Advanced Manufacturing

Minister for Economic and Regional Development, Hon Stuart Nash

Nau mai haere mai tena koutou, tena koutou tena koutou tena koutou katoa.

Thanks Renata for the mihi and the welcome. Thanks, Paul, for all the work you've put in.

As Minister for Economic and Regional Development, it is actually a pleasure to be here as we launch our draft advanced manufacturing industry transformation plan for public consultation. I'd like to thank the organisers of EMEX - New Zealand's largest engineering and manufacturing trade show for hosting this launch event today. And I'm really keen after this to to head out and have a look around some of the stalls so not too much of a grilling. Up to you guys.

Advanced manufacturing was selected for an industry transformation plan due to its scale and its potential to significantly increase productivity, higher wage jobs and transition into a globally competitive low emission sector. As the draft advanced manufacturing industry transformation plan describes, I might just call it the draft plan going forward.

Advanced manufacturing is vitally important for New Zealand. It is broad and diverse, and a major contributor to our economy, jobs, and the community. In fact, advanced manufacturing makes up 10% of the economy at $24.1 billion of GDP. The sector employs 10.7% of the workforce at 248,000 people.

It's the second largest employer of Maori and the largest employer of Pacifica. It's also our largest contributor to value added exports at nearly $45 billion and critical for innovation in New Zealand accounting for 24% of business expenditure on R&D, and that's about $650 million, probably enough for the stats.

But it's important for both our regions in our cities and advanced manufacturing makes up for a couple more states 45% of regional employment out of the main city centres.

And it's a pleasure to launch the ITP consultation documennt in Auckland we just over a third of all advanced manufacturing jobs are based and where the sector accounts for 9.1% of the economy.

Now we live in precarious times, globally precarious times. There's global inflation. And we're well aware of that. The stock market volatility, distressed global supply chains, there's war. There's major geopolitical positioning in a way that we haven't seen for at least a generation. There's food security issues, and we're still in the shadow of a global pandemic. But out of this exists, opportunity, challenges to be taken head on and chances to influence and grow our industry and optimised our global brand. And in light of this, I'd like to take a few minutes just to to outline the government's broad economic strategy and industry policy.

Many countries have introduced strategic modern industry policies to grow and transform key sectors of their economy and this includes transformation plans for their advanced manufacturing sectors. Australia is one, Singapore, UK, United States, so we can't afford for New Zealand to be left behind. In 2019, as Paul outlined, the government released a refocused approach to industry policy based on a deliberate and purposeful approach to grow in transition key sectors from the economy with potential to develop significant productivity gains, increased wages, sustainable outcomes, and improve wellbeing for all kiwis.

The plans are the key mechanism for delivering modern industry strategy. They set the long term vision for the sector and propose near term action plans to accelerate transformation. Again, this Paul outline partnership is a key and driving principle of industry transformation plans and I think representatives from business, unions and workers, government, Maori, wider stakeholders that have contributed to this draft. This includes members of steering, working, and partnership groups. In particular, I'd like to extend my appreciation to the tripartite steering group co-chairs Brett O'Riley  zooming in chief executive of EMA Association, Rachel Macintosh vice president of New Zealand Council of Trade Unions and national secretary of E tū . Thank you very much, Rachel, And Paul Stocks is, as he mentioned, Deputy Secretary of MBIE.

As the document describes there were two trends that provide an opportunity to accelerate growth and transformation of the sector over the next 20 years.

The first advanced manufacturing is undergoing a fundamental shift through the application of advanced technologies and processes. And at my table at breakfast this morning we were talking about how we are printing we're not we but that you can now print houses. Believe it or not. I mean goodness me.

Second, more focus has been placed on economic activity that is sustainable, circular and low emissions. And we should never underestimate the power of the global consumer to make choices aligned to their values. New Zealand's advanced manufacturing sector can adapt and thrive in this changing landscape. Seizing opportunities will however require action now. This is where the industry transformation plan is so important. It sets out 21 actions to accelerate growth and transformation. However, this is the draft plan. And whilst we have had some amazing people from right across a number of sectors working on this, it is going out to consultation. Because we want to know, we want to hear voices to see if we've got it right. Or there are things that we've missed or areas that we could, that we could build on. There are a range of opportunities for engagement over the next six weeks, including in person workshops and webinars across the country, hosted by industry transformation partners. Further informations on the website that's actually advanced.manufacturing.nz. Pretty simple. So please join in the discussion.

