Tawapata South Incorporation's George Mackey and Rocketlab's Peter Beck hongi at the signing of a lease agreement signed between Rocket Lab and the representatives of the landowners of remote Onenui Station, on Māhia Peninsula. Photo: Supplied

On the first rocket launched into orbit from the remote  Māhia Peninsula was soil from its launch site, Onenui Station, in an acknowledgement of the groundbreaking partnership with the station’s Māori owners.

The Tawapata South Incorporation is a Māori entity that runs Onenui Station, a 4000 hectare farming block on the Māhia Peninsula. Tawapata South formed a partnership with Rocket Lab and its founder Peter Beck, setting aside land for Rocket Lab to use as its launch site.

A multiple bottom lines approach played an instrumental role in developing this partnership.

George Mackey, former Chair of the Tawapata South Incorporation, explains that a Māori approach to business played an important role in confirming the formal land use and per launch payment arrangement between the parties.

“Trust and a commitment to a culturally informed solution was hugely important for us to confirm the relationship and as it turned out – it resonated with Peter too,” he says. “Peter also liked our five bottom lines to assess the implications of the proposition: economic, social, cultural, environmental, political.”

Ehara taku toa i te toa takitahi, taku toa he toa takitini
My strengths and achievements are not just my own efforts, they are from the efforts of many

The role and value of Māori approaches to business has been highlighted in the Productivity Commission’s latest inquiry report, on “frontier firms”. Frontier firms are the country’s most productive firms, and they play a vital role in lifting national productivity and wellbeing.

The inquiry found that the labour productivity of New Zealand’s frontier firms is on average less than half (45 percent) that of the best frontier firms in other small advanced economies. And while New Zealand has some world-leading firms, it does not have enough of them.

The Commission looked at what successful small advanced economiess do differently, to support their frontier firms to be world class. It looked at the experience of these economies – who like New Zealand have small domestic markets – like Sweden, Denmark, the Netherlands, Singapore and Israel. It found that much of their prosperity comes from exporting specialised, distinctive and high-value products at scale.

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Specialised and distinctive products are knowledge-intensive and hard for competitors to replicate. This requires innovation. So, successful small advanced economiess focus their efforts on building deep innovation ecosystems, in a few chosen areas, to support firms to innovate and export at scale.

The inquiry found that Māori businesses offer significant potential for driving innovative and sustainable export-led growth.

Statistics show that Māori authorities and small and medium-sized enterprises have been growing faster, are more likely to export, and have higher rates of innovation and R&D, than other New Zealand firms.

Research for the inquiry found that the need to serve multiple bottom lines (eg, commercial, environmental, social and cultural objectives) can be a strong driver of ambition, which can also flow through to expectations on suppliers. Further, high shareholder ambition, together with a long-term view, can spur innovation and experimentation, provided the underlying assets are not put at risk.

When RocketLab signed the lease for the Māhia land, Peter Beck gave a small perspex box to the spokesman for Tawapatu, George Mackey. He invited him to place things that are special to them in it, to be sent into orbit with the first launch next June. Some Onenui soil went into the box first. Photo: Supplied
When Rocket Lab signed the lease for the Māhia land, Peter Beck gave a small perspex box to Tawapata South Incorporation’s George Mackey. He invited him to place things that are special to them in it, to be sent into orbit with the first launch. Some Onenui soil went into the box first. Photo: Supplied

Māori values also help differentiate Māori goods and services and provide added brand value overseas. The values also align with the growth in consumer demand for products with strong environmental and social credentials, such as provenance and authenticity. This presents growth opportunities for kaupapa Māori firms.

These findings challenge often-held assumptions that having multiple bottom lines, a long-term view and collectively held assets are a handbrake on growth and productivity. Instead, they show how long investment horizons can support innovation and long-term value creation. Further, innovation is key to serving multiple bottom lines, as innovative solutions are required to solve many of New Zealand’s environmental and social challenges.

The success of Māori frontier firms helps light the way for further Māori business ventures. For example, the pioneering partnership with Rocket Lab has built the confidence of Tawapata South’s committee and owners. It has also led to further opportunities for the farm’s business, including conservation initiatives, infrastructure developments and R&D with a neighbouring farm to identify agricultural innovations. “The Tawapata South committee and owners have changed their perspective significantly on the scope of options and opportunities for the farm business as a consequence of our partnership [with Rocket Lab]. The partnership has expanded our horizons massively”, says Mackey.

However, despite their successes, Māori firms face barriers and challenges that are limiting their potential. For example, existing and prospective Māori land-based businesses face constraints from the land tenure and compliance requirements of Te Ture Whenua Māori Act 1993. The Trusts and incorporations established and administered under that legislation are subject to a range of compliance requirements under the Act. In practical terms, this means that it is very difficult to sell the land owned by these entities, and to securitise the land with debt finance from banks and other financial institutions. Consequently, many Māori businesses struggle to access the capital they need to expand or diversify. Additionally, certain major transactions and governance decisions require entities to apply to the Māori Land Court for approval.

George Mackey describes the experience of doing business in this complex environment: “Māori business people are like ‘swamp navigators’. To be successful they have to be able to effectively navigate the complex ecosystem of Māori entities including the structures, accountabilities, relationships and multiple bottom lines”.

Some Māori businesses have found innovative ways to work around their constraints. For example, Te Tumu Paeroa is investing in turning unproductive land in the Bay of Plenty and Gisborne into productive kiwifruit orchards. It is using a variant of the well-established Build‑Own‑Operate‑Transfer investment vehicle to access capital and manage the financial risk, without risking the security of the land or taking it out of the hands of its 95 Māori landowners.

While innovative approaches such as these are inspiring, the Commission concluded that Māori firms should not have to work around these roadblocks. It has recommended that the Government acts to reduce several of these constraints on Māori business, improve its services to Māori business, and support a Māori-led process for identifying further improvements to the Māori business ecosystem.

Among its recommendations, the Commission says the Government should:

  • Explore practical steps for reforming Te Ture Whenua Māori Act, to allow for more land utilisation and development, while recognising the importance of retaining Māori land in the lands of its owners and their whanau and hapū.
  • Accelerate action to protect mātauranga Māori and intellectual property, which are significant assets for Māori businesses.
  • Provide support and resourcing for a Hui Taumata – a national Māori Business Summit – of iwi and Māori business stakeholder organisations. This forum would enable a national discussion by Māori, to develop ideas for supporting productivity, innovation and resilience in the Māori economy.

Principal advisor and acting inquiry director at NZ Productivity Commission.

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