The Company
Kenex Knowledge Systems Ltd (Kenex) is a business development company specialising in modelling spatial information and its utilisation through Geographic Information Systems (GIS - see the appendix for a discussion of GIS technlogies). The firm's name is derived from the Gaelic word for knowledge; "ken", with the organisation's focus on exploration and experimentation with knowledge contributing the "ex". The website states that the firm's "area of expertise is at the knowledge end of the `Information Value Chain'".1
The company had its genesis when Rob Smillie, working at the Crown Mineral division of the Ministry of Economic Development (MED), identified the cumulative information value residing in routine reports filed for prospecting licence compliance. Simultaneously, Greg Partington, working in a project at the Crown Research Institute (CRI) Geological and Nuclear Sciences (GNS) was using GIS models and Bayesian statistical techniques to identify prospective areas for different minerals. Rob and Greg developed a prototype GIS showing gold prospectivity on New Zealand's West Coast in a joint venture between Crown Minerals and GNS in 2001, with a view that the two organisations would extend the project to cover other areas of New Zealand. When it became obvious that the government departments could not follow-up on the commercial potential of the GIS, and that it would lay idle under the joint venture, they, along with Michelle Stokes who has also worked at Crown Minerals, set up Kenex.
The firm is based in Eastbourne, near Wellington. As an information-based company, Kenex could theoretically be located wherever the partners chose. As all three partners had previously worked in Australia and Michelle is Australian, serious consideration was given to locating the business across the Tasman. The partners describe their location decision of a seaside town in New Zealand as one based on a combination of the "New Zealand government's stated commitment to developing a knowledge economy and offering support to small businesses to grow", and a "lifestyle choice made possible by the comparatively low price and ready availability of the broadband Internet information exchange infrastructures in New Zealand" that they would need to communicate with their clients and partners. As Michelle says, "you just couldn't operate the business in Dongara, WA where you have to go down the road to use the 56kbps connection at the Telecentre to avoid tying up your single phone line at home". The state of the infrastructure and price premia charged for broadband in other than metropolitan areas in Australia, even where infrastructure is available, were significant deterrents to the partners which made the decision to locate in New Zealand economically more sensible.
The Kenex partners see their business as bringing together "people, data and information … in a way that empowers organisations through increasing knowledge and intellectual capital".2 By applying their unique skill mix of business development, mining industry experience, research and development experience, and spatial information technology capabilities, the partners provide a range of services to customers in the earth science and agricultural sectors. These services include spatial data acquisition, compilation, management, analysis and modelling, along with geological and geographical information system consulting, training, and tenement management and monitoring. The wide range of the firm's activities is summarised in its motto "Creating Business Opportunities in the Spatial World".
The company provides services to a wide range of both public and private sector clients in New Zealand, Europe and North America.3 Clients are typically mineral exploration and mining companies who use Kenex's unique spatial modelling and prospectivity GIS outputs to gain increased information to decrease risk of prospecting failure when selecting areas in which to apply for prospecting permits. The Crown Minerals section of New Zealand's Ministry of Economic Development has also used Kenex to produce models to promote prospective areas of New Zealand to overseas exploration companies, in order to attract increased investment in the sector. In partnership with other technical specialists, Kenex has also successfully applied its GIS data and analysis techniques to horticultural projects. Kenex is the only company of its type in New Zealand, and one of only two commercial organisations in the world producing mineral prospecting models using GIS.
The business has provided full time employment for three people since its inception. When Rob Smillie left the partnership in December 2003, he was replaced with a full-time staff member. Greg is the managing partner, and a board comprised of Greg, Michelle and independent director, Sue Fitzmaurice, determines the strategic priorities of the company. Since its inception, the business has been extremely successful, with profits amounting to around 50% of revenue. Furthermore, joint ventures with clients have given Kenex equity and equity options in current and future projects. On the basis of current projects, if mineral prices stay at their current levels, Kenex work will attract a projected investment of up to $14 million in exploration in New Zealand over the next eighteen months to 3 years. This does not take into account the $100 millions worth of value to New Zealand if a mine is discovered.
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