NZ International Business
Why international business is important for New Zealand
International business is important to a nation because it contributes in practical ways to a wide range of national objectives. For example Statistics New Zealand figures show that two out of three New Zealand jobs are dependent on trade. The New Zealand Ministry of Foreign Affairs and Trade estimates that $4 of every $10 our economy produces is generated by exports - so nearly half our income is generated by what we sell off shore.
International business plays a pivotal role in promoting economic growth in modern economies, and is particularly vital for New Zealand because:
- New Zealand is an efficient producer of (has comparative advantage in) a range of products that are subject to some of the world's highest barriers to trade
- New Zealand is a very small economy where it is difficult to exploit economies of scale
- New Zealand is rich in certain resources, including skilled workers, but poor in other resources
- New Zealanders appreciate their higher income status and want to improve it in terms of goods and services consumption
- New Zealand's ratio of trade to GDP has increased spectacularly in recent years but continues to lag behind other comparable countries.
Exports can finance the importing of goods, services, technology and foreign savings. The export sector also supports the production of important consumer goods and thus creating domestic jobs.
Import-competing firms produce and supply consumer goods and new technology. Import-competing producers provide intermediate goods for local companies to add value to, thus also creating domestic jobs. Imports also help promote competitive markets in New Zealand.