Pathways to successful SMEs in construction and infrastructure
This report describes the findings of ConCOVE’s stakeholder engagement exercise, which sought to understand the key skills and support required for tradespeople to thrive as small and medium enterprise (SME) business owners in the construction and infrastructure sectors of Aotearoa New Zealand. The project identified that, although many tradespeople are highly skilled in their craft, a lack of business acumen and support often leads to high rates of SME failure within the sector.
To explore these challenges, the report draws on recent industry publications and data, as well as direct input from a diverse range of stakeholders across the construction and infrastructure industries. The ‘Industry context’ section highlights that construction is a major contributor to New Zealand’s economy, accounting for 6.3% of GDP and employing over 308,000 people. However, business survival rates remain low, with only 29% of construction businesses established in 2014 still operating in 2023, and a similar trend seen for more recent startups. The sector is characterised by a predominance of SMEs—most having fewer than 100 staff and many operating as sole traders.
The ‘Meister programme’ section describes the German approach to advanced training for tradespeople, which focuses on practical business training and mentorship. It is described in this report and discussed with stakeholders as a model that could be adapted to support business aptitude for SME owners in a New Zealand context.
The ‘Stakeholder narratives’ section captures the insights of industry representatives, who identified specific barriers to SME success including access to business training, financial management, and regulatory knowledge. Stakeholders also discussed the impacts of market volatility and the need for more robust mentoring and knowledge sharing opportunities. A strong consensus emerged around the potential for Vocational Education and Training (VET) to play a key role in addressing these gaps, by equipping tradespeople with practical business skills and connecting them with relevant resources.
Finally, the ‘Next steps and recommendations’ section synthesises stakeholder feedback, proposing education-based solutions and identifying agencies best placed to drive change. Recommendations include developing stackable micro-credentials covering technical expertise, business knowledge, and teaching/mentorship skills to create an advanced trade qualification pathway for SME owners. An optional business-focused strand should be integrated into apprenticeship programmes to provide early exposure to essential business concepts such as cash flow management, quoting, and compliance. Beyond education, the Ministry of Business Innovation & Employment (MBIE) and the Companies Office should investigate minimum business-readiness requirements for trade business registration, potentially including a provisional licensing model that demonstrates baseline business competence before full registration. Inland Revenue (IRD) should provide targeted tax education for construction SMEs and consider the requirement of demonstrated understanding of tax obligations (such as completion of an accounting micro-credential) before GST registration. These measures aim to address the critical gap between technical trade skills and business management capabilities, ultimately improving SME survival rates and sector resilience.
These findings are corroborated by the ConstrucTrend survey (2025) , which found that some employers identified skills gaps around compliance, costing and quoting, apps and software, accounts, and business marketing among both recent and experienced tradespeople*. Significantly, just under half of respondents who started a business did so within five years of completing their level 4 apprenticeship, highlighting the urgency of equipping apprentices with business skills early in their careers.
Download the full report (Size: 1 MB | Modified: 31/10/2025)
