New Zealand is quietly dismantling the productive base that built its prosperity – and we’re doing it without anything resembling a plan.

Over the past decade, the country has shed around 20,000 manufacturing jobs while the sector’s share of GDP has steadily eroded. Factories producing everything from pulp and paper to frozen foods and wood products have scaled back or shut down entirely, including household names such as Wattie’s and McCain. 

For regional centres like Westport and Kaitāia, each closure is an economic shock that ripples through the whole community. The blow would be blunted somewhat if we had a plan B to revive manufacturing and offer employment prospects in the regions. But we don’t.

Some economists and industry leaders now openly talk about the “deindustrialisation” of New Zealand. Manufacturing is responsible for roughly 60% of our exports and employs close to one in ten workers, yet it has slipped down the priority list in Wellington. 

Other countries – Australia, Singapore, the UK and the US among them – have modern industrial strategies and long-term Industry 4.0 programmes. New Zealand, by contrast, shelved its industry transformation plans and has yet to articulate what kind of manufacturing base it wants to have in 10 or 20 years.

Energy costs sit at the heart of the problem. For many manufacturers, electricity and gas now rank among their top 2 - 3 operating costs. The rapid push to electrify process heat, combined with volatile spot prices and an uncertain gas transition, has left some plants badly exposed. At the same time, manufacturers face chronic skills shortages, conservative lenders demanding personal guarantees for capital upgrades, and resource consent processes that add cost and delay to even straightforward investments.

In the latest episode of The Business of Tech podcast, I’m joined by Christchurch-based manufacturing expert Sean Doherty to delve into what’s gone wrong – and what can still be salvaged. 

Beyond plug-in AI fixes

After a 30‑year career that includes a long stint at Rockwell Automation and leading the advanced manufacturing programme at Callaghan Innovation, Doherty has had a front‑row seat to thousands of technology and productivity projects. He’s blunt about the structural issues and the policy vacuum, but he also insists manufacturers are not powerless.

Rather than chasing silver bullets or “plug‑in AI” fixes, Doherty argues for a disciplined focus on small, practical productivity and efficiency initiatives: getting real‑time data off the factory floor, tightening basic management practices, and investing in people alongside machines. 

In a tough, high-cost environment, those incremental gains can spell the difference between slow decline and a credible growth story you can take to the bank – and, collectively, between a country that drifts into deindustrialisation and one that chooses to rebuild its industrial backbone.

Listen to the entire episode of The Business of Tech, streaming on iHeartRadio, Spotify, Apple, or wherever you get your podcasts.

Show notes

Factories in retreat: inside NZ’s deindustrialisation crisis - The Post

Sean Doherty on LinkedIn

Aotearoa’s Industry 4.0 Journey - Callaghan Innovation report

New Zealand is quietly dismantling the productive base that built its prosperity &ndash; and we&rsquo;re doing it without anything resembling a plan.
Over the past decade, the country has shed around 20,000 manufacturing jobs while the sector&rsquo;s share of GDP has steadily eroded. Factories producing everything from pulp and paper to frozen foods and wood products have scaled back or shut down entirely, including household names such as Wattie&rsquo;s and McCain.&nbsp;
For regional centres like Westport and Kaitāia, each closure is an economic shock that ripples through the whole community. The blow would be blunted somewhat if we had a plan B to revive manufacturing and offer employment prospects in the regions. But we don&rsquo;t.
Some economists and industry leaders now openly talk about the &ldquo;deindustrialisation&rdquo; of New Zealand. Manufacturing is responsible for roughly 60% of our exports and employs close to one in ten workers, yet it has slipped down the priority list in Wellington.&nbsp;
Other countries &ndash; Australia, Singapore, the UK and the US among them &ndash; have modern industrial strategies and long-term Industry 4.0 programmes. New Zealand, by contrast, shelved its industry transformation plans and has yet to articulate what kind of manufacturing base it wants to have in 10 or 20 years.
Energy costs sit at the heart of the problem. For many manufacturers, electricity and gas now rank among their top 2 - 3 operating costs. The rapid push to electrify process heat, combined with volatile spot prices and an uncertain gas transition, has left some plants badly exposed. At the same time, manufacturers face chronic skills shortages, conservative lenders demanding personal guarantees for capital upgrades, and resource consent processes that add cost and delay to even straightforward investments.
In the latest episode of The Business of Tech podcast, I&rsquo;m joined by Christchurch-based manufacturing expert Sean Doherty to delve into what&rsquo;s gone wrong &ndash; and what can still be salvaged.&nbsp;
Beyond plug-in AI fixes
After a 30‑year career that includes a long stint at Rockwell Automation and leading the advanced manufacturing programme at Callaghan Innovation, Doherty has had a front‑row seat to thousands of technology and productivity projects. He&rsquo;s blunt about the structural issues and the policy vacuum, but he also insists manufacturers are not powerless.
Rather than chasing silver bullets or &ldquo;plug‑in AI&rdquo; fixes, Doherty argues for a disciplined focus on small, practical productivity and efficiency initiatives: getting real‑time data off the factory floor, tightening basic management practices, and investing in people alongside machines.&nbsp;
In a tough, high-cost environment, those incremental gains can spell the difference between slow decline and a credible growth story you can take to the bank &ndash; and, collectively, between a country that drifts into deindustrialisation and one that chooses to rebuild its industrial backbone.
Listen to the entire episode of The Business of Tech, streaming on iHeartRadio, Spotify, Apple, or wherever you get your podcasts.
Show notes
<a href="https://www.thepost.co.nz/business/350150300/manufacturers-will-you-embrace-ai-or-be-one-falls-behind">Factories in retreat: inside NZ&rsquo;s deindustrialisation crisis</a> - The Post
<a href="https://www.linkedin.com/in/seandohertynz/?skipRedirect=true">Sean Doherty on LinkedIn</a>
<a href="https://www.linkedin.com/feed/update/urn:li:activity:7265061377659019265/">Aotearoa&rsquo;s Industry 4.0 Journey</a> - Callaghan Innovation report

The Business of Tech, hosted by leading tech journalist Peter Griffin. Every week they take a deep dive into emerging technology and news from the sector to help guide the important decisions all Business leaders make.

Issues such as cybersecurity, retaining trust after a cyberattack, business IT needs, purchasing SaaS tools and more.

New Episodes out every Thursday. Follow or subscribe to get it delivered straight to your favourite podcatcher.

@petergnz

@businessdesk_nz

Proudly sponsored by 2degrees Business!

 

The Business of Tech, hosted by leading tech journalist Peter Griffin. Every week they take a deep dive into emerging technology and news from the sector to help guide the important decisions all Business leaders make.
Issues such as cybersecurity, retaining trust after a cyberattack, business IT needs, purchasing SaaS tools and more.
New Episodes out every Thursday. Follow or subscribe to get it delivered straight to your favourite podcatcher.
@petergnz
@businessdesk_nz
Proudly sponsored by 2degrees Business!
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The Business of Tech

Factories in retreat: inside NZ’s deindustrialisation crisis

https://api.omny.fm/orgs/7784f840-c291-422a-924b-ad9000bbad71/clips/c46c2539-dbc3-468f-bcc8-b43a000c66ca/transcript