Section 4: Managing for Outcomes
The strategic priorities focus on particular areas where increased effort is likely to be most positive for growth, but all the Ministry's work aims to enhance growth.
This section describes the diversity of the Ministry's contribution to promoting growth by outlining its 14 business environment outcomes. It also shows how the Ministry is implementing systems and processes to achieve its strategically identified outcomes and priorities.
The Ministry's Business Environment Outcomes
Economic development is a complex business, and the Ministry undertakes a wide range of activities to foster it. The strategic priorities focus on particular areas where increased effort is likely to be most positive for growth, but all our work aims to enhance growth. The diversity of our contribution to promoting growth is reflected in the Ministry's 14 business environment outcomes, which are summarised below.
The Ministry alone cannot achieve all of these outcomes: many require contributions from Crown entities and other departments. This is reflected in Outcome A, which concerns the alignment of economic development activities across central and local government. We also have a shared outcome with the Ministry of Foreign Affairs and Trade, and linked outcomes with the Ministry of Research, Science and Technology (see the discussion under the International Linkages and Innovation Strategic Priorities). However, the Ministry does have a major role in achieving all our business environment outcomes, either through developing policy for implementation by other agencies, or through services provided by the Ministry, especially by the Business Services branch.
Outcome A > Economic development activities are better aligned across central and local government
The more that policies affecting growth are aligned across government departments, Crown entities and local government, the greater the likelihood of improving New Zealand's growth prospects. The Ministry works actively with a range of agencies to ensure that a whole-of-government approach is taken to economic development issues. Our work under the Leadership Strategic Priority contributes significantly to this outcome.
Outcome B > New Zealand's international connections facilitate sustainable economic growth through increased international trade, foreign investment and knowledge transfer
International connections enable growth. This is particularly true for New Zealand, because the domestic market is small and distant from global markets. The Ministry works closely with other agencies to co-ordinate New Zealand's regulatory environment more closely with those of our major trading partners and to promote stronger business networks. Our work on the International Linkages Strategic Priority contributes significantly to this outcome. This outcome is also shared with the Ministry of Foreign Affairs and Trade.
Outcome C > Businesses are more capable of innovating and making the most of market opportunities
Innovation and entrepreneurial behaviour are fundamental drivers of success and productivity improvement in firms of all sizes. Business success requires entrepreneurs continually to spot opportunities, and to produce and market innovative products that consumers want. The Ministry works to help businesses build capability at both firm and sector levels, as well as improving the business environment so that it stimulates innovation. Some of our work on the Innovation Strategic Priority contributes significantly to this outcome. This outcome is linked to MoRST's outcomes for the Research, Science and Technology Sector.
Outcome D > National and regional networks enable improved knowledge transfer and co-ordination of economic activity
The international connections outcome above highlights the importance of effective connections to facilitate trade and knowledge flows across borders. The same is true of domestic economic activity. We are involved in work at firm, sector and regional levels to help build the networks that will foster greater levels of collaboration and knowledge transfer. Some of our work on the Innovation Strategic Priority contributes significantly to this outcome.
Outcome E > Businesses and consumers have access to reliable infrastructure services at reasonable cost
Provision of infrastructure is critical for growth because services provided using network infrastructure, such as electricity, gas, water and transport, underpin all aspects of economic and social activity. The Ministry has lead responsibility for energy and telecommunications policy, and contributes to work by other agencies on transport and water issues. Our work on the Infrastructure Strategic Priority contributes significantly to this outcome.
Outcome F > Business regulation is easy to comply with, and balances the costs it imposes with the benefits to the community
Regulation affects incentives for economic activity. It is often difficult to find the appropriate balance between the goals that regulation seeks to achieve and the costs it imposes. The Ministry aims to promote improvements in the quality of all regulations, so as to minimise the compliance burden and provide as much certainty and flexibility as possible. We also work to ensure that regulations designed to achieve non-economic outcomes do not unnecessarily impede the Government's economic objective. Our work on the Regulatory Environment Strategic Priority contributes significantly to this outcome.
Outcome G > Businesses and consumers use information held by the Ministry, or required by laws it administers, to help them make well-informed decisions
Information on businesses and markets is necessary to create confidence in those markets, to ensure that participants can make good investment and purchasing decisions, and to minimise undesirable conduct such as fraud. The Ministry advises on the law that creates obligations on market participants to disclose information. This is part of ensuring that markets work effectively, and so is closely related to work conducted under Outcome H, below.
