New Zealand needs $160 billion to $200 billion of business investment to meet the government's goals for boosting exports and research and development spending, requiring a better strategy to lure overseas funds and entrepreneurs, says Economic Development Minister Steven Joyce.
Joyce this week got cabinet approval to develop what he calls "the New Zealand Investment Attraction Strategy", and has established a taskforce made up of officials from NZ Trade & Enterprise, the Ministry of Business, Innovation and Employment, the Ministry of Foreign Affairs and Trade, Callaghan Innovation and the Treasury to lead the work. He also plans "targeted consultation with the private sector" to be run through his office.
The government's targets are to lift exports to 40 percent of gross domestic product and lift R&D spending to 1 percent of GDP.
The paper he took to cabinet breaks the plan down into three themes. The first is to attract high-quality foreign direct investment in areas where New Zealand is competitive - in tradeable and "innovation enhancing" sectors, which are most likely to benefit the whole economy. "We propose the target for theme 1 to be to facilitate investments with a potential direct economic impact of $5 billion over three years," the paper says.
The second theme is to attract overseas investment in R&D in New Zealand, especially to encourage multinational companies to locate R&D facilities here. The target will be to attract 10 new offshore companies to relocate R&D activity to New Zealand over the next five years.
The third theme is to lift New Zealand's pool of "smart capital" by convincing individual investors and entrepreneurs to live in the country. The target is to double the amount of actual and committed capital migrant investors and entrepreneurs have brought to New Zealand to $7 billion within three years. To achieve this, the paper suggests, will require "an end-to-end approach", from the design of visa categories and approval processes, through to programmes to attract the right migrants.
Joyce proposes a review of migrant visa categories "to enhance their attractiveness to high-quality applicants, tailored promotional events in key offshore markets to secure investors and entrepreneurs to New Zealand, and the capacity to provide a responsive, personalised service for high-value applicants to facilitate further investment."
The paper says R&D spending should increase employment opportunities for Kiwis in the fields of science, technology, engineering and mathematics. Sectors to be targeted would be those already identified by NZTE and Callaghan - primary industries, premium food and beverage, specialised manufacturing, infrastructure, oil, gas and mining, ICT/digital and shared services.
The strategy would leverage the existing offshore networks of MFAT, NZTE, Immigration NZ and Kea New Zealand to generate investment leads, the paper says.
"Achieving the government’s goal of building a strong competitive economy with increasing numbers of higher-paid jobs requires ongoing significant increases in business investment,” Joyce said.