Almost two years ago, in July 2015, the government announced that it was planning to introduce a new visa class.

Mr Woodhouse says the Government is also considering a new Global Impact Visa to attract high-impact entrepreneurs, investors and start-up teams to launch global ventures from New Zealand.

At the time, I noted

The Global Impact Visa idea sounds superficially promising. But my impression from the Pathways Conference last week was that existing entrepreneur visa schemes had not worked particularly well.  It will be interesting to see the analysis behind this proposal, including an assessment of how the risks around it will be managed and overcome.  I remain a little sceptical of the attraction of New Zealand to “younger, highly talented, successful and well-connected entrepreneurs from places like Silicon Valley”.  The flow of people in that sector would seem more naturally to be in other direction.  I hope it is not an example of the old derogatory adage used about Britons working in Hong Kong:  FILTH  (“failed in London, try Hong Kong”).

But since then I’d paid no more attention to the Global Impact Visa, until my son pointed out a large article in last Saturday’s Dominion-Post.   And it seems that I had missed the first part of what was actually a two-part series on the new visa, and the role two wealthy young Americans appear to be playing in determining who gets these visas.

The second article is really focused on the new visa scheme itself.  It begins this way

They’re young, rich, Silicon Valley idealists who want to change the world from New Zealand. How did the Monahan brothers come to influence our immigration policy – and what’s in it for us? In part two of our series, we look at how the Americans convinced Immigration NZ they should be the ones to pick the best entrepreneurial brains to come here.

In it there is lots of high-profile publicity for Nigel Bickle, the public servant who runs the Immigration New Zealand division of MBIE.  Bickle was last noted on this blog after he appeared on Nigel Latta’s advocacy TV programme championing large scale immigration thus

Bickle  –  that “front-line service delivery expert” –  argues that we need lots of immigration because a country “can’t get wealthy trading with ourselves”.  There seemed to be quite a bit of confusion there.  Of course, small countries (in particular) need to trade internationally, but that tells one simply nothing about the case for (or against) large scale immigration.  As it happens, and as I’ve pointed out before, most countries –  and especially most countries of our sort of size (population) –  export and import a much larger per cent of their GDP than New Zealand does.

Under the Global Impact Visa scheme (approved by Cabinet as a four year pilot), up to 400 visas (plus spouses/partners and families) will be granted.   As MBIE puts it

The policy is designed to attract those with the drive and capability to launch global ventures from New Zealand who may not be able to qualify for other visa categories. They will have the combination of drive, risk appetite and global connections which enables them to launch or significantly contribute to successful innovation-based ventures in New Zealand.

After three years, whether the ventures work out or not, recipients of global impact visas will be able to apply for residence visas.

Legally, of course, only government agencies can grant visas.  But MBIE will be granting these visas only to people who are recommended by their private sector partner, the Edmund Hillary Fellowship  (EHF).  EHF is itself a joint venture, again as MBIE puts it

between the Hillary Institute for International Leadership, a not-for-profit organisation that identifies and celebrates mid-career leaders from around the world; and Kiwi Connect, an organisation promoting and connecting high-impact entrepreneurship in New Zealand.

It isn’t quite clear what a non-profit that “identifies and celebrate mid-career leaders from around the world” has to bring to either (a) New Zealand immigration policy, or (b) New Zealand policies around innovation and technology, especially when this particular programme seems to be mostly fairly oriented towards young people (“early in their wealth cycle”).  It looks a lot like they just offer access to the Hillary name.

As for KiwiConnect, it doesn’t really seem to exist any more.  Their website says

Kiwi Connect originally set out to be a bridge between New Zealand and the world for impact-driven talent to be able to engage with the NZ startup and business ecosystem. We have succeeded in that mission with the creation of the Edmund Hillary Fellowship, and consequently have put Kiwi Connect into hibernation to focus our team’s efforts 100% on delivering a world-class Fellowship programme.

You can read their burble, on their transition, here.

We also identified that the ecosystem growth wasn’t matched with the necessary level of global connectivity for New Zealand to be internationally competitive. This connectivity is important in turning size and distance from what has been a disadvantage in more traditional industries, to a new advantage for innovation.

