A Sharper Focus for the ET Agenda
15. In order to build on these achievements, a continued, yet sharper focus on a few key priority areas is critical for three reasons: 1) our productivity levels and growth rate need to improve; 2) we need to be well placed to respond to and capture commercial opportunities arising out of the strong and growing pressure for environmental sustainability; and 3) we need to position ourselves to take advantage of an increasingly integrated global economy.
Productivity and Growth Rate
16. New Zealand's level of aggregate labour productivity and GDP per capita is currently at the lower end of the OECD range (22nd out of 30 using 2005 figures). To maintain or improve our position we need to grow faster. And because we have a very high level of labour force participation, growth will need to come from improvements in productivity. Increased innovation will make a critical contribution to this improved productivity. So will increased skill levels. Investment in RS&T and workplace skills therefore plays a fundamental role within the ET agenda. Overall, we need to ensure our input and institutional base allows us to move to a higher-value product and export mix.
Environmental Positioning
17. There is strong and growing pressure for business to prove itself to be environmentally sustainable. Consumers are demanding goods and services with environmental integrity and many international firms are seeking to take advantage of these preferences by giving more weight to environmental considerations in the way they produce, supply and market goods and services. Governments the world over are also enacting regulations to enforce sustainability and reduce greenhouse gas emissions.
18. New Zealand's green and trustworthy image can be leveraged to develop new opportunities and obtain a premium for our goods and services. But we also need to counter the perception that our distance means our products are more environmentally costly than those of in-market competitors. This means New Zealand needs to build on our current image and reputation – New Zealand businesses need to invest in sustainable business practices and both public and private sectors need to make a clear commitment to address climate change. Fundamentally, we need to build our country's integrity on environmental sustainability.
International Integration
19. Shrinking economic distance, new forms of organisation and distribution practices, sophisticated links between national and international value chains, and trade liberalisation are rapidly altering the nature of the global environment facing business. To survive in this new environment, New Zealand business must organise itself in complex systems spanning many countries, tapping differences in costs, skill, resources and tastes to maximise overall returns. New Zealand cannot compete in all areas of production. It needs, therefore, to be an attractive location for those parts of international value chains that focus on high-value products and activities or which compete in the weightless areas of business, such as design, marketing, and research and development. We will need a world-class communications and transport infrastructure to link with the rest of the world. In sum, we need to extend and deepen our businesses' connections with the rest of the world to take advantage of market opportunities and attract high quality capital and labour.
Back to Top