Background
10. Sector engagement is one of the four original pillars1 of the Growth and Innovation Framework (GIF). Under GIF, sector engagement is focussed on sectors that would have maximum impact on the economy as a whole, because of their own (vertical) growth potential. They were also chosen because of their potential to raise productivity across the economy as a whole (horizontal impacts).
11. Sector engagements (stretching back, in some cases, to the nineteenth century) have taken place for reasons as varied as environmental impacts, effects on social wellbeing or involvement of public goods, as well as the sector's economic size and importance. Examples include forestry, agriculture, fisheries, tourism, energy, transport, telecommunications, and education and training.
12. More recently, New Zealand Trade and Enterprise (NZTE), in partnership with other agencies, has engaged with sectors in the development of sector-specific strategies. The first such engagement, starting in January 2001, was with the Wood Processing sector. This has been followed by strategy development in other sectors such as the Textiles, Clothing, Footwear and Carpet industries (TCFC) as well as the GIF sectors themselves. Engagements have addressed systemic barriers to business growth such as skill shortages or inadequate infrastructure, and the provision of business assistance such as international market intelligence and market development services.
Problem Identification
Rationale and Aims of Sector Engagement
13. Recent engagements have led to an appreciation that a government-facilitated process to address sector specific impediments to growth can be an effective economic development tool. These various engagements are now at the point where it is timely to review the overall rationale for, and aims of, engagement, given that these have varied from sector to sector.
Identification and Selection
14. The government has taken various approaches and used different selection criteria, to identify sectors for potential engagement. Sectors have been selected for engagement as the result of a direct approach to government (TCFC), or specific targeting by government (the GIF sectors). The selection criteria have ranged from assisting those with high growth potential and perceived competitive advantage (wood processing), through to those that are undergoing structural change (TCFC).
Prioritisation and Co-ordination
15. Current policies do not provide for effective prioritisation and co-ordination of the management of government resources involved in sector engagement to achieve government's economic development objectives. The role that dedicated sector agencies, not currently tasked with specific economic development objectives, might play in facilitating sector growth is also not sufficiently clear.
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