Since founding Kiwi Connect, we have focused on filling the gap to connect New Zealand with world-class talent, impact capital, and cutting edge innovation, so that NZ can create a critical mass of entrepreneurial activity within a thriving ecosystem. We started with more questions than answers, facilitating multi-disciplinary, global conversations on what it will take for New Zealand to lead in innovation.

It is a certainly a novel proposition that distance and remoteness will not just be overcome, but might apparently be “a new advantage for innovation”.    One would hope MBIE rigorously evaluated that propostion.

Anyway, the Edmund Hillary Fellowship it now is.

The Edmund Hillary Fellowship (EHF) is a global platform that brings together the best of humankind’s creative potential and entrepreneurial spirit in New Zealand, to create a lasting positive impact for the world.

They are being paid quite a lot of public money ($4m) to get the global impact visa programme going and, according to their website, the first visa approvals are expected to be granted next month.

The Fellowship has a very useful set of FAQs on their website, which I’m drawing from here.

What is it?

The Edmund Hillary Fellowship (EHF) is an end-to-end programme that gives impact-driven entrepreneurs, investors and startup teams a platform to incubate positive impact ventures from Aotearoa New Zealand, and contribute towards a thriving innovation ecosystem in the country. EHF offers exclusive access to Immigration New Zealand’s new Global Impact Visa.

Who is it for?

EHF is for entrepreneurs and investors who are innovating in the industry or sector they operate within, with the ambition to build or support globally scalable ventures to solve significant challenges and influence the course of humanity. This programme is for individuals who align with our values, and who have the skills, capabilities, relentless drive and desire to leverage the unique opportunities New Zealand offers, and make game-changing impact on the world.

Which is where things start getting a little troubling.  Little old New Zealand, keen to develop its “innovation eco-system”, actually puts official weight and money behind a focus on influencing the “course of humanity” and drawing people who will “make game-changing impact on the world”.    If the Monahan brothers, or any else, want to pursue such dreams, I wouldn’t want to stop them –  I’m sure we could all think of ways in which the world could be a better place.  But this is almost “on another planet” stuff, with no sign in any of the published material as to how they think this might actually come to something, let alone offer something worthwhile for the citizens of New Zealand.

They go on

What are the personal qualities you are looking for in candidates?

Model Fellows are highly capable and motivated individuals who view the problems in the world as opportunities to significantly improve it. They are big-picture thinkers at the top of their game, who are able to unpack complex problems to understand all the angles, and come up with holistic solutions that connect the dots. They have unwavering passion, relentless drive, and the ability to execute with excellence. Edmund Hillary Fellows also take advantage of the unique opportunities that New Zealand offers.

Walking on water looks as though it might almost qualify one.   But one has to wonder whether even Bill Gates would have qualified.

After all, when asked about proposed “impact” they write

What do you mean by impact?

We define “impact” as solving problems of significance to humanity in a way that creates positive lasting economic, social and environmental value.

All three at once.  It is a tall order.  Did Microsoft or Google, let alone Facebook, create “economic, social, and environmental value”?

And it doesn’t seem very likely that any card-carrying conservative would qualify for this programme.  Perhaps you noted earlier that the Fellowship is looking for people who “align with our values”.    Here are their values.

The first marker of the left-liberal orientation is the repeated use of “Aotearoa New Zealand”.  It might be old-fashioned and conservative to make the point, but the country is actually called New Zealand.

Much of the rest is the sort of babble that probably appears on any agency’s “values statement”.  But these ones caught my eye from the longer list.

Simplicity inspires us.

We value collaboration over competition to help raise the tide for all.

We strive to act with care for people and land, and to improve intergenerational wellbeing through creativity and entrepreneurship.

Our work is not about us but about those we serve. We actively strive to be better versions of ourselves

and while they talk about how “We love challenging assumptions”  a bit further down the page we read that their person described as “Candidate Attraction Lead”

believes that startups will solve the world’s problems only when they represent the diversity of the world’s people.

Perhaps she is right –  although actually for the last few hundred years most really useful innovations have come from a handful of cultures and countries –  I suspect she might not welcome a candidate challenging that proposition.

And this stuff matters because it isn’t just about getting accepted into the Edmund Hillary Fellowship in the first place.  To get a residence visa, you have to stay on good terms with the programme for three years.   I suspect there are many people who could genuinely make quite a difference, who would struggle to put up with the globalist waffle, and what social pressure goes with it, for three years.    Being able to put on a good front looks a highly valuable skill in this context.

