New Zealand’s "Export Premortem” … what’s in it?

Kia ora ano o te tau hou! It’s nice to be back and excited about the year ahead albeit a little timorous given the ramifications of C-19.

It’s nice to have had time to think over the break and while our industries continued with some and their seasons almost at their peak, I thought about what needs to go right for New Zealand exporters for this year, our ‘premortem’ per se?

It feels like a lot needs to be considered this year. It’s been an exceptional period that asks different questions of us though.

It begins, at least for me, with what is in our control and what is not? Then it moves to ‘who’ does what? when do we do it? why this or in this order? and how do we do it? Is the old or known way now appropriate? or do we need to consider new skills or experience gaps that need to be addressed?

I reflected on it and inherently for me approach it as I would with a ‘dynamic risk’ assessment of ‘floor-to-board’ and then ‘internal-to-external’.

Floor is the observation that C-19 accelerated ‘back-end’ automation and data exchange in production and manufacturing to enhance competitiveness while enhancing the integrity of our food systems. It is the adoption of artificial intelligence and machine learning to drive performance and advantage, such as pricing models. It includes assurance of our food systems to maintain confidence and access. Clarification of the value our provenance stories bring and the two-way surety of supply, either to the markets we serve or our own supply needs such as packaging, machinery or ingredients.

Board is from a series of challenging but interesting conversations nationally and internationally last year. C-19 is expected to bring a new genre of entrepreneurship and innovation leading to the question if this is the opportunity to embrace the notion of virtual boards. Is it an effective way to deepen experience that will be needed to address challenges and be competitive? It has its own challenges but the ability for executives to draw on a board with different experience that perhaps we do not have in New Zealand could be telling, perhaps a differentiator.

Internal begins with R&D. Is it the traditional definition of research being an initial phase of new product or services development or it is research into clarifying target markets, consumers or partnerships post C-19? Is it the same, or not? Do existing market partners have the resources and capability to deal with the ‘just-in-time plus’ model analysts refer to given the experience of bottle necked supply-chains last year? Is there a need to define better criteria for partner selection and management with metrics that drives performance, addresses risk, and expands to include customer experience and trust in our service models?

I had in there too strategies for ‘forex’ to negate risks or losses associated with bottle necked supply-chains, is there benefit in increased elasticity for the cost of a few basis points? ‘Pricing’ models changing from our traditional cost-plus model to dynamic or value-based, what does this yield? ‘Op-model’ changes given the level of investment in back-end automation and data exchange, it is impossible for these not to be considered. ‘Labour’ being the other, not only at the ‘floor’ level but possibly ‘board’ too?

External is led by ‘geopolitics’ in my opinion as it effects ‘access’ to valuable markets. It’s out of industries control to an extent, so, what is our role? Is it ensuring Government is well-informed of the nuances and interdependencies that are not immediately apparent in a standard analysis without deep industry knowledge?

Is it being more hand’s on with bilateral agreements and help determine priorities? RCEP for example has had a lot of fanfare and without doubt a boost in confidence in bilateral agreements and simplification but indications are that it will deliver modest long-term benefits for New Zealand with an est. 0.3% increase to New Zealand’s GDP by 2030. In the event India decides to engage in dialogue again then it gets interesting to have access to such a tremendous market as analysts have RCEP valued at $25.8 trillion or 29% of global trade, but with India included it would be $28.7 trillion or 31% with an increase of $2.3 trillion. So, until then where should our attention be, and which has the better growth for New Zealand?

Lastly, and by no means least is continued investment in our sustainable value initiatives, strategies and goals set for 2030/2050.

It is a fascinating time, it drives us to consider changes to things that aren’t instinctive such as consolidation or cohabitation in production to address over capacity, co-opetiton go-to-market models to either scale, reduce risk to enhance reach and service models.

An ‘outlier’ for me is China’s Central Bank’s digital currency (CBDC) or digital version of the yuan. It differs to a cryptocurrency as it is a legal tender, centralised and not anonymous. It’s been trialled for five years now and relatively unknown. It has the potential to bring or make visible it’s ‘unbanked’ population into the economy so really interested to know what the action of creating a digital currency or tender will cause in terms of a reaction to potential growth opportunities or redefinition of the market, its segments, or consumers?

It’s exciting and reminded me of the pent-up billions of dollars held in ‘red packets’ last year, which are now ‘digital red-packets’, and a great example of innovation meeting tradition. Last year, Chinese consumers were unable to celebrate or spend as they normally would during their new year because of C-19.

It also begs the question of a subtle New Zealand currency strategy, and how that may affect export receipts?

So, what do we need to get right this year to address any challenges we can already see, while positioning ourselves to cope with anything new or growth opportunities?

Ngā mihi, nā,

Andrew Watene

Ngāi Tūhoe

Food, Agribusiness and Exports Lead at KPMG New Zealand

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