Tuesday, April 17, 2007

New Zealand is anorexic

“Ideas shape our world. They are the raw materials on which our future prosperity and heritage depend.” Kamil Idris, 2006

In the conceptual sell to sponsors and advertisers for Idealog magazine we made a great deal out of the fact that Micheal Jordan's earnings from licenses and royalties from things like his Nike Air Jordan association and his share of revenues from the NBA screening etc was greater than the income of the entire state of Jordan.

It was the central proposition - New Zealand needs to shift from being a net importer of licenses and exporter of royalties to being a generation engine.

The maps below make for depressing reading. The maps presented on this website are equal area cartograms, otherwise known as density-equalising maps. The cartogram re-sizes each territory according to the variable being mapped - generated by the University of Sheffield using a tool called Worldmapper .
Idealog has reprinted an article from The Atlantic Monthly by PJ O'Rourke using them to illustrate some important points. Get a copy of the magazine for the article if nothing else. It is funny and informative.

If the global appetite for books, movies, games, television etc is as insatiable as it looks then lets focus on that. Why we spend so much energy and effort mucking about with biotech I don't understand. Focus on your strengths. Likewise we need to rethink the significance of 'telling our stories to the world' - What percentage of global box office takings did Whale Rider and The Piano account for in their respective years of release?

The world doesn't care.

Cultural artifacts are important - to us, but we should produce them on the back of entertainment and information the world demands. The Lord of the Rings and King Kong have been lauded as great New Zealand movies. Maybe they are. Peter Jackson is a hero for the way he and his mates at Weta have created an industry almost from scratch. They didn't do it with New Zealand stories. Compare their approach to the movie The River Queen - very New Zealand film that no one outside of Whanganui wanted to see. Stories that have universal popular appeal are important (commercially). Black Sheep the movie errs toward that direction...but the same heavy handed New Zealandness that makes Peter Jackson films unpleasant to watch and its absence In My Father's Den a pleasure.

The challenge is to ensure the residual income from IP created here is reflected in our export earnings - that we don't simply become a craft factory for a fickle set of buyers (The UK recently revised their tax laws to ensure they can counter the threats from New Zealand and other emerging movie production markets).

Anyway, Here are the maps and supporting notes from the U of S site.
The main thing is to compare our anorexic exports and obese imports.

Imports


Ireland imports (US$ net) the most royalties and license fees out of all territories in the world. The value of net imports of these services to Ireland is more than three times higher than the next biggest importer, which is China. Ireland’s imports, when divided by the population, are also the highest per person imports in the world. The second biggest per person importer, Hong Kong, imports (net) only a fifteenth of what Ireland imports per head of population.

The high imports to Ireland partly reflect one method multunational companies use to maximise profits made, through exporting goods into the European Union via Ireland.

Territory size shows the proportion of worldwide net imports of royalties and license fees (in US$) that are received there. Net imports are imports minus exports. When exports are larger than imports the territory is not shown.

Exports



Only 18 (out of 200) territories are net exporters of license fees and royalties. This means that a few people living in less than a tenth of the territories in the world between them receive the US$30 billion of net export earnings for these services.

The International Monetary Fund explained that royalties and license fees include "international payments and receipts for the authorised use of intangible, non-produced, non-financial assets and proprietary rights ... and with the use, through licensing agreements, of produced originals or prototypes ...". Thus these export earnings are payments for past ideas.

Territory size shows the proportion of worldwide net exports of royalties and license fees (in US$) that come from there. Net exports are exports minus imports. When imports are larger than exports the territory is not shown.

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