Unlocking The Potential Of Māori Frontier Firms

The New Zealand Productivity Commission today released the final report of its frontier firms inquiry.

Frontier firms are the country’s most productive firms, and they play a vital role in lifting national productivity and wellbeing. However, New Zealand’s frontier firms lag significantly behind their international counterparts.

The Government asked the Commission to take a particular look at Māori firms. The inquiry found that Māori frontier firms have many of the characteristics needed to innovate, grow and support improved wellbeing.

Features of Māori firms, such as balancing multiple bottom lines and taking a longterm view, can be a strong driver of ambition, which can also flow through to expectations on suppliers. Further, high shareholder ambition, together with a longterm view, can spur innovation and experimentation, provided the underlying assets are not put at risk.

This appetite for innovation is reflected in statistics which show that rates of innovation and R&D are higher for Māori firms, compared to all New Zealand firms.

“Taking a long-term view and managing multiple bottom lines are complementary to innovation and productivity”, says Commission Chair Dr Ganesh Nana.

“Innovation requires patient investors who are prepared to stay the course. This contrasts with a short-term focus on financial performance and shareholder returns that can dominate the focus of boards and management.”

Many Māori firms are already involved in exporting. Māori values such as kaitiakitanga and manaakitanga, alongside mātauranga Māori help differentiate Māori goods and services and provide added brand value overseas. They also closely align with growing global consumer demand for products with strong environmental and social credentials. This presents export growth opportunities for kaupapa Māori firms and collectives.

Despite their successes, Māori firms face several barriers and challenges. Many are finding innovative ways to work around these constraints. But the Commission thinks they shouldn’t have to.

“Māori firms offer significant potential to contribute to sustainable and productive economic growth”, says Nana.

“However, they face a number of barriers and challenges that are constraining their potential. The Government should act to reduce these constraints, to unlock the potential of current and budding Māori frontier firms, and help the Crown better meet its Treaty obligations.”

Today’s report makes a number of recommendations for ways the Government can better support Māori frontier firms. These include:

· providing greater flexibility for Māori land-based businesses to use their assets to engage in productive enterprise;

· raising the potential of Government procurement processes to stimulate Māori business growth;

· exploring how the Māori-Crown relationship can be enhanced to unlock the potential of Māori firms;

· accelerating work to protect mātauranga Māori and intellectual property; and

· providing support and resourcing for a Māori-led approach, through a Hui Taumata, to improving the Māori business ecosystem.

The report also makes recommendations for significant changes to broader innovation policies, regulations and investments.

Notes 

1. The final report New Zealand firms: Reaching for the frontier is attached under embargo and will be available at https://www.productivity.govt.nz/frontier-firms/finalreport at 00:01 on Tuesday 20 April 2021. Chapter 4 focuses on Insights from Māori firms.

2. A Cut to the chase of Insights from Māori frontier firms is attached under embargo and will be available at https://www.productivity.govt.nz/cttc/maorifirms at 00:01 on Tuesday 20 April 2021.

3. An important measure of productivity is the amount of value created per hour worked. Improving productivity is about getting more from less. One way to think about productivity is working smarter, rather than harder.

4. New Zealand’s productivity record is poor. New Zealand’s living standards are only managing to avoid falling further behind other advanced nations, rather than catching up. And to achieve this people are working harder rather than smarter. This makes delivering improved wellbeing even more difficult.

5. The Government assigned the Productivity Commission this inquiry into how to maximise the economic contribution of New Zealand’s frontier firms. See inquiry terms of reference here.

6. The New Zealand Productivity Commission – an independent Crown entity – was established in April 2011 and completes in-depth inquiry reports on topics selected by the Government, carries out productivity-related research, and promotes understanding of productivity issues

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