Analysis

Technological change and the future of work

The Government asked the Productivity Commission to explore the impacts of new and changing technology on the quantity and nature of work. The final report makes 35 findings and 18 recommendations. It focuses on what steps the Government can take to improve the ability of New Zealand and New Zealanders to adapt to and benefit from greater technological change. What did the inquiry find? Technology doesn’t just replace jobs; it also creates them. Technology has many effects on the labour market, some of which are positive for workers, the quality of work, and jobs. Predictions that technology will inevitably replace work are simplistic and out of step with historical experience. There isn’t much sign of looming technological disruption. Faster technological progress would be evident in labour market and economic measures, such as productivity growth, occupational churn, and business start-up rates. But across the developed world, all of these measures are slowing or declining. New Zealand needs more technology, not less. Technological progress and adoption drives productivity and income growth. If we want higher incomes for ourselves and our children, New Zealand firms need to take up technology at a faster rate than has been the case in recent years. New Zealand is well-placed for faster technology adoption in some respects, but not in others. By international standards, adult New Zealanders are skilled and train at high levels. Our policy settings generally encourage openness to ideas, goods, services, investment and skills. And our labour market has historically done a good job of creating lots of jobs. On the other hand, core skill levels in our schools are dropping; high house prices make it hard for some workers to move to better jobs; and New Zealand’s business environment lacks dynamism. New Zealand should build on its strengths and address its weaknesses. The Productivity Commission recommends a number of policy changes […]

The future of thermoplastics

There are two major types of resin used in the production of composites — thermosetting and thermoplastic. Thermosetting resins are currently the most common, but as composite use expands, thermoplastic resins are increasingly being explored. Thermosetting resins are hardened via curing, using heat, to form heavily cross-linked polymers with insoluble or infusible rigid bonds that will not melt on exposure to heat. On the other hand, thermoplastics are branches or chains of monomers that soften when heated and solidify once cooled — a reversible process with no chemical bonding. Put simply, you can re-melt and re-form a thermoplastic, but not a thermoset. Why thermosets rule Thermosetting resins, such as epoxies or polyesters, are popular for composite production because their low viscosity helps achieve good penetration into the fibre network. This allows for the use of more fibres and increases the strength of the final composite material. The process for a thermosetting resin begins, in the pultrusion process, with the fibres being immersed in resin, which are then pulled into a die where heat is applied. This starts the curing reaction that converts the low molecular weight liquid resin into solid three-dimensional network structure, locking the fibres into this newly formed network. Because most curing reactions are exothermic, once the reaction has begun it will readily propagate, making thermoset production easily scalable. Once set, the three-dimensional structure locks the fibre in place and gives the composite its strength and rigidity. The rise of the thermoplasticThermoplastics and thermoplastic composites have been around for some time, especially for short fibre applications. But new attention is being drawn towards thermoplastics, due to the rising need for additional light weighting without the loss of structural stability, especially in the automotive industry. One specific example is the potential to use thermoplastic composite to reduce the weight […]

Manco Rail boosts NZ engineering sector with multi-million dollar Sydney tunnel contract

Auckland company Manco Rail has given New Zealand’s engineering sector a multi-million dollar boost by securing a contract to supply specialised equipment for two 15 kilometre rail tunnels being built under Sydney Harbour. Manco Rail won an international tender against Australian and European competitors to supply automated equipment to transport the rail through the two tunnels, lay the sleepers, and then thread the rail onto the sleepers. All this equipment is radio-remote-controlled. Manco is also supplying the equipment to install the overhead wire to power the trains. The New South Wales Government, via Sydney Metro Trains, is in the advanced stages of building the north and south tunnels under Sydney Harbour and a significant amount of equipment will be shipped out on 2 July. Manco Rail managing director Bryan Black said the contract, worth tens of millions of dollars, will secure employment for about 300 people and provide new jobs for the 40 New Zealand companies supplying Manco with components. “Manco Rail has about 75 employees at three locations in New Zealand but we have three times that number in long-term subcontractor alliances, mainly throughout the North Island. We have taken on six additional university-qualified design engineers, three auto-electricians, and a wide range of skilled engineering personnel from many industries including some redundancies from the airline industry.” Manco Rail’s subcontractors for the Sydney project include: Gaminco, a large Tauranga machining company with world-class facilities which does extensive work for John Deere, G90 Engineering and Juno Engineering in Matamata which supply machine and fabricated parts, Piako Engineering in Morrinsville which supplies fabricated parts, and 35 other New Zealand companies, mostly locally owned, which supply a range of hydraulics, electronics, and radio-control equipment. Mr Black said the capability of the New Zealand engineering sector is constantly underestimated. “Many of these companies are third-generation […]

Can we be more productive?

