Business matters
Businesses lie at the heart of the economy. It is where people gather and see opportunities to be grasped, risks to be tackled, dreams to be nurtured, tested, and fulfilled.
However, much of the debate about the economy is based on little evidence on what businesses in Aotearoa New Zealand actually do. Business by the numbers aims to provide an understanding of the nature and characteristics of the businesses in our communities.
We may not know where our future is going to take us, but we can be sure that the tens of thousands of businesses in New Zealand, and the many more yet to be born, will be where ideas are formed and turned into goods and services. This will shape our prosperity and wellbeing for all New Zealanders, current and future generations to come.
The Business Operations Survey
Using data from the Business Operations Survey (BOS), an annual three- (sometimes four) part modular survey, which began in 2005, Business by the numbers unlocks rich data for all to use, making links to New Zealand or international literature to provide readers with references to broaden their understanding.
The BOS is something approaching best practice in such surveys internationally. The 9,081 respondents to the 2022 survey represent 48,092 firms. Nearly three quarters of these firms are what is usually classified as ‘small’ firms (i.e. they employ more than six and fewer than twenty staff, smaller firms are usually classified as ‘micro’ enterprises). The largest sector in 2022 is construction followed by accommodation and food services and manufacturing. This differs from the industry structure in 2007, where manufacturing was the largest sector, followed by retail trade.
Key points
Business environment
- 64% of businesses rate their local ICT infrastructure as ‘good’, but only 27% rate their local body planning and regulatory processes as ‘good’.
- The share of firms reporting severe recruitment difficulties trended upwards throughout the 2010s, and jumped dramatically in 2020/21.
- Firms respond to labour shortages in many ways: changing how they recruit or increasing spending on recruitment; increasing hours worked by existing staff; and raising wages.
- 20% of businesses operate in a highly competitive market, 3% of businesses operate in a captive market or one with no effective competition.
Innovation
- One-in-five businesses have introduced new or significantly altered products or services.
- 8% of businesses conduct some kind of research and development, but most of the expenditure on R&D is concentrated in large firms across a narrow group of industries.
International engagement
- The share of firms reporting export sales, FDI and ODI has remained largely unchanged since 2007.
- International engagement is primarily a large firm activity.
- Digital marketing and delivery of goods and services is helping to level the playing field for smaller firms.
- Firms use overseas workers and purchases to get closer to markets, lower production costs, and access skills and technologies that are not available domestically.
Business finance
- 24% of businesses requested new or additional debt finance. 15% of these businesses received only some of the debt finance they requested, or none at all.
- 11% of businesses requested new or additional equity finance. 42% of these businesses received only some of the equity finance they requested, or none at all.
