By SIMON COLLINS
A prominent expatriate economist says New Zealand faces what amounts to a national emergency unless it changes its economic course.
Professor Robert Wade of the London School of Economics told a seminar at Auckland University yesterday that New Zealand had one of the slowest economic growth rates in the developed world since 1985, and risked becoming the first country in 50 years to lose its "developed" status.
His comments came as Prime Minister Helen Clark was preparing to release an "innovation framework" for the country at the opening session of the Catching the Knowledge Wave conference in Auckland today.
The Herald is a co-sponsor of the conference.
Science and Innovation Council chairman Rick Christie described the framework as a "high-level" consultative document which will set out challenges such as "education for a knowledge society" and making New Zealand "a magnet for talent".
It will suggest that government should be geared towards "investing for outcomes" - mirroring a comment from another Knowledge Wave speaker, Irish Development Agency chief executive Sean Dorgan, that Irish Governments see their role as "developing the country, not running the country".
Professor Wade said New Zealand's slide down the ranks of rich countries "should engender, if not a sense of national emergency, then at least a sense of critical national challenge, the response to which has to be led by the Government".
"The option of sinking gently in the world income hierarchy while the population gets on with living full and non-materialistic lives is not an option, especially because of network effects," he said in a prepared paper.
"Once a threshold density of skilled people is lost, the rate of out-migration is likely to accelerate, companies and organisations will have increasing trouble meeting staffing needs, the quality of public services will decline, the tax base will erode, and so on. My hypothesis is that it becomes very difficult for a country to rejoin the 'organic core' [of the developed world] once it has fallen out. Think of Argentina."
Professor Wade, an expert on the "Asian tigers" of Taiwan and Korea, said New Zealand needed "a concerted national strategy" to develop the economy.
He said Taiwan and South Korea both set up cabinet-level offices to attract home Taiwanese and Koreans who had moved overseas, offering incentives such as moving costs, salary top-ups and subsidised mortgages, as well as freedom to conduct their own research and establish new businesses. They both subsidised expatriates making short visits.
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