27 Nov 2013

Time for businesses to shift focus - NZIER

6:51 am on 27 November 2013

The New Zealand Institute of Economic Research says the economic outlook for the next few years is considerably brighter, meaning businesses can stop hunkering down and can instead shift their focus to strategy and growth.

NZIER principal economist Shamubeel Eaqub said it took seven years to recover from one of the deepest and longest recessions on record but 2014 would show the best economic performance since 2007.

Businesses were operating in an environment of accelerating change which required organisational nimbleness and adaptation:

"We've been through this very intense period in the last seven years where we've had the recession and that very slow recovery from recession, and as we look forward now to the next five or seven years, the outlook is gradually brightening and becoming more normal," he said.

"This is the time, I think, to really focus not just on crisis management as we have been in but also (on) investing in the strategic future of businesses."

The pace of change within the economy was getting faster, with technological changes sweeping through very quickly; it took 10-15 years for the internet to become prominent but the smartphone had taken only five to seven years, Mr Eaqub said.

"So every new technology is changing the way that we behave and how we interact with each other and how we buy things and how we sell things," he said.

"That means there will be some winners and some losers but the time between being a winner and being a loser might be very short."

That had been seen with companies such as Blackberry, which were at the height of their power only seven years ago but were now in deep trouble.

It was therefore important that businesses were flexible and able to react to changes, Mr Eaqub said. For some that would mean finding new opportunities but for others it would mean closing.