He said as New Zealand's position in the developed world fell, the economic forces which lowered income, such as the emigration of skilled people, would accelerate.
"Exhibit A is Argentina. Will New Zealand be looked at as the Argentina of the second half of the twentieth century," Professor Wade said.
Though he shared concern about New Zealand’s current economic position, Professor Wade poured scorn on previous speakers who had celebrated the American free market model of development, without acknowledging the huge amount of government support that went into US industry under the guise of national security.
He also ridiculed those who suggested New Zealand's free-market reforms would work if completed.
"It flies in the face of fact. What they did prove is you can level the playing field in the best neo-liberal fashion and the players don't turn up - if they do turn up, they don't play on your team."
He cited the work of Canterbury University economist Paul Dalziel, who argued Australia's achievements over the past decade were a good example of what New Zealand could have done with a moderate rather than radical reform programme.
Professor Wade said it would be hard for New Zealand to raise its position in the OECD without national strategies and policies.
An economic policy of Government deregulating and leaving the economy to individual decisions of corporates would not work for a country trying to catch up.
"An industry policy when a country is trying to catch up must go beyond neoliberal and Keynesian economics," he said.
"What government needs to do is create one or more organisations in the state where experts in science, technology and politics can exercise foresight in a comprehensive, economy-wide way, in a way which complements exercises of foresight being carried out by private firms.
"Such an organisation would need backing from upper echelons of government and be able to inject conclusions into other parts of government, notably Treasury.
He said the policy would not require large amounts of money or intervention "but it does require a lot of support.
"It's not like the old planning council which was essentially irrelevant."
He said governments not only had a role attracting capital, they must also now attract skilled migrants.
"In the past decade there has been a shift in perception towards seeing highly skilled labour at least as important for production as capital, and has become highly mobile."
Professor Wade said government should also consider a diaspora policy.
"There is large agreement in this room New Zealand needs to do more to attract back and make contact with expatriate New Zealanders who have valuable skills."
He said the pioneers of diaspora policy, Korea and Taiwan, had made very large returns from it, and now had cabinet level offices charged with creating networks of expatriates and inducing some to return.
Government should also support high tech clusters linked in universities, Professor Wade said.
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