Fran O'Sullivan on business

Business analysis and comment from Herald columnist Fran O'Sullivan

Fran O'Sullivan: How we missed the knowledge wave

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Helen Clark highlighted NZ's economic inertia in 2001 and 10 years later our performance is still not up to scratch. Photo / Paul Estcourt
Helen Clark highlighted NZ's economic inertia in 2001 and 10 years later our performance is still not up to scratch. Photo / Paul Estcourt

When I unearthed an archive box of the 2001 Catching the Knowledge Wave conference during a clean-up on a rainy Queens Birthday weekend, my first instinct was to bin it.

I've been steadily sifting through diverse printed material: The Think Big programme, the 1987 share market collapse, the state assets sales, the twin BNZ bailouts, the DFC collapse, the "mother of all budgets", Winston Peters scandals, the Winebox, Air New Zealand collapse - and so it goes on. Many of them keepers. Files that were compiled in the pre-internet era.

After three decades of business and investigative journalism many of the files I have collected should really be redundant. What has struck me is how relevant much of this material remains. New Zealand - and particular New Zealanders - have a penchant for repeating past mistakes. Finance companies, anyone?

But the Catching the Knowledge Wave project stands out as one of the key missed opportunities that also litter New Zealand's history.

The ambitions were certainly laudatory: University of Auckland vice-chancellor John Hood formed a partnership with Helen Clark's Government to initiate a project to "raise New Zealanders' sights and encourage new ways to create future economic prosperity". As the PR material said at the time: "The project arose from the recognition that New Zealand's economic performance was inadequate to sustain the quality of life, the quality of public services, and the social cohesion valued by New Zealanders."

What also strikes me now is the great generosity of spirit exhibited by many of the political, business and social leaders from countries like Australia, Canada, Ireland, Israel, Singapore, Korea, the US and Taiwan, who converged on Auckland for the three-day conference in August 2001.

Small countries like Norway, Israel and Singapore (and yes, Ireland and Iceland were also riding high then) had proved just how far tiny nations could go once they set hard targets and action plans to achieve success.

It's interesting to reflect now on Clark's words to the Knowledge Wave conference. In 2001, she pointed out that while others had been transforming their economies and societies by applying knowledge and innovation, New Zealand hadn't kept up. "Our export profile resembles that of developing countries, not that of a developed one.

"Our economy has not been generating the level of wealth required to keep us high in the first league. High commodity prices and good weather can't be relied on to make the primary sector profitable, and the exchange rate is not consistently export-friendly."

In 2001, Clark also talked about the impact of stop-go economic performance; how it limited confidence in career prospects and family security; how it resulted in under-investment in New Zealanders and their needs. She believed New Zealand had the luxury of debating such issues while the country was not in an economic crisis. As she noted: "Our drift down relative to others over the long-term cannot be ignored, and our Government refuses to be complacent. We believe New Zealand can do so much better if we have a shared vision, set clear goals, and establish the steps necessary to reach them. For that to happen, we must all be prepared to think outside our own squares."

In any event, Clark quickly dumped the conference's joint aim to get New Zealand back into the top half of the OECD economic performance tables. The project chalked up a few quick initiatives: Stephen Tindall and David Teece's Kea network - essentially an organisation that endeavours to keep talented expatriates abreast of developments here and provide networks overseas; the Social Innovation fund; the New Zealand Venture Investment Fund and a proposal for a television series to celebrate the nation's entrepreneurs.

A Knowledge Wave Trust was formed to push the conference objectives. This later morphed into the New Zealand Institute. But no truly stellar initiatives were implemented.

Ten years on, New Zealand's economic performance is still not up to scratch.

Much of New Zealand's export performance is still dominated by commodity exports. Fonterra's exports of safe milk powder to China have obviously helped underpin the economy in the post-global financial crisis era.

But where are the big raft of high-tech and service companies that should also be spearheading New Zealand's overseas performance and providing young New Zealanders the opportunity to work from here?

In retrospect, Catching the Knowledge Wave was too much about conversation and too little about action. It would be too pat to put this down to the heavy infusion of public relations messaging. Although that is a factor.

The real issue is that New Zealand body politic is still far too slow and far too slack when it comes to implementing a big agenda.

The John Key Government's own growth strategy is a case in point. For example, the shambles over the mining strategy and the failure to put some ballast under the PM's financial services hub project. Until recently, NZTE has been a relative shambles ... the list goes on.

It's unfathomable that a private sector operator like Key doesn't put a few more skilled ministers alongside Steven Joyce and Tony Ryall to form a speed team to get major change bedded down.

After three years of economic crises, endlessly debating is no longer an option.

- NZ Herald

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