A Crisis Should Not Be Wasted

By Dr Peter Lee, CEO, Auckland UniServices Ltd

The term crisis is being used to describe these economically turbulent times.

Crises are disruptive periods in which there is an inherent tendency to question deeply the way individuals and organisations conduct themselves.  For companies, these questions encompass their underlying value proposition, products and services, and how these are produced.

Although inherently unpredictable, recent economic cycles in New Zealand have had a period of approximately 10 years trough to trough.  It has been about 10 years since the depths of the last recession, which was shortly into the new millennium, and another 10 years between that trough and the previous recession of the early 1990s.

The approximate half cycle of five years between the peaks and troughs of recent economic cycles is about the same period required to develop substantially new products or processes from an early concept to an effectively designed and manufactured offering ready for launch. A famous example is Nokia, which paved the way for its transformation from a riverside paper mill to a global telecommunications leader during the late 1980s when Finland was in the depths of one of its worst economic crises of modern times.  As a result, Nokia was able to launch its first GSM handset, the Nokia 1011, in 1992 and in time to catch an upturn in the world economy.

Ironically, businesses have a greater ability to invest in new products and processes during buoyant economic periods.  However, because the results of these investments generally have to enter the market during economically depressed periods they fail to reach their full economic potential.  From this perspective, it is better to invest in new ideas during recessions such as we are experiencing now.  This counter cyclical mentality takes foresight and a conviction to behave as though there will be light at the end of the tunnel even though none is in sight.

Universities with their cutting edge research and inventive capabilities are ideal partners to reduce risk for companies seeking innovation.  Technology transfer offices, such as UniServices at The University of Auckland, are well positioned to facilitate the discovery of creative linkages between research capabilities and business needs, and then nurture the embryonic ideas through their early stages of development.  Our experience is that dialogue between research and business results in discovering linkages and inventions that neither could have made independently.

The discoveries are often game-changing  and stimulate the type of new thinking which can provide a competitive edge for the next economic expansion.  For example, recent interactions have identified: the possibility to apply relationships betweem neonatal nutrition and whole life outcomes in humans to the improvement of farm productivity; that inductive power transfer might be adapted to conveniently charge future fleets of electric vehicles; and that the technology behind artificial muscle might be used to develop a new generation of electric motors.  These are examples of how research can provide New Zealand businesses with an array of globally competitive new products and services in time for the next economic upswing.

This economic crisis is a good time for universities to reach out and connect with organisations which realise that our current economic crisis is the right time to consider a bright future based upon collaboration, breakthrough research, and sound development.

- Reproduced from The University of Auckland News