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SB2's origins span back to 2006, when the Department of Foreign Affairs and International Trade Canada approached one of SB2's Founders with the request to help identify and assist with programs aimed at enhancing bi-lateral economic exchange between Canada and New Zealand in the Science and Technology Sectors.  Since that time, work had been done to identify where and how assistance could be given that complements and extends those programs and services offered by the Public Sector.  As part of the discovery effort within the New Zealand context, the following findings were used to support the formal establishment of SB2 in 2008.

Where New Zealand Stands Now

The key challenges to export success for most New Zealand companies were identified during Export Year 2007. They broadly include: 

  • Selling offshore early in their corporate lifecycles. NZ’s small domestic market often pushes companies into foreign markets before they have attained the levels of capability necessary to export successfully;
  • A lack of scale to be able to compete effectively on the world stage;
  • Difficulty in acquiring the relevant knowledge of, and experience in, foreign markets;
  • Difficulty in positioning products in international markets to attain maximum value;
  • Problems in accessing the necessary capital, resource and investment needs of the business;
  • Inefficiencies and delays caused by compliance and regulatory issues, and;
  • Lack of scalable channel models to increase global market penetration.

Further to these findings, research performed by AUT and Massey Universities in 2007 (and presented at the 2007 Oxford Business & Economics Conference), identified the following specific characteristics of New Zealand export companies: 

  • Companies in New Zealand are more likely to have insufficient resources required to export successfully, depending on export success to happen by using entrepreneurial spirit and ‘serendipity’;
  • Government support organisations, such as ‘overseas trade development organisations’, are perceived by many exporters as too costly and of no great help owing to their lack of detailed knowledge to match products with either customers or suitable distributors.  Many SMEs reported that they can neither afford nor rely on them as a source of sound information when making market development decisions;
  • Most SMEs in New Zealand have generally only one person per company charged with strategic decision making, and that includes decisions about exporting or internationalisation.  The more that decision maker knows about a target market (the ‘psychic distance’), the less risky, the less costly and the smoother the realisation of their plans will be, and;
  • Consequently, access to appropriate and efficient overseas networks has been reported as vital in the achievement of export performance.

The Way Forward

To overcome the present challenges and ultimately create success stories, the following key recommendations and drivers are critical in improving New Zealand’s exports and economic development: 

  • Developing more and/or larger internationally successful New Zealand businesses, networks of businesses, and segments of the economy depends on developing more sophisticated and integrated in-market ‘eco-systems’ and centres of support with international potential so that New Zealand companies are able to better understand and manage the requirements of market development and global value chains. (source: Office of the Minister for Economic Development – Advancing Economic Transformation, 2007) 
  • To survive in a world of shrinking economic distance, New Zealand business must organise itself in complex systems spanning many countries, tapping into differences in costs, skill, resources and tastes to maximise overall returns. (source: Office of the Minister for Economic Development – Advancing Economic Transformation, 2007)
  • Enhance global knowledge transfer by assisting New Zealand firms and industries to locate, transfer and absorb new knowledge and technologies from overseas. (source: Office of the Minister for Economic Development – Advancing Economic Transformation, 2007)
  • The need for in-market investment reflects a desire to focus New Zealand’s efforts on areas in which some control can be exerted over the outcomes. (source: New Zealand Institute: Competing to Win, 2006)
  • Establishing in-market services, easing the process of international expansion by (1) delivering activities that are designed to assist New Zealand firms identify market opportunities, (2) assisting firms to develop a presence in the offshore market as they pursue market opportunities, and (3) providing access to local networks that can provide advice to New Zealand firms aiming to expand their presence in the market. (source: New Zealand Institute: Competing to Win, 2006)
  • It is well understood that resources to assist New Zealand firms to break into international markets are best located in the market rather than being based in NZ. (source: New Zealand Institute: Competing to Win, 2006)
  • Providing valuable, insightful market research and advice requires deep market understanding as well as deep sector-specific knowledge.  Such specialised information, expertise, and insight is less likely to reside in a delivery agency like NZTE than in-market local professional advisory firms such as accountants, lawyers, consultants and banks.  (source: New Zealand Institute: Competing to Win, 2006)
  • On average, it has taken more than 20 years to build today’s top NZ High Tech export companies with more than $10 million in export activity (e.g. Rakon, Tait, Glidepath, Navman). This is far too long for current growth companies to take given New Zealand’s economic situation. 
  • The ICT Sector has the greatest potential to impact New Zealand’s economic growth and stability through weightless goods and services. (source: New Zealand Institute, Creating a Weightless Economy)
  • Long term success for exporting goods and services will be determined by individual business owners, chief executives and senior managers making a commitment to the internationalisation process, and not being dependent on the Government in the process. (source: Export Year 2007 – Platform for the Future)
  • New Zealand’s vision need to be firmly connected to the global economy in ways that are in the best long-term interests of all New Zealanders.  Achieving this will come about through strengthening connections between local businesses and the global economy. This needs to be done through (1) more sophisticated and integrated in-market support, (2) greater fostering of international investments and partnerships, and (3) promoting increased collaboration offshore. (source: Export Year 2007 – Platform for the Future)

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