I'm confident about the future of New Zealand's advanced manufacturing sector, but I also recognise there is significant work to do if we are to optimise our potential. It is for this reason that the government set aside $30 million in the last budget to enable the first stages of implementation of initiatives and actions that will be detailed in the final advanced manufacturing industry transformation plan. This important step provides the funding necessary to ensure momentum as initiatives are finalised through consultation and we collectively work together to achieve and business transformation goals.

It's also why Budget 2022 is setting aside $100 million over the coming years for the Business Growth Fund, which will obviously be accessible for those in the advanced manufacturing sector. The fund will be a crown investment as a minority shareholder along private banks. It is intended to fill a gap in capital markets for SMEs that require growth capital for investments such as advanced technologies and proccesses to lift productivity and wages. A high performing advanced manufacturing sector will accelerate our transition to a more productive, sustainable, inclusive and resilient future.

I congratulate the sector for progress in creating this draft and I look forward to the next stage of consultation to inform the final advanced manufacturing transformation plan. Kia ora. kia kaha. Onwards and upwards. Thank you

Co-chair Paul Stocks

Kia ora, thank you very much, Minister.

I think that as you said that this is one of the industry transformation plans. It's one of the suite of plans that cover the entire economy. But this is one I think that's at the forefront of the way that's taking place.

It's now my great pleasure to welcome Rachel Mackintosh to the stage. Not just yet. I gotta pull you up first. One of the key planks of this plan was it was one of the first industry transformation plans that was genuinely co-chaired by industry and by workers with support from government. And what we heard consistently through the dialogue was it is the makers who make manufacturing special. It is the people who work in manufacturing, and Rachel and the other members of the steering group made that come alive in a very, very real way. And you will see that of the six priorities in the ITP.

First amongst them is a high skilled maker workforce and how do we make it a rewarding and trained environment? And also how do we make sure it's circular and sustainable and those are the areas that Rachel particularly champion amongst others in the ITP so So Rachel, thank you for the leadership. Please now you can come up.

Co-Chair Rachel Mackintosh

Tēnā koutou, tēnā koutou, tēnā koutou katoa.

Ko Rachel Mackintosh aho.

Nō reira. Tēnā koutou, tēnā koutou katoa.

Kia ora Renata. Motu mihi mahana.

I'd like to acknowledge Minister Nash, I'd like to acknowledge the government's commitment to this process, including budget commitment. I like to acknowledge my co-chairs. Brett - that's not what it looks like, and, Paul Stocks. So it's been great. It's been great having that working relationship over the past year.

I'd like to acknowledge the rest of the steering group, and the working groups that have been working on this and the fantastic team at MBIE who has done a lot of grunt work and really taken on board all the inputs. I will particularly name the three workers on the Steering Group. So Ces Herring from First Union works in Kaitaia. Lavina Ricard from E tū. Works in Havelock in the fish industry, and Ed Ikani, who is another another E tū delegate just standing up over there. Very handsome. And it has been great to have working people from the factory floor as part of this process.

First of all, I just want to talk about the vision for this plan.

It tells us where we're going, and actually what we want to transform to. It's short, so I'll read it out.

We want a thriving Aotearoa New Zealand advanced manufacturing sector of world class creators, innovators, and makers delivering quality products, sustainable solutions, and intergenerational well being.

So this vision, first of all, it's really grounded. This place here it mentions Aotearoa New Zealand. So this is where we are we're on this land. And what can we do in Aotearoa New Zealand that nobody else could do is part of it.

It's got time. It talks about intergenerational wellbeing. So it's not just for now it really is a vision looking beyond the horizon.

It's got people. It's got that idea of well being that's about people, creators, innovators and makers, so everybody involved in the process.

And it's got action. So people doing things to improve the industry to transform the industry and really improve our society.

And that's what grounds this plan. And that's, that's the beacon. That's what we're heading towards. And that's what it should be measured against. And that's what the outcomes should be measured against is this vision being realised.

And the vision really takes, it comes from taking a breath and looking up and imagining what is beyond our immediate situation, and thinking about transformation, not just transactional activity. It comes from hearing all the voices. And Minister Nash and Paul have already mentioned this. There have been many, many voices in this work and we've had a cooperative approach to the vision. And that's the real strength of the work so far, and it will be essential to the success of the transformation to have workers, employers and government engaged in and contributing to have Māori business, Māori workers and Iwi and Hapu involved as vital to creating and sustaining a transformation. It will take investment. And it will take ongoing commitment by all of us.

I do want to talk about what's in it for the workers. You know, that's what we're here for. That's the interest that we represent. And it really is an opportunity to advance the interests of working people, and also to make space for their contributions.

