Merge universities urge researchers

By ROB O'NEILL

Crown Research Institutes yesterday called for the amalgamation of New Zealand's eight universities into three world-class institutions as part of a drive to eliminate barriers to the creation of knowledge-based industries.

Dr Andrew West, the president of the Association of Crown Research Institutes, said at the launch of an association-sponsored economic paper that the Government needed to change the business and cultural environment through "cleverly designed, well-informed interventions" - and the education sector was a good place to start.

"The crucial single action is to create two or three genuinely world-ranking universities by merging the eight we now have."

The amalgamated approach had already been adopted in fields such as medicine and dentistry, he said, and should be extended to other capital-intensive research areas to concentrate thinly spread resources.

The paper says that low levels of vocational training at secondary schools also need to be addressed as New Zealand has fewer engineering graduates and more generalists than other OECD economies.

"It is almost as if a 'colonial imprint' still deeply affects out culture, expectation and education - a nation that produces unprocessed commodities to send to the UK and is populated by administrators to make this happen."

The paper paints a bleak picture of New Zealand's export capabilities. Despite 15 years of "painful restructuring," it says, New Zealand has failed to catch up with its OECD partners.

Levels of investment and savings are low, and while foreign direct investment has grown it is too focused on sectors of "natural advantage" such as forestry and aluminium. Foreign investors are not investing in research and development and "green fields" business opportunities which could help turn overall economic performance around.

"In contrast to Ireland, overseas investment in New Zealand has not generated new capabilities onshore, or new beneficial knowledge. The lesson appears to be we cannot expect foreigners to create capabilities we are not prepared to create for ourselves."

Dr West said New Zealand had benefited from foreign investment in areas such as an improved communications infrastructure.

However, investors had to be focused on the export rather than the domestic sector. "We need to encourage investors to build research capabilities, export-focused capabilities."

The paper was designed to encourage the Government to undertake a systematic and integrated review of public policy, Dr West said. Then to encourage systematic participation by the community.

New Zealand's economy is low-tech and centred on commodity areas where there is little growth potential, the association's paper says. In 1997, for example, New Zealand imported $12 billion in manufactured goods but only exported $4.9 billion. Most of these exports, it says, would not be deemed high or even medium-technology.

Worse, while high-tech exports are growing, they are not growing fast enough to gain market share. Present levels of high-tech production are similar to those of other OECD nations 25 years ago.

The association points out that while the New Zealand economy ranks highly in terms of freedom, its performance compared with others is poor. Per capita GDP is falling steadily behind.

Further, we are highly dependent on Australia, which buys around 50 per cent of our exports. Australian economic reforms and the erosion of the special relationship pose threats to that trade.