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Output Class > Policy Advice > Economic, Industry and Regional Development

Description

This output class provides policy advice encompassing the development, evaluation and overview of economic, industry and regional development policies and initiatives to promote sustainable economic development.

This includes ongoing development and implementation of the Government's Growth and Innovation Framework (GIF); the researching and analysis of factors influencing the capability and performance of firms, industry sectors, and regions; coordination of advice on the overall management and adequacy of New Zealand's infrastructure; and monitoring New Zealand Trade and Enterprise (NZTE).

Quantity, Quality, Timeliness and Cost

Work Programme

All policy advice projects were delivered in accordance with the terms of the work programme as agreed with the Minister. Changes to deadlines were negotiated with the Minister.

The following outputs were included in this output class for 2004/2005.

Regional Development Policy

This output provides policy advice relating to lifting the capability and performance of economic development initiatives in New Zealand regions, as well as monitoring and evaluation of NZTE regional programmes. In 2004/2005 the output included the following.

Working with regional stakeholders to put in place the foundations and preconditions for the take-up of commercially-driven economic development opportunities in regions.

Fortnightly Ministerial regional visits were carried out across nine regions, as part of a programme to address employment issues and opportunities in those regions. The Ministry provided briefings and undertook programme arrangements.

A project plan was completed and data collection has commenced (including interviews carried out in regions in June, July and August) to research regional innovation systems, with the aims of better understanding the levers for central government in these systems, and better integration of the regional component of the GIF. This work is scheduled for completion in December 2005.

The first round of consultation with other government stakeholders was completed as progress towards devising a consistent and well-aligned policy for the development of networked innovation hubs with world-class levels of excellence and critical mass.

Facilitating the building of regional economic development capability, including increased responsiveness to changing market conditions and the identification of regional specialisations, strengths and advantages.

Policy recommendations were developed for long-term regional development and changes to the Regional Partnership Programme (RPP). A Cabinet paper was submitted to the Minister in June 2005.

Facilitating improved governance and building leadership capability to improve the quality of decision-making and to generate economic development critical mass.

Research was carried out on partnership models for regional economic development to improve understanding about their applicability to the New Zealand context, with a report provided to the Minister for Industry and Regional Development in June 2005.

Providing advice and guidance on regional development best practice from a sustainable economic development perspective.

On 8 December 2004, Cabinet approved an initiative to design an experimental series of regional GDP measures. Statistics New Zealand have been contracted to undertake a one-off development exercise to produce experimental measures of current price regional gross domestic product by industry, and components of GDP, for a limited time period. This work commenced in early 2005 and is due to be completed by 31 December 2006.

Working with the Department of Internal Affairs and local authorities to help ensure that the implementation of the Local Government Act 2002 enables improved links and alignment between central and local government.

In May 2004, Cabinet agreed to a strategy for central engagement on the community outcomes aspects of the Local Government Act 2002. A key objective was to ensure that there is good alignment between central and local government. This included the establishment of new roles for the Department of Internal Affairs (DIA) to coordinate the interface between central and local government, via a number of resources and through the establishment of new relationship managers. The Ministry of Economic Development contributed to the establishment of these new roles in a number of ways, such as contributing to the web resources DIA have developed and by building relationships with their relationship managers. The Ministry has also worked with DIA, the Ministry of Social Development, the Ministry for the Environment and the Ministry of Culture and Heritage to share information and to assist in building a common understanding on the implementation of the Local Government Act 2002 and the issues arising from it.

In addition, in response to the Local Government Act 2002, meetings were held with local authorities and, where required, assistance was offered to become involved in local government outcomes processes.

Addressing whole-of-government coordination issues that affect regional development.

Throughout 2004/2005, a study was carried out to improve the Ministry's understanding of different types of Regional Economic Development Agency (RDA) models. The study's findings will feed into a broader stream of work on long-term policy for regional economic development in 2005/2006. The findings include an outline of the context and current environment in which RDAs operate in New Zealand, identification of the key features for effective New Zealand RDA models, and possible future scenarios for New Zealand RDA models that will be used as the basis for future discussions with stakeholders on long-term regional economic development policy.

