Lessons from abroad

Professor of International Business at AUT University, offers his perspective on exporting in New Zealand.

What’s the outlook for New Zealand exports?

The government is committed to ensuring exports account for 40% of GDP by 2025. We’ve been at around 30% for a while now. The outlook is positive and our desire is strong; what’s missing is a plan to get us from where we are to where we want to be. It’s still based on this expectation that markets will grow. The forecast growth in China is massive, with huge population increases and rising incomes, and we’re well positioned to capitalise on that if we know how. There are also opportunities in emerging markets like India and Vietnam. Where can we improve? It’s the old ‘we could do more’ in adding value to some of our products. We can’t do this in every industry – we can’t compete with China turning timber into furniture – but why produce the world’s finest merino wool then send it offshore for processing? We could be enjoying a huge mark-up on the end product.

We still laud the owner-farm, which is medium sized in world terms but it’s just producing wool, milk or meat. It’s not integrated into anything else. For some companies it’s a mindset or a lack of ability to integrate R&D and investment into downstream processing. But we do have companies that recognise the opportunities and are doing very well as a result. How are we helping exporters? The government has focused on getting trade agreements with countries like Korea and China. This opens the door for Kiwi companies, but it doesn’t get them into the market. It’s primarily based on trade rather than other ways