28 February 2006

Hon Trevor Mallard: More NZ companies join exporting beachheads

Closing comments to the Continental Shifts - NZTE Beachheads Advisory Panel discussion, Sky City Convention Centre, Auckland

This is a welcome opportunity to participate in this key debate at a time when internationalisation and export issues are top of the Labour-led government's agenda.

The speakers on the platform today bring considerable expertise and an international perspective, to the debate on offshore expansion.

It is excellent to note that, while based offshore, many of those working in and around the Beachheads Programme, particularly through the Advisory Boards, have an in-depth knowledge of New Zealand and have already spent many years advising and supporting New Zealand businesses expanding into overseas markets.

It has been valuable for delegates at Beachheads Week and those participating in wider newthinking’06 events, including myself, to hear from those closest to the action what the significant business trends in their markets are, what opportunities there are for New Zealand businesses and the profile and style required for companies to succeed.

It has also been interesting to hear from the speakers of the practicalities of market entry.

Their stories from the frontline provide a salutary lesson on the importance of market research and appropriate entry strategies.

Offshore expansion is not for all but when undertaken in the right climate with appropriate advice and support, it can bring substantial rewards.

Debate on the issues around offshore expansion is timely. The high dollar is having an increasing impact on businesses, and there has been talk of an economic slowdown, with exporters facing difficulties and businesses going into retrenchment.

Can I stress however, that economic projections have not changed fundamentally in the last five months, and noone is forecasting a recession. In fact, the latest merchandise trade figures reported a rebound in exports.

Evidence shows that export success is possible irrespective of economic climate and that long-term business expansion transcends short-term market trends.

New Zealand has a strong history of exporting – this year is the 40th anniversary of the Export Awards where we celebrate a long line of New Zealand export successes.

The reality is that we are managing our way through a dip in the business cycle and it is important to keep that dip in perspective.

The government is working with business to help achieve the economic transformation that we all aspire to - a high value, innovative export-led economy.

We want our country to be more affluent and dynamic. Growing the economy is a priority in terms of delivering the living standards, services and quality of life which New Zealanders expect, deserve and are prepared to work for.

Meeting the challenges we face involves a lot of players, from government agencies, to our innovators and researchers, business people, government science and research agencies, and universities.

New Zealand Trade and Enterprise plays a key role in supporting and advising businesses as they seek to gain footholds in offshore markets.

In particular, it focuses on how the government can add value to the private sector’s efforts to take their products and services upmarket and offshore. That’s why, for example, we’ve worked to open up opportunities for exporters through trade policy and other programmes.

As we have already indicated, we will be refocusing spending programmes in the economic development area to impact more directly on productivity and innovation and on export potential in the lead-up to Export Year in 2007.

This new approach, aimed at boosting productivity and innovation in the export sector is all about thinking bigger and better and focusing on productive partnerships.

Internationalising more New Zealand businesses is the key to raising our standing on the OECD ladder and has to be a co-operative effort.

As a small country with many very small businesses on an international scale, exporters are heavily reliant on personnel based offshore, who can help them get more quickly into the market.

For many exporters, the costs of getting to offshore markets remains the number one issue.

Any relief for these costs and greater support offshore to speed up the process is therefore likely to see exports increase more quickly than through building business capability on the domestic scene.

The cornerstone of the programme are the Advisory Boards, some of the members of which you have just heard.

These people have the kind of in-market skills, expertise and networks that make a real difference to New Zealand companies entering new markets. Their support is invaluable.

The economic doom and gloom merchants may be interested to hear that the interest from New Zealand companies in expanding offshore shows no sign of waning – 70 companies are already signed up, of which 35 have joined in the past 12 months alone.

Exporting is the way of the future for New Zealand.

A move back to the basics; getting exporters offshore to understand the market and the competition, and giving them the support when there, are some of the features which will need to be high on the agenda for Export Year to help build a strong platform for the future.

Forums such as this provide a great mechanism for industry and government to come together to discuss the issues at hand and the programmes that work most effectively. The internationalisation of New Zealand companies is something that we all need to discuss if we are to grow the New Zealand economy and to raise New Zealanders standard of living.

ENDS

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