In March 2005, a regional development conference was held over three days in Napier with over 500 attendees, including representatives from business, iwi, economic development agencies, central and local government and the academic community. The conference, Our Future - Our Potential - Our Choices, emphasised shared ownership of issues and outcomes for regional development across a range of regional stakeholders, including government agencies.

Sector Development Policy

This output provides policy advice on the industry- or firm-level factors that can influence the level and quality of sustainable economic growth. This includes the design, implementation and ongoing operation of sector and industry programmes developed by and through NZTE. It also provides advice on industry sector engagement and the Ministry's work with NZTE to develop sector strategies in priority sectors. In 2004/2005 this output included the following.

Ongoing monitoring and evaluation of NZTE sector and industry programmes including an annual stock-take of the effectiveness and efficiency of industry- and firm-level assistance programmes and the implementation of NZTE's Global Activities Review.

The annual stock-take was completed and a report submitted to the Minister on 22 October 2004.

NZTE's Global Activities Review report on the alignment of NZTE's globally-focused activities with other trade support was submitted to Cabinet in December 2004.

Research into the state of New Zealand's management capability and the development and implementation of strategies to facilitate management upskilling.

Project Collaboration is a collaborative public/private initiative aimed at improving the market for management and business capability development services. A strategic plan has been developed around six "channels" through which firms can develop capability: formal and informal learning; mentoring and advisory services; standards and certification; learning through networking and knowledge sharing; business improvement models and assessment tools; and research and benchmarking. Work plans are being developed that outline activities to be carried out in each of the channels over the next three years.

A review of the role that government procurement policy could play in stimulating technology adoption and spillovers across the wider economy.

Due to the diversity of the technology sector, where some components already had considerable government engagement, this project was removed with the Minister's approval. The work has now been subsumed into a review of the implementation of government procurement policy to identify how improved implementation could enhance innovation, to be delivered in Vote: Commerce in 2005/2006.

A review of New Zealand's standard-setting system with a particular focus on the role of standards in promoting innovation in the New Zealand context.

The timeframe for the review was extended to 30 September 2005 with the Minister's approval. At year end, a report from consultants had been reviewed and amendments were under way.

Identification of further sectors with which Government will work to develop strategies for increased sustainable economic growth, and the coordination of these engagements.

A report, Further Sector Engagement Opportunities, was provided to the Minister on 23 December 2004.

Implementation of the Government's Major Events Strategy, which is aimed at retaining, growing and attracting major events that contribute to New Zealand's overall economic development and international profile in alignment with the Brand NZ strategy.

The Inter Agency Events Group (IAEG) submitted the Major Events Strategy to Cabinet and received Cabinet approval on 13 September 2004. Strategy implementation by the IAEG was under way at year end and due for completion by 31 August 2005.

Policy advice aimed at enhancing the integration and upgrading of local industries in global value chains.

Due to competing priorities this output was deferred to 2005/2006 with the agreement of the Minister.

Building closer economic relations with Australia through increased cooperation in the development and delivery of domestic industry and innovation policy.

Opportunities have been identified for increased industry policy development in cooperation with Australian state governments. Strategies to maximise these opportunities have been developed in conjunction with NZTE; the Ministry for Research, Science and Technology; and the Foundation for Research, Science and Technology. A report on progress towards achieving this engagement was submitted to the Minister on 24 December 2004.

New Zealand has been invited to participate in the Australian Commonwealth, State and Territory Advisory Council on Innovation, a six-monthly officials' meeting which offers opportunities for information-sharing and possible coordination on industry policy.

Successful linkages have been developed between the Ministry of Economic Development and Australian federal and state governments on innovation policy. This work focuses on the global market, where sharing information that leads to potential collaboration or coordination can better equip companies in the trans-Tasman area to compete more successfully. This fits within the framework of discussion of the Single Economic Market.

