'Jobs machine' now in gear and set to deliver: chief

By KEVIN TAYLOR

The man running Economic Development Minister Jim Anderton's "jobs machine" says patience is needed to give the fledgling organisation time to bear fruit.

But Industry NZ chief executive Neil Mackay says the 18-month-old organisation will soon start to deliver in earnest on its task of boosting employment and enterprise.

A month ago, the former Budget Rent a Car chief told a parliamentary committee that just three Industry NZ projects would result in 4000 new jobs and $1.5 billion in extra revenue for those businesses.

That would be achieved within three to five years, he said, and in the meantime people would have to be "just a little bit patient".

Mackay says those job projections come not from Industry NZ but from the clients involved in the three projects - Business Growth, Major Investment and BIZenterprise Awards.

Intervention, instead of a hands-off approach to economic development, has been a mantra of the Government.

Anderton, as Minister for Industry and Regional Development as well as Economic Development, has been the political driving force in the creation of the Ministry of Economic Development and of Industry NZ.

Business has not had such a hands-on approach to economic development by any government since the early 1980s.

Until Industry NZ was formed in October 2000, the country had not had a national economic development agency.

Mackay says such agencies are common in many successful economies overseas.

Anderton, writing in the Business Herald last November, said the Alliance's most important achievement in government had been its economic, industry and regional initiatives through Industry NZ.

"Today this is having a profound impact on the lives of New Zealanders."

Mackay, 53, is just as passionate as his minister about his organisation's role.

A year into the job tomorrow, he says he has established an organisation which is now focusing on sectors identified as priorities in the Government innovation framework.

Those sectors are biotechnology, information and communication technology, and creative industries.

Industry NZ has also been involved in the wood processing industry and in niche manufacturing.

"It's aligning its programmes to build those sectors to the stage where they can achieve their potential," Mackay says.

Industry NZ runs programmes including the long-running BIZ assistance and training schemes, business incubators, business growth services, an investment service and a regional partnership scheme.

Hundreds of companies have been involved in Industry NZ's programmes, but Mackay says the agency does not stick its nose in where it is not wanted.

He says companies are becoming more interested in the advice and help Industry NZ has to offer than in the grants it makes.

He points to one specific achievement of an Industry NZ programme - the Waikato Innovation Park - as an example of what can be done.

Industry NZ through its regional partnerships scheme has given a $2 million conditional grant to develop the park, which has been years in gestation.

"The downstream effects of the Waikato tech park is going to lead to 500 jobs, and in 10 years 2500 jobs," says Mackay.

He says it is the first of Industry NZ's major regional projects, and it promises to lift the Waikato region's growth rate by 4 per cent. Four other big regional plans are in the pipeline.

But how well are Industry NZ and its programmes known? Mackay says the recognition rate is now 29 per cent among the population as a whole, but it is much higher among businesses.

Home Business New Zealand has asked members what their biggest election issues are. Only 3 per cent said they wanted more free business support.

Thirty-eight per cent said they would like more tax relief and 21 per cent wanted compliance costs cut.

But the view that the Government should cut compliance costs and regulations, and generally get out of businesses' way, does not cut much ice with Mackay.

He says for the answers we have to look overseas.

"Overseas, economic development agencies are very much part of successful economies, and very much part of addressing the failure rate of companies and giving assistance to high growth companies."

New Zealand has had no such intervention in business development in the past 15 to 20 years.

"I think we have suffered as a result of that," says Mackay. "We are country of SMEs [small and medium enterprises].

"We have to find ways of getting those SMEs to become international businesses and not say 'good luck to you' and just remove your compliance costs."

Mackay runs a government agency with 105 staff and an annual budget of $100 million.

He wants to make it flexible in its delivery of products and more responsive to business needs.

"That's where I would like to take this organisation - that we have much more flexible products and packages that are aligned as we learn what the customer's needs are."

Mackay ran Budget Rent a Car for three years. Before that he was general manager of business development at the Department of Internal Affairs and director of the heritage and identity group.

"I've got a commitment to this organisation and while I'm adding value, I'll stay," he says.

Industry NZ