For a visitor to the the National Field Days at Mystery Creek near Hamilton it is somewhat of a surprise to see the number of firms with products related to electric fencing.

This cluster of competing firms is the world leader, supplying over 50% of world exports. It is one of the few New Zealand examples satisfying Michael Porter‘s conditions for a competitive industry. The rival firms innovate vigorously to supply a sophisticated market.

Although much of the innovation has been in the firms, including in particular the Gallagher Group, one of the major contributions (an unshortable fence which met international safety requirements) came from Ruakura, a Government Research Laboratory. This development was key to establishing an international industry.

This involvment of a government research institution parallels that of another successful exporter, Fisher and Paykel, who got into healthcare products after being approached by a New Zealand Government scientific organisation to manufacture a respiratory humidifier developed by them in conjunction with Auckland Hospital’s Intensive Care Unit (ICU).

Gallaghers have a very strong commitment to Research & Development. Their expenditure of 10% of revenue is very high for a New Zealand company.

Reference

"Upgrading New Zealand’s Competitive Advantage" , Crocombe, Enright and Porter, Oxford University Press,1991. (pp 82-86)

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