I want to mention, one of the statements that came from actually was from Edwin I might as well name him on our steering group is that we have a challenge to and this is his words, unleash the creative potential of the workers. So not to just think of workers as labor units, but actually human beings who every single one of us is working people have creativity. So we have an approach to skills in this draft plan that centres the people doing the work. That includes what's necessary for productive business outcomes, and for satisfying decent work.

It allows for the development of people, the development of culture, creating a working environment that is conducive that aim of unleashing the creative potential of workers. And the plan, when it works well, we'll have decent work, decent wages and decent conditions for working people.

And so the actions under skills are to have our workforce skills map that will be developed in collaboration with Hanga-Aro-Rau Manufacturing, Engineering and Logistics Workforce Development Council. Renata is co-chair. Another steering group member, Troy Coyle, who is down with COVID, as the other co-chair of that workforce development council, and I also sit on that council. The cooperation between the skill sector of New Zealand in this plan is going to be vital. And so yeah, so we do that map.

We have individual development plans for people. And we develop digital and foundational skills first, and that then we attract a larger and more diverse workforce, by improving the culture and values through a development program, so that we can attract and retain a more diverse workforce than we have at the moment.

I just want to before I finish talk about the sustainable circular zero emission sector was great to hear Francesca this morning at breakfast. And to understand that there's a real government commitment to the circular economy.

Just to go back to the vision. It's a vision that's placed in Aotearoa New Zealand and as a vision of intergenerational well being, and the circular economy is going to be vital here. And so the actions there are to map the emissions and waste that we've got at the moment. To embed Circular Economy principles in the advanced manufacturing sector, and to develop zero emissions initiatives.

So skills and sustainability are just two of the six areas and my other co-chairs are going to cover the other, the other four.

So I just want to finish by reiterating that the strength of this plan is the cooperative way that it has been developed. We need to continue to have the input of government, business and workers, Maori to ensure that the vision is realised.

Kia ora tātou.

Co-Chair Paul Stocks

Thanks very much, Rachel. Once again, just thanks so much for both your leadership and your visioning on the ITP. As you would have seen, Rachel has a very strong vision for the opportunities and the possibilities for Aotearoa New Zealand.

It's now my pleasure to welcome I hope, technology willing, Brett O'Reilly to the screen. Brett. Are you there? Oh, yeah, gidday. I hope you are feeling all right. Because Brett as the time in 2022, is isolating at home with COVID. And I know he really, really wants to be here.

Brett's the chief executive of the Employers and Manufacturers Association. There's a clue in the name manufacturers. He has been, again, a passionate advocate for the sector. And for Tāmaki Makaurau - previously when he was chief executive of ATEED.

And I've known Brett for longer than I care to remember but every time I've known him over the years, he's been really pushing for the role of industry in New Zealand and what it can both contribute to the country as a whole. So it's really good to see you here.

Brett's particular focus in the ITP was on two things. Firstly, how do we tell our stories as a sector that really makes the world and around New Zealander has recognised the importance and the opportunity in the sector.

And secondly, and this is an issue that I know is dear to your heart, how do we encourage an increase in much needed investment and of the sectors that we are truly advanced manufacturing.

So Brett, welcome hope you feeling good?

Co-Chair Brett O'Reilly

Kia ora Paul.

Tēnā koutou katoa.

Ko Brett O'Reilly toku ingoa.

Excuse my, my voice.

It's actually ironic that I'm not with you today in person because of COVID. Because in a way, this industry transformation plan really came about because of COVID. Many of you in the audience will recall that COVID bought into sharp relief, just how important the manufacturing sector was. And 2020 as we grappled with lock downs and had to keep businesses and their workers operating safely. I was involved at that time and sharing the response to those challenges to the manufacturing sector. And through that process, we began talking with government about the opportunity for a manufacturing recovery, and where that might lead. That morphed into the advanced manufacturing industry transformation plan, as you've heard this morning. And despite an election and in between over the last 18 months, the team have worked really, really hard through this Mahi to deliver this draft plan that we present you today.

Advanced manufacturing, because it is about the future, it is about the direction that we're heading in and having the ITP structure around it, I think gives us a great opportunity to move forward with this.

We've had the opportunity over the last 18 months to reflect just on how significant manufacturing is in the New Zealand economy. And I will remember doing some of the media interviews in 2020. And having quite experienced commentators asking me about how significant that the manufacturing sector was to New Zealand so I think that the way we have been able to bring a lot of the facts that the minister talked about, and his his speech, and other information together and this ITP will be a surprise for for many New Zealanders just how significant advanced manufacturing already is in our economy.

It is an unambiguous pathway to higher wages through a higher skilled manufacturing sector.