By Ian Walsh, Managing Director, Intent Group Over the past 50 years, New Zealand has been on a negative GDP trajectory versus the OECD, sliding from 5th place to 22nd! The top 10 countries average 60% more productivity per person per capita in US$ than we do, and this gap has been widening since the mid 1980’s.* The general consensus is that we work hard, and the statistics say we work more hours than most. Clearly this is the harder not smarter argument. Perhaps Sir Paul Callaghan captured it best when he said, “In New Zealand we sense, somehow we are not as prosperous as we would like.” Without highly productive businesses we will not be able to generate the income to invest in human and physical capital, to create the society and country we aspire to. So why are we less productive? There has been a lot of research over the years, with the traditional arguments being that our costs are higher as we are further away from market. The research, however, shows that we should be 20% above the average** and playing in the top 10, but we are not. This is due to: Weak international connections. New Zealand firms face reduced access to large markets and limited participation in global value chains, where the transfer of advanced technologies now often occurs. Underinvestment in “knowledge-based capital”. In particular, R&D undertaken by the business sector is among the lowest in the OECD, reducing the capacity for “frontier innovation” and the ability of firms to absorb new ideas developed elsewhere (“technological catch-up”). The quality of management in New Zealand is low, which decreases the productivity gains from new technology. I find these outcomes interesting, but not surprising. 90% of NZ businesses are SME’s who can’t afford HR or a training manager, let alone an innovation manager! Most investment is managed by the entrepreneur who started the […]

NZ set for rapid increase in large scale manufacturing Post-Covid – 19

New Zealand is set to see a rapid increase in large scale manufacturing in the coming months according to new figures from the country’s largest industrial and residential development. More than a fifth of the 170 hectares of commercial land available at Drury South Crossing in South Auckland has been sold to a wide range of manufacturing, logistics, fabrication, construction and industrial businesses. The development is expected to contribute $2.3bn to the economy, employ 6,000 in the manufacturing, distribution, food processing, tech and logistics sectors and provide affordable housing for 2,000 Kiwis when it is completed in 2027. According to developers, Drury South Crossing will be one of the first large scale manufacturing hubs to be designed and completed in a post-COVID-19 environment. Design and planning for a number of the new plants are already well underway with construction on the first of the new facilities expected to come on stream in 2021. Stephen Hughes, CEO of Drury South Crossing says interest from local and international manufacturers has been strong, particularly from the agricultural sector with several food suppliers looking to establish high volume processing capability locally. He says New Zealand’s success in controlling the virus has meant the country is well-positioned for an expected uplift in post-COVID demand for New Zealand made goods. “The agricultural sector is seeing significant growth potential for New Zealand branded products as the pandemic stretches supplies around the world and consumers focus their attention on where their food is sourced from,” he says. He says increasingly a new generation of businesses operating at a high volume throughput need sizable footage and heights of 25m in order to accommodate robotic automation. “What we are seeing is a need from local food producers to store large volumes of export-ready product where it can be accessed using […]

Transport boost impactful for Auckland and Upper North Island

The four-lane highway from Whangarei to Tauranga may be the eye-catching part of National’s new infrastructure plan but it is arguably the significant rail upgrades and busway projects that could have the biggest impact on Aucklanders says the Employers and Manufacturers Association (EMA). National Party leader the Hon Judith Collins announced a comprehensive and far reaching infrastructure plan with an emphasis on Auckland but highlighted by a four-lane highway from Whangarei to Tauranga with new tunnels through the Brynderwyn Hills and the Kaimai Ranges. “That road plan north would be very welcome by our members in Whangarei and the Far North as it opens a true gateway for significant expansion in the north, particularly in the horticultural and manufacturing sectors,” says EMA Chief Executive Brett O’Riley (pictured). “But we are most excited about the announced plans for public transport. It is the rail links in Auckland, the third and fourth main lines, rail to the airport, completing links from the airport to Onehunga -supported by rapid buses to the CBD – and electrification to Pokeno and other proposed new rail links that are game changers. ‘These initiatives could take significant freight volumes off the motorway networks, enhance commuter options and provide a genuine fast-rail link from the city to the airport and Hamilton, driving productivity gains across the regional economy. “Electrification to Pokeno and new services to West Auckland would service rapid residential growth. Completing the Eastern Busway and building a North-Western busway should have similar impacts for commuters as the highly successful Northern Busway. A second Waitemata crossing has long been identified as a priority and planned ferry upgrades take advantage of the harbour as a key transport link.” National’s plan also includes funding changes that would allow the Transport Agency to borrow more and carry more debt on […]

