Exports make up about a third of our economy and they’re continuing to grow that slice of the pie. We’re moving up the value chain slowly, says NZTE chief executive Peter Chrisp – but overall, the picture is static, and that’s a huge concern.
It comes down to both lack of scale and lack of big companies, he says. Of our 13,000 companies, 12,000 have export revenues of under $5 million. And yes, Fonterra makes up a massive proportion; just 260 companies are making more than $25 million, for a total of $36 billion total, of which Fonterra accounts for nearly half.
That’s proof of how shallow the export economy is, Chrisp told the Go Global conference in Auckland last week.
While MSI chief Murray Bain reckons it's time to focus on our strengths in niches like food production, Chrisp takes it a step further. "It's not just carving a niche, it's carving a niche beyond the niche," he says.
"Niches get crowded very quickly."
He says there's no shortage of opportunities out there – it's just a matter of how many we can bring home, be it in the high-value food, wine, or tech.
Other emerging opportunities include Middle Eastern demand for government, educational and technological services, and the global demand for health services and technology, aka "New Zealand’s best kept secret”.
As Chrisp says, we've got a "very good tech platform here in health", an industry that's lucrative, recession-resistant and growing fast.
The question then becomes: how can we participate and add value, claiming some of that back as our own?
NZTE's main man says Kiwis have "great DNA" when it comes to tech, leadership and innovation. Surely we can solve the "Rubik's cube" of what the market wants.
He says New Zealand can sell a value proposition at many parts in the chain, from concept to branding, design, logistics and after-sales (not so much in manufacturing, which is declining).
It's these premium opportunities where the money lies, and as Chrisp says, it's a lot of value to be had without investment in physical infrastructure.
"New Zealand has a primary heart to our economy," he says. And we absolutely need it; where would we have been the last few years without Fonterra?
"But it is capacity constrained ... you can intensify, add water to some extent … but you're up against a very very hard physical constraint."
That, and the aforementioned lack of depth to the economy, lessens our risk-taking ability and appetite.
Chrisp says a common perception is a lack of ambition, culminating in the holy grail of the "Beamer, bach and boat". But people don't stop there because they're unambitious. Rather, he says, it's economically rational. Once they have some generational wealth to hand on, they retire rather than risk putting too much on the line for it.