Strategies Will Play Key Role In Reversing Decline

21 December 2001

Industry Strategies Will Play Key Role In Reversing Nz’s Economic Decline

[The Government is working with high-growth potential industries to help them play key roles in reversing this country’s economic decline. Dr Neil Maxwell, General Manager Industry Development, at Industry New Zealand explains Industry New Zealand’s work with some of these industries.]

The story of New Zealand’s relative economic decline over the last 30 years is well known.

Over that time we have slipped from sixth to twentieth out of the 30 counties in the OECD in terms of per capita income. It’s not because we haven’t been growing, it’s just that we haven’t been growing as fast as the countries we like to compare ourselves with.

A key government strategy to rewrite this story is the work being done to accelerate the growth of world-class parts of the New Zealand economy and the identification of others with similar potential.

This year (2001) the government’s economic development agency, Industry New Zealand, has been helping establish partnerships with the wood processing; information and communications technology; creative industries; niche manufacturing; food; textile, clothing, footwear and carpets; and biotechnology sectors.

What we have been doing is co-ordinating, facilitating and brokering to help these sectors deal with barriers to investment and growth.

These barriers include lack of skills, poor alignment of resources, poor access to overseas markets and inadequate infrastructure. Among possible partners for a sector development strategy are industry, research and development groups, educational institutions, investment agencies and regional development bodies.

Except for wood processing, we are still at the early stages of forming partnerships.

In general, our sector work is currently primarily focused on scoping and analysis, asking the question: “Are these the sectors we should be putting our resources into?”

The criteria we use to answer this question are:

- Does the sector have strong growth prospects in global markets? And

- Is the sector producing world-class quality products and services at a price that the world wants to buy?

We have been careful not to fall into the trap of “paralysis by analysis” so where we have seen immediate opportunities we have pushed ahead.

The sectors Industry New Zealand is working with are:

Biotechnology

In June, Industry New Zealand released a discussion document “An Initial Survey of the Biotechnology Industry in New Zealand”.

The report’s purpose was to open a dialogue and promote discussion among stakeholders in the industry about major issues facing its development.

It does identify three general impediments to its efficient and effective development:

- The need to free up access to intellectual property.

- The lack of appropriate and inter-disciplinary skills in New Zealand.

- The industry’s fragmentation and poor networking.

Industry New Zealand is continuing to consult and work with people in the biotechnology sector to further explore and resolve how to overcome these issues.

Information and Communications Technology (ICT)

Industry New Zealand sees the ICT sector as both a sector in its own right and as an economic enabler to help growth, like venture capital.

Industry New Zealand’s work in supporting regional initiatives to increase local bandwidth is an example of this enabling work.

It has funded two reports, at opposite ends of the country, which examine regional telecommunications problems and propose regional solutions.

The reports - on the Far North and Otago-Southland - have a number of common findings, including strong demand for high-speed services, dissatisfaction with existing services and support for regionally based telecommunications services.

Information from the two reports helped shape the Regional High-Speed Internet pilot schemes announced in October by the Government.

Industry New Zealand has also hosted two regional network forums at which regions, including the Far North and Otago-Southland, shared and pooled information on existing and planned high-speed services.

Wood Processing

By 2015, the wood supply from New Zealand’s planted forests is forecast to double to 30-35 million cubic metres; ten years later, 55-60 million cubic metres of wood could be harvested.

This “wall of wood” will have a significant effect on the New Zealand economy, its regions, its businesses and its communities. It could make the forest industry New Zealand’s largest export earner and turn New Zealand into one of the world’s top five forestry countries.

The Wood Processing Strategy, which is a partnership between the forestry industry, central government and local government, will significantly accelerate the development of the processing of logs, and associated industries, and get the best value from the regional expansion in wood available for harvest.

It is doing this by removing barriers to development of the industry and increasing investment in it.

Industry New Zealand co-ordinates this strategy on behalf of Government.

Textile, Clothing, Footwear and Carpets

This month (December) representatives of the textile, clothing, footwear and carpet industries agreed to set up a sector strategy similar to the one in place for wood processing.

The government is working with this sector to focus on issues that affect the whole industry, for example skills shortages, and where a partnership between the government and industry can make a difference.

This includes improving industry co-operation and information sharing.

Industry New Zealand will be represented on the strategy’s secretariat.

The creative industries

The creative industries are acknowledged as key wealth creators in a knowledge economy. Worldwide they have been growing very fast.

At the moment in New Zealand, four industries are under the spotlight - music, screen production (film and televison), digital media and design.

Industry New Zealand has commissioned scoping reports into music, screen production and design and hosted workshops on the economic development of the music and screen production industries.

Traditionally government involvement in the latter two industries has focused on the cultural aspects; now there is an acknowledgement of a second dimension - economic development.

At the music and screen production workshops there was support for industry growth targets and focused programmes to achieve those targets. The government has been given the task of improving the effectiveness of its agencies.

The work being carried out ion this sector fits under the overall umbrella of the Creative Industries Working Group which is chaired by Industry New Zealand and includes representatives of the Ministry of Economic Development and the Ministry for Culture and Heritage.

Niche manufacturing

There are a number of New Zealand manufacturing companies making world-class products for international niche markets.

To varying degrees, these companies take advantage of a set of intangible assets which are unique to New Zealand such as a “can do” culture, kiwi ingenuity, adaptability and responsiveness.

Research has shown that niche, high-tech, export-orientated New Zealand manufacturers can deliver orders up to four times faster than competitors in countries they export to. On top of this, their costs can be up to on third of the US counterparts.

At present, Industry New Zealand is working with the agricultural technology, marine, aviation engineering services and casting sectors.

Food

Our work in the food sector is at a preliminary stage. What we are looking for are niches within the food sector in which there are opportunities to increase the production and export of value-added “fine foods”.

We are already working with organics and aquaculture businesses.

Ends/¡K

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