LEADER COLUMN DECEMBER 2011
It has been another tough year and many Northland businesses have continued to struggle to maintain their market share or to grow their business. We have a relatively small population and a comparatively low regional GDP which means there is only so much money in Northland that people can afford to spend on goods and services. . As reflected in the recent Chamber of Commerce Northern Region Business Confidence Survey while both our population and economy will grow in the future this growth is likely to be slow and consumers are likely to remain cautious
This does not mean there are not opportunities for businesses to grow, only that this growth may require the owners to look at new ways of doing things. On the positive side with Whangarei being the first New Zealand town to receive Ultra-fast Broadband and Northland also well placed to benefit from the Rural Broadband Initiative, there is potential for Northland businesses to both increase markets and reduce their day to day operating costs.
There will be potential costs in initially adopting this new technology. This will come through connection fees, software development, hardware upgrades and just general costs associated with businesses changing the way they operate. How this will be done will vary depending on the nature of particular businesses and the willingness of their owners to adopt new ways of doing things.
While these costs may make some Northland businesses reluctant to adopt UFB, there are a number of things that this technology would enable them to achieve that they cannot do at present. Northland businesses are virtually exclusively very small enterprises and operating with a limited somewhat isolated market. Fast, reliable data transfer can overcome lack of scale and location. The Whangarei retailer need no longer rely just on those local customers who walk into their shop. There are now almost 2 billion people worldwide connected to the internet. Through innovative marketing local businesses can enjoy access to a large portion of this market.
They can reassess their communication systems and there will be a number of savings small businesses will be able to make in this area. Also through the use of “cloud” technology it will make financial and customer management systems that were once the exclusive domain of large corporates available to small businesses. While this new technology may not be right for all businesses, it is surely worth any business taking the opportunity to explore ways to reduce their operating costs and increase their market share.
28 February 2012
LEADER COLUMN FEBRUARY 2012
Several recent articles in national newspapers have once again highlighted the opportunities that could exist for Whangarei because of its location in close proximity to New Zealand’s largest city. Obviously there is potential for our deepwater port to benefit in the future as Port of Auckland meets its capacity, struggles with reverse sensitivity and considers whether storing several hundred thousand containers is the best possible use for a world class city. But it is more likely that it will be issues around quality of life and the challenges of living in a large metropolitan centre that may make Northland attractive alternative to Aucklanders in the near future.
While not wanting to view Whangarei through rose coloured glasses and recognising that we still have a number of issues that need to be resolved, we do have a lot to offer those disaffected with living in an overcrowded city with an infrastructure stretched to near capacity. Two factors that could potentially affect the quality of life of people living in such a large city are pressure on housing supply and traffic congestion. Neither of these is easy to overcome and both can lead people to question what they are doing there.
So we need to ask what would encourage these people to move here and contribute to our economy and our communities. It should go without saying that these people would seek a reliable and resilient way to ship their goods elsewhere around the country and world. They would want surety around power and water supply. But these are things that people in all communities aspire to have and are hardly a point of difference in a competitive market. If someone’s motive for moving from one place is related to their perceived quality of life in that location then this factor will be important to them when deciding on where they go. We have a relatively compact, walkable central business district, we have large areas of industrial land in close proximity to State Highway One and a deepwater port and we have a variety of wonderful residential areas that suit a range of lifestyle choices.
There is possibly some negative outside perceptions about Whangarei and possibly the lack of amenity to encourage inner-city living. This is why the work that the Whangarei District Council is doing in the place making projects and their “Love It Here” campaign are so important. There is opportunity for the community to participate and contribute to this work and ensure we can fulfil our district’s potential.
Several recent articles in national newspapers have once again highlighted the opportunities that could exist for Whangarei because of its location in close proximity to New Zealand’s largest city. Obviously there is potential for our deepwater port to benefit in the future as Port of Auckland meets its capacity, struggles with reverse sensitivity and considers whether storing several hundred thousand containers is the best possible use for a world class city. But it is more likely that it will be issues around quality of life and the challenges of living in a large metropolitan centre that may make Northland attractive alternative to Aucklanders in the near future.
