As NZ loses its place in the international league tables, business as usual just isn't an option.

Oopsy-daisy. I fear New Zealand's economy is broken. As in, really munted. In the past few decades we have argued about whether we should open up or close down, be right or left wing, go GM, make gizmos, have a picking winners or a "look ma, no hands" government.

But basically, none of that makes a jot, whit or tittle of difference. We are not part of any of the regional go-ahead clubs of world nations and picking lint out of our policy navels is a fat lot of use.

Last year economist Phillip McCann wrote a paper about our productivity paradox: the mystery of "why a country that seems so close to best practice in most of the policies that are regarded as the key drivers of growth is nevertheless just an average performer".

How can it be that we're the second best country in the world for doing business but in terms of GDP per capita we are falling behind countries like Slovenia, Korea and Taiwan?

McCann said existing New Zealand debates tend to focus too much on internal explanations like regulation, taxation and institutions - more lint picking - but his theory is that "economic geography" is to blame. Yes, New Zealand has always been in the wopwops of the world, but the world has changed.

Now we are being squeezed out by growth in super-regions we aren't part of, global cities we don't have and the influence of multinationals who can't even be arsed having an office here. Face it, we're not part of the "in" clique. Incidentally, could someone please invite the New York Times' rockstar economics writer Tom Friedman down here to explain why if "The World is Flat" as he claims, we are falling off the bottom?

This topic is hot stuff for academics, intellectuals and Rod Oram but it doesn't seem to have filtered down to the less pointyheaded. Or even lobbyists.

Case in point, Roderick Deane gave a presentation to the Business Roundtable's Dunes Symposium a few weeks ago where he said our slow productivity growth is the price we are paying for backing off reforms.

Oh, do try to keep up, Roddy! This is the song the Business Roundtable always sings. But as we head towards a double dip recession we need to reframe the way we think about our economy.

To most punters the idea of being the OECD dunce is a fat-cat kind of problem that should only keep tycoons called Roderick awake at nights. Teachers' unions are in this category. They figure it would be nice to be winning on international economic indicators but if not, so what - we can carry on as is. They just want more money and are not really interested in big picture stuff like why there is a huge pay gap with Australia.

Among this lot there seems to be a prevailing attitude that we are choosing to be "nicer", kinder, laidback sort of people rather than buying into the cut-throat competitive international marketplace. Big mistake. Because one of these days they are going to find out what the real cost of opting out is.

That will be the day they find their kids don't have access to all the life-changing technology in Silicon Valley or Mumbai or wherever, that their kids' degree in barista studies is a joke, that we really have got totally left behind.

The scary thing is, a lot of people feel more comfortable with this scenario than with trying to be successful. Words like "Switzerland of the South Pacific" sound far too intimidating and kick-arse. But I don't think there is much choice. Unless we shake up our metabolic rate in some way, we'll all be broken.

dhc@deborahhillcone.com