics in each location.

CONDITIONS FOR SUCCESSFUL INNOVATION LOCATIONS

there are six key conditions that are necessary if any location is to be a success: • Quality and depth of collaboration between innovators, mentors, investors, established business and local leaders. • Management systems and skills for hosting the innovation community and establishing a positive identity and visibility. • Conditions for anticipating how the community will grow, including ‘grow on’ space and synergies with other locations. • A whole place perspective to attract innovationoriented firms and talent. • Proactive engagement with local skills supply and future skills demands. • Matching of ambition and resources to the size of the location.

CREATING A NETWORK OF INNOVATION HUBS Tapuae Roa contained a specific priority to explore the creation of up to six innovation hubs across the region. This was explored in a number of ways during this analysis. Specifically this included: • reviewing global evidence on innovation locations, their characteristics and what makes them successful • looking at examples of innovation spaces across New Zealand and overseas, and discussed these with the business case workshop participants

While place and location are clearly important, research suggests for locations to succeed, beyond physical space, there needs to be a strong focus on ensuring that the necessary locational and ecosystem conditions are in place and that there is enough funding and resource available to turn aspirations into reality.

• meeting with existing innovation hubs and co-working spaces, and sought to understand their business plans

The Future Cities Catapult1 has also identified that while innovation locations each have their own distinct features,

• meeting with private developers to discuss their plans.

1 Source: The Logic of Innovation Locations, Future Cities Catapult, May 2017

• meeting with the district councils and Venture Taranaki to understand what is happening across the region and their plans, aspirations and investment appetite

SUMMARY REPORT

A developing regional market for co-working Co-working locations are one common type of innovation space and can contribute significantly in supporting business growth and networking. Across Taranaki, the awareness and potential for co-working is growing. In the locations where co-working is starting to be provided by the private sector, there is an important role for the public sector. This includes raising awareness of existing facilities, encouraging other businesses and entrepreneurs to consider these facilities as a means of connecting to other companies and to the wider innovation ecosystem.

Hub opportunities as part of town centre regeneration plans In those parts of the region where there is not currently enough market depth to support a commercially viable co-working offer, there is an opportunity to consider how innovation spaces, including, but not limited to, only co-working, might be incorporated into other spaces and projects that are already underway or planned.

Alternative innovation spaces Outside of the main centres there is currently a lack of diversity in innovation spaces, and the opportunity for the market to drive the creation of innovation hubs is more limited. This is due to issues of scale, density and commercial viability. While this means that the opportunity for more traditional forms of innovation space, such as coworking, may not be commercially viable, there are some alternative models that could be implemented. The first, and most obvious, opportunity would be to activate the network of community facilities that already exist across the region and to connect these to the wider Taranaki Innovation Ecosystem, physically and virtually. This could include using events, meet-ups, workshops, training, presentations and other such activations as a way of engaging communities, more remote businesses and local entrepreneurs and home workers, in the innovation ecosystem. This could be achieved by bringing regional activations to the local level and also by using digital tools and technologies.

INCUBATION AND ACCELERATION A key theme, confirmed by the stakeholder interviews and discussions, and highlighted in Tapuae Roa, is that there is currently insufficient intensive support across Taranaki for the incubation and acceleration of innovative new and emerging business and enterprise ideas. Increasing the availability and funding of these types of activities will be important in growing more innovative businesses and unlocking entrepreneurship across the region.

2 OECD, Innovation Policies for Inclusive Growth, 2015

Increased rates of incubation and acceleration will also help bolster demand for innovation and co-working space and contribute to a more diverse, and deeper, innovation ecosystem. While both the founder and technology incubators provide services and support across New Zealand, the fact that there is limited place-based provision in Taranaki is a recognised gap. The absence of place-based incubation programme in Taranaki is a constraint on growing the innovation ecosystem across the region.

