Ben Fath on the importance of New Zealand's small firms

"I am the first person in my family to attend university, thanks to my father's encouragement. His positive reinforcement pushed me to pursue higher education. Many of my high school friends were planning to study Economics at university, so I decided to join them.

"My research tends to be pragmatically driven, influenced by the people I connect with. I am naturally drawn to studying small firms because they are where real, impactful work gets done.

"Personal relationships are vital in small firms. It's rare to find a small business owner who doesn't know their employees or their families. This personal touch goes beyond mere rational decision-making, and I find it fascinating how these firms can profoundly impact people's lives.

"We are witnessing a fundamental shift in business from focusing on 'value,' traditionally measured in financial terms, to 'values.' Capitalism is increasingly challenged to be more inclusive and less disruptive. This shift presents both opportunities and challenges for small firms. Access to a broader set of values offers more chances for differentiation.

"Global power dynamics are also shifting, with Asia becoming increasingly important. Historically, our closest business partners have been culturally similar, sharing language and legal systems, such as the UK and USA, though they are geographically distant.

"Now, we must engage more with regions that have different institutions, political systems, cultures, and languages. This engagement can be tricky but is where new opportunities lie, aligning with the broader shift in values.

"Technological advancements challenge us to consider the skills and investments needed in the next few years. New technologies entering the consumer space can be difficult for small firms to keep up with. However, the upside is that many technological solutions are available 'off the shelf.' We don't need to invent them; we just need to find creative ways to integrate them.

"One advantage of New Zealand SMEs is their ability to do many things in-house, allowing them to be extremely responsive to customer needs. They offer a level of customization that overseas customers rarely experience. However, the current technological shift challenges this mindset, questioning if we can continue to customize to the same degree.

"It's a paradoxical situation: the pace of change is accelerating, and the value shifts should benefit us. Yet, if we don't embrace these changes with an outward-looking perspective, we risk becoming insular.

"SMEs have several important characteristics. They often congregate in unexpected areas and are critically important for keeping regions connected to the world. The positive effects of having these companies around are often underappreciated. They create employment, foster knowledge and ideas, and bring optimism to communities. As global dynamics shift, the adaptability of New Zealand's small firms will be of vital important for the country's economic and social fabric.”