Andy Hamilton: What's needed is business growth

We are in the bottom quartile of the OECD and we are getting further and further behind our mates Australia. How do we move up the ladder?

The answer is to grow our wealth.

In our view at the ICEHOUSE that means earning more foreign dollars by winning business offshore, as our market is just too small.

Therefore we need more Kiwi companies tackling these international markets and winning. The ultimate is we need our existing companies who operate offshore getting bigger and we need more companies doing it offshore.

When we reflected on the current state and through talking to a number of people we came up with a number of 750 globally capable and competitive Kiwi firms.

This is broken down further as 350 or so who are exporting and trading internationally and around 400 domestic market focused companies who are beating international competitors.

Examples of the first group are Vitaco (Healtheries), Icebreaker, Right Hemisphere, Fonterra and the second group would be Prolife Foods, Foodstuffs and BNZ. What we are talking about here are firms who have 'broken through' and made it. We recognise there are many others who are trying to get there and will do so.

What would it take it get New Zealand into the top half of the OECD?

What is realistic and what is not? Well, turning one Fonterra into 10 Fonterras would get us into the top half but that is never going to happen. We actually settled on turning the 750 into 3,000.

We think this is achievable and has to happen. If we could achieve this within five years then we would be on track to get back up the top, not just the half-way mark. Given what we know of the firms in New Zealand, we really think this can happen. It is only four times the current number.

The next thing we at the ICEHOUSE did was ask how many firms we had been associated with over the last eight years could fit into this 'globally capable and competitive scale'.

The answer was 150, which is not a bad ratio on the 750. After that, we then set a goal for our next five years of a further 350 or 70 a year, which is a three times scale lift on our past performance. Now it is starting to look harder!

Is it achievable? Of course it is! We just have to do it because we are not going to sit back and let our country go down the gurgler. We know we can do it, and while we know it is hard, that is the whole point of taking us somewhere new.

Further, it is a team game and we are only saying we can't deliver this by ourselves. The ICEHOUSE is saying it will deliver one fifth of the numbers required in New Zealand to get us into the top half that is 500 of the 3,000.

Others around the country need to do their bit too to deliver the other 2,500. Already we see many great groups who are doing their part, Powerhouse in Christchurch, Movac in Wellington, NZTE and its Beachheads programme and Stephen Tindall's K1w1 investment group.

The key question now is what are you all doing to get us into the top half of the OECD? We are going to deliver one fifth of the firms required and that leaves a gap of 2,500 firms. Who is up for the challenge?

Now, don't let the opportunity of a good recession pass you by!

* Andy Hamilton is chief executive of The Icehouse business growth centre.