Business Holds Key To Faster Export-Led Growth...

6 June 2003

Media Release

Business Holds Key To Faster Export-Led Growth...

Lifting the export performance of smaller businesses by making it easier for them to operate internationally is critical to New Zealand achieving faster growth.

Michael Barnett, chief executive of the Auckland Chamber of Commerce, noted that of the approximately 300,000 registered businesses in New Zealand, 90% are regarded as small-medium enterprises (SMEs) employing 10 or fewer people.

Of this 300,000 total, just 10,000 or 3.3% report that they export in any given year," which has to be among New Zealand's most disgraceful statistics, given the claim that we are an export-based economy whose standard of living depends on what foreign exchange earnings we generate," said Mr Barnett.

He was speaking at the launch of the New Zealand Chambers of Commerce and Industry campaign unveiled yesterday aimed at growing our exports 70% over the next decade.

The campaign has five inter-dependent action areas, all critical to New Zealand's efforts to prize open markets overseas and lift sustained growth to 4% a year for the next 10 years, and about twice the increase achieved over the last decade:

- Continuing work on trade liberalisation;

- Continuing regional and bilateral efforts to free up trade and investment links;

- Lifting the export performance of SMEs;

- Helping major established businesses to add value and find new markets; and,

- Improving the competitiveness of export infrastructure.

"If we can knock over constraints that make it difficult for businesses to get into exporting, this will help motivate more businesses to get into the game and those already involved to lift their targets," said Mr Barnett.

"This is an absolutely vital campaign, and the statistics make it very clear why."

Dairy, meat and forestry account for nearly 40% of exports by value.

Of the 10,000 businesses who say they are regular exporters, just 1500 are doing business of more than $25 million a year. Of these, about 150 businesses account for about 80% of New Zealand's total foreign exchange earnings. About 400 more do between $5 million and $25 million.

"The rest - about 8000 businesses - earn less than $5 million a year offshore, which means two things," said Mr Barnett.

Firstly, as a country we continue to be heavily dependent on a select few businesses who operate mainly in the commodity markets and whose earnings are heavily dependent on the global boom-bust price cycles.

Secondly, these statistics show the huge potential for more businesses to be encouraged to get serious about becoming successful exporters.

"I would like to think that our campaign will provide practical assistance to the 8000 businesses currently earning up to $5 million from exports to, say, set targets to double their returns in the next year or two and then sustain the growth. This way we will build up a new tier of foreign exchange earning businesses, and reduce our reliance on a select few."

In practical terms, achieving the campaign objective of faster growth for New Zealand requires every business to look at their performance and work out a strategy to shift into the fast lane of exporting, concluded Mr Barnett.

ENDS

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