By FRAN O'SULLIVAN and SIMON COLLINS
A major project to harness the talents of New Zealanders living overseas, create a technology hub and persuade foreign investors to put their capital into New Zealand is under way.
Prime Minister Helen Clark heads the joint Government/business steering group to which two private sector-led taskforces have been charged with bringing together strategies to enhance New Zealand's talent pool and the level of foreign direct investment.
The taskforces have also been charged with examining roadblocks to change: New Zealand's immigration policies, tax issues, and the diffused bureaucratic effort are all under the microscope.
A third taskforce which will look at innovation strategies - such as the development of the technology hub - has yet to begin formal work.
The project began at last year's Government-to-Business forum.
The foreign direct investment taskforce is headed by Deutsche Bank chief executive Scott Perkins. Other players include Carter Holt Harvey chief executive Chris Liddell, Infinity Group's Jon Hartley, Credit Suisse First Boston chief executive Bill Trotter, The Warehouse's chief executive Greg Muir, Baycorp's Gavin Walker, former Fletcher Building chief executive Alexander Toldte and Jenni Raynish of Raynish & Partners.
Boston Consulting Group, which produced much of the grunt work for the Competitive Auckland project, has also been integrally involved at the national level.
The talent taskforce led by McKinsey & Co principal Andrew Grant includes JB Were chief executive Clark Perkins, Korn Ferry managing director Annika Streefland, Global Dairy Company chief executive Craig Norgate, Andrew Harmos of Russell McVeagh and Donna Heizer.
A key behind-the-scenes player is private sector cheerleader Stephen Tindall - founder of The Warehouse - who is not formally involved with the existing two teams but is expected to combine forces with the University of Auckland's Bridget Wickham and ex-pats like businessman Craig Heatley when the project rolls onto its next phase, to produce big innovation ideas and strategies.
The Government allocated $259,000 in the Budget for the initial study by Auckland's LEK Consulting on possible measures to retain talented New Zealanders in this country, maintain or establish contacts with those who are overseas, and attract talented people to New Zealand.
Both this study and the Boston Consulting Group report on foreign direct investment are due to be completed this month.
Another $2.25 million was allocated for a "brain gain" initiative following up the LEK Consulting study to identify and network New Zealanders who are world-class thinkers and to use New Zealanders overseas to access international markets and promote New Zealand.
The Deputy Secretary of Economic Development, Roger Wigglesworth, says both consulting groups have been given a wide brief. "Nothing has been debarred. We are asking for the best advice," he says.
The two taskforces are reporting to a top-level business-Government steering group chaired by Helen Clark. Other members include Economic Development Minister Jim Anderton, Finance Minister Michael Cullen, Science Minister Pete Hodgson, NZ Post chairman Ross Armstrong, Andrew Grant, Scott Perkins and Annika Streefland.
Both studies are looking at the examples of countries such as Ireland and Israel, which have successfully targeted people of Irish and Jewish descent both to tap them for jobs back home and to use their international business contacts to attract investment in their respective countries.
Australia has also started to follow their example. Victorian Labor Premier Steve Bracks has created a $A10 million ($12.5 million) perpetual fund whose earnings will be used to bring expatriate Australians home for key jobs. Victoria's Biotechnology Ambassador, Professor Adrienne Clarke, said in Auckland last month that this could be used for salaries or expenses.
"The federal Government has also made available federation fellowships which recognise that we need clever people. They've put in $A250,000 a year for that. The first round of fellowships has just been called for," said Bracks.
Bracks launched a discussion paper in June which proposes developing a database of all skilled Australian expatriates and using that network for business development and technology cooperation.
A paper produced by NZ Treasury economists Peter Bushnell and Wai Kin Choy estimates that about 600,000 people born in New Zealand now live overseas - slightly fewer than the 650,000 people born overseas who live in NZ.
Almost 400,000 of our expatriates live in Australia, with a further 60,000 in Britain and 20,000 in Canada and the US.
Several hundred expatriates put their names to an advertisement placed in the Herald last year by Auckland stevedoring manager Richard Poole, which urged the Government to change its economic policies to make New Zealand a more attractive place for business and employment.
Kevin Roberts of the London-based advertising group Saatchi & Saatchi was closely associated with that group, and had earlier been tapped by former Prime Minister Jenny Shipley to develop a marketing campaign for the NZ Tourism Board.
Other New Zealanders in leading positions overseas who are here this week for the Knowledge Wave conference include the director of pharmacology at Merck Research Laboratories, Jilly Evans, Ian Narev of McKinsey & Co in New York, University of California business professor David Teece and London School of Economics professor Robert Wade.
Other groups of expatriates have also formed. A group of 60 coordinated by physicist Dr Richard Easther of Brown University in the United States made a submission to the Tertiary Education Advisory Commission last year on the future of the NZ tertiary education system. Other networks have been activated by NZ embassies, consulates and trade posts around the world.
In an interview in California in April, Professor Teece said "job number one" for all NZ consulates should be to establish databases of NZ expatriates and tap into their networks.
"There are a lot of Kiwis out of NZ who would love to go back if there was an opportunity for them," he said.
Professor Wade believes New Zealand needs a focused agency "to coordinate an immigration and diaspora policy targeted at increasing New Zealand's base of scientists and engineers, whether resident in NZ or abroad".
Meanwhile, a background paper prepared for the Knowledge Wave conference by Auckland University analyst Jason Ingham proposes that the Government create an integrated NZ Economic Development Agency to market both NZ trade and investment in foreign countries, advise and assist NZ exporters and attract talented NZ expatriates back to this country.
"Countries such as Ireland, Scotland and the Czech Republic have managed to shift economic under-performance by establishing a world-beating national EDA that promotes sustainable economic development and attracts a disproportionately high amount of foreign direct investment," Ingham argues.
"Currently Trade NZ, the Ministry of Foreign Affairs and Trade, the Ministry of Economic Development and Industry NZ are adopting separate strategies."
Ingham suggests a vision which he calls Opportunity NZ - "a proposition for personal wealth creation that is so strong that we excel at the war for talent, for example 25 per cent better than Australia".
He suggests that this requires:
* Lower and more uniform tax rates in line with the McLeod tax review's proposal to reduce the present four-step personal income tax scale to two steps.
* An openness to highly skilled immigration, including "a celebration of immigration, with cultural integration and support networks provided to ensure that immigrants immediately begin contributing to economic growth".
* Continuing to "lead the world in forging free trade agreements".
He says New Zealand is missing out on the benefits that could be gained from "clusters" of related businesses working together, as advocated by Harvard's Professor Michael Porter.
"There is a surprising lack of cooperation between NZ companies in the same industry, frustrating the formation of clusters," he says.
An attempt by Trade NZ to bring wood product exporters together in a consortium collapsed last year.
However, there are effective cluster organisations grouping exporters in the furniture industry, boat building and some service sectors such as tourism.
There are also local groups such as the Auckland fashion cluster sponsored by the Auckland City Council, the film industry in Waitakere and Wellington and earthquake engineering firms in Wellington.
Ingham says such groups need to include "a variety of related industries, suppliers and institutions all located in the same place".
"Clusters are important because they provide the most productive way to organise activity to achieve unique productivity and innovation," he says.
New Zealand has made a start. But, in Ingham's view, it still has a long way to go.
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