Critical workers needed for economic recovery

BusinessNZ has welcomed changes to immigration settings announced today. More occupations have been added to the skill level exception test and criteria for Essential Skills work visas have been changed. BusinessNZ Chief Executive Kirk Hope (pictured) welcomed the plan for phasing in remuneration tests as criteria for entry, reducing reliance on ANZSCO, an outdated occupational classification system which is not fit for purpose in a modern, changing labour market. But he said Immigration NZ needed to urgently provide clarity to companies on bringing in critical workers. “Right now we need a range of high-skilled workers to support the economic recovery efforts. They are needed for company operations that will save and create jobs, e.g. specialist engineers for commissioning and installing new plant and equipment. “Immigration NZ needs to be able to approve the entry of highly specialised skills that cannot be found in New Zealand. There is no cost to the taxpayer for allowing these specialist workers in, and the businesses applying for the critical worker exemptions will need to put up an economic case for exemption. “From the cases we have heard of, there are hundreds of jobs on the line if Immigration NZ is not able to approve entry for such critical skills,” Mr Hope said.

40 million to support NZ businesses a welcome relief

Minister for Economic Development Phil Twyford and Minister for Small Business Stuart announced a further $40 million will be invested in the Regional Business Partner programme (RBP) today. This is a welcome relief for businesses trying to plot a path back to a thriving business after the Covid-19 pandemic says the EMA Chief Executive Brett O’Riley. “Financial support via the wage subsidy and small loan scheme helped businesses stay afloat, but what is going to get them back to profitability long term is good advice and mentoring around changing the way they operate,” said Brett. The RBP offers eligible businesses help with HR, health and wellbeing, business continuity, cashflow and finance management, strategy and digital capability. In the announcement today a further $10 million of funding for tourism businesses will also be channeled through the RBP. “One of the sectors that was hit as far back as January by COVID-19 was tourism. They were feeling the effects of dwindling tourist numbers, the China tourist ban and accommodation, hospitality, tourism, and tourism related retail were all on the decline. “Six months later and with border closures still in place they are in desperate need of the type of support the RBP offers.” Brett said. The fund is open to registered New Zealand businesses with fewer than 100 full time equivalent employees and provides access to up to $5000 of expert advice and support. The RBP is a partnership between NZTE and Callaghan Innovation. Businesses looking to register should call the Business Helpline on 0800 500 362 in the North Island or 0800 505 096 in the South Island.

Where are we going, how are we getting there?

-Doug Green, Publisher, NZ Manufacturer Business people have been thinking it, they have done it. The statement released today by Sir Peter Gluckman, former Prime Minister Helen Clark and former Air New Zealand chief Rob Fyfe is long overdue. Not necessarily by just them, but by New Zealanders concerned about the economy…and our going forward. Or by the 94% of SME’s who wonder what tomorrow is going to bring. They are saying – what many businesspeople are thinking – that Government does not have a plan for the difficult journey we all face. Maybe because its an election year Government is not sharing its plans for the economy until closer to September? In the meantime, however, business owners are looking for the way ahead. One example, Fletcher’s laid off 1,000 workers in New Zealand as the economy closed down. They abided by the decisionmaking process of ‘the Team of 5m’ to play their part in making the country safer through the time of the virus. What we need is a Business Council – bringing together representatives from key business sectors like EMA, the chambers of commerce, BusinessNZ to make the financial decisions to move the economy forward. Soon we will learn National’s and the coalition’s plans. Pity its an election year, the parties will put forward ideas that will not necessarily start immediately, but make them look good. Think the ‘Shovels Ready’ projects. The shovels are not ready yet.

Soul Machines and Florence to assist tobacco users quit during Covid-19

Soul Machines has joined the World Health Organisation’s (WHO) Access Initiative (AI) for Quitting Tobacco to help share WHO’s life-saving information during the Covid-19 pandemic, combat misinformation, reduce the risk of Covid-19 and help over one billion tobacco users quit. Florence, the WHO’s first digital health worker, was created using Soul Machines technology and WHO technical guidance, with support from Amazon Web Services and Google Cloud. Florence will help provide clarity and expel damaging myths around Covid-19 and will specifically address smoking and its consequences – heart disease, cancer, diabetes, and respiratory diseases – all of which are comorbidities with Covid-19. With Florence, smokers can engage with a digital health worker to develop a quit plan and rely on a trusted source anytime and anyplace, to help them feel confident to reach their quit goals. Initially available in English, Florence will, over time, be available in all six official UN languages. Smokers are more exposed to the Covid-19 virus and are at greater risk of having severe disease complications. Although around 60% of the 1.3 billion tobacco users globally want to quit, only 30% of them have access to tools that can help them quit. As a digital health worker for WHO, Florence will help give the increasing numbers of people globally who have a desire to quit smoking during the Covid-19 pandemic a new, safe, easily accessible and engaging channel. Florence can scale seamlessly and to talk to many individual people around the world and is available 24/7 with no wait times, as a simple video stream from the cloud to any device. This frees up critical people resources and provides a user-friendly solution to an overwhelming demand for clear, concise information that can be relied on. Florence will always be available when needed and ready to engage to […]

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