An area of particular interest is the Food and Beverage Sector, currently the subject of whole-of-government engagement in New Zealand. The Ministry has been exploring the opportunity to propose the Food and Beverage Sector as the subject for the industry dialogue associated with the CER Ministerial meeting in 2006.

Development of innovative strategies and policies to exploit the economic development potential of New Zealanders overseas.

The Department of Labour is leading a strategy to attract expatriates back to New Zealand. The Ministry of Economic Development is supporting this project and a priority for the initiative is continued support for the Kiwi Expat Association.

Growth and Innovation Framework (GIF)

This output provides the basis for a very broad range of economic development activity in central government, with supporting activities undertaken in regions, sectors and firms. The continued development of GIF and its implementation across the public sector is a priority for the Ministry of Economic Development. During 2004/2005 the output included the following.

Strategic policy development, including the overall design of GIF, the GIF Budget strategy, and medium-term policy development across the GIF themes of international connections, skills and talents, infrastructure and innovation.

Advice was provided to GIF Ministers and Cabinet proposing a strategic approach to the GIF Budget, focusing on a series of flagship projects.

The Ministry advised Ministers on options for increasing the levels and quality of private sector research and development, leading to a Cabinet paper in December 2004 and the submission of proposals into the GIF Budget process.

Policy alignment and coordination, including the management of GIF whole-of-government activity such as the GIF Budget process and interagency approaches to medium-term policy development.

The GIF Budget process was successfully managed to the point where GIF Ministers agreed to a proposed package in January 2005, and the Minister of Finance concurred in the bilateral process in February 2005.

Communication of GIF through the GIF website, publications, and speeches.

A GIF website has been developed and maintained. GIF Weekly was produced throughout the year.

Evaluation of GIF and the production of a second Growth and Innovation Indicators Report.

The Ministry reported to GIF Ministers in December 2004 on progress with the implementation of GIF and proposed a series of next steps.

On 2 February 2005, the Ministry of Economic Development, in conjunction with Treasury, published a comprehensive set of economic indicators - Economic Development Indicators 2005.

Research, Evaluation and Monitoring

This output provides research, evaluation and monitoring of industry and regional development programmes, which is an important input into the development and refinement of industry and regional development policies. In particular, monitoring and evaluation information supports evidence-based policy development, which in turn serves to strengthen the overall efficiency and effectiveness of Government interventions. In 2004/2005 the output included the following.

Conducting a survey to determine the level and nature of demand from small and medium-sized enterprises for finance in New Zealand, in conjunction with Statistics New Zealand.

A survey on business finance in New Zealand was completed by 30 June 2005. Publication of survey results was deferred to 30 September 2005 with the Minister's approval.

Financial monitoring and advice on NZTE's performance.

Refer to the report on Crown Entity Monitoring.

Sustainable Development

This output provides advice and assistance to Government on the application of the Government's Sustainable Development Programme of Action to industry and regional development. In 2004/2005 the output included the following.

Co-leading central government participation in the Sustainable Auckland component of the Sustainable Cities programme with the Ministry for the Environment.

The Ministry of Economic Development worked with central and local government partners in the early part of the year to bed-in overall project governance and processes to allow individual projects to proceed. Work continued on the Auckland Regional Economic Development Strategy (AREDS) throughout the year and will continue into 2005/2006. The new Auckland policy office provides an opportunity to develop a sharper focus on identifying economic growth issues for Auckland.

Linking the Sustainable Cities programme to other regional and sector initiatives.

The Sustainable Cities programme is chaired by the Department of the Prime Minister and Cabinet. The programme is focused on cities being centres of innovation and economic growth that support social wellbeing, quality of life and cultural identities. The programme aims to provide a whole-of-region/whole-of-government sustainable approach to issues and to add value through existing initiatives.

On 13 June 2005, Cabinet agreed that the Ministry for the Environment would lead the central government participation in this project as part of the Year of the Built Environment Project (YBE 2005) and the urban affairs portfolio.

Working with other government agencies (in particular, the Department of the Prime Minister and Cabinet and the Ministry for the Environment) to facilitate a whole-of-government approach to sustainable development issues.

