 Think Outside the Fear
(New Zealand) - February 2010
By Geoff Merz
FINZ board member and director of Merz & Associates
I read and hear a lot of stories about the industry. But, in 28 years, nothing much has really changed. We’re simply going through another shift in how we do business. Some companies may have fallen by the wayside, but others are adapting and thriving. Looking at the year ahead, what fears does the industry really have?
There’s a lot of chatter about a second recessionary dip in 2010, but I’m not sure where it’s coming from. If some economist is saying it, then my first thought would be ‘yeah, right’. How many times do we have to listen to these forecasts before they get their facts correct?
Maybe the banks are propounding another downturn? But, what would they know about how business really works? It’s easy when all you have to do is ‘clip the ticket’ regardless of what’s going on.
I think it was Robert Muldoon who said that economic growth wasn’t about moving money around – “show me the production, that’s where growth comes from”. Unfortunately, we’ve moved far away from the basics and are now dictated to by foreign economies as part of a ‘we know best’ policy. And, somehow we’ve stopped thinking outside the square, which is what gave us that edge.
I mean really, why would we think that the voice of four million people at the bottom of the world has the power to influence other economies or, for that matter, our own elected Government? In these difficult times there needs to be a lot more cooperation in the industry.
Supporting New Zealand suppliers would be a good start. At the very least, the dollar you spend locally isn’t going to be remitted offshore to benefit other economies. The more reliant the industry becomes on offshore production, the more vulnerable it becomes. Because, sometime soon the dictate will be what they want to supply rather than what you want to produce.
The freight forwarding business is already in this position. The sea freight rate from Asia has more than doubled in five months. And, we’re at the mercy of overseas shipping lines that have reduced the weekly service from Asia to New Zealand to one direct vessel, which rarely arrives on time. Whatever crisis that occurs offshore will reach us sooner or later.
In 2009, a number of ragtraders fell off the rails, which is really no different from years gone by. Remember Warnock’s and Dress for Less? The industry has always seen dynamic change at intervals – great lurches as opposed to gradual shifts.
As a non-ragtrader looking in from the outside, passion remains strong in the industry among those who have survived. New Zealand has a lot of really good world-class operators right across the apparel and textile supply-chain. And, there is still a huge amount of potential out there. Free trade can work to our advantage – it won’t matter where product is made and all countries will have the same access – but, we need to work on brand New Zealand.
Worrying about things that you have no real control over only diverts energy away from what can be achieved. The industry needs to think positive, think outside the square, cooperate and work smarter. Look forward to the next big challenge, because that’s far more productive than fearing what might be.
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