Editorial: Let's make the most of our potential

Many eyebrows would have been raised at reading the result of a recent international survey called the Global Entrepreneurship Monitor (Gem). Out of 29 participating countries New Zealand ranked in the top five, ahead of even the United States. You would want to know more about that survey before opening the champagne. Each country surveys itself, using the same measures as the rest.

The New Zealand study, conducted by Unitec's centre for innovation and entrepreneurship, questioned 2000 people aged 18 to 64 and more closely interviewed a number of local entrepreneurs, educators, politicians and businesspeople, paying special attention to Maori entrepreneurship. We gave ourselves pretty high marks.

Not only were our scores in the top five, with Mexico, Australia, Brazil and South Korea, but we had the world's highest proportion of female entrepreneurs, especially in the younger (25 to 34) category. Yet we also had the world's highest proportion of senior entrepreneurs (aged 35 to 64). And Maori were every bit as enterprising as Pakeha. No group seems to be missing this bus.

Entrepreneurship - the ability to see and exploit an opportunity - has sometimes seemed the missing ingredient in our economic recipe. For most of New Zealand's history the major investment decisions have been made by the state, either directly, as in the foundation of Tasman Pulp and Paper, Air New Zealand and Telecom, or through import licensing and regulatory protection.

In 1984, the Treasury's calculations suggested the country's overall return on investment was below par and probably to blame for our declining wealth by comparison with countries with living standards we would like to share.

The solution at that time was to remove, or at least neutralise, state influences on investors' decisions. Resources would flow where private enterprise saw sound opportunities and sufficient returns. Entrepreneurship would lead the way.

After 15 years, the results were disappointing. Much entrepreneurial activity had consisted of buying former state enterprises. Telecom was the strongest stock on the exchange. Most New Zealand firms had passed into foreign hands and while New Zealanders also invested overseas, their returns were not a match for those that foreign companies were making here. The balance of payments worsened, the decline in relative national wealth continued.

At the Knowledge Wave conference in August, an expatriate economist warned that we were in danger of slipping off the table of First World nations. It is time to take stock pragmatically, assess our strengths and play to them. If entrepreneurship is our strength, as this survey suggests, then it would be folly to invite governments to muddy the market signals again. The state's best contribution would be to reinforce our entrepreneurial instincts with education.

The results of the survey are all the more remarkable because until recently entrepreneurship has not been a conspicuous element of the school curriculum, or in favour at institutions. But senior school students are now given a taste of entrepreneurial behaviour if they want it, and the tertiary sector, as witness the Knowledge Wave and this Gem project, is leading the required culture.

More could be done. Entrepreneurship is not a commercial quest alone. It is an attitude that can be applied to all fields. Primary school pupils can be taught to look for opportunities to apply knowledge in new ways to enhance their returns. If the country can make the most of the potential found in this survey, it will be well off in every sense.

nzherald.co.nz/entrepreneur

Global Entrepreneurship Monitor