Beyond Commodities: Manufacturing into the Future

Date: 
Monday, April 9, 2018
Location: 
New Zealand Productivity Commission, Level 15, Fujitsu Tower, 141 The Terrace

Ministry of Business Innovation and Employment Sectors Team

Time: 13.00 – 14.30
RSVP: hubsecretariat@productivity.govt.nz

At this roundtable the Sectors Team in the Ministry of Business, Innovation and Employment will present findings from their recently completed report: Beyond Commodities: Manufacturing into the Future. This report will be publicly released by Minister Parker on the 17th of April.

This 150-page report is the most comprehensive study of New Zealand manufacturing in recent years. It presents a wide range of data on the current state of manufacturing in a form which is intended to be accessible to the general reader. Thirty manufacturing firms were interviewed for the report. Industry commentary and case studies are included to provide a real-world context for the data. Key insights from other studies are highlighted in order to make these more generally available. An historical perspective is included in order to illustrate where New Zealand manufacturing has been and the profound changes that that have occurred in the last 30 years.

The report shows that manufacturing in New Zealand, particularly the export sector, is increasingly shifting to value-added products, including in food and beverage, but that this shift is not a trivial journey.  It takes time – as much as 10-20 years – to develop the skills and capabilities needed to succeed in a new activity. Both public and private actors are involved in this endeavour, but in New Zealand it is largely an organic process (versus Singapore for example). As well as a shift to value more generally, the report looks at New Zealand’s participation in global production networks, and the tension between building large exporting firms and large internationalised firms, that may not export much or anything at all.

In particular, the report looks at low and medium low technology industries (LMTs). In New Zealand and internationally innovation policy has focused on high technology manufacturing and knowledge-based industries. However, LMT industries remain significant in all developed economies, and in particular New Zealand. They are major engines of growth. These industries are key markets for high tech producers. However, innovation in these industries is a significantly different activity to high tech industries. LMT innovation involves little formal R&D but utilises highly distributed knowledge bases (e.g. customers, suppliers). It involves a large component of learning by doing. Much innovation activity involves investment in new capital equipment.

The presentation will conclude with an outline of some initial thinking on what this might mean for policy. In the context of a small open-market economy, comprised mainly of small or very small firms, are there policy levers available which can significantly shift the productivity performance in manufacturing, and by implication deliver greater benefits in the welfare of New Zealanders?

Members of the MBIE sectors team presenting are Andrew McCallum, Principal Advisor; Arek Wojasz, Policy Advisor; and Grace Smart; Policy Advisor.

Please note that this work will be under embargo at the time of the roundtable and that RSVPs are essential. Places will be allocated on a first come, first served basis.