The Government has approved the framework for the new integrated agency which will replace Trade New Zealand and Industry New Zealand, Economic Development Minister Jim Anderton and Trade Negotiations Minister Jim Sutton said today.

Cabinet has approved the establishment of a board for the new organisation, which will be headed by Phil Lough (Nelson). Board members are: Peter Menzies (Auckland); Craig Ellison (Wellington); Michael Andrews (Auckland); Ken Douglas (Wellington); Emily Loughnan (Wellington), Craig Boyce (Christchurch), Wendy Pye (Auckland), and Jenny Morel (Wellington).

One of the board’s first tasks will be the appointment of a chief executive designate.

Jim Anderton said the formation of the new organisation, expected to be up and running by the middle of next year, was a response to calls from business and other stakeholders for a single economic and trade development agency.

Jim Sutton said New Zealand businesses and our economy would benefit from an organisation that provides seamless, flexible and responsive service delivery to businesses throughout their life cycle, from start-up to global player.

The new organisation will offer three broad groups of services, supported by a substantial domestic and offshore service network. These are:

- Enabling services - government and stakeholders working in partnership to identify opportunities and clear the way for growth. These currently include Industry New Zealand’s regional partnership programme, sector development and investment promotion activities and Trade New Zealand’s generic trade and investment promotions.
- Foundation services - helping businesses and entrepreneurs build capability through information, advice and training. These include the various BIZ schemes and basic appraisal services.
- Growth services - customised assistance aimed at accelerating the development of businesses and groups of businesses with significant growth potential. Growth services draw together Industry New Zealand’s Fast Forward programme and Trade New Zealand’s International Business Consultancy.

Mr Anderton said both individual business as well as sector and regional groups would be serviced by the new organisation

Mr Sutton said key stakeholders would be consulted on proposed changes.

“A substantial service network will be maintained within and outside New Zealand to deliver the level of service required by New Zealand business.”

ENDS

BACKGROUNDER: INTEGRATION OF TRADE NEW ZEALAND AND INDUSTRY NEW ZEALAND

INTRODUCTION

In September 2002, Cabinet decided in principle to integrate the services currently provided by Trade New Zealand and Industry New Zealand and to create a new organisation to deliver those services.

The Government, having now considered proposals regarding the integration of Trade New Zealand and Industry New Zealand services, has agreed to proceed to integrate the two organisations and establish a new organisation to support the development of internationally competitive business.

The new organisation is to be established by 1 July 2003. A Ministerial team comprising the Deputy Prime Minister, the Minister for Economic Development, the Minister for Trade Negotiations and Minister for Research, Science and Technology will oversee the transition process. An establishment Board, which will also be formally appointed as the Board of Trade New Zealand and Industry New Zealand, will have primary responsibility for managing the transition.

RATIONALE

The main aim of the integration process is to improve service delivery to enterprise, while enabling government to maximise its contribution to the development of internationally competitive business in New Zealand. In particular, integration of Trade NZ and Industry NZ will

- Make service delivery less fragmented and confusing for firms, especially through the development of a single customer interface - Clarify the linkages between economic development programmes, allowing the elimination of overlaps and the plugging of gaps - Increase alignment of government interventions, and thereby facilitate the development of a clearer and more focused economic development strategy.

ORGANISATIONAL OBJECTIVE AND STRATEGIC DIRECTION

The objective of the new organisation is to support the development of internationally competitive New Zealand business.

The new organisation will

- Contribute to increased exports and investment in New Zealand by strengthening global linkages through trade and investment promotion, and targeted business and international market development assistance;

- Enhance industry, regional, enterprise and entrepreneurial capabilities by providing information and facilitating access to skills, expertise and resources; and

- Contribute to a supportive environment for economic growth by:

1. Fostering collaborative networks and partnerships among central government, local government, industry, regional, education and research organisations, potential investors, and individual enterprises;

2. Encouraging the development and delivery of economic development services by the private and non-government sector; and

3. Co-ordinating the delivery of government economic development assistance to industry, regions and individual businesses.

SERVICE RANGE AND CLIENT SEGMENTATION

The integrated service range, proposed by Trade New Zealand and Industry New Zealand, will consist of three broad groups of services:

1. Enabling Services - these service will require the new organisation to work in partnership with key stakeholders (e.g. priority sectors, regions, collectives, clusters and other government agencies) to identify systemic opportunities for economic growth, and to facilitate the removal of constraints to growth

2. Growth Services - these services will be targeted at businesses (and groups of businesses) with significant growth potential. These services will include both capability development services and international consultancy services. Growth services are aimed at accelerating business development and enhancing the contribution of business to New Zealand’s economic growth.

3. Foundation Services - these services will support general capability building among entrepreneurs and businesses, particularly small firms and start-ups, through the provision of generic business information, advice and training.

Development of the Service Range: The new organisation will integrate existing services and improve service delivery in the short-term. However, there will be some opportunities for some changes to, and consolidation of, existing services prior to integration.

Looking toward the medium-term, there will be greater scope to make changes to the service range. These future decisions should be based on analysis of which services deliver, or are likely to deliver, the greatest net benefits to New Zealand.

