Harvard Professor points way ahead

By JOSIE CLARKE

New Zealand must build on its existing industries and commit itself to a national economic strategy if it is to become a competitive force, says Professor Michael Porter, of Harvard Business School.

Professor Porter has an intimate knowledge of the economy. In 1991, he released the "Porter Project", which discussed New Zealand's opportunities for economic growth.

Five years later, Professor Porter said New Zealanders had accomplished much, but he believed the country had only partly achieved its potential.

Yesterday, he said all that separated New Zealand from competitive success was confidence and the commitment to succeed.

"We have a lot of the most important conditions in place, but somehow there has not been this national commitment to translating this potential into reality."

He said that New Zealand lacked a commitment to clustering, suffered from Government policies working at cross-purposes, and had yet to develop an overall strategy.

"I think these polices are a natural reflection of the to-and-fro of politics, but they also reflect the fact that there is still not complete commitment to a direction."

He said it did not matter what a country chose to produce.

"The challenge in New Zealand is not to get into totally new fields. The challenge is how to make our areas where we have a position extraordinarily productive.

"You build new industries out of existing industries. You build new opportunities out of existing strengths."

He stressed the importance of clustering, a process that systematically built the capability to compete.

He said that if New Zealand was to become competitive, it needed to address some chronic weaknesses, make the transformation to an innovation-driven economy based on its unique assets, better integrate its economic and social policies, and articulate an overall national economic strategy.

Weaknesses were financial markets and the human resource development system.

To be an innovation-driven economy, New Zealand had to upgrade its scientific and technological capacity in fields where it could be world-class.

Professor Porter's action agenda included increased specialisation of universities and research institutions, increased incentives for research and development, and a focused approach to attracting foreign investment.

An economic strategy was more than a list of policies and action plans. It was about which fields New Zealand aimed to become world-class in, and what the country stood for - or "the brand".

The New Zealand scorecard was a good first step, he said.

Professor Porter mentioned as examples of brands: clean, green and healthy in tourism, agriculture, manufacturing products and processes; ethical investment; "adventuresome" and "technologically savvy".

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