Michael Hannah, Manager
– Government Relations and Policy, Chief Executive's Office, New
Zealand Trade Development Board, New Zealand
In the early stages of
internationalization of New Zealand’s manufacturing sector through
the 1960s and 1970s, successive Governments took the view that private
sector firms nurtured on protected domestic markets needed public
support to motivate them to engage in exporting.
In this initial period,
the trade support network incorporated aspects of public and private
sector activity in:
Links between these two
arms of development were largely informal in the sense that business
development agencies and Tradenz could operate independently of one
another and shared no common operational structure. However, some
grants provided by the business development agencies were targeted at
encouraging export activity, and therefore provided links with
external market research and promotions through Tradenz.
But in one key area,
Tradenz incorporated a formal structure linking both domestic
development and external trade support. This was through its Joint
Action Groups (JAGs).
In partnership with the
private sector, Tradenz established JAGs, which supported the business
and trade development of companies working together as sector groups
to export or grow their exports. Sectoral strategies and activities,
aimed at improving the export performance of sectors, were funded by
Tradenz. From the mid-1980s to the late-1990s, there was a formal
structure linking the capability development and the trade support
activities of the JAGs.
Other initiatives were
undertaken. In order to promote scale, business management disciplines
and marketing strategies, Trade NZ began to develop Hard Business
Networks – looser arrangements of exporting companies; and
encouraged development of "clusters" – groups of
companies, including suppliers, clustered around specialist exporting
In the late 1990s,
however, this strategy was challenged.
From the mid-1980s, New
Zealand adopted a more free-market approach. This resulted in tariff
reductions, privatisation, deregulation, and the dismantling of
During this period,
Tradenz – renamed Trade New Zealand (Trade NZ) – decided to focus
on trade support, exiting from its business development role. While a
number of the JAGs had been successful in lifting the export
performance or a sector, it found that for other JAGs it was simply
funding administrative assistance and little real export activity.
Trade NZ successfully
moved its JAG funding into supporting only the export marketing
activities of Export Networks, groups of at least three companies.
and unrelatedly, regional business development boards closed, leaving
a vacuum in business development services, that some thought might be
filled by private sector consultancies in response to demand.
In 2001, Government
moved to fill this gap, establishing a new development agency,
Industry New Zealand, to provide domestic support for the development
of management skills, high-growth industries and sectors, and export
Clearly, this domestic
development agency and Trade NZ could develop strategies and
activities quite independently of each other. But if both were to be
active members of a trade support network, some formality would be
useful to ensure co-ordination of both the design and implementation
of strategy – just as a formal structure within the more successful
JAGs (Joint Action Groups) helped to link capability development with
trade development from the mid-1980s.
therefore implemented and encouraged some formal co-ordination of
strategies and activities of its business development and trade
support agencies at board level. Management have set up forums to
coordinate activities of the two agencies, along with a technology
development agency, Technology NZ, with their respective business
clients, providing an integrated service.
Each member of the
trade support network has a specific role or speciality, whether it be
management capability development, technology development or trade
support. Where there is overlap, for instance in dealing with industry
sectors, or in attracting investment at different stages of the
business life cycle, roles are clarified along the way.
In New Zealand’s
case, the formality of the structure of the trade support network is
limited, creating what might be termed a "virtual team"
approach to promoting trade.
The views expressed are
those of the writer and not necessarily of Trade NZ
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