Issue 45 – December 2012
A new 'Lifting export performance' report by NZIER for ExportNZ looks at what is holding New Zealand back, the effectiveness of export policies, and how best to move forward. We talked to Catherine Beard, Executive Director of Export NZ, ManufacturingNZ, and BusinessNZ, about exporting and manufacturing, and Standards.
Standards New Zealand: What is the focus of the new 'Lifting export performance' report?
Catherine Beard: The focus of the report is on addressing New Zealand's big issues – its smallness and isolation. As 50% of our exports come from manufacturing, the report is a relevant reality check. We need to grapple with the hard issues and the report helps us to start the debate about how to lift export performance.
We often talk about what is the best operating environment we can achieve for exporters and manufacturers and are there any barriers to growth and exporting that need to be tackled. In my role as Executive Director of Export NZ, ManufacturingNZ, and Business NZ, I am the spokesperson for these sectors and I advocate for them to policy makers and the Government. I'll be talking to politicians in the New Year about the report and how vital it is to get the policy framework right.
Standards New Zealand: How important are Standards in manufacturing?
Manufacturers in New Zealand tend to focus on a niche and they try not to compete with low cost, large volume products out of China, instead focusing on customised, bespoke products. Standards are particularly important in manufacturing for two reasons.
First, if you are innovating, you want the Standards to reflect the latest innovations, so it's important for manufacturers to stay close to the Standards process. If they are involved, they can see new trends.
Second, it's important for manufacturers looking to get into the export market. If there's a common Standard, it lowers the transaction cost of getting the product into the market. For example in the European Union, if there's one common Standard, it's very helpful for business.
Standards New Zealand: How do Standards support international trade?
Catherine Beard: I think it's just the surety of knowing that your products are going to fit into the market. With a common Standard, it's as if it reduces a non-tariff barrier.
Interoperability is a word that's used in the Standards area. Recently when I was flying back from Auckland I was thinking, there's different airlines and different kinds of airplanes and to connect with the air bridge, they must all have to be able to adjust to the right height, presumably. So – standardisation is in things we take so much for granted and it just enables everybody to 'plug and play'.
Standards New Zealand: How important is safety in manufacturing?
Catherine Beard: It's very important not just for health and safety for employees but it's important that the products you're producing are fit for purpose and safe, particularly if it's an electrical appliance or something like that. The Standard sends a signal to the consumer that what they're using is safe. It's a powerful endorsement of the product – it's one of those things that is a must have. There's an expectation that the product will meet the required Standard, you're not even in the ball game if you don't meet the Standard.
The other thing that Standards can denote is quality. We have manufacturers in New Zealand who get a bit annoyed when they are making something to the Australian/New Zealand Standard but goods can be imported that don't meet the Standard. For example, recently a ban on multi-purpose ladders that do not meet Australia and New Zealand safety Standards was announced. Standards, if a consumer is to look for them, say this product is made to a certain Standard and is going to be safe and of the required quality too.
New Zealand gets reputational kudos from having high quality Standards in our food area and that helps the food and beverage sector go out to the world with a good reputation.
Standards New Zealand: Can Standards help manufacturers and exporters lift export performance?
Catherine Beard: Yes, I think so, if you want to enter some international markets you've got to meet certain Standards, depending on the product. And if you're going to meet those Standards then possibly you're stepping up – you might look at the Standards for different countries and try and cover them all off in your product design if you're in the export business. If you've done that, it gives you some surety that you're compliant in a whole lot of markets around the world.
If you're in a product category where Standards are important, then if you're involved in Standards committees and international Standards discussions, you can plan for the changes that are coming, instead of suddenly finding you have a product that is not compliant because the Standard has changed.
New Zealand companies are not the biggest in the world, so if we are involved in Standards discussions we can ensure the Standards are doable for our smaller to medium-sized companies.
Standards New Zealand: How do Standards help exporters to access markets?
Catherine Beard: I think it's a practical way that business can actually move forward with the free flow of goods around the world, probably ahead of governments. Governments might be wrangling over issues like tariffs and negotiating whether they should come down and how fast, sometimes that's difficult and can take a long time. The thing with Standards is that businesses are involved in creating and maintaining Standards so they have more control over that.
With global supply chains and the way that business works in the modern world, you might be sourcing materials and goods from suppliers from different countries, adding value and manufacturing somewhere else, and shipping around the world. The commonality of Standards helps. It's as if business can actually get on with business and sometimes governments play catch up.
Standards New Zealand: How can links to the international Standards community and better use of relevant international Standards by New Zealand exporters help to boost export growth?
Catherine Beard: European manufacturing experts say that the successful manufacturers in Europe tend to be very successful in Europe because they focus on a niche. Part of their strategy is to dominate, so they're very close to Standards action. There's a reason for that – so that the Standards continue to be updated to continue to reflect their cutting edge innovation. Therefore, New Zealand needs to be involved in those discussions to ensure that Standards still allow them access, to see trends, and to see where product development is going.
Standards New Zealand: In which areas of manufacturing and exporting are Standards most important and why?
Catherine Beard: Safety, I think, is number one. Whether that's for electrical products, food, nursery furniture, or buildings – there's areas where safety is important for the customer. Here in New Zealand there's been a big focus on building Standards, building safety, and building materials, particularly following the Christchurch earthquakes.
Often with Standards there are independent audits – there's an independent safety Standard tester and that gives reassurance to purchasers of the product.
Then I think that interoperability is important too, that just makes it easier for manufacturers.
Standards New Zealand: How important is it to consumers and businesses overseas that New Zealand manufacturers meet the relevant international Standards?
Catherine Beard: Where it's a requirement or a safety issue, it's a condition of being in the market – the Standard has to be met. In other cases with voluntary Standards, I think the benefit for the manufacturer is partly with that consumer credibility.
Increasingly, with global supply chains, if you want to supply a big business and you want to be part of their supply chain, they will have increasingly higher Standards. These Standards can be anything from environmental right through to a requirement for good systems and processes – it might be an ISO requirement that they push right through their supply chain or it might be a safety Standard, which would be a must have. Big business can go back into their supply chain and demand that, 'if you're going to be a supplier to us you need to meet these criteria and these Standards'.
Like anything, there will be businesses where Standards are not an issue as they're not making that kind of stuff, but for some, like in electrical or areas where there are safety or interoperability issues, they're important.
→ Download the Lifting export performance report
→ Read the media release Ban on the sale of unsafe multi-purpose ladders