New Zealand's export economy has been dominated by its primary industries, commodities and tourism, but in the 21st century most strategic thinkers would accept that science and knowledge-based innovation is central to a better and more prosperous country.

But both our public and private sectors have over decades under-invested in research and development; only recently has this started to change. Auckland must play a critical role in this transition.

A smart nation must have a sufficiency of ideas flowing, an ecosystem that allows the market and the scientist to get close together, and a culture that accepts risk. Overseas evidence suggests that 100 potential commercial ideas need evaluation to find one that justifies investment. The ecosystem has many components - the generation of bright young minds (perhaps the most critical), access to capital, expertise in the management of intellectual property, expertise in dealing with regulatory affairs in areas such as health and food. And then, when the product is in the hands of the private sector, there are other issues.

Managing a technology company is not the same as running other companies - many ideas fail not because the science is not good but because of inexpert governance, poor management or inadequate capitalisation. And then we have to sell to the world. It is very different to selling food and tourism.


The government, while critical, cannot do it all: local government must take a major role. There is a need to promote, plan and incentivise an "innovation city". It needs the development of technology parks, clustering academia, entrepreneurs and support services. It needs the hospitals, universities, technical institutes and crown research institutes to co-operate rather than compete. It needs venture capital. It needs a commitment to work together and to attract the best and most creative to want to live in Auckland.

Auckland needs an explicit strategy encapsulating both central and local government working together and engaging institutions, public and private, business people and entrepreneurs. The University of Auckland is a world-ranked university and it is an enormous contributor to the local economy, but has this asset really been incorporated properly into thinking? And Massey, AUT, Manukau Institute of Technology and Unitec all have major contributions to make. There are institutional rivalries, and the town and gown must grow closer. We must integrate and use each academic precinct to maximal advantage without destroying their individuality.

The commitment to develop the Wynyard precinct is exciting but what public science activities, what kinds of incubators, what private sector services need to be there? Perhaps even a science museum? What sort of footprint will the Advanced Technology Institute that will arise from the announced restructuring of Industrial Research Ltd have in Auckland? What sort of facilities should Auckland develop to attract high-technology businesses and who should manage them? The creative arts and the sciences are often seen as two different worlds separated by a gulf - but both require the talent of the mind. Design sells: the ecosystem needs a school of industrial design.

We can build knowledge-based businesses but we have to keep them here. As companies grow, their markets will be overseas, and there will be a pull to shift executive functions and even manufacturing overseas. What will anchor companies here will be a research and development function so embedded within the city that it cannot be moved. We have to build a city that really values knowledge and science and entrepreneurship.

Ultimately it is about environmental and cultural change. Our leaders can encourage, but at the end we need to recognise the importance of better science and technology education in all our schools, the importance of our universities and polytechnics.

Green shoots are emerging - they must be nurtured. It is not unrealistic for Auckland to become, within a decade, known as a knowledge city with a vibrant technology sector comprising not only small to medium enterprises but also multinationals undertaking research and development in areas where we have a advantage. If we look at advanced comparable countries, a feature of all of them is their capacity to attract multinationals to do research and development. The tyranny of distance is overstated when we consider the knowledge-based industries.

Turning Auckland into a smart global city in a smart nation must be a priority. The investment needed is partly fiscal, but so much more of it is psychological and motivational.