I wrote a few days ago about Humanware closing down its New Zealand operations. Interesting to read this morning then that three Christchurch manufacturers look set to approach Humanware to seek a continuation of some manufacturing in this country.

Does anyone else find this somewhat amusing? For years we’ve been told that when business move manufacturing offshore (think Humanware, Macpac, Icebreaker, Fairydown, F&P etc etc etc), New Zealand would be the ultimate winner through the continuation of knowledge work in this country. According to the politicians the progression goes something like this;

  1. Business starts in New Zealand. Builds both R&D and manufacturing base here
  2. Business scales such that offshore manufacturing is required – guarantees given that IP and profits are retained here

In the event that the business is sold to offshore interests, the politicians methodology is changed slightly to go like this;

  1. Business starts in New Zealand. Builds both R&D and manufacturing base here
  2. Business scales such that offshore manufacturing is required – guarantees given that IP and profits are retained here
  3. Business is sold offshore, but funds introduced are re-spent in this country and the purchaser commits to keeping R&D (read knowledge jobs) here

Instead (and in this instance) it seems we’ve lost the IP offshore, the high value R&D has gone off shore and we’ve been forced to go to the new owners, cap-in-hand to try and rescue some of the low value manufacturing work for New Zealand.

Has it really come to this?

Ben Kepes

Ben Kepes is a technology evangelist, an investor, a commentator and a business adviser. Ben covers the convergence of technology, mobile, ubiquity and agility, all enabled by the Cloud. His areas of interest extend to enterprise software, software integration, financial/accounting software, platforms and infrastructure as well as articulating technology simply for everyday users.

2 Comments
  • Yep – I reckon this is a terrible thing and calls into question Government policy

  • What is the incentive to stay here? The overseas model requires companies to locate overseas and take the IP with them. There is greater value to be gained for shareholders in overseas markets as well as the investment available there as opposed to here.

    The business environment here needs some radical surgery. The R+D tax credit is a start but, like our population loss to Australia and beyond, our good companies will keep heading offshore because there is no good reason to stay.

    It’s hard to find any reasons to support Labour in the next election. Their lack of vision around enterprise is disappointing and it only the wave of global growth that has disguised this.

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