No.8 Wire

Over the last few weeks we have seen various reports outlining many predictions about the performance of the economy over the next few years. There is no doubt that COVID-19 has bought significant disruption to almost every industry and the global economy, the effects of which we are only beginning to feel as we move out of lockdown. However, many of these seem focused on worst case scenarios.

We are in uncharted territory and we are seeing many businesses being severely affected. However, many of these were already struggling with changes in technology, new competition and changing consumer behavior. The record speed of change caused by COVID-19 has sadly accelerated the demise of many of these businesses. New Zealand’s historically poor productivity has been blamed on the lack of investment in technology, capital investment and the reliance on traditional business models that have not evolved.

However, what is missing from these predictions is the power of the entrepreneurial spirit of New Zealanders and other free market economies around the globe to innovate. As New Zealanders, we have faced many adversities over recent times and each time we have grown stronger, we have collaborated and found opportunities none thought possible. I believe that the New Zealand economy will recover much quicker than many are predicting.

The ability for us as individuals to find opportunities, to pivot and develop new business models is unlimited. In this modern age, we have responsive governments providing financial support and infrastructural stimulus. We also have a banking and savings industry which is robust and prepared to lend to finance these new opportunities at historically low interest rates. The size of our companies are small, but this gives us huge flexibility and enables us to be nimble to navigate uncertainty. As a collective we have hundreds of thousands of business owners, entrepreneurial individuals and employees looking for new careers and businesses opportunities.

Economic modeling should take into account the resilient and ambitious spirit of New Zealanders to find and explore opportunities. Yes, there will be significant challenges faced by many, but do not underestimate the speed of our recovery. The No.8 wire reflects our ingenuity as a nation to solve problems with at times nothing but the bare essentials, a piece of number 8 wire.