Another chance to heed warning

By Ralph Cooney

The warning messages are old: 15 years ago the OECD called for New Zealand to diversify its economy; seven years ago the Porter Report called for value-added exports in place of commodities.

This year will be strike three for New Zealand if the messages of the Government's Five Steps Ahead plan are ignored. High-technology exporting to a global market will assure a more optimistic future.

A century ago, New Zealand was one of the wealthiest countries in the world. A century later, it is slipping down the table of advanced economies towards poverty.

Corporate research and development in the United States is accelerating at an unprecedented rate, and we see the British Government investing $3500 million in a one-year upgrade of research infrastructure.

Does New Zealand go quietly into the dark night or do we fight against the dying of the light?

The Bright Future package is not about increasing the growth rate in the economy over the year ahead. It is about rescuing the economy from drifting into Third-World status over the next decade or two.

The problems of providing First-World education and health services will become insurmountable if the long-term downward economic drift is not reversed.

Many highly qualified and motivated New Zealand citizens have detected that our economy is sinking and have sought professional survival and prosperity overseas. This outflow of talent compromises our country's ability to recover its strength, damaging hope and pride.

The contrasting youth migration patterns between New Zealand and Ireland illustrates a dramatic switch: the Old World has become the New World, and vice versa.

Global consensus on the past decade of future planning suggests a few key technology fields will be essential for economic growth. These include IT, telecommunications, biotechnology and advanced materials.

These fields are not narrowly focused science, but bridge fields and professions.

For example, IT is manifested in e-commerce, the electronic archiving of legal case histories, the storage of rare music, and in remote surgery. This is the age of advanced interdisciplinary technology.

There is the argument that New Zealand should buy and use this technology, rather than invent and develop it.

Given that access to such technology is truly global, it is also available to our competitors and hence its use is, at best, a means only to keep up with the pack. To invent, own and produce technology that is used globally is a far more permanent and powerful advantage.

Will the measures proposed in Bright Future move New Zealand from a commodity-exporting into an innovation-driven manufacturing economy serving the global market?

They are a very important first step and signal a positive switch in Government thinking.

This package of measures is intended to produce skilled, knowledgeable and entrepreneurial human capital.

The measures also include a contestable New Economic Research Fund focused on longer-term but higher-technology outcomes, including telecommunications, biotechnology and advanced materials.

The Crown Research Institutes (CRIs) will be central to the revolution. Their involvement in incubator initiatives will lead to spinoff companies producing innovative and commercially valuable products and processes.

A central principle is that all three sectors - industry, CRIs and universities - work in an integrated fashion to maximise the returns from research and development in high technology.

Ireland produces almost all of the Pentium III processors for the world. New Zealand should look for similar successes.

What are the impediments to realising and sustaining the promise of Bright Future?

Innovative economies require major investments in infrastructure, and better cooperation across the industry-CRI-university spectrum must emerge to achieve this.

* Professor Ralph Cooney is dean of science at the University of Auckland and chairman of the New Zealand Council of Science Deans and Assistant Vice-Chancellors.