Strategy : Demand Action to Increase Growth – People have to want it

NZ Management: What are the main challenges New Zealand businesses will face in the next few years?
Jonathan Ling: The main challenge ahead for business in general is business activity. If New Zealand is to prosper then it has to have lot more business activity than it has at present. And it’s going to get tougher to do this over the next couple of years as we’re headed for slowdown. To get the aggressive growth we need to be comparable with Australia in GDP per capita, income per capita and so forth, it needs to be faster. We’re going to have to do it in tough times.

NZ Management: So how do we do that?
Jonathan Ling: Where do I start?! The fundamental thing is that business and Government need to be lot closer together because one can’t do it without the other. Business leaders need to be involved in the process. We need people working on creating more business activity in New Zealand. There will be all sorts of projects one can think of for how to do that and then there needs to be the government settings and the tools to actually help it. These go from regulatory top settings, like tax and policy, to the tools like capital, infrastructure and other things that need to be there to support it [business activity].
One of the things I’d argue is that ‘New Zealand Inc’, as partnership between business and Government, is almost non-existent and that needs to change as first step.
Nick Main: I think there needs to be common vision too. There needs to be common goal, plan, strategy. If you’re meant to be running this as an organisation then, without knowing what your goal was, it would be pretty damn difficult to say whether you’d achieved it, pretty difficult to even get all your actions aligned to achieve that goal. big part of the problem, aside from the lack of common language between business and Government and perhaps lack of trust as well, is that you don’t end up with common vision.
Jonathan Ling: The problem is there’s three-way triangle: you have the politicians who talk government, there are the senior bureaucrats and officials, and then business. Business and officials usually have reasonable degree of continuity. It’s only the politicians who come and go every three years depending on whether they win or lose. The relationship between business and officials does need to get better but the main thing is that the politicians – on both sides – need to buy into some things that will go beyond political terms.
Personally I’m not one for big, complicated visions, so I just think statement which says “The New Zealand Government and business are committed to an aggressive growth strategy to catch up with Australia in GDP per capita and in income per capita.” Simple.
Nick Main: That would do me for vision.
Jonathan Ling: The problem is every time you are anywhere near doing that then everyone wants to qualify every tiny clause and you end up with three paragraphs that nobody really understands. But all we want is economic performance, and incomes per capita, to match Australia. Then all you have to do is decide how you’re going to achieve that and map out the projects. I don’t think that’s too hard. What you then consider is, if we’re going to do any project or activity, is that going to help us catch up with Australia? If the answer is yes, clearly and tangibly, then we go for it.
There are too many talkfests, forums and advisory groups in this country. What we need is some small groups to just start doing things, to pick few projects which have high probability of success and are not too hard to get off the ground. We need to get few runs on the board, some success going of business and Government working together, and more things will get going.
If you look at how the State governments do things in Australia – we could have board of, say, three government/official people and three business people. Typically they would have small executive to assist them, say four, made up of two officials and two secondees from business. You give that executive clear boundaries and goal and they go and do things.
Once you’ve got one win, the wind gathers momentum.

NZ Management: So are talks about that going on behind the scenes in business?
Jonathan Ling: I’ve said my piece to Treasury, to MED, and I think we’re getting some traction but we definitely need more.
NZ Management: Will things be derailed or delayed if we have change of government?
Jonathan Ling: I don’t think so because if we’re talking about wanting increased business activity to match Australia then it’s apolitical, so I can’t see either major party having an issue with that. There might be bit of debate about how you go about it, but these things go beyond politics.
The community is also getting to point where the brain drain to Australia is becoming real issue. Not just for business but for communities and families.

NZ Management: How do we convince people this is the thing to do?
Jonathan Ling: The economic well-being and standards of living in New Zealand are not just the responsibility of Government. The community has to support things and want change too. People have to be communicating their frustration to Government that New Zealand could be so good and asking why can’t we get it on to solid economic growth path. If New Zealanders start to say that and work towards it then Government will follow. I know Government or business has to lead the way sometimes to get few projects off the ground, but then people have to get on board. New Zealanders have actually got to get up and say “we want better life and better future for our kids”.
The average New Zealander probably knows that wages are higher over in Australia, but how many of them go to the next step and ask why? And more importantly, ask where New Zealand will end up if that continues, and what can I do about it?