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Recent key developments in MAKE│NZ
• Here’s our first GuessMasters® question for the year:
In what year, and in which country, was the last new steam locomotive manufactured for regular service?
• And please keep in mind that we are not after the fastest fingers for searching the internet …
• MAKE│NZ will hold its first Fireside Chat event on Feb. 10. We are excited to have Stefanie Gutschmidt, Professor and Head of Mechanical Engineering at UC, Philip Benson, Operations Manager at AW Fraser, and Pat Shannon, MD at Shamrock Industries, to discuss how product and process innovation work best in manufacturing – both from a practical, and from an academic perspective. Without suggesting that an academic perspective can’t be practical, of course!
• Our first Production Managers’ Working Group meeting for the year will be on Feb. 12 at Kiwicare Ltd, with a focus on growing staff engagement and removing bad culture habits
• If you interested in either event and think that you are eligible to attend, please drop us a line: dieter@makenz.org
• It’s still four months away, but we are in full swing preparing for this year’s conference – Mark the date in your diary: May 28 at the Wolfbrook Arena
In previous years we targeted manufacturing leaders at the GM and CE level as our primary audience. This year we’ll be offering a dedicated opportunity for production- and operations-level managers to learn from each other, and from invited speakers. Presenters will include subject-matter experts and experienced industry practitioners. Through Q&A with presenter panels there will be plenty of opportunity for all to share their ideas and insights and learn from others. The event will leave you and your team walking away with new ideas on how to get your production engine running smoothly.
• Last, but not least – Sabine has been working hard on revamping our website and has largely been successful. WordPress hasn’t exactly made her job easy, and there may still be the odd gremlin popping up.
If you notice anything odd-looking, not working, or have any suggestions on what you’d like to see, we’d appreciate if you could let us know – sabine@makenz.org
Recent key developments in New Zealand
• Talk about silly season – the last couple of weeks have been anything but. The government made a raft of announcements relevant to manufacturing, including on economic development, science and innovation, vocational education and, last but not least, a new round of musical chairs in Cabinet.
Starting with the latter, we have a new Minister for Small Business and Manufacturing, the Hon. Chris Penk, again a minister outside of Cabinet. Having spent a lot of time over the past three years taking Andrew Bayly on factory tours, we now have to start again, but that is the nature of our political system. We have sought a meeting with the new Minister at his earliest convenience to share our views on how to grow our sector.
In a very positive development, the Economic Development (now ‘Economic Growth’) portfolio has moved upwards big time – from pretty much at the very bottom, to Nicola Willis at the #2 position in Cabinet. We have long maintained that when you look around the OECD countries, the cabinet ranking of that portfolio tends to be a good indicator for how serious the country in question is about developing policies to generate additional wealth, rather than just worrying about how to distribute what’s there already.
We are considerably less enthusiastic about the direction the new minister has chosen for her new portfolio. “Newly minted minister for economic growth Nicola Willis says boosting tourism numbers is top priority … ‘when we’ve got more tourists coming, more tourists spending, that’s good for jobs, it’s good for growth and it’s good for the wealth of individual New Zealand families.’ ” (RNZ 22-1-2025)
We recommend Minister Willis and her cabinet colleagues go back to a presentation given by Sir Paul Callaghan (whose name will now completely disappear from public life with the disestablishment of Callaghan Innovation – but that’s another story for next week …) in 2011: https://youtu.be/OhCAyIllnXY
In his speech at the McGuiness Institute in March 2011 on the topic of StrategyNZ: Mapping our Future, Sir Paul said about the role of tourism in growing prosperity in New Zealand:
“To maintain our current per capita GDP [revenue per employee], we need $120,000 per job [new jobs created]. What does tourism earn? About $80,000 per job – about two thirds of what we need. The more tourism, the poorer we get. Tourism is great for employing unskilled people, it is absolutely not a route to prosperity.”
But that was the picture in 2011. And today? In the year to March 2023, tourism generated a direct contribution to GDP of $13.3 billion, or 3.7 percent of GDP. Note that in terms of total tourism expenditure, which includes international student expenditure, 71% is generated by domestic tourism, not the international tourism the Minister is targeting for growth.
Direct employment in tourism was 189,432, meaning a GDP-per-employee contribution for tourism of $70,210 for the 2023 fiscal year. New Zealand’s overall GDP per employee was $128,149. So, the gap is even bigger today, and the statement still stands – with every new job created in tourism, New Zealand becomes a poorer country.
The last word on this goes back to Sir Paul: “I think the government is right to have a goal to lift our prosperity, but they seem to have not the faintest idea how to do it.”
That was back in 2011. Let’s just hope that, contrary to the evidence before us, it no longer applies today.
Recent key developments in the World
• Again, there is no shortage of recent developments worthy of consideration here, but we’ll stick to the most recent hot topic – The new and current US President’s conviction that introducing new tariffs affecting multiple trading partners is serving his nation’s best interests.
There is nothing fundamentally new to this approach, started in earnest during Mr Trump’s first presidency, and faithfully continued by his successor. What’s new are the pace and intensity chosen, only surpassed by the media interest in the topic.
A prudent approach to risk management in business includes avoiding to be too dependent on a single (a few) customers for most of your business. As a recent McKinsey report shows, that advice appears to also have been adopted by China recently, when it comes to trade with the US and its ‘Western Allies’:
Not surprisingly in the case of China is the fact that the trade in manufactured goods is the key driver here:
Is there a lesson for New Zealand? Well, it’s always good to know how reliable those are we are most dependent upon …
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