David Teece discovered his penchant for economics in the 1960s at Canterbury University. Since then he has gone on to become a world leader in the field. Colleen Simpson reports.
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DAVID TEECE cuts an impressive and well-groomed figure, creating a hush in a roomful of aviation and tourism bigwigs in San Francisco as they still their cutlery to catch his every word of wisdom. Professor Teece's time is precious.
He gives the impression of being used to working a finely tuned schedule in which every minute counts. After a hasty but substantial presentation on the virtues of New Zealand's investment climate he offers some time to answer questions. But he is clearly anxious to make a quick exit to get to his next appointment.
That date happened to be in court, where Professor Teece took the stand in a landmark antitrust court battle between software giant Oracle and the United States Government. Such is Professor Teece's reputation that he appeared as Oracle's final witness in the trial last month, during which the government tried to stop Oracle's US$7.7 billion bid for PeopleSoft.
Now recognised as a world-leading economist, Professor Teece has gone far from his Blenheim roots. His family moved to Nelson when he was 12 and he went to Waimea College where he was a couple of years behind Business Roundtable executive director Roger Kerr. His elder brother Murray says the young David never did homework, but could often be found "picking up spuds in the paddock" to earn money to get him to university.
After a stint as head boy in 1966, he went on to discover his penchant for economics as an undergraduate at Canterbury University. "I'd always be decent at science and maths, but never the best," he says. "Economics was a social science. I really got into it." Murray Teece says his brother always showed signs of being an entrepreneur and bought his first section when he was 20. "David never sells anything," he says. "I've asked him why he doesn't sell that stupid section at Pakawau and he said one day he might put a bach on it. The first car he bought was at 20 years when he went to California and he's had that car (a Buick convertible) restored twice."
Those school and university days were obviously special times for Professor Teece, who remains a contributor to both institutions. Now 55, his list of qualifications reads like a thesis and he has gone on to carve out an enviable career and publish numerous books and articles while earning a slew of accolades along the way. He has honorary doctorates from universities in Finland, Denmark and Russia, in addition to the PhD in economics from the University of Pennsylvania and a couple of other masters' degrees. He has also been named by global professional services firm Accenture as being one of the world's top 50 living business intellectuals. But Professor Teece takes most pride in the honorary doctorates. "That was very satisfying."
However, he is modest about his natural predisposition for all things economic, crediting a clear, analytical mind and a keen ear -- despite having some difficulty remembering how many degrees he has. "It's not so much (the) formal training," he said. "Quite frankly, at the top of the list I would put good old-fashioned Kiwi values like hard work and also being a good listener. "In addition to that -- and not all, arguably most (economists), don't have this -- is the ability to take economic concepts and apply them to policy and business decisions."
And Professor Teece has not only been thinking, he has been doing. He is a low-profile but majority stakeholder in sportswear label Canterbury International and jointly founded I-Cap -- New Zealand's biggest private equity firm with $400 million under management and offices in Auckland, London, San Francisco and Bahrain -- with Tony Hannon and Nick Lodge in 2000.
Professor Teece's name may not be familiar to most Kiwi households, but he is undoubtedly one of New Zealand's most successful -- and probably most wealthy -- business sons. He has lived in the US for more than 30 years, longer than he lived in New Zealand, but keeps a foot firmly in both camps and is still patriotic. The years living abroad have only made Professor Teece more of a champion for New Zealand. "I come down there with some frequency driven by two things, family -- my kids and wife are very keen on New Zealand -- and second the number of business associations and contacts I have."
IN ADDITION to his business interests, he supports not-for-profit organisations in New Zealand, the US and Russia, and has chipped in for Nelson's about-to-be-opened transportation museum and the new Fulbright scholarship programme.
He is a business and finance professor at the University of California at Berkeley's Haas School of Business and is an advocate for New Zealand's investment environment. Professor Teece says opportunities in this country are ripe for the picking for foreign investors -- partly because of the lower levels of competition compared with overseas markets.
Professor Teece says Air New Zealand's new Auckland-San Francisco direct service is an important step for New Zealand because it brings the country much closer to the technology hub of Silicon Valley, shaving laborious hours spent travelling through Los Angeles. "Sydney has been closer to San Francisco than Auckland -- not geographically, but because you have had to go through Los Angeles," he says.
The Business Roundtable's Mr Kerr does not remember Professor Teece from their school days, but the two have since become friends. "He's really made the grade in the American academic world," Mr Kerr says. "He's regarded as a serious guy and that takes some doing in the academic world, and the American one is the fiercest in the world."
At Professor Teece's wife's 50th birthday party in Nelson several years ago, Mr Kerr said that "in typical David style" the economist chartered a plane to give his American friends a tour over the Southern Alps. "He's made a lot of money along the way," he says. "It wouldn't be correct to call him a big figure in New Zealand business, but he's got some serious investments."
Warehouse founder Stephen Tindall admires Professor Teece's business acumen as well as his brain power. "He is an academic and that's his first love," Mr Tindall says. "But he's been able to bridge that gap (with business practice)." Mr Tindall first met Professor Teece at the Knowledge Wave conference in 2000 and the pair agreed to put up $100,000 to establish the Kiwi Expat Association, which helps expats make business contacts abroad. Since then, the two men have been in regular contact, speaking often on the telephone and conducting "virtual board meetings".
Mr Tindall says Professor Teece remains reasonably low profile even within the higher echelons of the Kiwi business community. "Unfortunately, New Zealand tends to be a little Kiwi-centric. To be a household name or office name, you normally need to be in the press and living here," he says.
Professor Teece founded expert consultancy group LECG in 1998, but sold it after it joined the New York Stock Exchange nine years later. However, he led a group of investors that bought it back in 2000. It floated on the Nasdaq late last year at US$17 a share. Its shares are now sitting around US$16.66, giving it a market capitalisation of US$363.5 million.