It's also an unambiguous path to greater prosperity. While as Rachel said remaining consistent with our aspirations to be a low carbon, sustainable economy.

For me, it ticks the boxes for New Zealand for what sort of industry we want to have in the future, and builds on decades of success by New Zealand manufacturers and a globally competitive environment. And it's been great to see on the Prime Minister's recent trade missions, a number of advanced manufacturers featured on those missions. And in their work highlighted, so it's actually one of the success stories of our economy and industry transformation plan, and the consultation that goes with it is the opportunity to further that.

We have lots of proof points that give us confidence in the future of the sector. We have a number of manufacturing firms that have already embraced elements of industry four and are advanced and advancing alongside the makers and workforce.

I've seen that firsthand through the work that we do with our EMA members and the engagement that we've had with businesses and partnership with Beca, Callaghan Innovation and other partners in delivering the industry for program. Manufacturers today represent one of New Zealand's most diverse workforces, both in age and ethnicity, and they are embracing the opportunity to acquire more skills.

Similarly, we're seeing new opportunities for manufacturers to work together and cluster to take advantage of economies of scale and modern practices, which includes contract manufacturing.

And the industry transformation plan highlights some of these opportunities, like the Ngawha Innovation Park in Northland and its focus on circular economy.

And we know that there are similar opportunities being developed in Auckland southern corridor, and the Comfort Groups development at Ohinewai.

There are also manufacturing clusters elsewhere in the Waikato, including Greenfield developments, like Hautapu.

There are also clusters in areas like Tauranga, Hawke's Bay and Christchurch.

So we can see that there are new models that we can look at that will allow the sector continue to expand.

One of the keys to maintaining this momentum and realising the true potential of the advanced manufacturing sector will be to create an environment that encourages the investment in new plant, new technology and new schools. These are areas that the EMA and other industry bodies represented today have long advocated for and they are covered in the report's recommendations. They will continue to be areas where we work hard to get government policy aligned with our aspirations. And the ministers covered some of the initiatives that the government announced in the budget.

We believe we have an opportunity to bring together many of the themes we have discussed - skills, sustainability, carbon neutrality and competitiveness, and invest in that future. That means investing in young people, but also in re-skilling people already in the workforce. We believe that involves making changes and areas like depreciation, to encourage investment and plants and technology. This needs to be for manufacturers of all sizes, including smaller benefit, smaller manufacturers, who don't necessarily see themselves as being advanced, but are nevertheless a critical part of the advanced manufacturing ecosystem and supply chain. And it's the way that ecosystem functions. That's one of the things that we're really focused on, particularly at a time when there is so much pressure on the global supply chain.

As part of the ITP, we've begun consultation with Māori businesses and investors, who as intergenerational asset owners already are involved in the advanced manufacturing ecosystem. But there are opportunities to expand that involvement, and for manufacturing to add even greater value to much of our primary economy, and to spawn exciting new opportunities. We look forward to further developing that korero with Māori over the coming months and years.

While today we celebrate the launch of the industry transformation plan and the consultation on, it is the next steps that will be really critical.

As businesses and employers, we need to organise ourselves to partner with the government and unions to operationalise the industry transformation plan, and implement many of its recommendations. We're putting together an establishment group to develop this model, and welcome interested parties from amongst industry today and in some of the industry bodies. More announcements about this cooperation will come in due course, but we really encourage people to participate in this work, as we create the sort of industry group that we need to take this ITP forward.

The consultation process has begun. And it is appropriate that today is launched is that EMEX one of the most significant gatherings of the advanced manufacturing sector. I urge everyone to take the opportunity to take part in the consultation, to challenge our thinking, and to help us achieve aspirations in the sector, which can only benefit people and their communities throughout our country.

I'd like to thank Minister Stuart Nash for his unwavering support of this kaupapa. I would also like to thank those participants in the industry transformation plan process, including my co-chairs, Rachel and Paul, and our dedicated steering committee and working group members and has been hard Mahi, but it has been very enjoyable.

Finally, my thanks to the work that the MBIE team have done in maintaining momentum, and producing a high quality report from which we can base our future plans for the sector. Today, we lay down the wero for the future of the sector. I invite you all to embrace the challenge, openly debate the issues together and grasp the exciting opportunities for this in future generations.

Kia ora.

Co-Chair Paul Stocks

Kia ora.

Thanks Brett.

There was absolutely no sign of COVID fog and that very, very insightful and clear.

So there were six priority areas in the ITP. Rachel and Brett have covered all four of them.

I'd like to very briefly cover off the last two which were innovation and global connectivity.