NEED FOR CONNECTIVITY AND CO-ORDINATION As suggested above, and highlighted in discussions with stakeholders, there are a significant number of opportunities to connect people and places to the Taranaki Innovation Ecosystem. As the ecosystem is still emerging, the more connections and networks that are made across the ecosystem, and the more places that are connected to the ecosystem, the stronger it will become and the faster it will grow. However, connection and networking are an active process and there will be a need for supporting investment to ensure the important task of ecosystem coordination and curation is sufficiently resourced. At present, beyond the work of Venture Taranaki, much of the coordination and curation is undertaken on a voluntary basis. While volunteerism is an important part of any innovation community, it is not enough on its own to ensure that all parts of a potential network are fully activated. In addition, volunteerism often relies on a small number of people and the ecosystem can become unstable if they move on or are unable to commit enough time to key activities. Consequently, supplementing the work that is already underway with some dedicated resources for co-ordination would deliver positive returns.

INNOVATION AND INCLUSIVE GROWTH Alongside place considerations, there is another important dimension of the current global innovation discussion that also needs to be considered in Taranaki. While innovation is widely recognised as playing a significant role in supporting economic growth, there is also a need to consider the issue of its relationship to inclusive growth. Over recent decades, income inequality has grown across OECD countries, and New Zealand is no exception. The causes of income inequality are complex and multidimensional, but it is recognised that as the knowledge economy has grown and there has been a transition towards a more service sector-oriented economy, coupled with the growing role of innovation and technology, the rewards of growth are not evenly distributed.Â˛

POWERING-UP THE TARANAKI INNOVATION ECOSYSTEM

This is a key issue for Taranaki and is reflected in the significant variations in economic performance and outcomes across the region. Consequently, there is a need to consider how an enhanced focus on innovation and entrepreneurship might deliver better outcomes across the region as a whole. There is a need to ensure that there is focus on stimulating the development of a connected regional innovation ecosystem outside of New Plymouth, to support even more economic growth of benefit to all communities.

ROLE OF THE PUBLIC SECTOR While innovation might primarily be the domain of private businesses and enterprises, or the research community, the public sector has a role to play in facilitating the growth of the innovation economy and enhancing local ecosystems. Addressing the gaps identified above will require active participation, investment and leadership of the public sector, working with partners and stakeholders across the region, acting as connector across the ecosystem.

In Venture Taranaki, the region has an established regional development agency with responsibility for facilitating economic development across all parts of the region and supporting the co-ordination and delivery of Tapuae Roa and the Taranaki 2050 Roadmap.

THE TARANAKI INNOVATION ECOSYSTEM Although place matters to innovation, the wider innovation ecosystem is equally critical if locations are to succeed. Currently, the Taranaki Innovation Ecosystem is one that is still emerging and nascent. Many of the components that would be expected are present, but they are still relatively young and not yet operating at scale. The activities present are all signs of a growing ecosystem, but there is a need to increase the scale, frequency, co-ordination, consistency and reach of ecosystem activities to support sustainable, ongoing and inclusive long-term growth.

SUMMARY REPORT

Though it is widely acknowledged that innovation is an essential driver of long-term economic growth, there is also a growing recognition that innovation is an outcome of the interplay of several factors encompassing both market dynamics and the wider environment. This has given rise to the notion of an innovation ecosystem, which seeks to illustrate the range of factors and conditions that combine to deliver innovation outcomes.

Successful innovation ecosystems are characterised by an active knowledge economy, comprising academic, public sector and business R&D and innovation activities with effective commercialisation support, supported by flexible public policy mechanisms. Successful innovation ecosystems also need a culture of innovation based on interaction, and openness to international opportunities and change³. The figure below illustrates one version of an innovation ecosystem model⁴ particularly suited to the Taranaki context.

FIGURE: CROWLEY’S INNOVATION ECOSYSTEM FRAMEWORK⁵

3 European Union, Committee of the Regions, Regional Innovation Ecosystems, 2016 4 The World Bank, Boosting Tech Innovation Ecosystems in Cities, 2015 5 As presented in The World Bank, Boosting Tech Innovation Ecosystems in Cities, 2015