While not wanting to view Whangarei through rose coloured glasses and recognising that we still have a number of issues that need to be resolved, we do have a lot to offer those disaffected with living in an overcrowded city with an infrastructure stretched to near capacity. Two factors that could potentially affect the quality of life of people living in such a large city are pressure on housing supply and traffic congestion. Neither of these is easy to overcome and both can lead people to question what they are doing there.
So we need to ask what would encourage these people to move here and contribute to our economy and our communities. It should go without saying that these people would seek a reliable and resilient way to ship their goods elsewhere around the country and world. They would want surety around power and water supply. But these are things that people in all communities aspire to have and are hardly a point of difference in a competitive market. If someone’s motive for moving from one place is related to their perceived quality of life in that location then this factor will be important to them when deciding on where they go. We have a relatively compact, walkable central business district, we have large areas of industrial land in close proximity to State Highway One and a deepwater port and we have a variety of wonderful residential areas that suit a range of lifestyle choices.
There is possibly some negative outside perceptions about Whangarei and possibly the lack of amenity to encourage inner-city living. This is why the work that the Whangarei District Council is doing in the place making projects and their “Love It Here” campaign are so important. There is opportunity for the community to participate and contribute to this work and ensure we can fulfil our district’s potential.
ADVOCATE COLUMN 3rd WEEK JANUARY 2012
New Zealand Chambers of Commerce Northland has a wide range of resources available to assist start up businesses avoid many common pitfalls and is also a partner in the Regional Business Partnership whose objective is improved business capability for Northland businesses. Over the last months of 2011, New Zealand Chambers of Commerce Northland received a number of new membership applications from start up businesses.
At the time I thought why anyone would want to start up a new business given the tough economic times we had been experiencing over the last 18 months or so? Yet upon closer examination there are probably a number of good reasons why you would consider starting a business during a recession. It is also likely that the events of the last two years will influence management practices of these businesses long after the recession is over.
Statistics show that while there are currently more businesses exiting the market than entering, there will always be those who wish to start a new business. In some cases recessionary times put people in a position where they feel that by starting their own business may be the best way of providing some financial security. This is supported by overseas studies which show areas of high employment will generally exhibit higher levels of stat up businesses than those of low unemployment.
Then will always be entrepreneurs who have an aspiration and the energy to take on new challenges and many successful companies have their origins in recessions. The increased churn as businesses are forced from the market provides opportunities for others to offer products and services more efficiently and innovatively. This does not mean that their chances of success will be any easier but it may mean that the new business owners will develop traits different from those who started their businesses in a more buoyant market.
One possible legacy of the last two years may well be a new breed of managers. These people will be operating in an environment that requires disciplined financial management skills if they are to be successful and a high level of business capability. Yet history has also shown that managers who have begun their careers during recessions are risk averse and took on less debt. While this in itself is not a bad thing it does mean that they have also been shown to invest less in research and development. This may lead to slower growth and less innovation than has been experienced in the past.
New Zealand Chambers of Commerce Northland has a wide range of resources available to assist start up businesses avoid many common pitfalls and is also a partner in the Regional Business Partnership whose objective is improved business capability for Northland businesses. Over the last months of 2011, New Zealand Chambers of Commerce Northland received a number of new membership applications from start up businesses.
At the time I thought why anyone would want to start up a new business given the tough economic times we had been experiencing over the last 18 months or so? Yet upon closer examination there are probably a number of good reasons why you would consider starting a business during a recession. It is also likely that the events of the last two years will influence management practices of these businesses long after the recession is over.
Statistics show that while there are currently more businesses exiting the market than entering, there will always be those who wish to start a new business. In some cases recessionary times put people in a position where they feel that by starting their own business may be the best way of providing some financial security. This is supported by overseas studies which show areas of high employment will generally exhibit higher levels of stat up businesses than those of low unemployment.
