Small Business Summit Recommendations

Independent Business Foundation
Small Business Summit
25 July 2008
Small Business – The Key to Tomorrow

Key Priorities and Recommendations

1. Productivity of SMEs1
a. Set target of (say) 2% increase in productivity per year for SMEs in New Zealand -
as SMEs are the ‘backbone’ of the New Zealand economy they have a valuable role
to play in New Zealand; achieving this productivity target will improve the
country’s overall performance and contribute to increasing our OECD rankings.

2. Education & Training
a. Introduce business and entrepreneurship in primary, secondary and tertiary
curriculum as “core” subjects – to raise awareness of the value created by small and
entrepreneurial businesses, how they operate, grow etc.
b. Improve the IT skills and computer literacy in primary and secondary schools – to
ensure all students entering the workforce already have generic skills with the latest
technology and software.
c. Improve skills training by increasing the performance of ITOs – “approximately
50% are working well” so more work is needed to increase the quality of these
programmes. Consider providing mentors to assist with training/coordination of
apprentices as in Marine Industry.
d. Increase management capability in SMEs including how to create a differentiated
niche position in the market – as this will assist with improving the productivity and
performance of these firms.

3. Infrastructure for small business success
a. Analyse the impacts (including opportunity costs) of new regulations/legislation on
SMEs before they are proposed/introduced or changed – to reduce compliance costs
and enable SMEs to focus on doing business.
b. Streamline, simplify and reduce the reporting requirements for SMEs – e.g. single
portal to deal with all government requirements – to improve the efficiency and
effectiveness of these processes, reduce compliance costs and enable SMEs to focus
on doing business.
1 SMEs = Small and Medium Enterprises
c. Remove Employment law/Industrial Relations barriers for small business
operations/effectiveness
d. IT/Broadband
e. Reduce taxation rates - to provide more incentives for people to work, save and
invest, and to assist with recruitment of skilled people from other countries or
reduce flow of skilled people to Australia and other countries.
f. IRD to provide regular reports on the nature and extent of R&D tax credits utilised
by SMEs – as this will help SME owner-managers and their advisors to understand
the new scheme, as well as showing the impact of this scheme for the SME sector.
Consider reducing the threshold of R&D expenditure for SMEs and also increasing
the scope of applicable R&D for SMEs.

4. Growth of SMEs
a. Central government to provide resources for EDAs to drive localised development
of integrated clusters of firms operating within the same specialised sector e.g. super
yachts in Auckland, equine cluster in Matamata – as clusters enable small firms to
specialise and collaborate to compete successfully. EU and OECD are investing in
clusters which link firms, people and knowledge to make regions more innovative
and competitive.
b. Build whole-of-government alignment around the traded clusters – MED + NZTE +
FRST + DoL + TEC + TPK + DIA + ITOs + EDAs ….etc with single “one stop
shop” at the cluster location – as this approach will enable effective communication
and appropriate support for the cluster to be determined and provided as needed
(i.e. customised, localised, timely resourcing).
c. Focus support on high growth potential firms (rather than large firms or ambulance
cases) including validation of ideas, markets and business models, IP strategies,
capital raising, differentiation, niche marketing, networking, governance etc – as not
all small firms have the capacity or commitment for significant growth; it is
important to encourage and facilitate growth where the SME owner-managerentrepreneur
understands the risks, is prepared to commit, and the business model
will be profitable.

5. Entrepreneurial Culture in New Zealand
a. Provide resources to communicate and celebrate success of small and
entrepreneurial businesses - similar to the approaches adopted by MoRST to raise
awareness of science in New Zealand i.e. Entrepreneurial Business Learning Hub;
Entrepreneurial Business Media Centre; SME Awards.
b. Provide resources to profile SME owner-managers and entrepreneurs experiences as
leaders and managers in New Zealand – to raise awareness of the challenges and
opportunities of leadership and management in SMEs (including lessons from doing
the right things and lessons from failures).

6. Sustainability for Small Businesses
a. Provide resources to investigate the survival rates of SMEs (still operating after say
5 years) in specific industries/sectors - as it is important to understand the ‘churn’
factor i.e. why are high proportions of our small firms “not sustainable”?
b. Provide advice and support to assist SMEs to develop systematic approaches to
environmental management, and to utilise sustainable business practices – it is very
important for SMEs to keep up with the expectations of their customers, markets and
communities by adopting these ‘responsible’ business practices.

7. Government and Advisory Sector
a. Review economic policy and programmes for SMEs: (1) to ensure SME issues are
explicitly considered and addressed within existing government policies e.g.
Economic Transformation Agenda; and (2) to develop specific SME policies
focussed on SME processes and programmes – as government’s role is to create an
environment in which SMEs can succeed.
b. Rationalise numbers of government (central and local) agencies and programmes –
to reduce duplication and wastage across administrations.
c. Provide a vetted advisory selection service – to ensure that advisors and mentors to
SMEs have the appropriate qualifications, training and experience to provide high
quality advice, guidance etc on SME strategy, structure, staffing, systems,
processes, as well as relevant industry knowledge/expertise.

8. Research on SMEs
a. Provide funding for case studies of successful NZ entrepreneurial firms, clusters and
regions – as they are needed to profile the key players and the underpinning success
factors and to share the lessons with others.
b. Provide funding for longitudinal research on SMEs in NZ – to identify the patterns
of growth, adaptability, resilience etc. in New Zealand firms.
c. Provide funding to monitor the effectiveness of SME policies and programmes
implemented at regional, national and international levels – to provide systematic,
independent research on the value created by these initiatives.

Delwyn Clark
Trustee
Independent Business Foundation
26 July 2008