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Posted: 16 April 2018
A group of Kiwi firms is heading to the US in June to get an exclusive look inside factories at the cutting edge of internet of things (IoT) in industry

For most people the term ‘industrial revolution’ conjures up images of belching steam engines and grim Victorian factories.

In truth the industrialisation of the modern world happened in several phases, beginning with steam power at the end of the 18th century, through to mainstream use of electricity a hundred years later, and then the computer revolution of the 1980s when everything mechanical and analogue turned digital.

We are now experiencing the fourth industrial revolution, a fusion of technologies that is blurring the lines between the physical, digital and biological.

Thanks to advancements in robotics, artificial intelligence, autonomous vehicles and the internet of things (IoT) our societies and economies are evolving again. Just as businesses of 150 years ago had to adapt to electricity enabling mass production, today’s enterprises face the challenge of embracing what has been dubbed Industry 4.0 - using smart technologies and data to drive intelligent action in the physical world.

Knowing when and how to incorporate these new technologies into your business model isn’t easy, and supporting companies to adapt to Industry 4.0 is a priority for Callaghan Innovation in its role as New Zealand’s innovation agency. As part of this it has joined forces with EMA and the Manufacturers’ Network to lead the USA Manufacturing Trek – a mission of Kiwi firms heading to the Internet of Manufacturing Conference in Chicago on June 6-7, and to get an exclusive look inside factories at the cutting edge of IoT in industry, such as CNC machine tool maker Haas Automation.

New Zealand companies are at the early stages of adopting Industry 4.0, Mike Burgess, senior policy analyst at EMA, says.

“Our members need to know what the manufacturing plant of the future looks like, what skills will be required, and what training they will need to develop for their workforces to adapt,” he says.

“There’s only so much you can learn from surfing websites. Nothing beats hands-on experience, talking to industry experts face-to-face and seeing how companies have implemented the new technologies.”

Philip Benson, operations manager at bronze alloys manufacturer AW Fraser, plans to head to Chicago to learn more about the practical applications of IoT. “For us it’s about a smart factory – using technology to gather, process and utilise information more efficiently.

“This is nothing new. Industry 4.0 is an evolution, rather than a revolution.”

Doing intelligent things with data in real time is creating whole new business models, says Nathan Stantiall, Callaghan Innovation’s business innovation adviser for manufacturing.

“An example is ‘servitisation’ – not selling the widget itself, but getting other forms of revenue from it,” Nathan says.

Aircraft engine manufacturer Rolls-Royce services its clients under a ‘power by the hour’ model, he says. Airlines do not own the engines, but pay for use and maintenance based on flying time. Meanwhile R-R utilises IoT technologies to collect and analyse huge volumes of data that enable it and the airlines to operate more efficiently.

While Germany is the leading proponent of Industry 4.0, it’s important for Kiwi companies to see how it’s being done in America, Nathan says. There it’s known as Industrial IoT or Internet of Manufacturing, with a focus beyond the factory.

“For example, your database might be connected to your customer or supplier’s database, so they get full visibility of stock and know exactly when to order,” Nathan says.

Firms ask him when they should implement Industrial IoT. “There is no right answer, but they should be starting now and experimenting with simple connections and data collection,” he says.

The USA Manufacturing Trek runs from 4-8 June. For more information contact us on international@callaghaninnovation.govt.nz

This article was first published in the April issue of the EMA Business Plus magazine.

Posted: 10 April 2018
What can New Zealand do to be prepared for the most disruptive years in history? We've gathered some key points from the Digital Nations gathering in New Zealand earlier this year.

At the Digital Nations 2030 summit in February, over 550 business leaders, policy makers and technology experts from 18 different countries heard that the next five years may be the most disruptive ever. Attendees were tasked with preparing every level of society for this technology-driven change.

 

1. NZ is a digital leader but we have a big job ahead

New Zealand is currently a leader in the Digital Evolution Index, ranking as a stand out country for digital success and noted as exceptional even within the ‘stand out’ group, alongside the UAE and Singapore.

However, as Frances Valintine put it, the next five years will see colossal change. As a nation, we must pick up the pace and adapt accordingly.

