It is fascinating how new business ideas and concepts arise becoming the latest thing that has to be observed.  Some become embedded into our culture and others try and fail.

But businesses can die if they select the wrong fashion and spend time and money developing their product or business around that ideal.

In the last few years we have had food miles, climate change, sustainable business, gluten free etc.

Food miles morphed into a movement to eat local food where possible and initially some huge supermarkets stopped providing food from countries such as New Zealand as the food miles were high, which had a major effect on the market.

Over time however further analysis demonstrated that local provision might have other environmental costs that were not accounted for just by reducing the transport factors.  It was found that local production might have higher environmental costs when studied in depth.  It was not simple!  So the policies evolved and changed to accommodate real world practices.  One result is that in New Zealand many of our foods now have labels that tell us where the has come from and the person may use their judgement as to whether  a long distance travel is more or less important than the sprays used in particular countries or whether the cows graze on lush grass outside in the fresh air not stand in stuffy sheds.

“Climate change” has cost the world many billions of mostly unproductive expenditure and not added much yet to the quality of life to most of the world.  While we do need to protect the world against pollution in all its forms the focus on whether warming or cooling is occurring has blurred the picture of what really needs to be done.  The vast investment in this so called science may have yet to prove its value.  And if compared to expenditure in other activities there has been very little discussion over actions, products and services might have had a more valuable impact on this world we live in.  The argument has been dominated by hysteria, which is not a good form of investment analysis.

At a smaller more local level are the food fads that rise and fall.  These are usually in the more wealthy communities who can afford to be fussy.  If your business can tool up quickly and comparatively inexpensively to meet the market demand, it is probably worth doing.  But tooling up for something that is “here today gone tomorrow” could cost your business its life.

This is where it is important to have a strategic plan that has a strong emphasis on risk management.  While it is difficult to foresee the future and plan for it there should always be the flexibility to adapt to opportunities and to be ahead of the game.

Our Diploma focuses on teaching our students to think strategically about the future, not to continue with BAU – Business as usual.  We want our students to be able to look forward for new ideas, to have the skills to evaluate the risks and opportunities that open up before them.  BAU does not work for the rapidly changing world we live in.

Frances Denz, MNZM

New Zealand, like many countries is a mix of private businesses, government owned businesses and community owned organisations.

Knowing who provides what, who controls what and even more importantly who pays for what is important for new comers to New Zealand who wish to participate in the economy.

As a starting point, it is a fact that New Zealand is one of the easiest countries in the world to start a business.  Our Government encourages competition in the provision of goods and services. However they frequently have quite onerous restrictions in the delivery of those goods and services to ensure that they are of sufficient quality and safe so no harm is done to the consumer, the staff or the environment.  These laws are policed and infringements can bring heavy fines. It is the individual owner responsibility to know and understand what these “rules” are.

At Stellaris these boundaries are frequently discussed and embedded in our business classes.

In many cases the Government provides services to the community and owns the “business”.  Examples include some of the provisions for health and education where there is a mixed model of provision.

In this blog we will look at education, further blogs will cover other sectors.

Education is broken up around traditional provision lines without much rational consistent policy.

Pre-school education (up till 6 years old) can be provided privately by community organisations such as the Play Centre movement, kindergartens which are usually privately owned businesses and small in home service delivery.  These are all partially paid for by the Government (i.e. the tax payer).  Anyone providing preschool education must be licensed and follow very rigid rules and regulations.  There is alot of forms and paper work required and staff must be qualified in appropriate disciplines.

After preschool the child progresses to Primary School. Most Primary Schools are owned by the State although a small number of “Special Interest” private schools do exist.  These are usually schools run by the church who meet the needs of religious teaching as well as standard education required.  These schools get government funding if they meet specific requirements.

When the child gets to High School they usually attend the High School in the community that they live in due to ‘zoning’. Homes in the zone of the best high schools fetch the highest prices and are in demand.

Maori have special interest schools where most of the teaching is done in Maori. Traditions and beliefs are the basis of their teaching. These are funded by the Government.

The previous Government (National) approved a further category of private schools called “Charter Schools” where there was more freedom to innovate which were provided for more challenging students.  These have been tremendously successful but the new Labour Government is determined to close them down for ideological grounds.  These schools are usually owned by trusts or private companies and permitted to make a profit, although this is unlikely given the fact that the Government pays them less overall than the state schools.

We then come to the Tertiary sector and again this is made of a mix of private and public funding.

The Government owns and pays for all the Universities.  In the world context this is very unusual, there are usually many privately owned foundations or similar who own the University with the State filling in the gaps by providing Tertiary education where it is absent in the community.

However there is a very strong ideological bias in the current government and some in the community that say the State should own and control education and research of what is seen as the senior sector of the education system.

There is one Maori University which is owned by the local tribe (Iwi) and has special legislation.

Next come the Polytechnics which deliver a mix of trades courses and university level degrees and these are again owned and funded by the State.

Then come the PTEs, Private Training Establishments.  As the name implies these are privately owned.  However the ownership does not grant them immunity from all the rules and regulations.  The State controls them too and in many cases provides no funding at all.  In fact for International students the rules are extremely onerous and have to be funded completely by the students themselves.  If the student is a New Zealander they may get Government funding as they would at the Polytechnic but this is usually less than it is for the comparative Polytechnic.
Government money is competitively bid for against other providers and is allocated on the basis of performance, fits the government approved plan for subject matter, demographics, and sometimes political agenda.

So is there an opportunity for people to enter the education market as a business proposition? There is a small window for the pre-school market which would be worth investigating, but you must accept that the regulations are onerous.  It is not just a matter of looking after the littlies.

And there is a small niche to own a PTE but be warned this is expensive to set up and has very big hurdles to jump through to gain approval.

This is my first of several blogs on the interface between government and the business sector in the provision of business services.

Frances Denz, MNZM