NZ ranked first in world for ease of doing business
New Zealand has topped the World Bank’s 2017 Doing Business report for the first time.
But being theoretically the easiest place to set up and run a business doesn’t necessarily flow through to a series of successful ventures.
The report shows New Zealand has moved up two places over the past four years from third in 2014 and second last year.
Doing Business examines regulations that enhance or constrain business activity. It assesses 190 countries and ranks them according to the impacts of their regulatory environment on business.
Naturally, the government is pleased with the result.
“This is the first time New Zealand has topped this list. For the past two years we have ranked second after Singapore, and in 2014 we were third behind Singapore and Hong Kong,” Economic Development Minister Steven Joyce says.
The report is made up of 10 different indicators that affect the life of a business. New Zealand ranks first in half of these including starting a business, dealing with construction permits, registering property, getting credit, and protecting minority investors.
The report also notes:
- New Zealand’s strength in procurement through its online procurement process (GETS);
- New Zealand is world leading in ease of starting a business with the smallest number of procedures required and the shortest time to start a new business; and
- New Zealand has made the process of paying taxes easier and cheaper.
But other research shows small-to-medium enterprises (SMEs) have a woeful success record.
Half fail in their first five years, which is a big waste of financial and other resources given the sector’s dominance in the economy.
SMEs make up 98% of all firms in New Zealand. This compares with 96% in Australia 97% in the UK and 93% in the US.
But the impact on employment shows a much different pattern, with SMEs providing 60% of jobs in New Zealand 51% in Australia, 46% in the UK and 37% in the US.