Country must see past the UK and seek radical innovation elsewhere in Europe, says academic
New Zealand’s universities and business entrepreneurs must “let go” of traditional loyalties in the wake of Brexit and increase their investment in R&D collaborations with Europe, according to a University of Auckland global business academic.
Peter Zámborský, a lecturer in international business strategy, says his research shows that NZ companies that invest in R&D projects in Europe are “still a rare breed”.
“Eurostat data showed there were around 100 to 150 New Zealand and Australian firms innovating in Europe compared to over 5,000 American firms, about 750 Japanese firms and about 400 to 500 firms from emerging markets such as China, India and Brazil,” he says in an editorial published by Newsroom, an independent NZ news website.
“The innovation strategies of New Zealand and Australian firms in Europe were driven more by cooperation—in particular within the group—than strategies of firms from other countries, perhaps because of our isolation.”
Zámborský says that NZ businesses have more conservative attitudes than their Australian counterparts toward diversifying investment and R&D collaborations to include European countries. However, both countries struggle to “let go” of traditional ties to the UK and to “strategically diversify their innovation and R&D portfolios by encouraging radical innovation” with Europe.
“Radical innovation often involves experimenting with new business models rather than just products or processes,” he writes.
“For companies that are seeking more than fast-growing markets for low value-added products, it may be strategic not to over-rely on Asia and diversify their innovation to include deep partnerships in Europe.”
Zámborský suggests that NZ research partnerships in Europe also offer connections to “world-class universities and talent that can improve innovation”.
A recent survey indicated that foreign direct investment in R&D in Europe had increased by 16 per cent annually over the past six years, underpinned by a 45 per cent “surge in digital R&D projects across Europe”.
“A longer-term view shows R&D foreign direct investment has doubled in 2013-18 across Europe,” he says.
The main issue for NZ universities and businesses investing in R&D partnerships with Europe is to find ways to “overcome communication bottlenecks due to geographic and cultural distance”.
“The key lessons are to invest in building trust with European partners and facilitate knowledge flows and connectivity,” he says.