In Support Of Modern Manufacturing
David Shearer In 1881, a group of South Island farmers and businessmen established Summit Wool Spinners in Oamaru. It forged a proud heritage and grew into a high-tech international business: one of North Otago’s biggest employers. But in June, fifty jobs were lost at its Oamaru plant. In a population of 13,000 that’s got to hurt. This is happening too often: 70 jobs lost at Norman Ellison Carpets in June. 71 at Flotech. 55 at Gould’s Fine Foods in July. Some of those staff had been loyal employees for more than 20 years. There are plenty of reasons why businesses falter. But these weren’t fragile startups, or badly run. They were once very productive businesses. So what’s the problem? The government blames it on Europe. But our major trading partners, Australia and China, haven’t been in recession at all. In the last three years New Zealand’s GDP has grown just 0.4 per cent a year in comparison to Australia’s 2.8%. The government also blames it on the earthquakes. They were devastating, but economically the rebuild of Canterbury now presents a source of growth. We have tried to shield ourselves from declining living standards by borrowing money and selling assets. Consequently, our overseas liabilities from personal borrowing are among the highest in the world. Meanwhile we’re losing 50,000 good people a year to Australia because our wages are so low. I listened to a speech recently by Professor Gšran Roos, a world leader in innovation. His research shows that each job in manufacturing generates between 2-5 jobs in the rest of the economy. So when Oamaru loses 50 jobs in its wool mill, the ripple effect hits Timaru, Maheno, Hampden, Middlemarch, Palmerston, Ranfurly, Dunedin. Flip that on its head and – given the right conditions – renewed business vibrancy could […]