northland chamber

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.