Cover Story: Made in New Zealand. Innovation Nation. Myth or Reality? despite Capricious Currencies, Low-Wage Competition and Financial Crises, New Zealand's Manufacturing Is Earning Its Role as a Mainstay of Our Economy. Can Its Trademark Innovation Also Put Some Serious Grunt Behind Our GDP Growth? Vicki Jayne Checks out the Manufacturing Challenge

New Zealand Management, May 2012 | Go to article overview
Save to active project

Cover Story: Made in New Zealand. Innovation Nation. Myth or Reality? despite Capricious Currencies, Low-Wage Competition and Financial Crises, New Zealand's Manufacturing Is Earning Its Role as a Mainstay of Our Economy. Can Its Trademark Innovation Also Put Some Serious Grunt Behind Our GDP Growth? Vicki Jayne Checks out the Manufacturing Challenge


Byline: Vicki Jayne

Stories of NZ enterprise success

This is the second article in a major new eight-part NZ Management series: Stories of NZ enterprise success. Leading New Zealand business journalist Vicki Jayne conducts a sector-by-sector review of the underlying drivers of success in key parts of New Zealand's economy. Next month: The primary sector.

It accounts for nearly half our exports and around 12 percent of our GDP but New Zealand's manufacturing sector is no place for the faint hearted. An ability to make stuff -- even good and useful stuff -- barely gets you to the start line when investment capital is in short supply. Scaling up to compete globally is a whole other level of challenge.

Entrepreneurial flair is paramount -- but it ain't enough, notes business leader Sir Ken Stevens.

"It's not just about coming up with a better mousetrap but better marketing, branding, R&D -- the whole ball of cheese. There's a lot of competition out there."

As founder and chair of baggage-handling equipment specialist Glidepath, he's had decades of experience competing globally, chairs Export NZ and is a board member and trustee of the Asia New Zealand Foundation. And he reckons it's tougher than ever.

"Markets are depressed. There are some glimmers of optimism in the software industry but manufacturing is dead -- and that's the case even in China, comparatively speaking. So that's a challenge."

Kiwi companies are up against countries with bigger populations, deeper pockets and centuries of tough trading knowhow -- and that's before they start to deal with depressed markets and margin-decimating currency fluctuations.

But it's not all bad. Against the odds, local manufacturers are adapting, evolving, building market share in global niches and growing exciting new business opportunities.

As Deloitte/Management magazine's Top 200 data reveals, our more established manufacturers are global players whose product expertise ranges from food and fertiliser to resins and rubber. While it's a sector still playing to traditional strengths in land-based industries -- food, drink, wool, wood -- it also embraces high-tech, value-add offerings from frequency control solutions (Rakon) to health products (Fisher & Paykel Healthcare). Some Kiwi manufacturers are dominant players in their global niche.

And coming up fast behind the more established players are a bunch of rapid growth operators whose expertise ranges from radio equipment and electromagnets to plastic containers. But is that all enough to put "a bit of welly" behind this country's languishing GDP growth? Is the sector functioning in top gear or could it do better? What are some of the secrets to manufacturing success?

Fleeing the fortress

Innovation often born from necessity was a trademark of early manufacturing in New Zealand. People like Henry Shacklock (stoves) and Thomas Edmond (baking powder) shifted the market game with new inventions. Factories were mostly small, though Chelsea Sugar -- established in 1884 and still thriving in the same site on Auckland's North Shore -- employed more than 200 workers.

By the mid-1900s, import substitution ruled and a fortress New Zealand mentality helped featherbed local manufacturing by whacking hefty tariffs on imported goods. But when protectionist policies were lopped from geopolitical lexicons in the last two decades of the 1900s, the sector took a major hit.

Under a regime of economic liberalism, New Zealand rapidly opened its doors to offshore competition -- and factories started closing. Some regions were particularly hard hit -- Wairarapa lost 25 percent of its manufacturing capacity, Central Otago 35 percent.

A wide range of cheap imported goods appeared; jobs disappeared. Big chunks of our manufacturing capacity moved offshore to take advantage of cheaper labour in places like Fiji, Vietnam and China.

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
Loading One moment ...
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited article

Cover Story: Made in New Zealand. Innovation Nation. Myth or Reality? despite Capricious Currencies, Low-Wage Competition and Financial Crises, New Zealand's Manufacturing Is Earning Its Role as a Mainstay of Our Economy. Can Its Trademark Innovation Also Put Some Serious Grunt Behind Our GDP Growth? Vicki Jayne Checks out the Manufacturing Challenge
Settings

Settings

Typeface
Text size Smaller Larger
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

While we understand printed pages are helpful to our users, this limitation is necessary to help protect our publishers' copyrighted material and prevent its unlawful distribution. We are sorry for any inconvenience.
Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.

Are you sure you want to delete this highlight?