POWERING-UP THE TARANAKI INNOVATION ECOSYSTEM

BUILDING AN EFFECTIVE INNOVATION ECOSYSTEM There is significant diversity in what constitutes an innovation location, and while innovation can occur anywhere, this does not automatically mean that every location has the necessary assets to create a strong innovation ecosystem. The notion of an innovation ecosystem is fundamental to how innovation is enabled and sustained. In this regard, there are several fundamental drivers that support innovation outcomes. These drivers include factors⁶ such as: • proximity to customers and suppliers • local sector and company dynamics • access to knowledge and research • culture of collaboration • ability to access and retain talent. The extent to which these fundamental drivers are present has a significant impact on the viability of building an effective ecosystem and of locations that foster innovation. Ensuring the Taranaki Innovation Ecosystem continues to develop is important. Research by the World Bank⁷ suggests that those locations that are looking to establish and grow effective innovation ecosystems need to focus on a framework that incorporates five essential dimensions: 10

1 People – entrepreneurs and a skilled workforce are essential to creating an effective innovation ecosystem. 2 Economic Assets – referring primarily to the existing economic and industrial structure of a location. 3 Infrastructure – including business accommodation (including co-working and shared office space), transport, broadband speed and access, housing availability and affordability and wider amenities, and quality-of-life factors. 4 Enabling Environment – reflects the policy and regulatory settings, both nationally and locally, that support entrepreneurship, business growth and innovation. 5 Networking Assets – the existence and development of networking assets are critical to any innovation ecosystem. Innovation can be regarded as a creative process that is sparked by meaningful collisions and collaborations between people businesses and institutions. Networking assets are central to the ecosystem and networking events, meet-ups, competitions and collaborations are all essential.

6 MartinJenkins analysis of various sources 7 The World Bank, Boosting Tech Innovation Ecosystems in Cities, 2015 8 Source: MartinJenkins analysis

GAPS IN THE ECOSYSTEM Taranaki’s Innovation Ecosystem has many of the key components needed to be successful. However, the ecosystem is still emerging, and some areas are more developed than others. From interviews and observations several areas emerged that could be addressed to strengthen the overall system⁸. These are as follows: • Research & Development There are few tertiary-level research and development or high-quality study options or research activity across Taranaki. This is a barrier to developing capability within the ecosystem, impacts the ability of existing businesses to access knowledge and holds back the creation of new businesses. • Support for entrepreneurs There is little support for emerging entrepreneurs between the early stage start-up assistance of start-up weekends and hackathons, and the serious scenario of pitching for investment funding and taking a product to market. • Support for growing and scaling innovative businesses Moving past the initial start-up phase there was seen to be a need for a deliberate programme to support founders and founding start-ups to grow and scale. • Support for established businesses There was also a recognised need to think about established businesses and enterprises, particularly those in traditional industries. • Mentoring for innovation Mentoring programmes for innovators and start-ups play an important role in supporting business owners and leaders. • A distinctive Taranaki innovation proposition Taranaki’s innovation proposition is not well known and there is an opportunity to create a distinctive placebased narrative that leverages the region’s qualityof-life offer but serves as an attractor for business, investment and talent and helps to further develop the ecosystem.

SUMMARY REPORT

PROBLEM DEFINITION AND INVESTMENT OBJECTIVES Given the analysis set out in previous sections, together with the views of stakeholders and partners from across the region, it’s apparent the development of the innovation environment for Taranaki should not simply be focused on the development of physical spaces, important though this is. Considering innovation locations within a wider ecosystem framework creates a compelling platform for Taranaki, and an opportunity to set the region apart from many other locations across New Zealand. The opportunity for Taranaki is to consider physical space requirements alongside those activities that would support ecosystem development, including business support, network activation and curation, and culture and identity. This would include defining Taranaki’s innovation proposition and how this is effectively communicated and leveraged to further support the development of the region’s ecosystem. Consequently, there is a need to take a broader approach to determining the problem definition and identifying investment objectives that support the sustainable growth and development of innovation hubs and precincts across the region.

The Taranaki innovation story is still relatively unknown and there is an opportunity to market the region, its innovation capabilities and its aspirations nationally and globally and to create a stronger sense of excitement and direction. Achieving these outcomes will require focus, collaboration and investment. Success will result in higher rates of innovation and firm formation, stronger growth and sustainable and resilient communities.

INVESTMENT OBJECTIVES Following on from the problem definition, and based upon an inclusive process of engagement, the following investment objectives have been agreed. 1 GROW: Enable the sustainable growth of the Taranaki Innovation Ecosystem by increasing the scale, frequency and reach of activities and programmes that support the development of networking assets and their accessibility across the region. 2 CONNECT: Enable, promote and connect existing, new and emerging innovation locations and communities across Taranaki, supporting the growth and sustainability of current, emerging and new hubs.

