Liam Dann: Who is this gloomy business community anyway?

Liam Dann, NZ Herald,
Publish Date
Sun, 2 Sep 2018, 9:10AM
Businesses in New Zealand are growing more nervous and unsettled. (Photo / Supplied)
Businesses in New Zealand are growing more nervous and unsettled. (Photo / Supplied)

Liam Dann: Who is this gloomy business community anyway?

Liam Dann, NZ Herald,
Publish Date
Sun, 2 Sep 2018, 9:10AM


Who is this gloomy business community? Does it really exist as a distinct cultural entity?

I don't think so. I've been embedded in the business world for 20 years and I am sceptical of the idea that it is a homogeneous group.

Business as a community divides along numerous lines, based on things like size and industry type. It has regional differences and within that a surprisingly diverse spectrum of individual beliefs.

An obvious and growing divide in the business world was on display last Tuesday as the Prime Minister delivered her big speech "confidence" to the gathered captains of industry at Westpac's head office.

It was smart politics for Labour to bring the "big end of town" into the tent —​ as they have with the Christopher Luxon-led Business Advisory Council.

It is a more achievable goal than winning over the small- to medium-sized employers whose worries dominate confidence surveys.

As a crowd, Tuesday's event was very much the "big end of town".

In other words it was the chief executives, directors and other senior leaders from New Zealand's major corporate players.

It also included some heavyweight fund managers and financial market players —​ the people who manage our retirement savings.

It was a crowd which, in the old days, would be have been characterised by the left as "fat cats".

The New Zealand public's generally pejorative attitude to business and finance makes it all too easy to hang on to this stereotype.

The dominance of the Business Roundtable as a prominent lobby group through the 1980s and 1990s didn't help the perception either.

But that world has changed.

Ironically, in context of the conservative backlash dominating the political landscape these days, the corporate world now stands out as bastion of progressive liberal values.

The big banks, insurers, telcos and tech companies remain actively on the march towards a more diverse, inclusive and sustainable world.

A corporate culture some might describe as "politically correct" remains in ascendancy across the Western world.

Critics call all that stuff "window dressing", but there is management science pointing to diverse perspectives driving positive outcomes.

Certainly a considerable amount of time and resource is being allocated to it all these days.

Corporate culture is also very good at embracing change.

Thanks to the disruptive powers of the internet, the idea of constant transformation and re-invention has become a mantra.

Both these factors make big business leaders more open, to the kind visionary economic goals that Jacinda Ardern talks about, than smaller employers.

They are almost certainly less gloomy about the economy.

The finance crowd is a bit different. These guys are certainly less PC and, although some efforts are being made, theirs is very much more a white-male-dominated world view.

Most of the current generation populating Auckland's Shortland Street and its immediate surrounds came of age during the Rogernomics revolution.

They aren't lefties by any stretch —​ but they are ruthless pragmatists. As Bob Dylan once put it: "They don't need a weather man to know which way the wind blows".

A big shift in the culture of the finance sector began in the wake of the global financial crisis.

The buttoned-up pinstripe suits and ostentatious behaviour has all but gone. A greater level of regulatory oversight and government oversight of market behaviour has been begrudgingly accepted.

There is nervousness about the return of big government inefficiency and ideological decision making, but concern about nationalist politics (and general weirdness) in the US and UK remains a more popular conversation starter.

And with the market still hitting record highs these guys are not particularly gloomy either.

The market players also tend to share one specific ideological quirk with Labour.

They don't like property investment and see the national obsession with it as an economic failing. Many would be broadly supportive of a capital gains tax to level the playing field with equities and boost capital markets.

Meanwhile, away from the shiny fortresses of downtown Auckland the small- and medium-sized businesses that account for something like 70 per cent of the business landscape in New Zealand definitely do feel nervous about the outlook.

They are feeling rising costs more acutely. They have less logistical support around them to cope with regulatory change and new employment laws will, proportionately, have a bigger impact.

Within this group there is also diversity, of course — the last decade has seen a huge rise in youthful socially conscious entrepreneurs.

Hipster business owners: Craft brewers, artisan foodies, web designers, video editors, software and video game developers, there are many micro-business people doing things in non-traditional ways to reflect core values around environmental and social issues.

But we shouldn't overplay those numbers.

The Prime Minister acknowledged some of the realities of business confidence in her speech and when pushed she indicated the Government was working hard to connect with disenchanted small business too.

But let's not pretend that her words will resonate with these people. What they need to see is action.

They are not likely to be Labour voters. They will likely never love this Government.

But if the PM can deliver on her promise of more policy certainty and economic conditions hold up, then they may learn tolerate it and the noise about business confidence will fade from the headlines.