Small and medium-sized businesses (SMEs) are multiplying and firms are becoming more profitable, a report shows.
The Ministry of Economic Development's latest survey of SME structure and dynamics found that the number of companies with 19 or fewer staff increased 4.9 per cent last year, following an increase of 2.7 per
cent in 2002.
"This shows that, with all its pluses and minuses, New Zealand is a pretty business-friendly country," said ministry SME director Roger Wigglesworth. "It's easy to set up a business and the economic environment is positive."
The average enterprise size remained stable, with SMEs accounting for slightly more than 38 per cent of the economy's output.
Enterprises with 10 to 19 fulltime equivalent staff experienced the strongest increase in profits, while value-added continued to improve for all firms.
"New Zealand export industries have been highly reliant on commodities, which benefited from high prices in the last years," Wigglesworth said. "The incentive to add value wasn't strong."
More companies were increasingly opening up to the global value-added chain and slowly moving in the right direction.
SME survival rates were slowly improving.
"The key is the ability of businesses to adapt and for authorities to communicate changes early enough for them to react. Change in itself isn't bad," Wigglesworth said, referring to recent changes in legislation affecting businesses.
SMEs were evolving in a similar pattern to small and medium-sized firms overseas - but were "smarter and more dynamic than in many other developed countries".
The report shows ethnic groups are unevenly involved in the country's business growth. Asians are the most entrepreneurial participants, with more than 14 per cent reported to be self-employed without staff, closely followed by Europeans.
Maori and Pacific Islanders recorded much lower proportions.
The number of women employers and self-employed remains low compared with males. Almost 30 per cent of employers and 31 per cent of the self-employed are women.
- NZPA
