19 May 2010
New Zealand Trade and Enterprise (NZTE) and the Foundation for Research Science and Technology are creating a nationwide network of ‘regional partners’ to help small businesses access information, funding, training and development services.
The network, which builds on the Foundation’s existing network of regional TechNZ partners providing research and development (R&D) support to businesses, is the key feature of a new model for delivering publicly-funded information and development services to small businesses, announced today by Minister for Economic Development Gerry Brownlee.
Each partner organisation will be funded by NZTE and the Foundation to employ staff with business development skills and R&D expertise.
On behalf of NZTE, the partners will be responsible for coordinating suitable training and information services in their regions by assessing local businesses and directing them to courses, advisors, information, and other public and private services that meet their particular development needs. In some cases businesses may qualify for a partial subsidy, in the form of a voucher, to help pay for the cost of training and business development services.
On behalf of the Foundation, regional partners will provide R&D advice and make and manage research and development investments from the Foundation’s TechNZ business programme, as already occurs through its existing regional network.
NZTE Acting Director of Performance Improvement Euan Purdie said the idea was to make information and advice for small businesses easily available – whether that was through the Government’s internet portal business.govt.nz, the 0800 biz Information telephone line, or through a conversation with a locally-based business development advisor.
“Our regional partners will have the local influence to encourage businesses to develop their management capability, to use information services, and to undertake research and development,” Mr Purdie said.
Foundation Group Manager Manufacturing & High Growth Firms Richard Bentley said more than $5.9 million had already been invested in 500 small businesses through the TechNZ regional partner network in the past two years.
"The joint network will allow local organisations to make and manage R&D investments with local companies that have the aspiration and opportunity to grow. This is a great initiative for small businesses to access early stage support from both NZTE and the Foundation to help those businesses reach their business goals faster.“
Regional partners will also refer businesses to other private providers and government services, such as NZTE’s programmes for exporters and the Foundation’s TechNZ programmes for business innovation.
The Enterprise Training Programme, which a range of organisations have been contracted by NZTE to run, will not operate from 1 July 2010. The NZTE-funded biz Information service for businesses will remain, but will be focused on the 0800 telephone service instead of separate ‘walk-in’ centres around New Zealand.
Regional partners are being sought through a request for provider (RFP) process and the new model is expected to be implemented in the various regions throughout the remainder of this year.
The Minister for Economic Development’s media release about the changes can be viewed at www.beehive.govt.nz/minister/gerry+brownlee.
Questions and answers follow.
For further information please contact:
Anna McIntyre
Communications Consultant
New Zealand Trade and Enterprise
Tel: +64 4 816 8317
Mobile: 0275 498 155
Email: anna.mcintyre@nzte.govt.nz
Or
Stephanie Gray
Senior Communications Advisor
Foundation for Research Science and Technology
Tel: +64 4 9177801
Mobile: 021 599 132
Email: stephanie.gray@frst.govt.nz
Questions and answers
What is meant by a small business?
In this instance the term small business (or ‘SME’) refers to New Zealand businesses with up to 50 full-time equivalent employees.
Why are these changes being made?
These changes will:
- improve business and management capability development in SMEs, which will help drive productivity gains and greater profitability
- reduce fragmentation by providing better coordinated access to government business assistance, and so lower transaction costs for businesses
- drive quality and innovation in the provision of training and advisory services, while also providing businesses greater choice in these services
- create a network that will act as a filter for the Foundation and NZTE and refer firms with high growth, innovation and internationalisation potential for more intensive engagement.
How will the regional partner network work?
A nationwide network of regionally-based third parties will be contracted by NZTE and Foundation to employ staff with business development skills and research and development expertise. They will use those skills and their knowledge of the local business community to facilitate access to training and information services in their regions, assess and advise small businesses, and issue vouchers for business development services where appropriate. They will also help to identify businesses in their region that are likely to be eligible for more intensive support from NZTE and the Foundation.
The Foundation’s TechNZ programme currently uses a regional partner network to deliver research and development support to businesses. NZTE’s regional partners will be integrated with this network to ensure businesses can access research and development information and support in the same place and at the same time as other business development support.
Who will be the regional partners and how will funding be allocated?
There will be 14 regional partners nationally. A request for provider (RFP) process will be completed to select these partners. They are likely to be Chambers of Commerce, Employers and Manufacturers Associations, Economic Development Agencies, other business development service providers, or consortiums made up of multiple entities. Ideally regions will collectively respond to the RFP.
The current providers of training and information services are welcome to participate in this process.
Why provide the subsidy directly to businesses, rather than the training provider as currently?
Under the current arrangements, private providers for business training and coaching have not entered the market occupied by the Enterprise Training Programme which is fully subsidised by the Government. By providing eligible business owners or managers with the subsidy and giving them the ability to choose their own accredited provider, competition in the market is encouraged. This will ensure that the needs of business are better met and that any gaps that emerge in the market will be filled.
How will the vouchers scheme work?
All SMEs will be able to seek information and advice from their regional partner.
Depending on their profile and needs, they might also be eligible for a subsidy which will be provided through a partial-voucher.
Vouchers will be targeted to those businesses that have been assessed as having growth and innovation potential, and a commitment to development.
The amount available nationally for vouchers will be capped and each region will be given an allocation to manage and support businesses in their area. Details of how are still to be finalised but partial-vouchers could be up to $5,000 per firm.
How will businesses be assessed?
Regional partners will use Capability New Zealand’s online New Zealand Business Assessment (www.businessassessment.co.nz) to assess a firm’s development needs.
Why is a new model being implemented now?
The new model is based on findings from both the Government’s Review of Business Assistance and a separate evaluation by the Ministry of Economic Development (MED) of New Zealand Trade and Enterprise (NZTE)’s training and information services for SMEs.
The evaluation found the services are valuable but that there could be other ways of delivering them to ensure they continue to meet the needs of SMEs. NZTE and MED have since sought input from a range of organisations, including Business New Zealand, EDANZ and the Chambers of Commerce, about a new model for delivering the services currently provided through the Enterprise Training Programme and the biz Information service.
Why is the Enterprise Training Programme ending?
MED’s evaluation showed high levels of satisfaction with the Enterprise Training Programme. However, SMEs continue to face problems in terms of understanding why they need to improve their skill base and where to go for assistance. As a result they are often unprepared to invest in assistance.
It also found that private training providers have found it difficult to compete with the Enterprise Training Programme because it is fully subsidised. This has reduced the training options available to businesses and meant there has been little incentive for training providers to innovate and adapt to meet the needs of businesses.
Why are changes being made to the biz Information service?
MED’s evaluation of NZTE’s training and information services showed there was little demand for biz walk-in centres relative to the cost of providing the service.
Under the new model, regional partners will become a single point of contact for businesses in their region, including for business information.
Businesses will also be able to access comprehensive information through business.govt.nz and the biz 0800 telephone line.
When is the new model expected to be implemented by?
The implementation date will be dependent upon meeting specific and unique needs of the various regions across New Zealand. It is anticipated that the regional partners will be operating in the latter half of 2010.