The Ministry also manages a range of databases and provides information on various topics to assist people to make well-informed decisions. We target some of our information provision through dedicated media channels, such as Pacific community radio. We are also increasing our use of technology to place much of this information on the internet, thus improving access and reducing the costs of that access.
Outcome H > Businesses and consumers have confidence in the integrity and effectiveness of markets
For markets to work well, businesses and consumers need to have confidence in their integrity and effectiveness. For businesses, this means having confidence in the rules and institutions that govern the business environment, including investment. For consumers, it means having confidence in the products and services they purchase, confidence in the parties with whom they transact, and confidence in the market rules and institutions that govern their transactions. Without this confidence, businesses and consumers are less likely to participate actively in markets, or will spend time and effort protecting themselves against unknown dangers. The Ministry provides advice on a broad range of consumer and investor issues relating to market regulation.
Outcome I > Māori realise more of their economic potential
The skills acquired in education, employment and self-employment are a platform for successful entrepreneurial activity. Continuing improvements in these areas and reduction in inequalities with the non-Māori population will help Māori realise even more of their economic potential. At this point, continuing to build this platform is likely to have a relatively stronger impact than the Ministry's work to enhance the general business environment - particularly because of the small size of the Māori business sector. However, there are certain characteristics of the Māori community and the structure of Māori businesses - for example, tribal ownership of assets - that may provide opportunities for a more tailored approach by the Ministry to certain applications of business regulation. The Ministry also works to ensure that programmes targeted to business development are designed and delivered in a way that makes them accessible to Māori and other significant groups in the economy.
Outcome J > Intellectual property rights support investment in innovation and the sharing of ideas
Intellectual property laws underpin innovation in New Zealand. By ensuring that people who generate innovative business ideas can benefit commercially from them, these laws provide incentives for continued innovation and invention. Innovation is also generated through access to knowledge and ideas, and building on the work of others. Legal protection for intellectual property must take account of all of these factors by aiming to reward innovators, while also encouraging the dissemination of new ideas. The Ministry is responsible for intellectual property policy and also offers fast-turnaround intellectual property registration services to support entrepreneurial activity in New Zealand.
Outcome K > The Ministry's management of Crown resources supports business development and sustainable growth
Crown resources for which the Ministry is responsible, such as the mineral estate and the radio spectrum, need to be managed and allocated to maximise opportunities for economic development. The Ministry advises on the management of these assets and allocates the rights to utilise or exploit them, taking into account the Crown's commitments under the Treaty of Waitangi.
Outcome L > Government encourages a culture of enterprise in New Zealand
Culture has a strong influence on the behaviour of individuals and firms. New Zealand has a track record of innovation and creativity, but there is also evidence of what some commentators refer to as the "tall poppy syndrome", which may act as a constraint on our growth potential. The Ministry seeks to support and enable the efforts of entrepreneurs, and to celebrate their spirit of enterprise, to help encourage a culture that is more supportive of business.
Outcome M > Competition regulation promotes dynamic and efficient markets
Businesses can start and thrive, and consumers get a fair deal, when anti-competitive behaviour is restricted and firms compete for business in well-functioning markets and under transparent rules. The Ministry works to ensure that markets are regulated fairly and effectively, and that the competitive process is protected in a way that promotes dynamic markets.
Outcome N > Businesses in New Zealand are governed and managed responsibly
Businesses, their managers and directors need to be accountable to their stakeholders. Regulation both prescribes this accountability and ensures that shareholders have the information they need to hold managers accountable. The Ministry advises on the rules that establish accountability and promote responsibility, and the institutions and powers required to ensure effective monitoring and enforcement of these rules.
Improving Our Ability to Manage for Outcomes
The Ministry is continually sharpening its strategic focus. We want to concentrate effort and resources on the things that matter most for growth, as reflected in our major outcome and strategic priorities. Over the past two years we have improved our planning and systems, so we are better able to achieve our strategy and give effect to the Government's policies.
The Focus over the Last Year
We have intensified our focus on the strategic priorities and on the projects critical to achieving them. We have made significant progress in aligning our planning and review processes with this strategic thinking. Each strategic priority has an "action plan" comprised of the following elements:
- An agenda, setting out what the strategic priority means, why it is critical to achieving our major outcome, and critical issues or opportunities that need to be addressed if we are to achieve the strategic priority.
