COVER STORY : From Here To 2020

It’s billed as century of transformation – time that will render the past 100 years’ worth of change into little more than starting line for major advances in science and technology. But the 21st century will also bring major challenges.
Ongoing growth is running head first into environmental limits as resource-hungry humanity out-paces the planet’s ability to provide. The recent resurgence in economic activity and business confidence meanwhile, threatens to turn into something of false dawn.
Economic pundits have, since the beginning of the year, been predicting recovery that is more “W” than “V” shaped, as the bubbles of fiscal stimulation delivered by governments worldwide lose their froth. What remains are unprecedented levels of government debt. OECD countries’ total net government debt is forecast to increase by 21 percentage points of GDP between 2007-2010 to more than 60 percent.
Given these realities, how will New Zealand fare on its journey to 2020? What are the critical issues the nation will face and what are the opportunities we could exploit?
We put these and other questions to five high profile Deloitte/Management magazine Top 200 Awards winners of the past two decades. Their answers reflect cross-section of business opinion – and perhaps the reality that change can be viewed either as threat or opportunity.

Critical issues

New Zealand will face some critical issues in the next 10 years. Opinions, however, differ as to which three are seen as most critical. The emphasis ranges from preserving and building New Zealand’s “clean, green” reputation; to building personal savings in order to help fuel growth; or untangling the excessive regulatory red tape that stymies business endeavour.
For Roderick Deane, Top 200 Executive of the Year in 1994 when he was CEO of Telecom and then voted Top 200 Executive of the 1990s’ Decade, too much government, excessive regulation and low productivity are the critical issues. Deane now holds directorships on several boards including that of Fletcher Building, Woolworths and the IHC Foundation.
To his mind, the Government has again become too large and is crowding out the private sector. “We need less government intervention and less regulation to get things done more easily and more quickly in order to promote our international competitiveness,” he adds. And tax rates need to be lowered to promote more incentives to work and save, to promote individual self-sufficiency and to “ensure we do not continue to lose our competitive advantage as nation”.
Saving is Jim Syme’s priority. He was chosen as Top 200’s QBE Chairperson of the Year in 2004 and had 30 years of experience in retail, commercial and merchant banking. He also held numerous other directorships including chair of Waste Management.
“We have,” he says, “a very shallow capital market compared with other countries, particularly Australia. We must deepen it. To do that we need more savings because they transfer to investment. We [Kiwis] are not good savers and I think we should introduce compulsory superannuation.”
A deeper capital market would, Syme reasons, help business grow exports that can quickly capitalise on free trade agreements with Asia. Besides, the country needs to increase its per capita income to help lift the tax base so New Zealanders can access quality education, healthcare and social services.
Stephen Tindall, founder of The Warehouse and the Top 200 Executive of the Year in 1998, agrees that generating savings mentality is clear priority.
“Maintaining national triple bottom line approach is important because it means balancing taxation issues to maximise the productivity of the economy,” says Tindall. “Having savings mentality so as to invest in companies that are focused on export is big part of that. The other side of that coin is about maintaining well-run infrastructure in areas such as education and health,” he adds.
But for Tindall, the first priority is to protect New Zealand’s clean, green image. “We can [then] continue to leverage all that springs from that including safe, healthy food production and inbound tourism, while also growing what I call clean, green technologies,” he argues.
He also calls for stronger emphasis on education and internships in the productive sector to help focus the country on earning its own living and becoming cashflow positive.
Unsurprisingly perhaps, Queensland-born Ralph Waters, the former Fletcher Building chief executive who hit the jackpot in 2003 by scooping Executive of the Year for himself and Company of the Year for his company, sees closer New Zealand ties with Australia as critical. “By 2020, New Zealand will hopefully realise the importance and benefit of single economic ANZ market – if it has not already [by then] moved down that track,” he offers.
And New Zealand must recognise the importance of its larger corporates growing their businesses overseas and simultaneously lift its aspirations rather than be swayed by “gloom merchants” who oppose enterprising endeavour.
Kerry McDonald, 1996 Top 200 Executive of the Year and former Comalco chief executive, is emphatic that the most critical issues for New Zealand are the parlous state of its economy, its low productivity, low competitiveness in the export sector and its serious structural problems, such as the nation’s high level of net foreign obligations.
“I’d add to that the electorate’s propensity to focus on short-term personal benefit rather than on the national interest and what needs to be done to create viable future for New Zealand,” he says. “We’re worrying too much about house prices and welfare and not enough about the economy, our business and the tradeable goods sector.”

Opportunities ahead

How, then, does New Zealand best make its way in changing world?
Our panel of outstanding leaders suggest, perhaps understandably, stronger focus on the export sector. For Tindall, however, that is hooked into building on our environmental credentials.
“Our opportunity lies in providing high quality premium-priced food and beverage products to world that will become increasingly short on safe, nutritious and reliable food,” he elaborates. Beyond that, he suggests focusing on building our environmental know-how and developing an export services industry based around the intellectual property and products that grow from it. “Renewable energy generation, water conservation, innovative new clean-technology companies… there are some big opportunities we could exploit there,” he adds.
“I also think we could leverage the innovation that comes from the public sector – New Zealand could build world-class business and gain royalties from developing innovation in the health sector in software, devices and drugs.”
Syme is also optimistic that New Zealand can significantly increase exports over the next 10 years, particularly from the dairy, meat, fruit and timber industries, and in niche manufacturing, service IT and “tourism into our clean, green New Zealand”.
To accomplish this New Zealand must, he says, beef up resources and trade offices in Asian countries to facilitate export growth. “We also need stronger collaboration between business and our educational institutions to build the talent pool of scientists, technicians, export marketers and managers so we actually have the resources to achieve these opportunities,” he adds.
Syme thinks New Zealand has the horse power and brain power to create successful enterprises, but we need to “deepen our capital markets” in order to scale them up without losing them offshore. “Once we get good [levels of] saving, investment will flow into many areas of the capital markets, both public and private. Without that we won’t get very far,” he warns.
Ralph Waters thinks New Zealand’s world-leading role in dairy is an opportunity that should be more fully exploited. But it will require continued overseas investment. And he think

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