 

2. Don’t freak out - we're not facing the end of jobs for humans

There was resounding agreement that technology disruption is not going to destroy the job market. Instead, we will see different skills in demand, some jobs eliminated or transformed, and new jobs created.

This means though that we need a radical and swift change in our approach to education and upskilling. A recent Digital Skills Forum report said New Zealand should be hearing alarm bells because the country is seeing more tech jobs being created than the combined number of tech students graduating and tech visas granted.

 

3. Be curious and play with new technology

Things like personal 3D printers, robotic vacuum cleaners and the sharing economy will transform our lifestyles and the way we work. Leaders in business and government need to embrace technology and new innovations in their work and private lives.

Our Chief Executive, Vic Crone, urged that along with healthy pragmatism, leaders must have a curious attitude, trialling and getting comfortable with these innovations. It creates a deeper understanding of how to apply them to business products and services, industry value chains, or in government services.

Vic Crone at Digital Nations

 

4. NZ’s new Chief Technology Officer position will be crucial

There was concrete support for a new national Chief Technology Officer role which would provide visionary leadership and direction to help prepare us for the changes ahead.

Our General Manager of Strategy, Impact and Insights, Rosalie Nelson, suggested an important part of the role will be fostering a culture of innovation. This includes helping us recognise that we need to take risks to be successful, and although this may lead to failure sometimes, we can continually speed up the subsequent learning and recovery.

 

5. There is a wealth of opportunity for our productive sectors

Vic Crone noted that the convergence of technologies we’re seeing poses significant threats and opportunities for our key productive sectors. Data and AI-driven smart crop forecasting, automated manufacturing bots and smart machine learning cameras; and consumer-driven collection models, are examples of how these opportunities are being seized. Her key message was that we all need to prepare for this disruption in order to thrive.

 

About Callaghan Innovation

Callaghan Innovation is New Zealand’s innovation agency, activating innovation and helping organisations grow faster for a better New Zealand.

We play a lead role in the country’s innovation ecosystem, connecting businesses to the networks, capability and co-funding they need to make their ideas happen and thrive. Our 400 or so staff include more than 200 of New Zealand’s leading scientists and engineers, dedicated to solving tough technical problems for our customers.

Posted: 06 April 2018
The latest news, events and announcements from New Zealand's startup sector.

Cruising into 2018 at full throttle, we saw the launch of accelerator programmes Kōkiri, FLUX, Kiwibank Fintech Accelerator (KFA) and SPROUT. Read on for information on these launches and other highlights from the Callaghan Innovation startup programmes over the last six months, and Soda Inc's INNES48 competition. Also, don't miss Techweek 2018 coming to your town in May.

For more info on what Callaghan Innovation’s startup team does, please see our startup site.

Accelerators Update

Kōkiri

Kōkiri teams

The teams taking part in Kōkiri, the first ever Maori business accelerator, have just finished their second week-long residential in Hamilton.

A unique feature of Kōkiri is its blend of in-residence and out-of-residence delivery. For one week a month the teams stay fulltime in student accommodation at Te Wānanga o Aotearoa’s Mangakotukutuku campus in Hamilton. The remaining three weeks sees the teams travel to their homes (which range from Christchurch to Auckland) where they receive support from local business mentors as well as remote support from the core accelerator team. This is so the teams are not isolated from their core support network and whanau.

Check out more about the teams online here.

Key dates: Friday 15 June – Kōkiri Demo Day (Air New Zealand Innovation Centre, Auckland).

FLUX

The Icehouse’s FLUX programme has confirmed five high performing startups for the 2018 cohort.

This includes:  a robot analysis and management company; a tool for dropshippers to find new products; a tool for global search of all of your cloud apps; a company helping brands with high turnover customer-facing employees recruit faster and better; and a therapist in your pocket.

For more information on the cohort, see this Idealog article.  

Key dates: Thursday 28 June – Flux Demo Day (venue TBC).

