Agritech ITP launch SpeechEconomic Development
Tēnā koutou, it’s a pleasure to be here in the beautiful Bay of Plenty to talk to you today.
Thank you very much, David, for the introduction, and thanks to Zespri for hosting us. I want to acknowledge my colleague Hon Damien O’Connor, and I’d like to acknowledge all the work that Agritech New Zealand has done to bring us all together.
Finally I want to acknowledge you all for giving up your time to join us today. I know that many of you have also contributed to the development of this work and I thank you for your ongoing commitment to the agritech sector.
ITP aim and sector success examples
Our Government believes we can grow the agritech sector into a stronger economic contributor, increase agritech exports, and advance sustainable primary production in New Zealand.
We want to grow a cluster of large agritech firms that can take on the world, and build on New Zealand’s agricultural strength.
We can build on a platform of excellence.
Companies such as Gallagher, a long-established firm with a proud history of invention going right back to the first electric fence. Start-ups such as Biolumic, and entrepreneurs like Steve Saunders with Robotics Plus.
Simcro which is creating ways to better care for our animals and protect their health, and Tru-Test which is helping farmers collect data and information on their animals and their farms. To name just a few.
Vision for the sector
We’re here today to launch the Industry Transformation Plan for the Agritech sector. And like all good plans, it starts with a vision.
Our collective vision for the future of the agritech sector is a globally competitive agritech ecosystem, which produces ingenious, value-adding companies that provide meaningful jobs, and helps solve New Zealand and the world’s sustainability problems.
This vision emphasises one of the key opportunities identified in the Industry Transformation Plan or ITP. We have a tremendous amount of intelligence, talent and valuable ideas across our agritech businesses and researchers.
Until now this talent has been largely directed inwards to solving New Zealand-specific problems, but we can do more.
We have the ability to solve some of the big problems affecting the primary sector globally, and if we can focus our efforts on those, then there will be significant returns for our companies and for our country.
To help us achieve this vision, the ITP sets out a detailed action plan that addresses the challenges faced by the sector in a holistic way, with specific focus on areas such as:
- getting better at commercialising our IP
- attracting more investment,
- re-orienting towards delivering solutions for global markets
- and ensuring we have the skilled workers needed to develop and use agritech.
To support the fantastic work that’s already been done and help us take those next steps towards our vision, the Government has committed $11.4 million to the implementation of the agritech ITP action plan.
But money alone will not help us achieve our vision.
Success will depend on how well Govt, private sector and the research community work together.
Industry representatives will be a key part of the governance of this work, and Agritech New Zealand are working to develop advisory groups to give input into the delivery of each of the ITP action plan’s workstreams.
Over the last 30 years, New Zealand has experienced productivity growth that is low by international standards. GDP growth has been largely driven by more people working harder and longer rather than improved labour productivity.
In recent decades governments have focused on ensuring strong system settings and efforts to lift aggregate productivity.
As a result New Zealand is a great place to do business and we have been acknowledged globally for having generally strong policy foundations, but our productivity performance remains stubbornly low.
Industry Strategy and ITPs
Recognising that broad system settings alone are not enough to improve our productivity, we have developed a new Industry Strategy.
The goal of the strategy is to address our productivity problem by actively focusing our efforts on specific sectors where we have a comparative advantage and can grow innovative industries that compete on a global stage, and in sectors where we can shift from volume to value.
A core part of the Industry Strategy is the development and implementation of Industry Transformation Plans in partnership with industry. The process brings together all relevant parties to agree a long-term vision for the industry and identify the actions that can be taken by industry, government and others to realise this vision.
Impacts of COVID-19
Since we announced our Industry Strategy, the context has changed quite significantly. In addition to health and social impacts, COVID-19 has sent massive shockwaves through global economies and our own. The world is getting used to life with lockdowns, social distancing, and border controls And while now, thanks to the Team of 5 Million we have one of the freest economies in the world, our borders will remain closed for some time, and the global economy has taken a massive hit.Agritech and the primary sector have proven relatively resilient, but I must acknowledge the challenging times that you are all going through and the impacts on you and your businesses. How well New Zealand gets through this crisis, depends in large part on how agile our businesses are in responding to the new environment.
Refreshed Industry Strategy
COVID-19 has forced us to rethink our industry strategy. COVID-19 has impacted different sectors of our economy in different ways, but reinforces our need to improve productivity and support recovery with the tailored approach outlined in our Industry Strategy.
With this in mind, Cabinet agreed to a refreshed approach to Industry Strategy focussed on two core outcomes.
The first is taking a collaborative and partnership based approach to drive change in our industries that face major transition challenges, whether it is tourism and export education post-Covid, decarbonisation in our energy sector, or overcoming entrenched productivity and workforce challenges in construction.
The second, and the focus for us today, is supporting industries where New Zealand has a competitive advantage, to build clusters of highly productive firms that can take on global markets.
In this area we’ve prioritised three broad sectors: advanced manufacturing, digital technologies, and food and fibre. The food and fibre sector includes the agritech ITP we’re launching today, as well as work on the primary sector, food and beverage manufacturing, and forestry and wood processing.
Agritech ITP – example of the ITP approach and principles
Our partnership with Agritech New Zealand and the broader sector in the development of this agritech ITP is a good example of this approach.
Through the past 18 months, the agritech industry has carefully guided the direction of this work as it evolved into the plan we have today.
Hundreds of people have participated at workshops and provided ideas and feedback. And I’d like to thank you all for your contributions.
In particular I’d like to acknowledge Agritech New Zealand and the commitment of Peter and Jacqui Wren-Hilton, who have been an integral part of bringing the industry together around this work and getting us to where we are today.
And thanks to all your efforts, this plan does a great job of telling the story of why New Zealand agritech is such an exciting sector, highlighting the breadth of the industry and the level of ingenuity amongst New Zealand firms and researchers.
It sets out the context for New Zealand agritech and tells us where we are today. It details the history of the sector, its importance to New Zealand and its relative position in the world. It outlines the challenges that the sector faces and its advantages and opportunities.
Conclusion and Next steps
Industry policy, often caricatured as picking winners, has been out of fashion in New Zealand since the 1980s. In its place was the idea that the Government simply needed to set good policy foundations and then stand back to watch the market work its magic.
In the decades that followed, the success of the world’s top performing smaller advanced economies – Israel, Singapore, Ireland, Denmark – in raising productivity, growing their competitive advantage, and building world-leading firms, tells us we need to rethink the orthodoxy.
Those countries have been much more hands on, backing winners, and working hand in glove with the private sector to support competitive advantage. The results speak for themselves.
Industry policy is back. The success of our work will depend on the quality of engagement, and whether Government can be smart, agile, and thoughtful; using all the levers available to create the conditions for your industry to realise its potential.
We see today’s launch of the agritech ITP as a very good first step on what we hope will be a long and productive journey together with the agritech sector.
Our task now is to implement this action plan and make our collective vision a reality.
I hope that you will all continue to be a part of that journey.