Leaders must protect our triple bottom line

In the second of two articles on New Zealand's future, Professor WAYNE CARTWRIGHT* argues that the Government, as well as business leaders, needs to lift its game.


The Government is the steward of New Zealand's triple bottom line. Its aim should be to achieve an ethical balance of wealth creation, social equity, and environmental sustainability. The brain drain debate has focused attention on how desperately necessary it is that we succeed in meeting these challenges.

In my view, New Zealand's triple bottom line scorecard is mixed. Our levels of income and international competitiveness, for example, are mediocre by international standards. This is simply not good enough if we aspire to be a secure and prosperous nation.

Our passive response to globalisation has resulted in a hollowing-out of corporate management and innovative capabilities as these have moved overseas or been subsumed into foreign control. Executive and professional jobs have been lost, and many of the role models of business management and technical expertise, from which people learn essential knowledge and skills, have been removed.

Moreover, our national scorecard in attracting the investment and embedded expertise of transnational organisations is dismal, as the recent rejection by Motorola illustrated.

Kiwi innovation and imagination seem to be scoring well in a small way in businesses based on information and communications technology, but the test of sustained global competitiveness is yet to come for most of them. We clearly have a raft of social issues to address. New Zealand's ethical stance is to look inward at our own social issues, and we seem to have little focused regard for the social impact of change in other parts of the world.

Until there is resolution of our own social issues, the country will not have a secure and stable base from which to become a more substantial part of the world economy and community. At the same time, we must demonstrate an informed willingness to contribute to social balance in the world scene.

On the environmental front, New Zealand is struggling to come to terms with accepting international protocols about greenhouse gas emissions, and our own biodiversity remains at severe risk. There seems to be a national reluctance to take these matters seriously. Further, business is not yet showing much awareness of triple bottom line approaches to governance and management, as is beginning to happen in other countries. We face substantial challenges that require strong and focused leadership, much of it coming from the Government. This leadership must endow the diverse communities of New Zealand with a shared sense of vital purpose and vision that transcends sectional interests and concerns. Anything less will be insufficient. In some respects, the Government seems to have a strong intent for building New Zealand's position in the world, but in others it seems not to have a plot.

It should be applauded for reasserting the view that it does have a role in economic leadership, as well as in social and environmental matters. It has reversed the economic ideology, taken seriously by successive Governments for years, that the Government should have no such role, and should leave matters to market forces alone. But now it must lead.

While its policies relating to social equity are reasonably clear, its vision for building New Zealand seems murky and incomplete. Although several environmental issues have been addressed, a cohesive strategy is not yet apparent.

The most serious matter is that it has not yet demonstrated a clear understanding that the country's triple bottom line requires that all three dimensions be advanced together. There is not much point in setting ambitious social and environmental objectives if wealth creation is sidelined.

To lead processes of wealth creation, it should ensure that it has a firm grasp of the structures and dynamics of global industries, as well as the political economy in which they are embedded. Furthermore, there is a non-negotiable requirement for a collaborative working relationship between businesses and the Government that also includes appropriate community groups and other non-governmental organisations. So far, the Government's scorecard in building positive relationships with the business sector is very poor.

I see no point in the Government arguing with, for instance, Business Roundtable people unless it has a compelling alternative vision and a cohesive and credible strategy for building the country's position. This has not yet appeared in a form that makes sense in the context of international business. Its rapid introduction of changes to accident compensation and employment relations was certainly in accordance with its promises and mandate, but was it wise to do this before it led New Zealanders into a shared commitment to the country's directions for development, and the issues to be resolved as we progress? The lesson is that engagement and commitment of the business sector requires its understanding and active acceptance of a direction and strategy, not simply assertion of power or ideology.

The Government is trying hard to encourage and support business innovation and the so-called knowledge economy, through such initiatives as Industry NZ and a revamped approach to prioritising expenditure on research and development. But its efforts look fragmented.

There is an urgent need for clear articulation of the capabilities that New Zealanders and their organisations should be developing through education, research, and experience. This, in turn, depends on an equally clear statement of the business, social, and environmental initiatives that will be core to the pathway that this country takes to building its future.

* Wayne Cartwright is a professor in the Department of International Business at the University of Auckland.