Kiwibank Fintech Accelerator

This year’s crop of financial technology startups promises to be just as disruptive as the first. Companies are using blockchain to manage payments, creating chatbots, helping freelancers fulfil their tax obligations, creating a whānau-based lending platform and much more.

Check out the teams in the KFA Press Release and in The Spinoff.

Some of the teams are doing incredibly well gaining support at just week four of the programme! KFA Team Choice recently secured $1m NZD in non-equity funding from the NEM.io Foundation. Read more at the KFA blog.

Key dates: Thursday 17 May - Kiwibank Fintech Accelerator Demo Day (venue TBC).

SPROUT

SPROUT Agritech Accelerator has kicked off the year with nine promising agritech ventures getting exclusive access to world-class mentoring and training from leaders in technology, research and business growth and funding. Companies will receive unparalleled access to the New Zealand and global farming network to validate and grow their businesses.

Check out the teams online here.

Key dates: SPROUT Showcase at Fieldays 2018, 13-16 June, Mystery Creek.

Going on around the country

SODA INNES 48

SODA INNES 48

The weekend of 17th March saw Hamilton’s annual INNES48 startup weekend take on the theme of “Better Together.”

The event attracted teams from around the Waikato, and even a group that included students and academics from Wintec’s Tertiary partner China Chengdu University of Technology.

A great opportunity for collaboration, the challenge sees the region’s movers and shakers come together to build stronger connections and to support entrepreneurship across the Waikato business ecosystem.

Taking out the top prize of $10,000 was Creative Dragons with C&D Box, a cooperative concept, putting convenience store owners together to benefit from better security through technology, group buying and support.

Brown & Down Boys took out the Peoples’ Choice and the Best Pitch awards with an Airbnb style concept to respond to the issues New Zealand marae are facing to maintain their facilities.

Congratulations to all the participants and mentors for a great event – read more online here or on the SODA Inc. Facebook page (@sodaincnz).

Founder Incubators making a mark in first half of 2017/18

Our founder incubator programme partners are knocking it out of the park! Since the start of the reporting period on 1 July 2017 until 31 December 2017, we have seen 99 new startups enter a programme, 61 startups raise $53m of funding, 428.8 FTEs supported (18% Female) and 61 companies referred in to other partners in the ecosystem, including the Regional Business Partner Network.

Keep up the good work supporting startups and entrepreneurs in NZ!

Tech Week

Are you ready for Techweek 2018?

Check out the programme – you can even filter for startup related events – including a tour of the Mahuki Accelerator in Wellington; a series on how IoT is saving the world in Waikato; and a kids’ robotics challenge in Christchurch.

The week-long programme is updated regularly so keep an eye on it, and don’t miss registrations for the best events.

Zeropoint Ventures

Zeropoint Ventures has refreshed its programme, and it looks great. Check out their website to learn more about 0. Sprint – a one-week intensive sprint – and 0. Studio, a place to nurture promising startup ideas with capability and resource.

Upcoming events

17 May 2018 – Kiwibank Fintech Accelerator Demo Day (TBC)

19–27 May – 2018 Techweek 2018

15 June – Kōkiri Demo Day

13-16 June – Sprout showcase @ Fieldays 2018

28 June – Flux Demo Day

Is your startup related event missing from the list? Email Startup Team to get it added in the next issue.

 

 

 

Posted: 23 March 2018
Kiwi companies selling Software as a Service (SaaS) are reeling in global revenue and customers.

Whether tap-and-go donations at church with Pushpay, in business with Xero's accounting software, at the museum with Dexibit's cultural data software, or during halftime with DropIt's reverse auction service – Kiwi companies selling Software as a Service (SaaS) are reeling in global revenue and customers.

58 Kiwi SaaS companies joined 10,000 global players at the recent 2018 SaaStr Annual conference in San Francisco - the largest non-vendor confab in the world. Their common aim: making life easier with innovative subscription based software. Paul Norrie, Digital Business Advisor at Callaghan Innovation, shares some of the key insights.

With San Francisco being a fertile ground for growing SaaS companies, our Kiwi entrepreneurs returned from 2018 SaaStr inspired and hungry for rapid expansion – but focused on accelerating in an intelligent way.