Innovation. So the advanced manufacturing sector makes up only 10% of all businesses in New Zealand, but it's a quarter all business R&D. And there's a reason for that. And the reason is that having innovative processes, innovative products is the key to success. And research and innovation supports them. Last decade or so I've been responsible for research, science and innovation policy at MBIE. And one of the things that we heard consistently is how do we get good research out of the universities and into businesses. And it's another theme that we kept on hearing through the ITP.

So the other things we heard is that place matters, ecosystems matters. I'll use the word clusters they matter. Bringing like minded businesses and workers together in a similar place to share knowledge and experiences really matter. So there are a few recommendations that are in the draft ITP around how we can lift the contribution of ours RS&I system of innovation to advance manufacturing and really grew up that value curve. And by the by our manufacturers are already well up the value curve, we do some awesome high tech product in New Zealand, that is core to many of the world's you know, most famous products. But those initiatives were firstly mapping the system.

As I said, I spent 10 years responsible for the RS&I system, and I find it hard to get around it. So I don't know how people who are whose day job is not navigating universities and CRIs find it. So the first thing was to actually provide an easy to use map, a guide of where to go for the best and research and best in innovation.

The second big idea was the idea of creating a Centre for Advanced Manufacturing Excellence. This is where you'd gather together both firms and researchers in a single place to really provide a one stop shop, it's something that's done elsewhere around the world, UK has catapults, Australia has an advanced manufacturing growth centre. So what we should do is look overseas and see what works there and bring it back to your own New Zealand.

Thirdly, the use of product accelerators, they're in place now, let's make sure that people know how to use them, and how to really benefit from commercialisation expertise.

And finally, there is another big process that Minister Megan Woods is currently leading, which is a wholesale sort of once in thirty year review of our research science and innovation system, future pathways Te Ara Paerangi. it's important that advanced manufacturing in the manufacturing sector more generally, is front and centre there. Our research, science and innovation system has built over many years, great expertise in biological industries, great expertise in natural hazards. That's really important. But what's equally important is that manufacturing is front and centre for the next 30 years of the science systems development.

The final area was global connectivity. We all know that we're an exporting country, we're 5 million people. We can't sell to ourselves, and particularly in manufacturing. Half of all goods and services that New Zealand exports are for manufacturing, and three quarters of goods are manufacturing. So it's a critical component of what our country is in what we sell. I mean, traditionally, people overseas would have thought about New Zealand, firstly a sheep, and then a sheep and hobbits. And actually what's really important is that they think of New Zealand as high tech, high value, high integrity products and in the manufacturing space. So missions such as the Prime Minister has just left the United States and previously to Japan and Singapore, are really, really critical for building that constituency, building that understanding, and building trade agreements and access to markets.

And the ITP team basically identified that they said that study missions were really important to learn from what happens overseas, to build our export story, and to keep on contributing to those trade missions. So when you're invited to participate, please do. They're really important not just for your firms, but for the country as a whole.

So that was the ITP, six priority areas, a lot of work has taken place over two years. But it is just beginning. And we are now entering to a phase of asking the broader community, the broader manufacturing community and New Zealand as a whole about which of these 21 recommendations matters most, what have we missed, by the way, I noticed that when you open up into the middle, and accelerated depreciation is right in the middle page. So I'm not sure if it was an accident or not. But which of the of the priorities matter most.

So there are 21 initiatives. That's a lot to get through, we are going to be holding 12 regional workshops from Kaitaia down to Invercargill over the course of the next six weeks. Again, it'll be awesome to see people in person, it's just so special to be back together again.

There will be specific sector online thematic workshops, Māori hui, Pacifica Fono, you know, a real attempt to engage on this. And as has been said, the website as the Minister said, www.advancedmanufacturing.nz. All the details there.

So we really do want to see you and all your contacts there to engage. We're hoping to finalise the plan by the end of the year, at which point are we presented to Minister Nash. And then Minister, it's all up to you no pressure.

So that's a huge ambition for us to deliver that by the end of the year.

Before I close off and invite Minister Nash and Rachel to return to the, to the stage and, and Brett to the screen for your questions.

I do want to just do a call out to the MBIE team for the mahi that they have done on this, particularly Hunter Nottage, who's led the team with as was mentioned this morning over breakfast, always with a smile. And by the way, it's not that easy to smile when you're working for me. So he's done a really good job. So I do want to call out the team. They have been unwavering in their commitment. And again, I also want to call out the steering group. It's been an excellent professional group have worked together really, really well and produce excellent mahi. So thank you to the MBIE team and thank you to the steering group.