‘Super diversity’ brings benefits, challenges

The key speaker, prominent lawyer and Global Women’s first chair, Mai Chen, said she intends to focus for the next 10 years on the effects of New Zealand’s highly diverse population on law, public policy and business. 

This “super diversity” is shown in that 25% of New Zealand’s population was born overseas, and in Auckland 44% were born overseas and the city has 230 ethnicities. It will bring benefits in increased productivity, increased innovation and more foreign investment but also great challenges to social capital and social cohesion, Chen says.

This will affect all businesses, she says. “I have one business a week in my boardroom saying ‘we are losing market share’.” 

She tells them this is because they are targeting the wrong population. The Anglo Saxon populace is ageing and diminishing, while the Maori Pacifica and Asian population is growing – 50% in Auckland and growing. 

“That is part of a megatrend which is Asia. The middle class in Asia in 2015 will be bigger than Europe and America combined,” Chen says.

“Half of New Zealand is now brown; that has an impact on your workforce and your customer base. Another megatrend is agglomeration: Auckland will get bigger and bigger and that will be tough on the regions.” 

She is doing a stocktake for all businesses, including farm businesses, on how we leverage off this super-diversity of our country.

Kevin Cooney, head of agri capital at ASB, said in a later panel discussion at the conference that greater diversity will be needed on the boards of food companies as they more closely align themselves with consumers.

He says the trends in global food demand are now attracting institutional investors. “Offshore capital is seeing the food industry and the availability of new technology as a massive opportunity to invent change in what has been a traditional industry.

“The convergence of technology and global food trends will drive massive change in the way we connect with consumers.

“We have seen the emergence of the large scale corporate farm; that is not going to change.”

In the next 5-10 years a handful of globally relevant food producing businesses with an asset base of $1-2 billion or more will emerge in New Zealand, he said.  Technology gives us an opportunity to be more closely attuned to consumers “so those businesses will be increasingly mindful of what consumers want and be making stuff to order”.

There are limits to what the bank can do to fund that future, he says. Too much debt can be an underlying constraint on a business’s ability to invest in new efficiencies and technologies.

“Therefore we’re going to see inevitably a greater role for large scale institutional foreign direct investment into our industry. Venture capital investment will also be a key influence.”

This posed questions he said he did not intend to answer at the conference, but to raise for discussion.  

First, for large scale businesses, or even smaller businesses looking to the future, what would be the shape of boards and governance “for us to thrive and compete in this new world and provide value for its shareholders? If our businesses are to be more closely connected with consumers in the future, we need to have boards connected with how consumers think.”

Second, given that farm prices have escalated to the point where farm ownership is now hard to achieve, “how do we motivate in the future and build a new generation of world class farmers to run our industry?”

Adaptability the key to success

Mai Chen says the dairy industry is one of the most regulated in New Zealand – and she warned the secret to success in any field was learning to adapt. 

“I can’t tell you what’s going to be in your industry in five years – everything is changing,” she told the conference. “I don’t know what’s going to happen in the future but I can make sure I have the abilities as a person to adapt to it.”

Chen quoted Charles Darwin as saying the race is not won by the strongest, nor the most intelligent, but by the one who is most responsive to change. “I will not succeed because I am faster or stronger than anybody… but no one is more adaptable than I am.”

Chen said her adaptability came from arriving as an immigrant at the age of six. “You can’t speak the language, your parents can’t, you don’t have much money, you don’t know anybody and you are the first Taiwanese family in the South Island; you get pretty good at solving problems.”