Then will always be entrepreneurs who have an aspiration and the energy to take on new challenges and many successful companies have their origins in recessions. The increased churn as businesses are forced from the market provides opportunities for others to offer products and services more efficiently and innovatively. This does not mean that their chances of success will be any easier but it may mean that the new business owners will develop traits different from those who started their businesses in a more buoyant market.
One possible legacy of the last two years may well be a new breed of managers. These people will be operating in an environment that requires disciplined financial management skills if they are to be successful and a high level of business capability. Yet history has also shown that managers who have begun their careers during recessions are risk averse and took on less debt. While this in itself is not a bad thing it does mean that they have also been shown to invest less in research and development. This may lead to slower growth and less innovation than has been experienced in the past.
ADVOCATE COLUMN 1st WEEK FEBRUARY 2012
Last year during the debate regarding the North Auckland rail link and whether it should retained, one of the arguments in support of its retention was the fact that at some stage in the future it may be needed and that the cost of reinstating a “mothballed” line would be prohibitive. Of course it is hard to argue based on what may or may not happen in the future but perhaps the reality is that there is already evidence to support the retention of this strategically important infrastructure based on the current state of New Zealand’s maritime industrial practices.
In recent times the Port of Auckland has been involved in industrial disputes that may of may not have directly resulted in it losing business to Tauranga. At the same time their plans to expand their area of operations has also caused many Aucklanders to ask whether this is the best use for this land. What was particularly interesting about the conversations taking place around the Port of Auckland and their current productivity levels and their planned expansion, was the fact that over a quarter of the containers landed there are trans-shipments. This means that almost 350,000 containers which are unloaded at Auckland never actually leave the port by road.
There is no argument that the Port of Auckland is a substantial contributor to that city’s economy and that it will continue to grow. However many commentators believe that at some stage in the not too distant future neither Auckland nor Tauranga will have sufficient capacity to meet demand. If this is the case then perhaps we really do need to ask whether the locking up a large portion of land in our largest city and severely reducing the recreational facilities for which the city is known is such a good idea given that there is a suitable deep water port with virtually unlimited storage capacity within 200 kilometres.
This goes beyond what is best for an individual region or city. A highly productive deep water port at Whangarei working to its potential capacity, supported by the necessary infrastructure to integrate it with the northern land and marine transport networks is essential to creating a resilient supply chain that New Zealand’s economy needs if it is to be competitive and productive. This is just one example of the role Whangarei can and should play in the wider national economy and also the danger in dismissing the transport link between our two centres as nothing more than a tourism opportunity.
Last year during the debate regarding the North Auckland rail link and whether it should retained, one of the arguments in support of its retention was the fact that at some stage in the future it may be needed and that the cost of reinstating a “mothballed” line would be prohibitive. Of course it is hard to argue based on what may or may not happen in the future but perhaps the reality is that there is already evidence to support the retention of this strategically important infrastructure based on the current state of New Zealand’s maritime industrial practices.
In recent times the Port of Auckland has been involved in industrial disputes that may of may not have directly resulted in it losing business to Tauranga. At the same time their plans to expand their area of operations has also caused many Aucklanders to ask whether this is the best use for this land. What was particularly interesting about the conversations taking place around the Port of Auckland and their current productivity levels and their planned expansion, was the fact that over a quarter of the containers landed there are trans-shipments. This means that almost 350,000 containers which are unloaded at Auckland never actually leave the port by road.
There is no argument that the Port of Auckland is a substantial contributor to that city’s economy and that it will continue to grow. However many commentators believe that at some stage in the not too distant future neither Auckland nor Tauranga will have sufficient capacity to meet demand. If this is the case then perhaps we really do need to ask whether the locking up a large portion of land in our largest city and severely reducing the recreational facilities for which the city is known is such a good idea given that there is a suitable deep water port with virtually unlimited storage capacity within 200 kilometres.
