E-commerce big threat to NZ export earnings

Dr Charles Handy, the British authority on the future of commerce and nations, is worried about New Zealand in the looming age of e-commerce.

"There are great dangers for you in the new technology," Dr Handy argues, citing our isolation.

"The new technology means the death of distance. Your competitors won't just be in New Zealand. They will be everywhere. Other countries want access to your markets."

It is nothing new that we have competition in our trade with the rest of the world but, according to Dr Handy, the way that e-commerce facilitates long-distance trade poses a special and fast-emerging threat.

To forestall more powerful economies from threatening New Zealand's export earnings, we should urgently develop a strategy built around a relationship with a big-brother nation.

"You can't make a living with 3.6 million people," he says.

And he cautions: "New Zealand can't hope to woo the world [in trade]. You have to be more focused."

Just another international expert dispensing highly paid wisdom after five minutes in the country? Far from it. Dr Handy knows New Zealand surprisingly well (his daughter lives in Katikati).

He gave his advice free in publicising his latest book, The New Alchemists.

It is a study of people, including former New Zealander now London-based publisher Martin Leach, who with that special mix of doggedness, self-belief, passion and know-how create something out of nothing.

Dr Handy, aged 67, is a guru's guru. A profound thinker with an impressive scholarship which has helped him sell over a million copies of books such as The Empty Raincoat, he dispenses his opinions in a kindly and avuncular but certainly not apologetic way.

His insights are so breathtaking that it is a pity Wellington did not grab him for an inter-party session with the politicians. After all, this is a man who is paid colossal fees to help chart the direction of Fortune 500 companies.

Dr Handy sees the big picture and he thinks New Zealand's place in it looks alarmingly tenuous.

"You could end up as a cheap call centre" unless long-term strategies are adopted.

His suggestion? Copy Singapore and select a much larger, complementary nation with which we can not only trade but form a deeper and enduring association.

He calls it a "hinterland" strategy, in the sense that the larger country should be big enough to provide room for our products and an umbrella for our aspirations. That, of course, used to be Britain.

In Singapore's case, the hinterland nation is the United States.

"Singapore woos Americans. It's a deliberate strategy," he explains, having just visited the island nation.

"But what market does New Zealand have for its hinterland? I'm not at all sure what it is. But without one, you will become somebody else's hinterland."

Dr Handy suggests we might choose Japan and start on an equally deliberate, 20-year programme that would bind the two nations together.

This would be much more focused and expansive than existing ties - languages, cultural exchanges, Japan in the curriculum - meaning the whole relationship.

"Tourism isn't enough," explains the self-styled social philosopher. "There must be an underlying reason [for the relationship]." In effect, he's talking about a conscious, two-way investment in each other's future.

Although he steered clear of politics, Dr Handy would probably take issue with some aspects of the Government's Bright Future strategy designed to underpin the knowledge economy.

Unlike Bright Future, he believes New Zealand's knowledge economy starts with the arts.

The knowledge economy depends, he says, on "buzzy, magnet cities" such as London and Dublin which have plenty of universities and vigorous, world-class arts complexes producing "young imaginative people."

Hardcore technology skills are all very fine and essential but it is the arts that "stir people's imaginations and start them dreaming."

In the long run that is where the money is - "New Zealand wants to be at the creative end [of the knowledge economy]."

For Dr Handy, the creative end does not include call centres, which he sees as New Zealand's possible fate because we are inherently pleasant, English-speaking people in the right time zone.

"That might be all right for, say, smaller centres," he says, as has happened successfully in some of the regions of booming southern Ireland.

But it is not the way to add value to the economy.

And although he is also too politic to say so, it is pretty clear from an hour's conversation with Dr Handy that he fears many New Zealanders do not yet appreciate the urgency of our situation and that solutions will be forced willy-nilly on us.

"Things have to change to stay the same," he explains. "The trouble is you'll have to change or you will just get poorer."