Hannah on SMEs: SME's cite NZ safety, lifestyle as tops

By Hannah Lynch

BusinessDesk (Oct. 23) - Kiwis' pride themselves on New Zealand's "100% Pure" clean, green image. So it's not surprising that small and medium sized business owners rank safety and lifestyle as the main advantages of being based in New Zealand.

New Zealand's safe living environment - as distinct from good health and safety practice - came out top in MYOB’s Business Monitor survey of 1,000 SME's, with 83 percent rating safety as the country's strongest attribute. That was closely followed by lifestyle advantages and a good, stable education system on 77 percent.

SME's ranked New Zealand's international brand and reputation at 65 percent.

MYOB's New Zealand general manager Julian Smith says the country's image as clean and safe is "a real boost to our exporters, especially in a world where issues like bio-security are becoming more and more important."

"Being able to leverage off the strong brand of ‘New Zealand Inc’ is an attractive prospect for business owners in the global market,” he says. But, and there's always a but, "when we look at New Zealand’s economic performance, particularly in comparison with our trading partners, many of these intangible factors aren’t measured.”

Generally speaking, local SME's find it challenging to make their mark on the international stage. New Zealand's distance from international markets, limited capital and small business sizes mean it's difficult to make the leap.

A small company in New Zealand employs five people. In the UK, an employer with 70 staff is a small business.

The high New Zealand dollar hasn't help either, ranking as the lowest "advantage" for Kiwi SME's at 32 percent in MYOB's survey. That suggests about a third of SME's get benefits from the lower cost of imported inputs when the dollar is strong.

SMEs also shrugged off the supposed benefits of our relatively low wages, with only 36 percent citing this as an advantage.

“Clearly business owners are making some trade-offs to work here,” Smith says. “They might enjoy the lifestyle and the ability to be close to friends and family, but the costs of competing in export markets and the continual struggle to attract staff who can get higher wages offshore make it harder to run a business in New Zealand.”

MYOB found that 71 percent of SME's believe New Zealand's number eight-wire mentality and culture of innovation offer benefits for companies working here. That's higher for exporters on 81 percent. And that's despite the growing understanding that innovation is one thing, while the "bodge your way through it" aspect of number eight wire thinking is a disadvantage when it leads to poorly executed business plans.

The MYOB survey also shows that views are split by age group. Born from the late 1970's to early 2000's, members of Generation Y are more likely to consider New Zealand’s clean, green environment a major advantage to their business, on 81 percent. That’s compared to Generation X, born from the early 1960s and late 1980s, on 65 percent and the Baby Boomers, born from 1946 and 1964, on 63 percent.

Younger business owners are more likely to be frustrated by regulations and red tape, with just 37 percent saying New Zealand’s comparatively low levels of bureaucracy are an advantage, compared to 54 percent of Baby Boomers and 52 percent of Gen X. That suggests that younger businesses have yet to try and establish businesses in other countries. They'd quickly realize New Zealand's business environment is actually one of the easiest in the world for start-ups, allowing SME's to concentrate on building their businesses quickly instead of keeping the bureaucrats at bay.

“With more and more young New Zealanders owning their own businesses, these numbers show that new values and approaches are entering the market,” says Smith. “This will be important to understand in ensuring that New Zealand continues to be seen as an attractive and exciting place to do business.”

(BusinessDesk)

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