This component of the Sustainable Development Programme of Action has been reviewed by the Sustainable Development Chief Executives' Group and the Department of the Prime Minister and Cabinet. Little progress was achieved in 2004/2005 pending the outcome of the review.

Leading an information sharing project, in particular the development and maintenance of a cross-agency intranet site and an external website for the Sustainable Development Programme of Action.

The Ministry of Economic Development administered a shared internet workspace established for officials working on the Sustainable Development Programme of Action. Protocols were established to enable local government partners working on sustainable cities to access that area of the shared workspace.

The Ministry of Economic Development contributed to the establishment of a website, the Population and Sustainable Development website, as part of the Sustainable Development for New Zealand: Programme of Action. The website provides a single point of access to a comprehensive collection of New Zealand population statistics, tools and resources provided by a wide range of government departments and agencies, including the Ministry of Economic Development. The website is hosted and administered by Statistics New Zealand.

Actively supporting the policy tools and processes and sustainable indicators projects.

The policy tools and processes project has been reviewed by the Sustainable Development Programme of Action Chief Executives' Group and the Department of the Prime Minister and Cabinet.

The Ministry of Economic Development participated on the steering group of the sustainable indicators project, which is being led by Statistics New Zealand. This output was removed from the Ministry of Economic Development Output Plan, with the Minister's approval, as the Ministry is not lead agency on this project.

Providing leadership for the Government's engagement with the sustainable business community.

A report was submitted to the Minister for Economic Development setting out a framework approach to sustainable business, focusing on reconciling a policy perspective with a commercial/business perspective. The Ministry sponsored the Sustainable Business Network Conference and the Murray Edmunds Conference focusing on sustainable business issues. The Ministry also provided input to policy initiatives with a sustainable business dimension (for example, extended producer responsibility, business opportunities from climate change policy).

Working with the Ministry for the Environment's Sustainable Industry Group to promote sustainable practices within the business community.

The key element of this output was to be a forum between business leaders and government on sustainable business issues, chaired by the Prime Minister. However, competing priorities meant that the forum did not take place and the output was removed with the Minister's approval.

Infrastructure Stock-Take Advice

This output provides the coordination of future work, arising from a stock-take of New Zealand's infrastructure, to improve the overall management and adequacy of the infrastructure.

Material progress was made on a number of issues arising from the infrastructure stock-take, including clarifying the contribution that infrastructure indicators could make to overall information requirements. In addition, the Ministry:

• Led work on possible measures to mitigate "buildability" constraints in relation to Auckland road construction, which was completed and reported on to the Minister in July 2004. A report, Addressing the Buildability Constraints of the Auckland Transport Package, was published on the Ministry of Economic Development's website the same month;
• Contributed to the Wellington land transport package, including leading the social and economic workstreams; and
• Progressed development of the nature and design of national guidance under the Resource Management Act 1991 (RMA) for network infrastructure.

Projects Not Included in the 2004-2007 Statement of Intent

Growth and Innovation Advisory Board secretariat functions were transferred from the Ministry of Research, Science and Technology from 1 May 2005 and were carried out for the remainder of the year.

Crown Entity Monitoring

The Ministry, in conjunction with the Ministry of Foreign Affairs and Trade (MFAT), provided advice to Ministers on two statutory appointments to the New Zealand Trade and Enterprise (NZTE) board, within agreed timelines.

The Ministry, in conjunction with MFAT, reviewed and provided comment to Ministers on NZTE's quarterly reports. Advice was provided on NZTE's Statement of Intent 2005-2008, and NZTE's 2005/2006 Output Plan was negotiated and completed.

Cost

(Figures are GST exclusive)

Major Budget Variances

The Supplementary Estimates increase mainly reflected new funding to meet costs associated with holding a Regional Development Conference ($707,000), undertaking a regional economic statistics exercise ($380,000), secretariat costs associated with the Government's Major Events Strategy ($178,000), the development of a national policy statement for network infrastructure under the Resource Management Act 1991 ($178,000), and the transfer of the GIAB secretariat functions from Vote: Research, Science and Technology ($183,000).

