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Rod McNaughton, Professor of Entrepreneurship, University of Auckland, Waipapa Taumata Rau

NZ’s low productivity is often blamed on businesses staying small. That could be a strength in 2026

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For decades, we have heard a familiar story about why New Zealand’s firms choose to stay small. Business owners prefer comfort, control and lifestyle over ambition, summed up in the old notion of the “bach, boat and BMW” being the height of aspiration.

The statistics show this pattern clearly. New Zealand’s productivity has lagged other advanced economies for years, with output per hour worked sitting below the OECD average.

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