3 TELL: Develop, communicate and promote a distinctive Taranaki innovation narrative, brand and identity, highlighting innovation assets, opportunities, innovators and entrepreneurs and leveraging the region’s quality-of-life offer to better attract and retain talent, investment and innovators.

Taranaki has an emerging Innovation Ecosystem with some visible locations, activations, entrepreneurs and companies. However, there is a compelling case for powering-up the ecosystem to create greater outcomes and more opportunities across the region.

These three objectives are shared objectives and regional partners, including the public sector, the private sector, iwi and the social sector have shown clear intent to work collaboratively to make progress in each of these areas over the next three years.

PROBLEM DEFINITION

In further developing Taranaki’s innovation ecosystem, place factors have an important role. Having appropriate, adequate and connected locations that support innovation outcomes across the whole of the region is critical. These places may come in many forms, but they are necessary in making innovation more visible, companies more connected and communities more engaged. At present, there is insufficient scale in the ecosystem and there is a need for greater co-ordination and additional points of engagement to encourage new and existing businesses and entrepreneurs to grow, innovate and succeed.

POWERING-UP THE TARANAKI INNOVATION ECOSYSTEM

ECONOMIC CASE PURPOSE

CRITICAL SUCCESS FACTORS

Having set out the strategic case, problem definition and investment objectives for enhancing Taranaki’s Innovation Ecosystem, including the opportunity to create a network of innovation hubs, this section considers the economic case for any investment.

The assessment of any short-listed options needs to consider the critical success factors that are key to achieving the investment objectives. The critical success factors for enhancing the Taranaki Innovation Ecosystem have been informed by the analysis set out in the strategic case, by stakeholder interviews, a facilitated business case workshop and discussions with the project advisory group. These critical success factors are set out in and formed the basis for assessing the short-list of options and identifying the preferred option.

The first component of developing the economic case involves identifying a small number of project dimensions that represent choices that can be made regarding the shape of any intervention that might be made to further develop the Taranaki Innovation Ecosystem. These dimensions are used to identify a long-list of options that can then be used to identify a short-list of options for further consideration. Once the short-list of options has been identified, each of these options are then reviewed against a number of critical success factors. The critical success factors are identified with reference to the investment objectives set out previously and are used to assess each of the shortlisted options in order to identify a preferred option. 12

KEY DIMENSIONS There are several key dimensions that are critical to consider in order to meet the identified investment objectives. These dimensions recognise that it is not possible for the innovation programme to be all things to all people and that there is a need to focus activity to get the best possible outcomes. The key dimensions include: • Scale – what is the spatial focus of the intervention? • Target Population – what is the target population for the intervention? • Customers – within the target population who are the customers for the intervention? • Partners – who are the partners that will be key to the successful delivery of the intervention? • Solution – within the option, what are the activities that the intervention undertakes or facilitates? The long-list of options are essentially choices that can be made as to the focus of activity to enhance the Taranaki Innovation Ecosystem. These choices are then reflected in the short-list of options.

A long-list of options was assessed and a short-list of options to enhance the Taranaki Innovation Ecosystem were identified. The short-listed options have also been informed by the analysis set out in the strategic case, as well as knowledge of good practice experience and international lessons and evidence relating to the development of innovation ecosystems and locations. The four short-listed options were: 1 Maintaining the status quo (do nothing) This option recognises that there are a range of activities already underway across Taranaki that are designed to grow the innovation ecosystem and assumes partners continue to progress current activities and promote current innovation precincts and hubs. 2 Delivering and enhanced programme of support The enhanced programme option recognises that Taranaki’s current innovation ecosystem and supporting infrastructure is still nascent and in need of further development and enhancement. This option proposes an integrated programme of activity designed to meet the investment objectives. 3 Focusing activities on attracting innovative companies and entrepreneurs to Taranaki This option proposes a focus on activities to attract talent, businesses and investment to the Taranaki region to support the further development of the innovation ecosystem and to drive demand for current and future innovation precincts and hubs. 4 Powering-up the Taranaki Innovation Ecosystem The powering-up the ecosystem option is a blend of the previous options with a focus on a series of connected strands, specifically: delivering an enhanced programme of support to grow the ecosystem, connecting places and supporting the development of the Taranaki innovation community, enabling the creation and expansion of precincts and hubs across the region and developing and raising the profile of the Taranaki innovation proposition.