The variance between the Supplementary Estimates and actual expenditure (-$291,000) mainly reflects delays in evaluations of the Growth Services Fund and the Enterprise Development Grant Scheme, delays in a research project on access to business finance, delays in work associated with the national policy statement for network infrastructure due to the need for further consideration prior to public consultation, and branding and communications associated with the Government's Major Events Strategy not being completed by 30 June 2005.

The variance between 2004/2005 and 2003/2004 for actual expenses mainly reflects increased costs related to new areas of work, including the Regional Development Conference, a regional economic statistics exercise, secretariat costs associated with the Government's Major Events Strategy, development of a national policy statement for network infrastructure under the Resource Management Act 1991, and new responsibilities part way through the year for the Growth and Innovation Advisory Board secretariat functions.

Output Class > Policy Advice > Small Business

Description

This output class provides policy advice on issues relating to lifting the capability and performance of Small and Medium Enterprises (SMEs), including development, coordination and implementation of policy advice concerning SMEs.

Quantity, Quality, Timeliness and Cost

Work Programme

All policy advice projects were delivered in accordance with the terms of the work programme as agreed with the Minister. Changes to deadlines were negotiated with the Minister.

The following outputs were included in this output class for 2004/2005.

Developing the Government's response to a public report to the Government by the Small Business Advisory Group on the outcomes of the Small Business Day events.

Initial delays resulted in the publication of a Small Business Advisory Group (SBAG) report six weeks later than planned. A report was submitted to the Minister in December 2004 outlining initial responses to the SBAG report. A number of initiatives relating to the recommendations were pursued successfully through the 2005 Budget process. A Cabinet paper seeking approval for a government response to the SBAG report was provided to the Minister in August 2005.

Managing a project to develop resources that encourage youth entrepreneurs to establish businesses in New Zealand.

Significant research and field work had been undertaken and reported on to the Minister by 30 June 2005. The project will be completed in the first quarter of 2005/2006.

Assisting the Small Business Advisory Group to complete the tasks it has assigned itself in its strategic plan, including publishing guidelines for government agencies on how to consult with small businesses.

SBAG met ten times during 2004/2005. Its work programme was advanced and initial work was undertaken on the consultation guidelines, which will be completed by 30 June 2006.

Reporting to the Minister for Small Business on the issues facing SMEs in complying with government regulations, based on research, literature searches, and consultation with SMEs.

A consultant's report was obtained by 30 June 2005. However, owing to work pressures, and with the Minister's approval, reporting to the Minister on the outcome of this work was delayed to the first quarter of 2005/2006.

Compiling the annual report - SMEs in New Zealand: Structure and Dynamics.

A statistical report, SMEs in New Zealand: Structure and Dynamics, was publicly released on 5 September 2004. The report provides information on the nature and contribution of SMEs in New Zealand. Work on the 2005 report commenced in May 2005.

Projects Not Included in the 2004-2007 Statement of Intent

Project COMET (Central Online Management and Export Trade) accelerator project was established during the year with the objective of developing a "blueprint" for SMEs to use e-commerce to access global markets. The project will assist up to 30 SMEs to get into exporting via electronic commerce. Research for the project commenced in May 2005. The Ministry will report to the Minister in February 2006 on how SMEs can be encouraged and enabled to successfully use e-commerce to access global markets.

Cost

(Figures are GST exclusive)

Major Budget Variances

The Supplementary Estimates change reflects new funding for research to develop a blueprint enabling SMEs to enter export markets using e-commerce.

The variance between the Supplementary Estimates and actual expenditure (-$487,000) is mainly due to delays in completing the Youth Enterprise, e-forms, and Pacific Peoples business capacity projects and a report on issues facing SMEs in complying with government regulations. (An in-principle expense transfer has been approved for completing research to develop a blueprint enabling SMEs to enter export markets using e-commerce.)

The variance between 2004/2005 and 2003/2004 for actual expenses mainly reflects costs associated with the Small Business Day series of meetings undertaken during 2003/2004.