The purpose of this experimental release is to provide information on activities that contribute to business growth, and the number of businesses involved in those activities.
About the business growth activities tables
The tables that accompany this release contain information at the territorial authority (TA) area level for the cities of Auckland, Christchurch, Dunedin, Hamilton, and Wellington for the period 2005–10.
The tables give you the total number of businesses by TA area, and businesses that have:
- foreign direct investment
- high growth in sales/employment
- filed intellectual property applications
- exported goods/services.
The information in these tables are unique because they do not come directly from survey or administrative data. Please use them carefully, and note the assumptions used to compile them.
The tables are available in Excel format from 'Available files' above. If you have problems viewing the files, see opening files and PDFs.
Interpreting data at the territorial authority area level
Sometimes data is desired at the TA area level but are available only at the national level. This gap in data motivated the experimental study that underlies this release.
Consider the following example on export data. Export data is reported at the business level. Aggregating export data of all New Zealand businesses can approximate national business-sector exports. However, businesses with branches in different TA areas do not report their exports by branch. This means that TA area exports or the number of exporters by TA area cannot be accurately calculated (likewise, data on businesses with foreign ownership or high growth cannot be accurately calculated at the TA area level).
The study examined whether a business’ permanent business number (PBN) can be used to get regional information. The basic idea is summarised below:
For example, consider an organisation with a business in TA area 1 and another in TA area 2. The business-level information will reveal the business number (unique to a geographical location), number of employees and location (eg region or TA area). When merged with the organisation-level information from the Business Frame, information available at the organisation level (not at the business level) can be linked to businesses and to specific TA areas.
Reverting to the export example where organisation information is merged with business information, it may be possible to determine how many businesses in a given TA area were part of an organisation that exported in any given year and the value of total exports by that organisation in that year. Note that this is not a measure of a business’ share of the organisation’s exports. This means that aggregating the exports related to organisations with businesses in a TA area should not be interpreted as the TA area's exports.
To illustrate, if an organisation exported $100 worth of goods and had two businesses in TA areas 1 and 2, respectively – the $100 will be reported against both TA area 1 and TA area 2. Therefore, adding up TA-area-level exports will invariably overshoot national exports, owing to multiple counting. While it is possible, in theory, to allocate the exports of an organisation to its businesses on employment shares, this requires an assumption that business-level exporting is directly proportional to the number of employees in a business.
Businesses excluded from this study
Not all the organisations in the Business Frame are considered in this study. Specifically:
- The analysis was restricted to businesses that have an Australian and New Zealand Standard Industrial Classification (ANZSIC) 2006 code and excluded those with an ANZSIC affiliation of ‘public administration and safety’ (O) or ‘not elsewhere classified’ (T).
- The analysis was restricted to businesses with its business type recorded in the Business Frame as: individual proprietorships, partnerships, registered limited liability companies, cooperative companies, joint ventures and consortia, and branches of companies incorporated overseas. Central-government-owned trading entities were also considered.
- Only businesses that are recoded as being economically active in the Business Frame were considered. This means that the business should have had non-zero employment, non-zero sales, non-zero purchases, non-zero income, non-zero expenditure, or non-zero fixed assets.
- Zero employment firms are excluded (employment includes workers on wages and salaries and working proprietors).
- Businesses for which TA areas are not in the Business Frame were excluded.
- Except when specified otherwise, a business was included only if it and any other businesses in the given TA area together account for at least 10 percent of the total employment of the organisation. That is, if the activities of the business(es) in the TA area are ‘significant’ for the organisation as a whole. The definition of significance is arbitrary.
Exports: includes exports of both goods and services.
Foreign direct investment: an organisation is considered foreign-owned if the reported value of foreign ownership share in the Business Frame is 10 percent or more.
High growth: a high-growth organisation has 1) at least 10 employees in the base year and 2) an annual output or annual employment growth of at least 20 percent for three years after the base year.
Intellectual property (IP) filings: includes filing for plant variety rights, trademarks, designs, and patents. All filings of an organisation over the 2000–10 period are considered. As long as the organisation has filed at least one IP application over this period, it is considered an IP-filing organisation.
For more information contact:
Yolandi de Beer
Wellington 04 931 4600
Published 31 May 2013