Government responds to Productivity Commission’s report

Economic Development Minister Stuart Nash has issued the formal response to the Productivity Commission’s inquiry Maximising the Economic Contribution of NZ’s Frontier Firms.

The Government has responded to recommendations from the Productivity Commission’s report into Frontier Firms and will update existing programmes to support the growth of firms exporting innovative products at scale.

Economic Development Minister Stuart Nash has issued the formal response to the Productivity Commission’s inquiry Maximising the Economic Contribution of NZ’s Frontier Firms.

“Frontier firms are the most productive firms within their industry. They are prized for their ability to disperse new technologies and business practices into the wider domestic economy, as we work to accelerate the recovery,” said Stuart Nash.

“Frontier firms tend to export more, invest heavily in innovation, have the size and scale to break into new markets, and have dynamic capabilities due to sophisticated leadership talents, management and technology processes, and the skill to seize new opportunities.

“The Productivity Commission inquiry cited Fisher and Paykel Healthcare, Xero, Fonterra, Zespri, Mainfreight, a2 Milk, Te Tumu Paeroa, Datacom and others, as examples of Kiwi firms or organisations that support internationally-focussed growth and innovation.

“The Productivity Commission delivered a well-researched and practical inquiry that has provided valuable insights to support Government efforts to build a productive, sustainable, and inclusive economy.

“It also highlighted the need to coordinate existing government work that supports and connects exporters such as our offshore trade and investment offices, market intelligence, high-quality foreign direct investment, migration flows, and links to global research science and technology.

“The Government agrees that internationalisation and investment are vital for the growth and competitiveness of our firms. MBIE has been directed to review internationalisation support for firms and to develop an investment attraction strategy, to ensure we are attracting high-value investments.

“Work is currently underway that reflects other recommendations of this report. This includes improvements to the system of vocational education, the Future Pathways programme in research, science and innovation, rebalancing immigration, developing high-value sectors through our Industry Transformation Plans, and RMA reforms.

“Other recent work to improve New Zealand firms’ access to early-stage capital markets will help our innovative start-ups grow and become frontier firms of the future.

“I have asked the Productivity Commission to check in again in 12 months with a ‘helicopter level assessment’ to review whether the current reform agenda is achieving results.

“Frontier firms are critical to our economy.  These high-performing firms are key to delivering well-paid jobs and sustainable growth, to keep up the momentum of economic recovery.

“Exporting specialised goods and distinctive products at scale will help the New Zealand economy overcome its traditional challenges of small size and geographic isolation, and significantly lift national productivity,” said Stuart Nash.

(With Inputs from New Zealand Government Press Release)