Fran O'Sullivan: Big visions must be shared

The Government has a challenging ambition to rebrand New Zealand as "Innovator to the World."

Its vision, says Prime Minister Helen Clark, is to see New Zealanders turning great ideas into great ventures.

The Clark vision has got somewhat lost during the welter of information disclosed during last week's second Budget by the Labour/Alliance Coalition Government.

But the Government needs to rebrand itself, step up its own metabolic rate, lift the change tempo and enshrine growth targets at well above the Budget's stated aim of four per cent if the ambition is to become reality.

Last Thursday, the Coalition missed a classic branding opportunity to use its Budget to capture New Zealanders' hearts and minds and inspire them to sign up to a dream.

Finance Minister Michael Cullen's Budget was a conservative affair. Its focus was to demonstrate two core elements: a strong commitment to sound fiscal management, and an equally strong commitment to the transformation of the economy.

But Cullen's Budget speech smacked more of a politician wanting to protect the Government from suggestions that it lacked fiscal probity, than of a dare to New Zealanders to lift their game.

Instead of immediately signing New Zealanders to a dream to rebuild their economy - underpinned by the Government's own leadership to create a knowledge society dynamic - Cullen read a fiscal sermon which would have turned many listeners off by the time he announced a new indicator, OBERAC (operating balance excluding revaluations and accounting changes).

The exciting moves to invest in human capital and create wealth-generating measures were sandwiched between fiscal platitudes and the inevitable social policy prescriptions.

It was left to the Prime Minister to communicate the Government's vision at post-Budget events the following day.

At a video-linked breakfast, Clark illustrated her supremacy by announcing she had instructed her Science and Advisory Council to develop a formal innovation strategy and action plan.

She fleshed it out at a later lunch, saying the council - chaired by Rick Christie - had been asked to come up with a consultation draft by July.

The strategy would identify critical elements to ensure that innovation, enterprise and technology were the key drivers for the Government's vision.

But the timing was astray.

As former US president Bill Clinton said, "The Budget is the Plan."

The Government would have achieved greater publicity for its aims if it had used the Budget to sell its thrust rather than making it a mere statement of spending priorities.

Inevitably, business focused on the Government's failure to indicate cuts to the company tax rate in the Budget.

Last year's increase in the top personal income tax rate to 39 cents in the dollar on incomes over $60,000 remains a sore point.

Clark's riposte that New Zealand in effect cannot afford a lower tax rate did not go down well with business people who believe lower taxes encourage talented New Zealanders to stay and make a contribution.

But other Government strategies - particularly rationalising the tertiary sector and creating centres of excellence - met general approval.

Last year, it was a grim-faced Helen Clark who used the post-Budget lunch to front the Auckland business sector for her first time since becoming Prime Minister.

At that time the Government and business were at a standoff over the abolition of the Employment Contracts Act and other measures which have reduced New Zealand's international economic competitiveness.

A year later the dynamics have changed. Prime Minister and business are now more comfortable with each other, and Clark's decision to refocus on building a knowledge economy initiative instead of redistributive programmes such as Closing the Gaps is welcome.

The Advisory Group's strategy will be focused on:

* Developing and promoting a culture of innovation.

* Ensuring New Zealanders have the skills and opportunities to participate in a knowledge-driven society.

* Developing and encouraging effective entrepreneurial and business skills.

* Ensuring New Zealand's success as an export-focused economy based on high value products.

* Ensuring the maximum commercialisation of research and development.

* Ensuring Government spending which can support innovation is used to best effect.

* Making sure the education system is an engine and a conduit to New Zealand's success.

The former academic turned politician wants to see much higher standards in the tertiary sector.

The blueprint for much of the Government's new tertiary education drive is contained in an extensive report by the Tertiary Education Advisory Commission.

Its February report, Shaping the System, contains 97 recommendations, many of which are geared at reducing the fragmentation and duplication of resources which bedevil the sector.

An Education Commission will be empowered to drive through change.

Already Canterbury University is jibing at the Government's decision to start a rationalisation process. But Clark has strong business support for her stance that the Government is not attacking academic freedoms - just waste.

The most encouraging aspect of the Government's new thrust is its decision to borrow good ideas from anywhere to back the growth of innovative, high value, research-driven New Zealand businesses.

Cabinet Ministers such as Pete Hodgson and Paul Swain have recently been studying best practice in countries such as Israel and Singapore and in America's Silicon Valley.

Clark herself has been transfixed by Korea, which has itself caught web fever.

As she pointed out on Friday, Korea launched a Cyber Korea 21 initiative after the Asia crisis to accelerate its transition to a knowledge-based economy.

Korea has set a target of having 95 per cent of all its sixteen million households connected to the internet by 2005.

A Venture Valley has been established in Seoul to encompass 4000 venture firms and small and medium-sized companies. Korea has 300 business incubators and its Government is supporting new startups to the tune of $US900 million ($2120 million), with $US45 million allocated to securing Nasdaq listings for 100 Korean ventures by 2005.

"If we have an ambition for New Zealand, as we do, the Korean example is worthy of study," Clark told a Friday lunch.

Pushing economic development initiatives in international forums like Apec will be added to New Zealand's traditional pre-occupation with trade liberalisation.

Getting New Zealand to adopt a "one-team, one-dream" approach that branding gurus such as Saatchi International's Kevin Roberts recommend will require the Government to be more inspirational.



No targets for national and regional wealth creation are on the table. Just a rather anodyne commitment to getting back into the top half of the OECD nations.

As John Mulgan stated, New Zealand has frequently been seen as the world's laboratory, providing radical and progressive solutions to common problems.

The Government's challenge is to ensure that wealth creation again takes priority.

In August, the Clark will be at the Catching the Knowledge Wave conference.

Conference organisers hope she will use that event to lift the Government's metabolic rate and signal radical change.

It is an opportunity she must not flunk.

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