RESOURCE ALLOCATION

Based on existing services, Industry New Zealand and Trade New Zealand estimate that the combined budgets of approximately $160 million are currently divided across the three broad service areas as follows: enabling services (35-40%); foundation services (10-15%); and growth services (45-50%).

ORGANISATIONAL FORM, GOVERNANCE ARRANGEMENTS AND TRANSITION

Organisational Form: The new organisation will be established as a Crown entity. It is important that the organisation develops and maintains a commercial focus and culture. It is also important that there is an effective interface between the new organisation and government policy agencies. In order to help achieve the latter, the Government has decided to appoint the CEOs of the Ministry of Economic Development (MED) and the Ministry of Foreign Affairs and Trade (MFAT) as advisors to the Board of the new organisation.

Directors who have been appointed are:

Phil Lough, Chair Mr Lough was Chief Executive of the Sealord Group Limited from 1994 until 2002. He was previously Deputy Chief Executive of the New Zealand Dairy Board. His current directorships include; Meridian Energy Ltd, Port Nelson Ltd, Tatua Dairy Co-operative, Crop and Food Research and the Livestock Improvements Corporation.

Peter Menzies Mr Menzies was Chief Executive of Mainzeal Group Ltd from 1970 to 1990. Since that time he has been a company director and consultant. He is currently Chair of Auckland Uniservices Ltd., and Director of the New Zealand Seed Fund, Neuronz Ltd., Team New Zealand, Aotea Board of Management. He is Chair of the Strategy Leaders Group which developed Auckland’s regional economic development strategy, a member of the Auckland University Council, and a trustee of the Tindall Foundation.

Jenny Morel Ms Morel runs Morel and Co, an investment bank, and No 8 Ventures, a venture fund which specialises in technology companies. She has served on many company boards including NZ Rail, Carborundum Abrasives, Rural Bank, Trust Bank NZ, AgResearch, AgVax Developments, and Interlock Group. Jenny was Wellington Chairman and a National Councillor of theInstitute of Directors from 1992 to 1997. She holds qualifications in science and economics, with career experience largely in the finance industry.

Emily Loughnan Ms Loughnan is director of Click Suite, an interactive television and internet company. She is co-chair of Wellington cluster “Creative Capital”. She is currently a member of the Prime Minister’s Growth and Innovation Advisory Board. Emily’s background is in marketing, with career experience largely in television. She will bring to the Board valued experience in cluster development and small company export experience.

Wendy Pye Wendy Pye is the owner and Managing Director of New Zealand’s largest successful exporter of educational materials worldwide- with 1800 titles having sold over 190 million copies. Ms Pye was leader of the Prime Minister’s Business Delegation to China in 2001, has been a member of the New Zealand APEC Business Advisory Council group since 2000 and is a member of the Task Force for the redevelopment of the NZ Racing Industry 2002. She will bring extensive experience to the board as a one of New Zealand’s most successful exporters.

Ken Douglas Mr Douglas has been a member of the Trade NZ Board since 1988. He was President of the New Zealand Council of Trade Unions National and Secretary of the New Zealand Federation of Labour. He is a Trustee and Board Member of the Asia 2000 Foundation, a Board Member of NZ Post, a Director of Air New Zealand, and a Porirua City Councillor.

Michael Andrews Mr Andrews is the current Chair of Industry NZ. He was Chief Executive of Fletcher Challenge from 1997 to 2001. He is current Chair of Rubicon Limited and a Director of Fletcher Challenge Forests. He has been Chair of the New Zealand Business Council for Sustainable Development, member of the World Business Council for Sustainable Development and member of the World Economic Forum.

Craig Ellison Mr Ellison is of Ngai Tahu affiliation and has a background in resource management. He has been a Commissioner with the Waitangi Fisheries Commission (Te Ohu Kai Moana) since 1993. He is a Director of Otakou Fisheries Ltd, Chair of the Seafood Standards Council, Convenor of the Pacific Economic Cooperation Council Fisheries Task Force and President of the New Zealand Fishing Industry Association.

Craig Boyce Mr Boyce is currently on the Industry NZ Board, he is acting chair of TVNZ, director of Advanced Foods (NZ), Christchurch City Holdings, the Christchurch Arts Centre, Datacom and Origin Group. He is chairman and chief executive of South Island retailer, Smiths City, and has a background in the meat industry.

On December 1 the new directors will assume office as directors of the boards of Trade New Zealand and Industry New Zealand, replacing existing directors. They will also constitute the Establishment Board of the new organisation, which has yet to be named.

Vote, Appropriations and Accountability Arrangements: The new organisation will have a single Output Agreement with the Government. However, both MED and MFAT will collectively be responsible for purchase advice, monitoring and evaluation.

Ministerial Team: A Ministerial team comprising the Deputy Prime Minister, the Minister for Economic Development, the Minister for Trade Negotiations and Minister for Research, Science and Technology will oversee the transition process.

Legislation: The passage of enabling legislation will be given high priority in 2003. Officials from MED and MFAT will prepare instructions for Parliamentary Counsel Office.

ENDS

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