The Ministry's Outcome Framework
Contribution to Government Goals - The Economic Development Outcome
The Government's key goal of growing an inclusive, innovative economy for the benefit of all is central to the Ministry's activities. Given this goal, the Government's economic objective referred to earlier, and our sphere of influence and operation, the Ministry's aim is to achieve the following outcome:
The business environment promotes a higher rate of sustainable income growth for New Zealanders
This is the Ministry's major outcome and the main focus of our work, but its achievement relies on contributions from different agencies across the public sector. Improvements in the business environment are the means by which Government supports enhanced productivity and thus improved growth rates. For this reason we believe that the aspiration represented by this outcome is relevant to all of the public sector agencies that contribute to achieving the Government's economic objective.
Business Environment Outcomes
The Ministry's main contribution to the economic development outcome is to create the micro-economic conditions in which growth can occur. Government cannot generate wealth or growth per se: only businesses and individuals can achieve this. However, Government can provide the regulation, and the active support and facilitation, to enable businesses to start, to thrive and to grow. We think of these conditions as comprising the business environment, and have described our outcomes in these terms.
The contribution that the Ministry makes to improving the regulatory and policy conditions for businesses and consumers are set out in our "Business Environment Outcomes". By working to achieve these outcomes we support increased productivity and hence economic growth in New Zealand.
We cannot achieve these outcomes on our own: many of them require contributions from Crown entities and other departments. However, the Ministry does have a major role to play in achieving all these outcomes, either through developing policy for implementation by other agencies, or through the services provided by our own Business Services branch.
In its work the Ministry is mindful of the Government's goal of strengthening national identity and upholding the principles of the Treaty of Waitangi. Some of the issues we advise on are of particular relevance to Māori, including the use of Crown-owned natural resources, access to the radio spectrum, intellectual property, regional development, implementation of the tourism strategy, and consumer and energy safety matters. Further details are provided below, in the descriptive text accompanying Outcome I: Māori Realise More of Their Economic Potential.
There are 14 outcomes in the Ministry's framework: 13 Business Environment outcomes and one Alignment outcome (see below). This number is largely a function of the level of detail to which the outcomes have been disaggregated. Economic development is a complex business, and our Ministry undertakes a wide range of activities in order to promote that development. We have chosen to portray this breadth of activity in our outcome framework so as to provide clarity of focus for our staff.
Alignment Outcome
Our Alignment outcome provides a focus for the work the Ministry already does, and will continue to do, to facilitate a more effective whole-of-government approach to economic development.
Strategic Priorities
The strategic priorities we have identified describe particular areas of work we will be concentrating on over the next three years. Clearly we will be working on a wider range of issues than these alone (as indicated by our Business Environment outcomes), but the strategic priorities represent the areas in which we believe there are particular gains to be made in terms of achieving the Economic Development outcome.
The Outcome Framework
This outcome framework is illustrated in Figure 2.
Figure 2: MED's Outcome Framework
The above diagram illustrates the things MED will be focusing upon over the next three years.
- Increasing economic development: the top section shows the Economic Development Outcome, and a highly schematic illustration of the way changes to the business environment contribute to achieving this outcome. This should be read in conjunction with the Ministry's Productivity Model, shown earlier in Figure 1.
- MED's Intermediate Outcomes: this shows the Alignment Outcome and the Business Environment Outcomes that are being pursued by our diverse business units.
- Strategic Priorities: this illustrates the activities which represent the primary focus of our work and our strategic management effort for the next three years.
- Building Capability: this highlights the four key aspects of our organisational development strategy which are designed to build the capability we need to achieve all of the above.
Developments from Last Year
This document is the Ministry's second Statement of Intent and it represents a significant step forward in terms of our understanding of outcomes-focused planning and management. Work by a series of cross-Ministry "Outcome Teams" and our Medium Term Strategy Group has more explicitly linked our major outcome to the business environment outcomes we seek to achieve. This is reflected in the outcome framework and the outcomes in Figure 2. In addition to simplifying and focusing our outcomes, this work led to two changes in our approach.
- Our previous outcome framework categorised the Ministry's work in terms of economic foundations and growth. The deeper understanding that we have developed this year has clarified that such a distinction is more valid in terms of policy than it is in terms of outcomes (at least at the level they appear in the SOI); and
- Our Outcome Teams confirmed the wide range of agencies that can affect productivity and growth. The Ministry's own contribution is complementary to and interacts with the work of these other agencies. This underlines the importance of our facilitating the alignment and co-ordination of policy and operations across government.
For these reasons, our revised outcome framework is structured in terms of the contributions of both the Ministry and the whole of government to economic development. Within this overall framework, we have replaced last year's supporting goals with outcomes derived from our intervention logic. In some cases these are the same as or similar to last year's supporting goals. In other cases they are different and more focused. Together, however, they embrace the scope of the Ministry's work and thus provide an important basis for organisational alignment as well as a focus upon results.
Assessing Achievement
As we move beyond the conceptual planning for outcomes to improving our ability to achieve them - and the strategic priorities associated with them - one of the main challenges will be assessing our success. The economy is a complex system, and it is difficult to establish robust empirical links between particular policies and improved economic growth. We do, however, have some well-developed hypotheses about how our work impacts upon the business environment and the outcomes that we seek to achieve. These are based on the theoretical and empirical economic literature, in particular that relating to New Zealand, and our own practical experience of economic development. We believe that being explicit about these hypotheses is fundamental to achieving the results that Government is seeking.
We will be conducting annual assessments in relation to the goals set out in the Government's Growth and Innovation Framework, using the indicators agreed by Cabinet. These are high-level indicators of progress in relation to some of the key contributors to productivity improvement (see the Ministry's Productivity Model - Figure 1). They include, for example:
- High level indicators of productivity and growth, such as:
- Real GDP per capita
- Foreign Direct Investment
- Indicators of innovation, such as:
- Investment in plant and equipment
- Proportion of firms using the latest technology
- Global connectedness indicators, such as:
- Exports of high and medium-high technology goods and knowledge-based services
- How New Zealand cities rate against other cities of the world
In addition to these higher level indicators of progress, over time we expect to focus more on assessing the impact of specific outputs. This will be a challenge for the Ministry over the medium term and beyond, but the combination of these output-related results with the rationale linking them to the higher level drivers of productivity will, we believe, eventually enable us to evaluate (and report on) our effectiveness in achieving our outcomes.
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