Thursday 23rd October 2014
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Bank of New Zealand chief executive Anthony Healy has challenged other Kiwi business leaders to think what they can do to contribute to five key issues the country faces.
The five issues include upskilling business owner-managers so they grow faster, capturing more opportunities from Asian economic growth, responding to environmental issues such as the degradation of our lowland waterways, getting faster uptake of digital opportunities in our businesses, and dealing with school underachievement.
Speaking at an Auckland business lunch today, Healy focused on five numbers.
The first is 450,000. That’s the number of small and medium-sized businesses in New Zealand who collectively contribute 28 percent of the country’s gross domestic product. Healy said many SMEs grow to a certain size and scale and then fail to take the next step that would allow them to go global.
“The most common reason for not making this step-change is capability,” he said. Owner-managers need to invest in upskilling themselves as much as plant and equipment or distribution channels, he said.
The second number is 470,000 – the estimated number of Aucklanders of Asian origin by 2021, up 75 percent from today. Taking advantage of this shift requires a changed attitude from some New Zealanders as much as it does on open borders and trading arrangements, he said.
“I do find the occasional knee-jerk response to some types of direct investment from some countries a little disheartening. It betrays a close-mindedness that can seem at odds with our self-image as a generally confident, connected, outward-facing and tolerant nation,” he said. Old institutions also need to act in new ways and commit to true staff diversity, he said.
Third on the Healy index was 62 percent – the percentage of New Zealand’s lowland river waterways officially classified as unsuitable for swimming. Healy said this was not just a farmers’ issue – the problem was collectively owned by anyone who has eaten anything produced on a farm. He cited the example of Taupo beef cattle farmers Mike and Sharon Barton who have a nitrogen cap on the catchment they farm. The Bartons fund the costs of water quality protection by adding brand value to their beef which provides them the money to deal with the problem.
The fourth number is 517,000. That’s how many New Zealand premises can access ultrafast broadband yet less than 40,000 do so. Digital technology enables savvy kiwi producers to expand their world trade and sell direct to consumers in ways that would have been inconceivable a few years ago, he said.
The BNZ faced the same digital challenges with Accenture estimating competition from non-banks could erode one third of traditional bank revenues by 2020. “It’s self-evident to me that these threats will have powerful digital propositions at their core.”
And the final figure was 26 percent – the percentage of New Zealand students in 2013 who left school without a qualification at NCEA level 2 or above. Healy posed the question whether it was acceptable in a country the size of New Zealand that one in four school leavers have no qualification.
“We should throw the kitchen sink at improving this statistic,” he said. Profitable businesses had the capacity to play a role in helping tackle some of the issues behind school underachievement and benefit dependency, he said. The BNZ’s community initiatives include a scheme launched earlier this year, in partnership with the government and church groups, offering low and no-interest loans to kiwis who don’t meet traditional credit criteria.
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