The Startup Ecosystem of New Zealand

New Zealand has come a long way from relying on an agricultural economy to focusing on technology and innovation. With the public sector’s involvement, the country now relies on startups to maintain economic growth. New Zealand has a great reputation when it comes to ease of doing business, and considering the country’s small population the results are encouraging, as the success stories of Xero and A2 Milk have shown.
The startup ecosystems in New Zealand have an interesting relationship with their Australian counterparts; Australia is not only a close ally but also a large potential foreign market. The two countries share the same language, and there is free movement across borders. On the other hand, as Australia offers so many incentives for talent to relocate, it is also a source of brain drain from New Zealand ecosystems. Besides the larger market for expansion provided by Australia, New Zealand entrepreneurs view the US, UK, and Singapore as possible places to scale their startups in spite of the time zone challenges.
However, there are multiple incentives for entrepreneurs within the country. For one, the maturation of the venture capital scene sends positive signals about the country’s startup ecosystem. Promising VCs such as Blackbird are raising record funds in New Zealand to support the tech sector. Moreover, New Zealand’s public sector has implemented several initiatives, such as the Elevate NZ Venture Fund, and other venture capital funds for early-stage startups.
The Public sector is active on other fronts besides investment. New [Research and Development Tax Incentives](https://www.rdti.govt.nz/#:~:text=The R%26D Tax Incentive (RDTI,credit refunded or carried forward.) help startups attract a highly qualified workforce, while the Entrepreneur Work Visa ensures a steady flow of foreign startup founders. It is encouraging to see New Zealand’s Action Plan for a More Entrepreneurial Economy and the eight strategic goals it set in the Start NZ Up Plan. There are also local ecosystem developers like the Nelson Regional Development Agency who support the growth of businesses and attract investment to their region.
These development plans are welcomed, as an overall increase in impactful startups is needed to take New Zealand’s ecosystem to the next level.