The pandemic induced global economic speed wobble of 2020 raised awareness that economies remain fragile since the global financial crisis. Furthermore it becomes increasingly more apparent by the day that we must urgently shift to more sustainable and environmentally sound forms of economic development if we are to survive as a species. As a nation in the spotlight right now, New Zealand has an opportunity to lead with change. But we need a vehicle to drive this process and we must shift the mindset of the nation towards environmental entrepreneurship.
Institutional leaders such as the World Economic Forum (WEF) and the European Investment Bank predict that the next two decades will see a vast migration of capital from traditional industrial verticals to green investments, “responsible” deep tech and “bio-impact” investment, as the “just transition” to a cleaner, low carbon economy takes hold. Some sources have suggested that this “green shift” could eventually be worth as much as $6 Trillion per annum as infrastructure replacement and the migration to a cleaner industrial base proceeds. The global effects of the pandemic have only served to accentuate the very urgent need for deep structural reform. In fact the WEF argued strongly that fiscal responses to the post-pandemic economic crisis should be tied to a greener economy.
Along with this shift comes increasing recognition from global corporations that profit and social purpose are inextricably linked. Socially responsible companies and those that develop engaged, happy and productive learner employees, will capture a greater share of value within the transition economy. Consequently this will invoke greater delivery on environmental, social and governance objectives (ESG) as part of reporting to boards, shareholders and other stakeholders such as local communities. Indeed, the New Zealand government is a signatory to the UNDP Sustainable Development Goals (SDG) of which SDG 9 has a particular focus on “building resilient infrastructure, promoting inclusive and sustainable industrialization and fostering innovation”. At the same time, governments remain interested in endogenous approaches to economic development that value development of human capital, since innovation through creating new knowledge is essential to sustainable growth and wealth creation.
With rapidly shifting technologies, the reconfiguration of the global economy and consequent disruption of traditional industries, in what has been described as the “fourth industrial revolution”, there is an ongoing need for discovery, evolution and enrichment of entrepreneurial skills, from an early age and throughout life, supported by better connectivity, greater insight and structured exchange of knowledge. Many of the capability building mechanisms required for this journey already exist in their own silos within New Zealand. But there is no unifying framework or plan in place to fully capitalise on this energy.
Alongside the recently announced NZ CleanTech Mission, the nationwide incubator network could provide a key supporting role in delivering environmentally focused innovation and entrepreneurship programmes nationwide that align with our obligations under SDG 9 and that leverage the unprecedented transference of capital that is underway already. This would open up a pipeline of talent and uplift a plethora of new technology startups fit and ready to address the biggest and most important economic opportunity of our lifetimes — rehabilitating our living environment.
Paul Spence is an advisor at ThincLab New Zealand, Christchurch’s founder led incubator within the University of Canterbury.