SUMMARY REPORT

CRITICAL SUCCESS FACTORS9 Factor

Description

Strategic fit

• How well does the option enable the delivery of Tapuae Roa objectives and actions? • How well does the option align with national plans and policies? • How well does the option fit with the investment objectives?

Wider impacts

• How well does the option deliver for people and places across Taranaki? • How well does the option build future skills and entrepreneurs?

Ability to engage existing ecosystem

• How well does the option build upon existing activities and initiatives?

Contribution to regional profile and identity

• How well does the option build and leverage a Taranaki innovation brand and identity?

Ecosystem impact

• How well does the option support the growth and development of the Taranaki Innovation Ecosystem? • How well does the option support the growth of the future economy as well as existing industries?

Complexity and timeliness

• Can the option be implemented without creating excessive complexity or without significant delay?

Deliverability and ease of implementation

• How well does the option fit with existing organisational responsibilities and capabilities?

Risks

• Are associated risks acceptable and manageable?

Value for money

• How well can the cost of the option be met from existing funding? • How well does the option optimise value for money considerations?

An assessment of the short-list against the critical success factors to indicate strength of fit was then undertaken.

THE PREFERRED OPTION POWERING-UP THE TARANAKI ECOSYSTEM OPTION Based on the analysis and assessment of the short-listed options, together with the feedback from stakeholder interviews and discussion and research, the preferred option is the Powering-up the Taranaki Innovation Ecosystem option. The preferred option identification explored the strategic case assessment, potential investment objectives and the range of possible investment options. Through this process, stakeholders have played an active role in informing the shape of the programme and proposed activities, ensuring that they reflect local issues, concerns and opportunities.

ABILITY OF THE POWERING-UP THE ECOSYSTEM OPTION TO MEET THE INVESTMENT OBJECTIVES AND CRITICAL SUCCESS FACTORS The powering-up the ecosystem option was seen to be the only option that had the ability to successfully meet each of the investment objectives. The proposed programme of activities offered the ability to address all the objectives directly and could build upon existing activities. The preferred option also has the strongest fit with the identified critical success factors. These draw upon the views of stakeholders as well as the review of wider evidence and best practice in innovation ecosystem development and the characteristics of successful innovation locations. The powering-up the ecosystem option also demonstrates alignment with national priorities including the Government’s regional development focus and the Living Standards Framework.

9 Critical success factors combine standard business case questions with factors that are specific to the enhancement of the Taranaki Innovation Ecosystem as informed by the strategic case assessment and investment objectives

POWERING-UP THE TARANAKI INNOVATION ECOSYSTEM

THE PROPOSITION: A POWERED-UP INNOVATION ECOSYSTEM FOR TARANAKI

FIGURE: TARANAKI INNOVATION ECOSYSTEM PROGRAMME

Looking to the detail of the powering-up the ecosystem option, this would involve the development and delivery of an integrated programme of activities designed to power-up the Taranaki Innovation Ecosystem, building upon existing activities and bring greater visibility and co-ordination across the region. The programme would respond to the key issues identified in the strategic case and would reflect each of the defined investment objectives.

Support innovation in existing businesses

The Powering-Up the Taranaki Innovation Ecosystem option would be structured around three programme areas and 11 core themes. While the activities proposed are extensive, they should not be seen as a â&#x20AC;&#x2DC;wish-listâ&#x20AC;&#x2122;. Each has been identified through comprehensive engagement and discussion with existing ecosystem participants and they draw upon wider research and good practice. The activities would be phased over a three-year period with an annual review of progress and priorities. It is acknowledged that activities will need to be extended beyond the initial threeyear period and there will be a need to review ongoing funding models and partner commitments. The overall programme is illustrated in the figure alongside. 14

Support entrepreneurs and start-ups

Develop a signature innovation event

There are clear linkages between the proposed programme areas, the identified investment objectives, the strategic case assessment, underlying evidence base, and established good practices. The figure overleaf provides a high-level intervention logic for the powered-up innovation ecosystem programme.

