18 June 2002 Media Statement

Excellent exporting firms reveal success

Export company growth and innovation have as much to do with attitude and relationships as they do with technology, R&D and capital according to a report released today by Economic Development Minister Jim Anderton, Trade Negotiations Minister Jim Sutton and Research, Science and Technology Minister Pete Hodgson.

The survey showed that innovation is about taking risks, embracing success and valuing difference.

New Zealand exporters who are innovative are increasing their export sales by developing sophisticated distribution strategies, acquiring top management skills, focussing on niche products and making a greater commitment to R&D.

The survey and study of 30 of New Zealand’s largest, most successful exporting manufacturers is the sixth in a series of such reports since 1991.

“The survey helps us identify how New Zealand can perform better and how Government can assist businesses to be effective,” said Jim Anderton.

“The study showed that twenty-four of the 30 firms studied experienced export growth over the past two years. Their experiences provide some useful information as to how we can encourage export growth. .

One key finding was that companies are increasing sales through developing smarter distribution strategies.

Trade Negotiations Minister Jim Sutton said “The study confirms that distribution is one of the most critical steps in the export growth process.

“It shows that strategies designed to maximise efficiencies in logistics and transport have enabled some firms to out-perform their competitors in delivery, despite being located much further away from their markets.

“Establishing or changing distribution systems is an expensive, time consuming and potentially risky exercise. It follows that mistakes are extremely costly. Trade New Zealand works to internationalise New Zealand businesses, reducing many of these risks, and it will continue to help in this area,” Jim Sutton said.

The study points to increasing discipline in the development and implementation of business strategy, and an increasing commitment to technology and research and development (R&D).

“Several companies in the study have become specialist R&D centres for foreign parents, while in general the study notes a marked lift in the quality and sophistication regarding technology and R&D,” said Minister of Research, Science and Technology Pete Hodgson. “It also suggests inward investors are attracted to New Zealand as an R&D location because of value for money, multi-skilled researchers, stable R&D teams and, most importantly, the quality and originality of kiwi innovation. That is our true competitive edge.”

The Manufacturing Export Study was jointly funded by TradeNZ, Treasury and the Ministry of Economic Development, and is accessible through the Ministry of Economic Development Website.

The report is published at:
http://www.med.govt.nz/irdev/ind_dev/manufacturing/index.html

ENDS

Background:

The Manufacturing Export Study series has been undertaken by Infometrics Ltd. The 2002 study is the sixth in the series since 1991. Thirty companies were interviewed as part of the 2002 study, and 16 of these were interviewed for the fifth or sixth time. The longitudinal study provides a picture of firm-level development over time, showing how companies have responded to the changing domestic and international environment. While the study is robust, some caution needs to be taken in interpreting the results of the research due to the small sample of companies included in the study and the focus on more successful exporting companies.

The Manufacturing Export Study 2002 complements other research work being conducted by the three agencies. The Ministry of Economic Development is currently in the process of completing its study on firm-level business practices and the development of competitive capabilities.

ENDS

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