- A work programme, describing the projects we will deliver to address the critical issues over the next year and beyond, as well as a rationale explaining how each project will address the critical issue. The strategic priority agenda and work programme together contain the intervention logic that links our work to our major outcome.
- An assessment of the inherent risks, capability issues, and alignment challenges. This assessment is currently being conducted, and will become part of the action plan for each strategic priority during the coming year.
The Focus over the Next Few Years
Over the next year or so, we will focus on consolidating our approach to managing the Ministry to achieve strategically identified outcomes and priorities. In particular, we will:
- Ensure that our thinking and planning processes relating to the strategic priorities are integral to all the Ministry's work.
- Implement a system for reviewing our strategy, particularly regarding the critical issues for each strategic priority. This will ensure that our strategy can adapt to meet changing circumstances while incorporating our evolving understanding about what works best to influence growth.
- Improve our understanding of how we can be most effective. This work will include policy-guided research, connecting better to New Zealand business, and building a more systematic Ministry-wide approach to evaluating the impact of particular policies and programmes.
The following table shows the Ministry's progress with developing the strategic priority action plans, and the next steps over the years ahead.
| | Strategic Priority Action Plan development proposals over time |
| 2003/2004 | 2004/2005 | 2005/2006 and beyond |
SP Agenda
Priority Policy Areas and SP Outcomes | Develop description of high level SP rationale and areas of focus | Enhance statement of SP rationale and identify specific critical issues and opportunities for the SP | Clarify SP outcomes (where appropriate)
Formal environmental scanning and review of critical issues under each SP (every year or two years)
High level review of the strategic priorities (every 3-6 years) |
SP Work Programme
Outputs, Rationales and Intended Impacts | Business units refer to high level SP rationale as context for planning | Develop multi-year SP work programmes based on addressing critical issues (and improve rationales connecting outputs to SP issues) | Update and improve critical issues, rationales and intended results of outputs |
| SP Learning and Evaluation Plan | No specific development | Clarify knowledge gaps and develop proposals
Develop a knowledge management tool for recording and sharing information on research and evaluation | Develop Ministry-wide guidelines on evaluation and build research and evaluation capability |
| SP Organisational Development Plan | Develop generic, organisation-wide capability priorities | Identify policy development or service delivery capability gaps within specific SPs | Address any capability gaps identified |
| SP Alignment Plan | No specific development | Identify SP-specific alignment issues and a plan for addressing them
Identify and address cross-cutting issues |
| SP Risk Management Plan | No specific development | Identify key risks for the SP, and develop management plans | (Once risk management plans are identified) develop risk monitoring plans |
Cost Effectiveness of the Interventions the Ministry Delivers or Administers
The greatest strategic challenge to the Ministry is to determine what it "must do", as opposed to what it "can do", to help improve New Zealand's economic performance. Economic development is a very broad canvas - there are many dimensions to how the economy performs and many links to longer-term social and environmental goals. There is a risk that the Ministry gets pulled in too many directions and stretched too thinly.
While needing to be constantly aware of the bigger picture, we need to ensure that we focus on the areas where we have expertise and which relate to our core purpose and outcomes. As discussed earlier, this requires rigorous priority setting and a well-developed understanding of economic development processes. The outcomes and goals in this Statement of Intent are intended to provide that focus.
The Ministry will continue to adopt strategies to ensure we can provide efficient and effective services to Ministers and third party fee-payers, within the resources available to us. To achieve this, the Ministry will:
- improve the efficiency of our own processes and systems to reduce costs to purchasers of our services;
- invest in people and systems to develop the skills needed to deliver;
- ensure our support structures are delivered efficiently and effectively; and
- ensure efficient decision-making and effective identification of financial implications and capital expenditure.
Therefore, while the short-term focus is on prioritising operating expenditure and managing within budgets, the long-term focus is in on examining ways to meet increasing cost pressures within relatively fixed revenue, while minimising the impact on our strategic priorities. Our business planning processes are intended to support this by:
- encouraging an approach that is driven by the Ministry's strategic priorities and outcomes;
- ensuring there is a clear basis for identification of outputs; and
- developing and implementing processes around prioritisation of resources across the Ministry.
The Ministry also administers Crown-related expenditure. In addition to on-going monitoring of Crown entity performance, during 2005/2006 the Ministry intends, among other things, to conduct a baseline review of Tourism New Zealand's budget, with a particular emphasis on international marketing; develop a suite of measures of electricity market performance, including both historical and forward-looking measures; and review and evaluate Investment New Zealand's activities.
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