Deliver targeted campaigns

Develop Taranaki innovation proposition

TELL

Develop and promote a Taranaki innovation brand and identity

SUMMARY REPORT

Increase incubation and acceleration

GROW

Deliver an enhanced programme of innovation support and services

Increase networking opportunities

Create a network of innovation locations

POWERING-UP TARANAKIâ&#x20AC;&#x2122;S INNOVATION ECOSYSTEM

Facilitate collaboration and integration

CONNECT

Prepare for the future

Support the development of a connected innovation community across Taranaki

Enhance inclusive innovation outcomes

POWERING-UP THE TARANAKI INNOVATION ECOSYSTEM

FIGURE: HIGH-LEVEL INTERVENTION LOGIC

Medium-term outcomes

Outputs and Outcomes

Intervention

Inputs

Drivers and opportunity

LONG-TERM OUTCOME OR IMPACT

• • • • •

Create a network of innovation locations Facilitate collaboration and integration Enhance inclusive innovation outcomes Prepare for the future

• Increased resilience of Taranaki economy

• Develop Taranaki innovation proposition • Deliver targeted campaigns • Develop a signature innovation event

Develop and promote a Taranaki onnovation brand and identity

• Increase in number of connections across ecosystem • Increase in level of business investment in innovation, research and development Increase in level of investment into Taranaki businesses Improvement in rates of business formation and growth Increase in technological uptake and adoption Increase in rate of intrapreneurship and employee-led innovation Increase in revenue and growth of supported businesses

OUTCOMES

• Reduced differentials in regional performance

POWERED-UP TARANAKI INNOVATION ECOSYSTEM

• Increased in employment levels across region

OUTPUTS

• • • •

• GROW – Enable the sustainable growth of the Taranaki Innovation Ecosystem by increasing the scale, frequency and reach of activities that support the development of networking assets and their accessibility across the region. • CONNECT – Enable, promote and connect existing, new and emerging innovation locations and communities across Taranaki, supporting the growth and sustainability of current, emerging and new precincts and hubs. • TELL – Develop, communicate and promote a distinctive Taranaki innovation narrative, highlighting innovation assets, opportunities, innovators and entrepreneurs and leveraging the region’s quality of life.

Investment Objectives

Develop connected innovation community across Taranaki

• Increase uptake of business support activities, grants and vouchers • Increase in number of companies accessing innovation mentors • Increase in companies adopting disruptive technologies and new business models • Increase in amount and take up of co-working across region • Increase in number of companies and entrepreneurs participating in incubation and acceleration activities • Increase in amount and reach of networking activities • Increase in number of innovation events and participation in events

TARANAKI INNOVATION ECOSYSTEM PROGRAMME

Support entrepreneurs and start-ups Support innovation in existing businesses Increase incubation and acceleration Increase networking opportunities

• Existing co-working activities and providers • Wider innovation initiatives • Enhanced co-ordination and promotion of existing activities and programmes

Enhanced programme of innovation support and services • • • •

• Establishment of innovation ecosystem development team • Financial investment into innovation locations • Scale up of existing innovation community activities

Taranaki’s economy has generally been performing well but there is a need for the region to focus on creating sustainable and inclusive growth. Innovation is critical to the long-term success for Taranaki’s businesses and its people. Taranaki has an emerging innovation ecosystem with some visible locations, activations, entrepreneurs and companies. However, there is a compelling case for super-charging the ecosystem to create greater outcomes and more opportunities across the region.