And if you don’t already get the sense of what part of the political spectrum these people are coming from, I refer you back to the first of those Dominion-Post articles.   Take their annual innovation festival held near Wellington.

Every February since 2014, an eclectic bunch of people from around the world have descended on Whitemans Valley, an easy 30-minute drive from downtown Wellington, for a week-long “eco-innovation” festival called New Frontiers, a kind of techie’s version of Nevada’s Burning Man.

Think yoga, yurts, giant domes, composting toilets, campfires, more yoga, drum circles, dancing, vegan food and talking – lots of talking.

Guests have included film director James Cameron, Immigration NZ head Nigel Bickle, Conservation Department director-general Lou Sanson, regional mayors, US digital artist Android Jones and dating site guru Eben Pagan, poets, painters and inventors, as well as curious locals. It’s either a beautiful gathering of like minded thinkers or a weird cult, depending on your point of view. “There’s some freaky looking punters down there camping out in their domes, doing yoga and singing Kumbaya to the moon,” one local says.

Mike O’Donnell, a tech investor formerly of TradeMe who attended last year’s festival, was impressed by the diverse range of people and open exchange of ideas.
“They’re kind of 21st Century cyber hippies,” he says. “It’s a little bit overwhelming, but it’s quite cool. It’s a combination of 60s values, together with sustainable business models, truckloads of vegetarian food and exotic fruit juices.”

and then of the sorts of view championed

Matthew [Monahan] nominates Charles Eisenstein, who has spoken at New Frontiers, as his favourite author. That’s instructive of the brothers’ world outlook – Eisenstein is known as a proponent of “degrowth”, a movement based on “ecological economics” that rejects consumerism and capitalism.

Brian [Monahnan] raps about building a culture “not based on commerce, but on kindness”.

The brothers gave $4m to set up their non-profit Namaste Foundation, which has gifted money to everything from Black Lives Matter to climate change groups.

The Monahans’ philosophy is, of course, the polar opposite of Trumpism.
​”I’m definitely not a Trump supporter,” Matthew says. “I think the environmental challenges we have ahead of us are real. They are really giant problems that require all hands on deck.”

Doesn’t give a strong sense of a place with the Edmund Hillary Fellowship for, say, the large number of Americans with a different take on the world, politics and so on.

And all this is even aside from the bigger challenges a programme of this sort faces.    Adverse selection, notably.  Groucho Marx once famously remarked that he wouldn’t care to join a club that would have him as a member.  Realistically, why should we think that anyone who applies for this programme, to come and live in relatively poor remote (albeit non-Trumpian) New Zealand, is really likely to be the sort of person who can build a business that would “change the world”?        Take just the other OECD countries: every single one of them (even Chile) is closer to “the world” (markets, suppliers, knowledge clusters etc) than we are.   Most put on a pretty good show of democracy and the rule of law.   Quite a few have English as their first language –  and, of those, all look more attractive places in most respects than New Zealand does, for such transformative businesses (even Trump will be gone in, at most, seven years and seven months).   There  are isolated areas in which our regulatory provisions may be world-leading, but looking across the range of policy settings, we don’t really stand out.    And, frankly,  clusters of industries –  be it in Silicon Valley in tech, or London in finance, or wherever, exist for a reason.  The economics of agglomeration are real.

And when even venture capitalists, with their own money on the line, expect that relatively few of their investments will really pay off, why should we suppose that the Edmund Hillary Fellowship will manage even that sort of performance?  Is there any reason to suppose that they will successfully identify any people who will really turn out to “change the world”, or even add much sustained value to New Zealand?  Where are the focused incentives?   Perhaps there is such a basis, but it isn’t clear what it is.

As I noted a couple of years ago when the programme was first mooted, it would be “interesting to see the analysis behind this proposal, including an assessment of how the risks around it will be managed and overcome”.    As it happens, the government pro-actively released the Cabinet paper from last April on the proposed new programme.

But there was very little there.  There was no Regulatory Impact Statement, and although there is lots of talk about the scheme could be scaled up even before the pilot finished if the programme is “more successful than foreseen”, there is not a single indicator or marker in the entire paper that would have given Ministers (or now us, as citizens) any basis for knowing what counts as success, let alone whether any actual success is more than was foreseen.

