Fran O'Sullivan: Revolution on the business front

Andrew Little backs the digital revolution.

New Zealand needs to be in the race as digitally driven high value industries take over from traditional ones.

Labour Leader Andrew Little has staked out valuable new territory with his announcement of a Future Work Commission.

Little is on the button when he says the digital revolution is as "world changing as the industrial revolution was 200 years ago".

New Zealand - which is currently enjoying relative prosperity compared to other Western developed nations - needs to become match fit. We already have a major skills gap which is holding back our companies. New Zealanders are poorly paid by international comparisons.

But deploying a Future Work Commission - staffed by MPs led by new shadow finance minister Grant Robertson - as an effective Trojan horse to get Labour alongside New Zealanders from the "smoko room to the boardroom" is a triumph of sloganeering over substance.

The major trends affecting New Zealand are not being dictated from here.

If Labour wants to really get to the bottom of the 21st century challenges posed by the digital revolution - which is cutting a swathe through traditional jobs right round the world yet also creating many much more interesting new jobs - it could usefully spread its wings a great deal further and not limit its vision casting to the future of work.

Sending his MPs offshore on a study tour over the summer break would be a first step. First to challenge their intellectual grasp of the issues affecting New Zealand and second - and much more importantly - their commitment to stepping up opposition tempo which has been lacking.

There are plenty of useful models.

The Singapore Government, for instance, also grapples with disruptive trends, yet it constantly tries to ensure that the city state remains relevant and a magnet for high-value industries and jobs.

Just last week Singapore Prime Minister Lee Hsien Loong announced Virtual Singapore - a 3-D model of the entire country - as part of Singapore's aim to be a smart nation with cutting-edge urban living solutions. It has long applied smart technologies to issues like traffic planning. Our major cities have been slow to step up.

In New Zealand - where Auckland has become the business capital - the council has an Auckland Plan. But there is little integration of that plan with those of central government.

Lee has made a practice of ensuring leading business leaders (together with worker leaders) travel outside of Singapore to look at how China's industrialisation will affect the city state's viability. After the East Asian Crisis and the Global Financial Crisis, Singapore responded by redefining its value proposition and setting up a swathe of new industries including petro-chemical plants. But the prime value of taking businesses and unionists offshore together was so that they could see the future and adapt accordingly to stay competitive. To understand that their future was together and not at loggerheads.

There has been a great deal of work done under the current Government, for instance NZTE's venture with Stanford University to encourage Maori and agribusinesses to lift their value propositions.

But the Government has (so far) failed with its target to lift exports as a percentage of GDP to 40 per cent by 2025. The reality is the export target is flat-lining at best and in danger of dropping back further with the current dairy commodities slump.

Economic Development Minister Steven Joyce has said his priorities are to lift private sector spending on research and development and alleviate a shortage of engineers and ICT workers. Joyce has also been leading job fairs in Australia.

But New Zealand's competitiveness is under pressure.

The terms of trade fell by 4.4 per cent in the September quarter, leaving it down slightly on the same time last year. As Westpac's economic team noted this week, "the fall came as no surprise to us or the rest of the market, as it was largely the product of the sharp downturn in world dairy prices that has garnered a lot of market attention this year."

What's missing from the commentary is any real strategic interrogation of the drivers of the commodity slump.

This is where Little's team could usefully deploy itself.

The big questions are around how New Zealand exporters and commodity producers carve out valuable niches in the global supply chains.

How we can create digitally driven high value industries from here.

And a focus on ensuring that the global digital disrupters - like the Googles - pay their fair share of taxes.

This will pose a challenge for Robertson who has predominantly served in the Government space during his career.

So far, he has been slow to stake out some ground as Labour's new shadow finance minister. Partially, this is because he is still getting his feet under the table after being appointed to the role by Little after losing the leadership race by a whisker. It's also because he is leaving Little some space to establish his own leadership brand.

So far, he's pushed the Minister of Finance (well Steven Joyce actually as Bill English was absent from Parliament last week) on whether a fiscal hole has emerged as a result of reduced tax take due to the massive slump in dairy prices. But Robertson has yet to stake out the principles that will drive him.

Understanding the future of work is a given - understanding what drives the future of business is where Robertson should do some homework.