Harnessing the productivity of New Zealand’s tech firms for economic growth

24 July 2020
Annual Technology Investment Network (TIN) survey launches this week into a changed world
Frontier Firms inquiry: industry case studies
New Zealand tech companies have a strong history of innovation, as evidenced by the more than $1B invested in R&D in 2019, and continue to scale up quickly due to a “global from day one” mindset. This year the Productivity Commission, with their Principal Advisor and TIN member Geoff Lewis, is conducting an inquiry to help the Government understand how their economic contribution can be maximised and leveraged to other domestic firms.
About this work

The Productivity Commission is conducting an inquiry into New Zealand’s “frontier firms”. These are the most productive firms in our economy, and the Government wants to know how their economic contribution can be maximised, through their own performance and the way they diffuse new technologies and business practices to other domestic firms.

The terms of reference for the inquiry were referred to us from the Minister of Finance, and are available on the Commission’s website. The Commission published an Issues paper in April 2020, and its final report is due in March 2021. As part of its inquiry process, the Commission is undertaking some in-depth case studies, to explore the productivity performance of some significant New Zealand industries where productivity improvements could materially help to “shift the dial” on New Zealand’s overall productivity performance.

Areas of focus
To this end, the Commission has chosen to focus on four exporting industries of significant size, and/or with high-growth potential: Dairy (both farming and processing), Horticulture (with a focus on kiwifruit and wine), Health Technology and Computer Systems Design and Related Services. Each case study will focus primarily on the following key drivers of productivity: investment in innovation and R&D (including the innovation ecosystem); international connectivity; skills; and organisational form and ownership structure.
Industry engagement

The Commission is looking to engage with a wide range of stakeholders in each industry. This will include discussions with sector experts, industry organisations, individual firms, research institutions and relevant government agencies. These discussions are an opportunity to inform the Commission’s analysis and its recommendations to Government on how to strengthen enablers and remove barriers to higher productivity. They may also provide examples that enable the inquiry to showcase some of New Zealand’s most successful and innovative firms.
Discussion topics will include:

  • How firms in these industries learn about, adapt and adopt cutting-edge technologies and practices.
  • Which types of international connections make the biggest difference to the spread of new ideas and technologies, and what could be done to improve these connections.
  • The innovation ecosystem, and how it could be improved to better support innovation and knowledge diffusion among New Zealand firms.
  • How different organisational forms and ownership structures affect firms’ incentives to innovate, grow and internationalise.
  • How the government can reduce barriers to up-and-coming firms acquiring resources they need to grow.
Next steps and process from here

If you are willing to help the Commission with the case studies, the inquiry team will arrange a convenient time for you to meet with it either face-to-face or via a virtual platform such as Zoom. The team will send you a meeting brief prior to the meeting to let you know who will be attending from the Commission and some discussion questions tailored to you and/or your organisation.

The findings from this research will be published in the Commission’s draft inquiry report which is due by the end of November. There will be opportunity for public submissions on the draft report which the Commission will take into account in preparing its final report due in March 2021.

Please contact geoff.lewis@productivity.govt.nz for more information.

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