SUMMARY REPORT

INDICATIVE COMMERCIAL AND FINANCIAL CASES APPROACH TO ESTIMATING THE PROGRAMME COSTS The financial case estimates the cost of the powered-up ecosystem programme, using both top-down and bottomup analysis. The top-down analysis has compared the proposed activities to the costs of similar programmes from elsewhere and has used available information and data from recognised public sources such as MBIE and IRD. The bottom-up analysis used a purpose-built financial model that estimated operating and capital cost over the initial establishment period and the three years from 2019/20 to 2021/22. In terms of the investment required, the total investment to deliver the activities and programme proposed is estimated to be $8.5 million. The financial model is based on several assumptions, including the approach to delivery; for example, the balance between delivered activities, commissioned activities and grants/sponsorships. The proposed costs have been tested and validated with Venture Taranaki and with the advisory group. In some cases, costs have been estimated based on the likely delivery costs of proposed activities, but it is recognised that final numbers would be established through the commissioning and procurement process, as would the funding mix. Of the proposed annual operational expenditure, the majority of investment (close to 60%) relates directly to the operational costs associated with the development and delivery of new programmes of activity under the GROW, CONNECT and TELL strategies. Most of the investment would be in the form of grants and sponsorship and the largest component of these costs would be those associated with the provision of incubation and acceleration support. This investment recognises the key role that current ecosystem participants are already playing and their ability to do more, if sufficiently resourced. At the same time, it is also recognised that when activities are commissioned there will also be opportunities for new organisations to put forward proposals. This will ensure that value for money is a key consideration, while also ensuring that the region is able to secure the best partners to deliver the required services and initiatives. The second most significant cost (approximately ¼ of operational costs) relates to the recruitment and ongoing salary costs of the team that would be required to deliver the programmes and help co-ordinate and activate the ecosystem.

The proposed programme of activities has been set out over an initial programme period of three years. However, it is recognised that powering-up the Taranaki Innovation Ecosystem will require consistent and ongoing activation and co-ordination, which extends beyond the initial three years. In the first instance, implementation of the programme to 2022 provides an opportunity for the emerging ecosystem to mature and to respond to the additional investment that is proposed before taking stock of progress and refocusing activities. Activities will be monitored and reviewed annually to measure progress against the objectives and targets of the Tapuae Roa Strategy and Action Plan. The delivery model assumes a central role for Venture Taranaki in the co-ordination and curation of the proposed activities contained in the preferred option. As the regional development agency, Venture Taranaki is responsible for delivering economic development activities across the region and the development of Taranaki’s Innovation Ecosystem aligns with the organisation’s existing activities and overall purpose. It is proposed that the additional capacity required to deliver the preferred option would be established within Venture Taranaki and some of the proposed activities would be delivered directly by Venture Taranaki. More generally, it is assumed that many of the proposed activities would be delivered by existing ecosystem partners from across the innovation community, including iwi. In these instances, Venture Taranaki would play a commissioning role, using sponsorship and grants to support a comprehensive and connected programme of activities across the region.

LEVEL OF CERTAINTY OF COST ESTIMATES Careful thought has been given to assumptions, analysing the nature of the proposed activities, examining various approaches to service delivery in other organisations, and drawing on expertise in organisational design. The cost estimates presented in the indicative business case are based on the most up-to-date information available. They are likely to change over time as further detail is developed about how the powering-up the ecosystem option will be delivered.

FUNDING APPROACH The programme of activities contained in the enhanced ecosystem option represents a significant new investment into growing the Taranaki economy. Funding this

POWERING-UP THE TARANAKI INNOVATION ECOSYSTEM

programme will require additional investment from existing partners, from the private sector and from government. While it may be possible to apply some existing resources to delivering elements of the proposed activities, it will not be possible to fund all activities from within existing budgets. It is anticipated that the funding mix of each activity will vary, depending on the nature of the service or activity proposed. As part of the next steps for the programme there will be a need to determine the precise funding mix and strategy for each initiative. This will include discussing opportunities for an increase in core funding from existing partners and exploring opportunities for funding from central government funds.

PROCUREMENT APPROACH In terms of the proposed procurement approach, it is envisaged that the activities contained in powering-up the ecosystem will require a combination of: • Direct Delivery – utilising existing people and resources from across the ecosystem; for example, current Venture Taranaki staff involved in administering current enterprise support services. Or alternatively, direct delivery through the proposed innovation ecosystem team. 18

• Commissioned Services – where proposed activities are to be newly developed, these will be commissioned following Venture Taranaki’s usual procurement procedures. This will variously involve the preparation of Request for Proposals or Expressions of Interest seeking partners to design and deliver new services. • Grants and Sponsorship – for some activities that support the development of the ecosystem, it is likely that investment in, and then the use of grants or sponsorship, will be required. Grants and sponsorships will be important as they allow for the active engagement and participation of existing ecosystem partners.

