From NZ Manufacturer magazine February 2025

Ian Walsh, Partner, Argon & Co NZ

I have been considering the approach to drive growth in NZ as we move into 2025. Overall, this is a positive direction, and business needs growth to fund investment, to improve its product and service and create a virtual cycle.

This is very much what Dr Edwards Deming laid out to Japan in the 1950’s. However, he described this as a quality circle with the start being to focus on improving your product or service, leading to happier customers, better product, lower cost, then more sales and the cycle is virtuous and repeats.

Expecting growth for growth’s sake by encouraging investors, without improving your product or service, or a clear strategy (Ireland or Singapore for example) is a recipe for failure. This investment is only one part of the puzzle. The other parts are aligning your businesses and universities and research capabilities with the areas in which the nation can win.

The restructure of Callaghan and research institutes goes some way to this, but aligning universities and business and research, I would suggest is still a work in progress.

This of course is common practice in Japan, America and other “successful” countries with major corporates invested in universities and research in a synergistic manner.

As Doug Green outlined in his article, our top 10 exports accounted for over three-quarters (76.4%) of the overall value to global markets:

• Dairy, eggs, honey: US$12.2 billion (30.7% of total exports)
• Meat: $5.4 billion (13.6%)
• Wood: $2.9 billion (7.2%)
• Fruits, nuts: $2.2 billion (5.4%)
• Beverages, spirits, vinegar: $1.53 billion (3.9%)
• Cereal/milk preparations: $1.52 billion (3.8%)
• Modified starches, glues, enzymes: $1.4 billion (3.4%)
• Machinery including computers: $1.19 billion (3%)
• Fish: $1.19 billion (3%)
• Aluminium: $949.8 million (2.4%)

These would seem to be a good space to start, to align business, research and universities in terms of creating a pipeline of innovation and talented capable people to drive our economy forward.

Only the government can bring these parties together, effectively and create the right framework and support to deliver the right outcomes for the whole country not just specific parts or entities within it.

It is great we now have a minister for manufacturing. There is now some growing recognition of the need for greater profile for manufacturing however, the budget is still controlled elsewhere and the rate of progress is slow.

There are signs of some engagement but we could do so much more. For example, a quick review of funding available to support manufacturing in Australia reveals

• Industry growth program giving SME’s access to grants of between $50k to $250k for early-stage commercialisation projects and $100k to $5 Million for commercialisation and growth projects, all designed to help build manufacturing capability.
• National reconstruction fund, $15 Billion into priority sectors to boost Australia’s domestic manufacturing and economic base
• Manufacturing modernisation fund, with $50 Million available from 2021 to 2023 designed to support transformation in small to medium manufacturing business (up to 199 employees)
• Modern Manufacturing Initiative $200 Million to help business collaborate with research institutions, translate innovation into commercial projects and integrate into international markets
• State funding, each State has specific initiatives as well

Unfortunately, a quick study of funding available for NZ, is not as productive, with the Callaghan Lean fund now discontinued, training initiatives such as TTAF now stopped.

There are regional business partner funds up usually 50:50 funded up to $5k and similar initiatives with NZTE and funding for numeracy and literacy training.

A comparison of the two approaches is very stark. The reality is many NZ SME’s need support to develop the capability they need and they do not have the resources or capacity to deliver this requirement.

Government and universities and other institutions need to provide better more capable candidates and we need to provide support and funding to commercialisation of innovation to drive the growth.

We have some of the pieces of the jigsaw on the table but not the complete picture as yet and talking growth without the detailed roadmap may only lead to further frustration.

We can and must do better.

 

NZ Manufacturer February 25 by Media Hawkes Bay Limited – Issuu