Rakon

Rakon is one of the success stories for NZ technology based firms. The company based in Auckland, New Zealand, is one of the world's leading manufacturers of frequency timing solutions (primarily quartz crystals and temperature compensated crystal oscillators) for the GPS industry. It claims to supply over 50% of all the frequency control products in this area, which is quite staggering since the world GPS market was estimated at US$30 Billion in 2008, with worldwide shipments of handheld devices numbering approximately 30 million in 2008.

GPS units work by locating four or more satelites, calulating the distance between the unit and each satelite, and then using this information to calculate its own position by a process called trilateration. This is done by timing how long a signal takes to travel between two points, which needs to be known very accurately. This is where Rakon comes in with their quartz crystal oscillators.

When a quartz crystal is cut and mounted properly, the silicon and oxygen atoms that make up that quartz crystal can be made to distort when an electric field is applied. When the electric field is removed, the quartz crystal will return to its normal shape and generate an electric field.
The result is an electric circuit with a precise resonant frequency, to which time can be measured. This is known as piezoelectricity. Such crystals are used in digital watches, cellphones and computers - Rakon sell theirs to GPS equipment manufactuers so that they can measure the time taken for signals travelling between two points and thus figure out where in the world you are.

With the explosion of handheld GPS devices (CAGR 18%) and the inclusion of GPS technology in many mobile phones such as the iPhone, it doesn't take a rocket scientist to realise that if Rakon stay ahead of the game, they will have a very big future indeed. This will only be achieved by having the right science and technology minds behind them - not only imperative to Rakon of course, but to New Zealand.

NZ's Knowledge Economy

Over the weekend I was thinking about why so many more young scientists are thinking of sticking around in NZ. That is a distinct shift from perhaps even 5 years ago when the only thing it seemed you could do after finishing a PhD was do a postdoc (maybe I was just unaware then!). I think this is a positive effect flowing on from the work of people like Prof. Paul Callaghan, whose documentary seeks to raise public awareness of the importance of science in NZ’s economy. Paul raises some interesting points, and I think everyone should make time to watch at least some of it.

Of particular interest to me were the statistics on revenue and profit per employee of some of the world's most successful companies. McDonald's, for example, has a revenue of $70K per employee and a profit of $6K per employee. Compare that to Samsung, who with 100,000 employees produce nearly the entire GDP of NZ! They have a revenue of $1.03M per employee and a profit of $135K per employee! It's easy to see in what type of business the profits lie, and put quite simply, we need more of these types of companies in NZ.

There are several NZ companies like Fisher & Paykel Healthcare and Rakon, who have revenues per employee in the several hundreds of thousands, and so the early signs are encouraging. But if we had 200 more of these types of companies, NZ would be a very different place to live. Hopefully in the next few weeks I'll get the chance to talk about some of the up and coming companies that one day might make up part of those "200" companies.