There is lots of detail about the programme –  and the choice between MBIE running something directly or going with a private sector partner –  but almost no supporting analysis of the substance.   In putting the paper forward, the Minister of Immigration never touches at all on the incentive or potential adverse selection issues and risks.  There is lots of talk of the Business Growth Agenda, and aspirations to have New Zealand as an “innovation hub” (whatever that is), but nothing at all robust or rigorous on what MBIE thinks holds us back.   There is also really nothing on how a handful of people, focused on “changing the world” are really likely to favourably affect the economic performance of New Zealand and New Zealanders, including (in their strange words),  meeting “the entrepreneurial needs of New Zealand”.   Apart from anything else, if the rare one succeeds, are they likely to stay?

One’s confidence isn’t greatly enhanced when the Dominion-Post reports that one of the first proposals (and remember EHF provided this to the Dominion-Post, so they presumably thought it was one of the leading propositions) was “research into legal innovations that might arise from the recent granting of “person” status to the Whanganui River”.  World-changing?  Productivity-enhancing?

As the Dominion-Post article notes, there is plenty of disquiet about some aspects of the scheme in the immigration community.  Some of that may just be sour grapes and business rivalries –  the Monahans got the ear of the government when the critics didn’t.

I don’t have anything against the Monahans, although their much-vaunted respect for all seemed to run into a roadblock when they bought into Whitemans Valley –  named for a pioneer 1840s farming family –  and thought it was both a terribly amusing and  unsettling name, and decided to refer to the place as Aroha Valley instead.  But it isn’t hard, reading the MBIE material and the EHF material, to conclude that a bunch of idealistic, probably well-intentioned, Americans, ran into a government that wanted to look like it was “doing something” innovative, and out popped a programme with little hard-headed rigorous analysis to back it, not that much prospect of success, but which was good for some feel-good headlines for a while (note that back in 2015 even my initial comment was guardedly positive).

On the government’s side it looks a lot like another play from the MBIE “smart active government” playbook, which very rarely (and not surprisingly) seems to come to anything much.   I dug out a few articles last night about assistance to Sovereign Yachts –  lauded by a then Minister for Economic Development.  And there was a Simon Collins Herald article from 2003 on the “benefits of a helping hand” from the government

Most spectacularly, support for business and regional development jumped from $14.2 million to $100.5 million.

In the year to last June, Industry NZ handed out $7 million to 89 companies to help “significant expansion”, did business appraisals for 252 firms and helped 38 of them raise capital.

It gave $1.5 million in total to 15 business incubators and brought together 22 “clusters” ranging from organics to software.

It put $10.4 million into regional strategies, including $2 million each for four big projects – a technology park at Hamilton, forestry training in Rotorua, food processing research in Napier and wine research in Marlborough.

It gave a $500,000 “guarantee of assistance” to the American company Jack Links to build a meat snack factory in Mangere, another $500,000 to US company Media Lab for a research centre in Wellington and $50,000 to Hit Lab, a joint venture between Washington and Canterbury Universities.

Trade NZ’s investment arm helped expatriate yacht-builder Allen Jones set up in Whangarei, and this year gave $1.5 million to computer giant EDS to install call centres and researchers in Auckland and Wellington.

Less successfully, Industry NZ and Technology NZ promised $1.6 million to the Ericsson-Synergy software joint venture which closed late last year, and helped Sovereign Yachts to get land at Hobsonville, only to see it lay off staff last February.

Meanwhile, our productivity performance remained as weak as ever, and our tradables sector has been under even more pressure.  Why, one wonders, should this latest clever-sounding programme be so much different?  Why, for example, are the incentives right?

“Probably the best summation is the kaupapa set by Nigel [Bickle] at the outset,” he says. “Go get the world’s best people New Zealand needs to prosper.”

Plenty of foreigners have done well in New Zealand, and no doubt will continue to do so.  But New Zealand has the people to prosper –  the skills, the drive, the energy –  as it did 100 years ago.  Successful countries mostly make their own success, from their own people, institutions and cultures.   It isn’t clear why Michael Woodhouse, Bill English, and –  for that matter –  Nigel Bickle seem to think the answer lies in people over the water.