This goes beyond what is best for an individual region or city. A highly productive deep water port at Whangarei working to its potential capacity, supported by the necessary infrastructure to integrate it with the northern land and marine transport networks is essential to creating a resilient supply chain that New Zealand’s economy needs if it is to be competitive and productive. This is just one example of the role Whangarei can and should play in the wider national economy and also the danger in dismissing the transport link between our two centres as nothing more than a tourism opportunity.
ADVOCATE COLUMN 1st WEEK DECEMBER 2011
Based on recent Treasury forecasts, it seems almost certain that economic growth will remain low for the foreseeable future and that there will an almost no rise in labour productivity for the next decade or so. Yet while this may not be a particularly satisfactory prospect, there are some New Zealand companies that are performing in a manner that defies this forecast.
These companies occupy a niche international market and are involved in ICT, high tech manufacturing and the bio-tech sectors. They also operate largely unnoticed by the wider community. It shows that what many economists having being saying about our creating economic growth is true. That is that to grow our economy and increase our productivity requires innovation and the identification of those international niche markets where our comparative lack of size can actually be a competitive advantage.
If not already these companies are fast becoming our biggest export earners and make a lie of the statement that New Zealand cannot compete globally as a manufacturer and exporter. We have an innovation sector worth $7 billion a year, contributes $5 billion per annum of exports and yet is largely based around only a handful of companies.
New Zealand cannot compete with many other manufacturing countries that focus high volume and a low waged work force and nor should we. To grow our wealth and raise our GDP will require a shift to a high wage economy. This is the ground that our successful manufacturing companies are currently occupying. These companies are involved in manufacturing things of high value by weight and that have a high profit margin. Yet conversely we as a nation continue to focus on low waged activities and our natural resources.
New Zealand business people in general like to maintain a low profile. Because these businesses operate below the radar of the domestic market it can at times be difficult to extol their virtues and offer them as an example to future young talented entrepreneurs as a possible pathway to success. This is compounded by the often bizarre or specialised nature of the products they manufacture.
These businesses show that our location and population base are not in themselves barriers to a successful manufacturing enterprise. We have a physical environment and on occasion a lifestyle that can be attractive. What is needed is to ensure that we create a social and commercial environment that encourages innovation and values excellence in research and development.
Based on recent Treasury forecasts, it seems almost certain that economic growth will remain low for the foreseeable future and that there will an almost no rise in labour productivity for the next decade or so. Yet while this may not be a particularly satisfactory prospect, there are some New Zealand companies that are performing in a manner that defies this forecast.
These companies occupy a niche international market and are involved in ICT, high tech manufacturing and the bio-tech sectors. They also operate largely unnoticed by the wider community. It shows that what many economists having being saying about our creating economic growth is true. That is that to grow our economy and increase our productivity requires innovation and the identification of those international niche markets where our comparative lack of size can actually be a competitive advantage.
If not already these companies are fast becoming our biggest export earners and make a lie of the statement that New Zealand cannot compete globally as a manufacturer and exporter. We have an innovation sector worth $7 billion a year, contributes $5 billion per annum of exports and yet is largely based around only a handful of companies.
New Zealand cannot compete with many other manufacturing countries that focus high volume and a low waged work force and nor should we. To grow our wealth and raise our GDP will require a shift to a high wage economy. This is the ground that our successful manufacturing companies are currently occupying. These companies are involved in manufacturing things of high value by weight and that have a high profit margin. Yet conversely we as a nation continue to focus on low waged activities and our natural resources.
New Zealand business people in general like to maintain a low profile. Because these businesses operate below the radar of the domestic market it can at times be difficult to extol their virtues and offer them as an example to future young talented entrepreneurs as a possible pathway to success. This is compounded by the often bizarre or specialised nature of the products they manufacture.
These businesses show that our location and population base are not in themselves barriers to a successful manufacturing enterprise. We have a physical environment and on occasion a lifestyle that can be attractive. What is needed is to ensure that we create a social and commercial environment that encourages innovation and values excellence in research and development.
Subscribe to:
Posts (Atom)
Posts
