THOUGHT LEADERS : “NZ Made” Missing the Point

Some decades ago the then New Zealand Manufacturers Federation launched the Buy New Zealand Made campaign. It was based on similar campaign in Australia and was aimed at producing greater sales for the manufacturers selling in the local market by persuading the public to buy locally made products rather than those that were imported.
It also had the secondary aims of reducing the expenditure of overseas funds and improving employment levels in New Zealand. The government of the time and the Council of Trade Unions supported the campaign.
A very recognisable, stylised kiwi logo was designed and number of large manufacturers were signed up to use the logo on their products. An extensive advertising campaign, including TV, was implemented with mixed results. The numbers of manufacturers joining the campaign fell short of the numbers that were planned and the campaign did not convince the public to buy New Zealand made. That was in stark contrast to the experience in Australia where the similar campaign was well supported by both the manufacturing sector and the public at large.
Despite that the campaign still continues under the auspices of Business New Zealand, the organisation established with the merger of the Employers and Manufacturers Federations.
In the period since the campaign was launched the manufacturing sector has undergone some profound changes. It started with the economic policies of the Labour government of the 1980s, followed by the 1987 sharemarket crash. Many manufacturers went out of business because they could not compete with imported product.
In addition, many exporters found that their business was not really profitable when export incentives were removed. There is no doubt that local manufacturers still cannot match the imported goods for price unless they are producing perishable goods or have real technological advantage.
The good news is that some very smart businesses realised that, to sell products in the world markets, point of difference is needed. That point of difference is adding real value to the raw materials that are produced in New Zealand at competitive cost and with stunning design.
Despite the ongoing debate about the effectiveness of our education system, the reality is that it produces designers and engineers who are in demand around the world. Most people in this country are aware of the reputation of the earthquake engineers and F&P’s double drawer dishwashers, but there are quite number of small to medium sized businesses selling into niche markets, such as the Hawkes Bay company selling cleverly designed school furniture into the United States.
It seems to me that our future for the export sector, apart from agriculture and horticulture, is to focus on our skills with design and engineering. (As an aside we should be spending more money and research on what we can produce from the land particularly with the threat of climate change.)
What in practical terms that means is that the product is designed in New Zealand, as are the tools to manufacture it. Where it is manufactured becomes matter of what the customer wants – for example, the product may be part of system, in which case the customer may want the product manufactured near to his main production. If cost is the main driver then it may have to be produced in low-cost country such as China.
The New Zealand company can make its profits through joint ventures, patents on the products or managing the whole process. It is probably unlikely – given the distance to world markets – that manufacturing in New Zealand will often be an option. What is holding us back is that not enough skilled technicians are being produced by our education system at present.
The current debate on the value of new Buy New Zealand Made or Made From New Zealand campaign misses the point. Firstly, the New Zealand public are not likely to change their attitudes and buy product because it is made in New Zealand, price is still king. Secondly, the sector is but shadow of its former self following the economic changes of the past decades. Thirdly, it is critical that we improve our export performance so that we can improve our standard of living, which is currently slipping behind those countries with which we like to compare ourselves.
Rather than Buy New Zealand Made campaign, why don’t we do what the exporters ask for and provide assistance and advice to greater extent than we currently do, to get into overseas markets and to attend trade fairs. It does not matter where our New Zealand based product is manufactured.

David Moloney was the last president of the NZMF and former chairman of the Buy NZ Campaign.

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