The 2018 SaaStr event was the trigger point that enabled us to bring the community of Kiwi SaaS founders and leaders together. Having so many Kiwi businesses together at a global event makes those in the know notice. Plus for each Kiwi delegate the energy from the cohort and the shared learnings, friendships and experiences will be of ongoing value over time.

SaaS companies achieve phenomenal growth 

SaaS companies are known for their ability to achieve speed, scale and volume. One company we spoke to in San Francisco went from $1-$50 million revenue in 3 years, another in 3 years now has 70 staff. That level of growth is phenomenal.

It’s not surprising given 7 out of the top 10 of Deloitte's North American 2017 Fast 500 were software companies, with 43% identifying themselves as SaaS companies. American software companies are relentless in their growth efforts.

Here in New Zealand, SaaS companies feature heavily in the Technology Investment Network 200. As a group, these companies experienced high revenue growth in 2017 of nearly $163m and many featured on TIN's high growth awards lists last year.

NZ is an attractive place for R&D

It became very clear on our trip that New Zealand is a really attractive place for companies to base their R&D activities - in this case software development.

In San Francisco you’d be looking at a cost of about $140K-plus for a graduate. In New Zealand it would be a fraction of the price, plus we have a government committed to supporting these high growth businesses via Callaghan Innovation and NZTE.

While in NZ we struggle to find leaders with startup experience, finding dedicated research and development talent isn’t a problem. In the US there is a faster churn rate where experts and employees don’t stay long because there is a huge appetite for hiring.

In the Bay Area of San Francisco you’d have a 13-month churn rate. Basically you’ve barely hired your expert and they’ve taken up another opportunity elsewhere.

Capital and risk appetites

In the US you have a $US75 billion capital market and it’s much different here. Even with the NZ capital we do have, there is a way to go to build a productive risk appetite.

It’s why many of our startups either list overseas, receive foreign investment, or are acquired by big multinationals - local investors aren’t signing up. We’re definitely seeing healthy international investment interest in some of our Kiwi startups and R&D projects.

It has a lot to do with the way Kiwis define and engage with risk. We are getting better, but we’ve got a lot of work to do to shift our traditional mindset. As Doblin’s Larry Keeley told us recently, the ultimate paradox is that the boldest and seemingly riskier ideas are actually the easiest to succeed.

NZ SaaS companies rate connections as essential

Storypark is using research and human-centred design in their service platform to help document and support children’s learning.

“It’s important being able to meet other CEOs and founders of companies and be able to talk about everything from how they structure their business, to how they reach their customers, to how they develop their product,” says Storypark’s Jamie MacDonald.

Feature IT's SaaS solution helps businesses make sense of the magnitude of data they are accumulating from a range of sources every day. Clients can mix and match their different functional software and cloud computing applications for smoother collective insights.

“It's about SaaS being an ecosystem of a lot of solutions that need to work together. That's the exciting part, for NZ to be a part of that,” says Penny Anderson of Feature.

Unison, traditionally a power lines company, is also in the SaaS business.

“People share the challenges and how they overcome them. That's definitely useful because if we are entering this new industry, we have to enter it with our eyes wide open and understand the different challenges,” says Unison’s Thahirah Jalal.

5 key lessons for Kiwi SaaS companies

  1. Connect and share to accelerate. Peer engagement is crucial for resilience, problem solving, and market knowledge.
  2. Be focused. Choose a narrow vertical/market that your product fits (product-market fit) and align your R&D pathway specifically.
  3. Know the well-established stages of growth. Arrange activities accordingly.
  4. Scale smartly. Nail your solution, lock in customers, and then scale.
  5. Make use of NZ’s competitive advantage in software development and R&D.

What is Software as a Service?

SaaS companies sell software services, but through a subscription. Google Docs, Netflix, Microsoft Office, Spotify and Audible are all examples you might use as a consumer. Organisations use SaaS applications for anything from accounting to inventory tracking.

The software is hosted elsewhere (‘the cloud’) but you can access the services almost anywhere over an internet connection. In the past you would have to physically have a CD or floppy disc and businesses would have to engineer their systems specifically for each service.

