Tuesday, February 15, 2011

Plugging The Gap (NZ Institute) || Food & Tourism...?

"The difficulty for firms trying to build successful international businesses is that the domestic market here is very small so that businesses are small when they begin to export and the markets they serve are distant. That means their capability and resource base is relatively low when they internationalise and the cost to establish in offshore markets is relatively high. Those difficulties often cause delays that consume capital and erode competitive position."

"The business must have a product or service that is appealing enough to win customers and those customers must be willing to buy from an emerging business that is headquartered a long way away. It must be able to deliver the product or service at a competitive price and have costs that are low enough to provide an attractive margin."

"The current ecosystem is not delivering sufficient talent and capital to the internationalising businesses so the businesses are not as successful as they could be. Some are being sold overseas when the value created could otherwise be held in New Zealand."

Rick Boven (2010), Plugging The Gap – An Internationalisation Strategy, New Zealand Institute.

There has to be a reason why a product is produced in New Zealand, with agriculture it's obvious: the conditions are just right and arable land is relatively plentiful. Produce a product that can be produced more easily elsewhere, and the market is elsewhere, then production will move. In short, unless production in New Zealand delivers some form of advantage, production will move.

'Clean & Green' ('Pure') are probably our greatest brand assets. These gel well with food production and sustainable tourism. There is no particular limit to the diversity of food product or variety of tourist experience that we can produce. We would do well to play on this. If we work to New Zealand's strengths we will most likely succeed in overseas markets and still produce here.


Tuesday, February 1, 2011

Dollars Are Only One Measure Of Productivity (NZ)

It's not gross domestic product per worker, it's the monetary value of product per worker, which is quite a different thing from product per worker. On product per worker I have no doubt New Zealand would be very much the same as Australia.

By measuring everything in dollars we fall down on the things that are actually important to us, like making a meaningful contribution and finding fulfilment in what we do.

New Zealand's natural products have not done well (in dollars) because other countries have subsidised a glut on the market. Now the market has grown (in world population and affluence) and even those extensive subsidies are not enough to encourage supply great enough to keep prices down.