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International engagement

The provision of richer information about exporters and their practices was the prime focus of the BOS. However, an insight into other forms of international engagement by New Zealand businesses was also required to understand the full range of international connections these businesses have.

Many of the available sources of New Zealand data on international engagement, such as external trade statistics, relate to the export and import of goods. There is an absence of information about international trade in services or the overseas operations of New Zealand businesses. The information collected in the BOS 2007 helps fill the gap about these types of international engagement; it contributes significantly to the evidence base for policy development that supports growing globally competitive firms, an outcome identified by successive New Zealand governments to support economic growth.

The international engagement module of the BOS 2007 collected information on a range of practices and behaviours associated with either current, past, or future international engagement. In developing and testing the module, it was apparent that many different situations needed to be captured and that it was possible for businesses to be involved in more than one type of activity. Accordingly, the module was structured to profile businesses under broad categories covering the main types of international engagement.

Business profiles

These types of business arrangements were examined in the survey:

  1. businesses that had generated overseas income in the last financial year 
  2. businesses that had not generated overseas income in the last financial year, but had in previous years 
  3. businesses that had never generated overseas income 
  4. businesses producing goods or services overseas in the last financial year 
  5. businesses with purchases from overseas in the last financial year.

Businesses must fit under one or other of the first three groups related to overseas income, but may undertake any combination of the remaining activities related to overseas production or purchases in conjunction with this.

Overseas income was defined as income generated from: 

  • overseas sales of goods or services 
  • ownership of overseas assets (eg foreign direct investment) 
  • significant income from overseas residents visiting or studying in New Zealand (eg tourism and education)

Income generated from sales to other New Zealand parties who then export was not included.

Figure 2.01 illustrates how these groups relate and summarises some key results.

Figure 2.01
Profiles of Businesses in Scope

Profiles

 

Further detail for the various groups is covered in the following chapters and all results can be found in the appendix tables. Before progressing further, let us take a brief look at overall results from the BOS 2007 and consider the various combinations of overseas activity. Appendix tables 1 and 16 also relate to this chapter.

  • Overall, 20 percent of businesses received overseas income in the last financial year. A further 3 percent did not receive any overseas income in the last financial year, but did previously. Seventy-seven percent never received any form of overseas income.
  • Incidences of overseas production by New Zealand firms were small, reported by only 5 percent of businesses. Overseas purchases were more common and were undertaken by 29 percent of businesses.
  • Combinations of the various activities indicate the range of operations possible, but show fairly low levels of businesses being involved in multiple types of international engagement.

Table 2.01
Businesses with International Engagement
By type of international engagement
Last financial year at August 2007

Type of international engagement  Percent of all businesses(1) 
Current overseas income only

 8

Overseas production only

 0

Overseas purchases only

 15

Overseas income with overseas production

 1

Overseas income with overseas purchases

 9

Overseas production with overseas purchases 

 1

All overseas activities

 2

 (1) For more information on the businesses included, refer to chapter 7 ‘Technical notes’. 
 
  • There was some variation by industry and there were considerable differences by businesses size for many international engagement types and associated activities examined by the survey. 
  • While larger businesses are more likely to be internationally engaged, for businesses that do engage, the differences in practices are generally greater between industries than business size groups.
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