SUMMARY REPORT

MANAGEMENT CASE 19

The purpose of the management case is to provide an initial assessment of the capacity and capability of partners to implement the preferred option and the role of different organisations.

DELIVERING A POWERED-UP ECOSYSTEM It is envisaged that the powering-up the ecosystem option will require the active participation of stakeholders and partners from across Taranaki. There will therefore be a requirement for co-ordination across the various activities to ensure that opportunities for collaboration and synergies are maximised. In addition, where new activities are to be designed and commissioned, there will also be a need for these activities and any associated procurement to be co-ordinated as efficiently and effectively as possible.

In order to avoid any unnecessary duplication, it would also be advisable, where possible, to use existing regional structures to deliver and implement the proposed activities contained within the powering-up the ecosystem option. Consequently, recognising the fact that Venture Taranaki already operates at a regional level and has a track record of delivering and supporting innovation-related initiatives, it is recommended that Venture Taranaki would be the lead organisation for delivering the preferred option, working in collaboration with the private sector, existing providers, NgÄ Iwi o Taranaki, TLAs and central government.

POWERING-UP THE TARANAKI INNOVATION ECOSYSTEM

CONCLUSION & NEXT STEPS DELIVERING THE OPPORTUNITY Powering-up the Taranaki Innovation Ecosystem is critical to the long-term success and transition of the Taranaki economy. As the region’s institutions, businesses, communities, entrepreneurs and residents continue to embrace innovation, Taranaki’s economic wellbeing will become more resilient, more diverse and more inclusive. Delivering this opportunity and successfully powering-up the Taranaki Innovation Ecosystem will require the focus, active participation, collaboration and investment of stakeholders and partners from across Taranaki and at the national level.

In terms of the investment required, over the initial establishment period and the three years (2019/20 to 2021/22), the total investment to deliver the activities and programme proposed is estimated to be $8.97 million. Much of the required investment relates to the operational costs associated with the development and delivery of new programmes and activities, including the provision of incubation and acceleration support. Supporting the GROW, CONNECT and TELL strategies and actions is investment into human resource to curate, connect and facilitate the powering-up and activation of the region’s innovation ecosystem. The majority of the remainder of the investment required is to be invested into this human resource. Taranaki’s Innovation Ecosystem is relatively young, under-developed and under-resourced. There are many opportunities for the region to pivot, grow and ultimately flourish in the face of change and challenge. It is apparent that this transition will benefit tremendously from a strong, active and multi-faceted region-wide innovation ecosystem. The time for powering-up Taranaki’s Innovation Ecosystem is now, with potential return of investment evident across the region.

COMMUNICATION AND ENGAGEMENT Across the Taranaki region, there is strong interest in this initiative from all stakeholders, partners, the wider innovation ecosystem and enterprises more generally. Ongoing communication and engagement will therefore be one of the key functions, ensuring that the ecosystem is connected, involved and engaged in initiatives as they are developed and implemented.

NEXT STEPS With the recommendations for the powering-up of Taranaki’s Innovation Ecosystem clearly articulated through the delivery of this study, there are a number of next steps to progress the development of the ecosystem and begin work on implementing its evolution.

SHORT-TERM AND INTERMEDIATE NEXT STEPS Consult and Engage: Re-engage with stakeholders, partners and participants, government agencies and initiate discussions with potential funders. Secure Funding Commitments: Confirm governance arrangements, confirm 3-year budget, prepare and confirm funding/investment proposals. Recruit & Prioritise: Prepare position descriptions and recruit for team positions, agree immediate actions to be progressed in year 1.

MEDIUM-TERM NEXT STEPS Plan: Prepare detailed implementation plans for proposed activities, design new projects to be delivered and agree delivery approach. Commission: Prepare RFP/EOIs, commission new services and confirm sponsorship and/or grant opportunities and arrangements. Implement: Launch new activities, promote and coordinate, deliver projects. Review: Collect data on initial range of activities, monitor and evaluate, set new delivery baselines. Reset and Adapt: Restart planning cycle on next range of activities, continue to promote and communicate activities and successes across ecosystem.

CONTACT: Michelle Jordan General Manager Enterprise, Venture Taranaki Email: michelle@venture.org.nz Phone: 06 759 5167 | www.taranaki.info