Digital services moving en masse to subscription

  • Radio, live sports games, maps, fitness workouts, personal assistants, medical tracking, news, TV and movies are largely predicted to shift to subscription-based models - much like Netflix.
  • Deloitte Global predicts 580 million digital subscriptions globally in 2018 with about 350 million subscribers, increasing 20% year-on-year. It says this year about 50% of adults in developed markets will have 2 digital subscriptions, increasing to 4 subscriptions in 2020.
  • Cisco's Global Cloud Index forecasts 95% of all data center traffic will come from the cloud and 59% of all cloud workflows will be delivered as SaaS by the end of this year.

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Posted: 12 March 2018
‘Victoria’ is shaking things up at door and window hardware manufacturer Assa Abloy.

Victoria is a cobot – a UR5 collaborative robot able to work on 32 different product variants on the lock body line at the company’s Albany facility.

She has been a game-changer, so much so that Assa Abloy is about to commission two more cobots on a different assembly line, manufacturing engineering manager Marc Simkin says.

The sleek new employee paid for herself within a year, and has created a whole new role for the person who used to do her job. He is now the robot minder, directing her to where she’s needed and placing a much greater focus on quality.

“Our experience has been absolutely fantastic,” Simkin says.

Cobots are robots that work alongside their human colleagues without the need for safety guarding. They are easier to install than traditional robots and typically have a shorter payback period.

Compared with their American, European and Asian counterparts New Zealand manufacturers have been slow to adopt cobots. The technology is a key part of the digital revolution that is changing the face of manufacturing, and the Kiwi sector risks becoming uncompetitive if it doesn’t get on board, Callaghan Innovation’s business innovation adviser for manufacturing, Nathan Stantiall, says.

Cobots aren’t for everyone, which is why Callaghan Innovation, the Government’s business innovation agency, offers a free one-month trial of its own UR5 plus research support.

Universal Robot
Universal Robot UR5

The borrow-a-bot scheme is how Assa Abloy came to know and love Victoria. It held the “robot wars”, pitting three different technologies against each other – a UR5 made by the Danish-based Universal Robots (UR); a cobot from Swiss industrial equipment maker ABB; and the cobot Callaghan Innovation had at the time, dubbed ‘Baxter’.

Sadly for Baxter, a first generation cobot developed by US-based Rethink Robotics, the UR5 won. But without the trial Assa Abloy would have taken much longer to evaluate its options, Simkin says.

“At that stage we had no idea what we were going to do with the technology,” Simkin says. “The whole point was a process of discovery and understanding of what is out there.”

Christchurch-based Design Energy distributes UR products in New Zealand. The great advantage of cobots is that they’re easy to use and extremely flexible, managing director Mike Shatford says.

“Companies can deploy them themselves, maintain them, programme them,” he says. “Because they’re so simple, that can be put back into the end user’s hands.”

UR5 touchscreen tablet controls
UR5 touchscreen tablet controls

Smaller firms with mixed production runs may not think they are ripe for automation, but the technology can be deployed to perform a variety of different tasks even within a single day, Shatford says.

The lower implementation costs mean the payback period is typically around six to 12 months, and putting cobots into the mix also stimulates consistency in the production process, he says.

“We’ve seen multiple cases where throughput gains far outweigh savings on labour,” he says.

Embracing automation will be increasingly important as New Zealand seeks to lift its low productivity growth levels, Callaghan Innovation’s Nathan Stantiall says.

“It’s not about replacing the workforce. It’s about throughput gains, upskilling your workforce to do more fulfilling and productive roles, and improvements in safety,” he says.

Trialling a robot would be most beneficial to businesses that are new to robotics and have implemented lean manufacturing principles, he says. Combining use of cobots with Callaghan Innovation’s Better by Lean training programme may be a good strategy for some firms.

“We urge manufacturers to come and talk to us about giving cobots a go,” Stantiall says.

If your company is interested in a cobot trial please contact Callaghan Innovation

See also Manufacturing Robots

This article was first published in the March issue of the EMA Business Plus magazine.