The Ministry advises the Government on its strategy for economic development and transformation. We work to ensure New Zealand is one of the best places in the world to do business, to create the conditions to lift productivity and prosperity, and to make New Zealand business successful on the world stage.
This section summarises the five strategic priorities the Ministry has identified to most effectively support the Government's economic goals, focusing on:
- Investment
- Infrastructure
- International linkages
- Sustainable business
- Auckland
The Ministry's Roles in Supporting the Government's Economic Transformation Objective
The Government's goal is a dynamic and internationally competitive economy that increases the prosperity of all New Zealanders. To support that goal, the Ministry works to promote:
A step change in New Zealand's economic performance through the success of innovative, internationally competitive firms.
The Ministry undertakes a diverse range of activities to pursue this outcome, which contribute to the Government's economic transformation agenda and its five subthemes:
- Growing globally competitive firms
- Innovative and productive workplaces
- World-class infrastructure
- An internationally competitive city - Auckland
- Environmental sustainability
Achieving these outcomes is a challenge for the whole of government, the business sector and citizens more generally. Economic development outcomes are affected by a range of factors outside the direct influence of the Ministry, including the work of government agencies with whom we collaborate. The decisions and actions of firms and other players in the local and global economic environment are also critical. All players need to be constantly alert to opportunities and flexible enough to move quickly in response to them.
The Ministry has two key roles in advising on, and giving effect to, the Government's economic transformation objective. First, we are responsible for developing a significant portion of the broader, cross-government set of advice and actions that underpin the economic transformation agenda. The Ministry's strategic priorities in pursuit of the Government's economic objective are described in more detail in this section and Section Three. The nature of our particular contribution in support of the Government's five economic transformation subthemes is described in Figure 1.
Beyond the Ministry's individual contribution to the Government's economic transformation objective, we also carry out an active leadership role. In this role our aim is to coordinate and enable a range of government agencies to work collaboratively to identify, advise on and implement the suite of priorities and actions that collectively comprise the economic transformation agenda.
Figure 1: Alignment between the Economic Transformation Themes and the Ministry's Strategic Priorities4
The Ministry's Strategic Priorities
We need to prioritise our effort by focusing expertise and resources on activities within our sphere of influence that are likely to impact most positively on innovation, productivity and sustainable growth.
We have derived five strategic priorities, which align with, and contribute to, the Government's five economic transformation subthemes. The Ministry's contribution to these goals needs to be seen in the context of the broader set of Government actions directed towards economic transformation.
The strategic priorities are at the core of our medium-term (three- to five-year) strategy to influence economic growth in New Zealand. Within each strategic priority, we have identified a set of key issues that need to be addressed to achieve the Government's economic goals. Our strategic priorities are outlined briefly below and described in more detail in Section Three.
We review our choice of strategic priorities every year, to ensure we remain focused on the things that matter most. Within each strategic priority, we also review our understanding of the key issues to make sure we are addressing the most significant issues as they emerge.
We have revised our choice of strategic priorities for the next few years as a consequence of this year's strategy review. We have added three new strategic priorities: Sustainable business; Investment; and Auckland. We have also removed three strategic priorities: Innovation; Regulatory environment; and Leadership. This judgement does not mean that these elements of the Ministry's work are no longer important - far from it.
- Innovation is an overarching focus for most of our strategic priorities - it is one of the ends that the other strategic priorities are seeking to achieve, so we are building elements of innovation policy into a range of work programmes across the Ministry. We will also be continuing to improve our understanding of New Zealand's broad innovation system and ways to enhance it.
- The regulatory environment is an important means that the Ministry can influence to achieve the Government's goals. Where there are particular elements of this environment that could be instrumental in helping or hindering growth, these are often within the subject areas framed by other strategic priorities, such as investment and infrastructure. Accordingly, these areas of work will generally be "mainstreamed" into other priorities or stand alone as important projects (such as the Quality of Regulation Review).
- Leadership is now part of the Ministry's formal mandate in relation to the economic transformation agenda and so has become more embedded in the way we work across government. This will continue to be important as part of the way we work, but we have judged that there are other areas that now demand more direct focus.
Ministry of Economic Development Strategic Priorities
Investment in ideas, infrastructure, equipment, people, marketing and distribution build the foundation for tomorrow's income. In making investment decisions, New Zealand's firms have choices about the extent to which they invest in New Zealand and the extent to which they make some investments offshore. Both are important if New Zealand is to have globally competitive firms.
The Ministry will work on policies to ensure that New Zealand is an attractive environment for firms to invest in and to base their high-value operations. We will work with other agencies to progress these issues and also work closely with firms to understand ways in which we can support them to invest in and from New Zealand. This includes ensuring that financial markets work well to support investment in New Zealand firms.
Efficient and reliable infrastructure services reduce the costs of production, increase the attractiveness of New Zealand as a location for investment and a place to live, and facilitate the flow of ideas, goods and services, and people. Adequate levels of infrastructure investment can also assist in meeting social and environmental objectives essential in supporting wider sustainable development goals.
The Ministry will focus on improving the security, competitive pricing and environmental sustainability of our energy system. We will also work to enhance New Zealand connectivity through an effective telecommunications environment. More widely, we will work to create an environment that encourages and enables timely and well targeted investment in infrastructure.
Being well connected with the rest of the world is key to New Zealand's growth prospects. The internationalisation of New Zealand firms leads to productivity improvements as businesses discover and embrace new technologies, new markets, and new models of production and distribution, including the ability to finely slice their activities and draw inputs from a variety of countries. Strong linkages are particularly important for New Zealand, because the domestic market is small and a long way from major global markets.
The Ministry will work on policies to ensure New Zealand firms are well placed to take advantage of international opportunities. We will work with other agencies to coordinate New Zealand's regulatory environment more closely with those of our major trading partners, and to promote stronger business networks. We will also engage with New Zealand firms to better ascertain the key factors enabling firms to take advantage of changes in the global economy, and how government can promote these linkages.
How New Zealand is perceived will become increasingly more important for our economic wellbeing as countries respond to environmental challenges such as climate change and consumers become more discriminating about how the choices they make affect the natural environment, both locally and globally.
Many international firms are seeking to take advantage of changing policies and preferences by giving more weight to environmental considerations in the way they produce, supply and market goods and services. A number of countries are also recognising the increasing importance of environmental integrity as a source of competitive advantage and as a driver of economic development, both in terms of new business opportunities and as a spur to innovation throughout the economy.
The Ministry will work with others to identify where and in what ways government can assist New Zealand firms to respond effectively to changing market and regulatory approaches to environmental issues.
International evidence highlights the importance of having at least one outward facing, global city to lead a nation's economic development. A globally competitive city attracts world-class firms and highly skilled workers, which have significant flow-on effects throughout the economy. The concentration of activity will allow both employers and employees to benefit from specialised labour markets, allow for greater tacit knowledge flows between and within firms and research organisations, and provide the right platform for growing off a critical mass of innovation. Auckland doesn't yet play this role to the extent that major cities do in other economies.
For Auckland to achieve world-class city status a number of critical issues must be addressed - these are broad in scope and complexity. The Ministry will work in partnership with regional stakeholders to identify and address a range of these issues.
Figure 2: The Ministry of Economic Development's Strategy for Growth
