Editorial: In search of our own success story

The Danes have always gone out into the world. A thousand years ago, their Viking forebears ventured as far as America. Today, Denmark's corporations continue the tradition, providing the foundation for the country's prosperity. The search now is not for the spoils of war, but for ideas - the sort of ideas that two big Danish companies, Novo Nordisk and Oticon, have bought from North America and improved upon to make themselves world-leaders in pharmaceuticals and hearing aids, respectively.

Those companies' success, as Simon Collins reports today in the first of the Herald's Our Turn series, is based on their founders travelling, making contacts, picking up ideas and then investing in developing them.

New Zealand must, similarly, search for ideas if it is to reverse its trend of sinking further behind the world's economic success stories. We were once referred to as the Scandinavians of the South Seas. There are similarities in temperament, innovative flair and an appetite for ground-breaking social welfare advances. Once we also shared success. No longer.

Denmark, a country of 5.2 million people, continues to thrive while New Zealand, in terms of average income, has slipped from third in 1960, behind the United States and Switzerland, to 22nd today.

Just as the Danes have bought ideas from North America, there must surely be ideas that we can borrow - ideas that will help kick-start a lethargic economy.

Countries such as Ireland have swept past us in recent years. Simon Collins and photographer Paul Estcourt travelled to seven flourishing economies - the US, Ireland, Singapore, Taiwan, Israel, Australia and Denmark - in search of common threads. Their daily reports will examine the cogs of these countries' economies and assess how success has been achieved.

The series starts today by examining how an entrepreneurial spirit has been fostered. Pivotal is the way in which growing companies are able to raise money. A strong sharemarket or thriving venture capital industry is essential. It is also important that national frontiers present no impediment. More than 100 Israeli companies have listed on New York's Nasdaq exchange. And Denmark has put aside traditional friction with other Scandinavian nations in the interests of a common computerised stock exchange trading system. Now, Danish companies can raise capital from the whole Nordic region.

The position here is much different. The New Zealand exchange put itself out on a limb by defying international norms in areas such as takeovers. And even stuttering progress towards closer transtasman relations has stalled because of fears of a takeover by the Australian exchange. To New Zealand's cost, the pragmatism which shaped the Scandinavian alliance has not been embraced.

Entrepreneurship is, of course, further encouraged by favourable government policies, including competitive tax rates, and a culture that celebrates success.

New Zealand business has long railed against a tall-poppy syndrome. We do not endow hero status on business leaders in the way that Americans idolise Bill Gates. Neither do we have tax rates recognising that companies contribute to the nation's wealth in different ways, nor personal tax rates that reward hard work.

But we are not alone. Denmark has no business superstars. The likes of the Maersk family, of shipping fame, are appreciated mainly because of their modesty. And in Israel, a huge defence budget means that personal and company tax rates are higher than in New Zealand.

But they have found alternative roads to success. Grasping the opportunities of a global economy, their entrepreneurs have ventured confidently out into the world.

Yet always they are underpinned by a base which, in a variety of ways, supports their efforts. New Zealand must create a similar climate if such confidence is to be contagious.

Our turn

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Simon Collins

Letters to the editor (newspaper)

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The jobs challenge

Common core values

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