In a year when global FDI is forecast to drop 40%, New Zealand is bucking the trend. Data from fDi Markets shows the island nation attracted more greenfield projects from January to September than in the whole of 2019. Peter Chrisp, chief executive of New Zealand Trade and Enterprise (NZTE), shares best practice and the secrets of its success.
Q: What are the principal factors that contribute to New Zealand sitting atop Ease of Doing Business rankings?
A: I’d highlight three dimensions of the country’s ecosystem. First, the simplicity of the regulatory and tax environment. Second, the huge drive to simplify business and registration systems. But the most powerful aspect is the mindset and integrity of the people. We are the least corrupt country in the world and individuals in the government are more inclined to think they work for the cause — being the country — than an institution. I care an enormous amount about the mandate to grow New Zealand internationally.
NZTE operates in the halo effect of that ecosystem. Its entire set-up is based on a customer-centric approach whereby we identified and personified our customers, figured out their operating systems, identified how to deliver value, designed our culture and then chose the leadership team accordingly. It’s been a huge journey over many years to calibrate the organisation across that sequence, knowing that if you deliver customer centricity you can deliver ease of business.
Q: Covid-19 has prompted IPAs around the world to reassess their operations, but New Zealand’s case numbers have remained low. Has the pandemic impacted NZTE and its priorities?
A: This has been the busiest, most intense period in my 10 years in this role. The money we saved from not travelling was shifted into business continuity work like cash-flow planning and inventory control, where we hadn’t been involved that much in the past. The government asked us to lead an international recovery strategy which meant putting more boots on the ground overseas, and focusing on 1,400 key customers instead of our usual 700. One of our biggest successes has been improving the digital capability of exporters. We are finding that companies can and will adapt if you give them sufficient guidance and support.
Q: For foreign investors, what are the key takeaways from Labour’s landslide victory in the October election?
A: It was an extraordinary election with very high voter turnout, and the parliament — almost 50% of which are women — is among the world’s most diverse. It shows we have a healthy, diverse, stable democracy.
Q: What are the best foreign investment opportunities in New Zealand?
A: New Zealand has been built off the back of FDI. We know there are plenty of opportunities for investors and they are very welcome here. Our highly-innovative tech sector is the country’s fastest growing. A lot of venture capital is involved in software-as-a-service tech and many international firms are active in deep tech. There is a high-quality food and beverage sector, plus big infrastructure builds and housing developments. We have a big wood processing sector and, in line with our commitment to become carbon neutral by 2050, we’ve always continued planting trees. The sector is dominated by unprocessed exports, but we’d like to see more value-add processing.
Q: How has FDI been impacted by the pandemic and what do you expect in 2021?
A: Activity has continued, but much of that is the result of work that started two or three years ago. What we are more concerned about is the pipeline going forward. The opportunities are still there, but greenfield investors like to meet teams and see assets in-person. The current border closure means they have to go via intermediaries, which slows things down. That said, the rate of domestic investment is very high so we haven’t seen much of a drop-off overall.
Peter Chrisp is the chief executive of New Zealand Trade and Enterprise.
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