NZ's Productivity Problem: A Challenge That Won't Fix Itself
New Zealand's economy has made significant strides in recent years, but it still faces a major challenge: low productivity. According to the Treasury, the country's productivity growth averaged just 0.2% between 2013 and 2023, down from 1.4% between 1993 and 2013.
Experts point to several factors contributing to this issue, including weak competition, declining educational performance, slow uptake of new technologies, and shallow capital markets. The country's small domestic market and geographical isolation also make it harder for firms to grow and innovate.
To address these challenges, the government will need to implement a combination of policy reforms that encourage investment, increase competition, improve skills, and boost innovation. This may involve removing barriers to housing, energy, and infrastructure development, as well as improving access to capital for growing businesses.