Dialogue: If seminars were the answer we would all be rich

By JOHN ROUGHAN

This is not a bad time of year for a bout of anxiety about the economic decline. After reading the papers the Prime Minister put around on Tuesday, you could look up to a deep blue summer sky and find solace that there is no better place to live.

Which would be a conclusion as profound as any you would have found in the papers. They were not consciously disheartening. In fact, one of the "visions" listed in the final report of the much-touted Science and Innovation Advisory Council was: A country that the rest of the world dreams of living in.

That proved too much for inclusion in Tuesday's Innovation Framework. The Government settled in the way of visions for: A land where diversity is valued; a great place to live, learn and do business; a birthplace of world-changing people and ideas; a place where people invest in the future.

We have been to these sorts of seminars. We know how it happens. Everyone's idea is written on the whiteboard. None is criticised, each is valid for discussion, which somehow never happens. In the end they all go into the report. It is not so much the verbiage of these documents that fills me with foreboding, it is the fact that anyone imagines an economy can be uplifted this way.

The Government is not the only offender, though it probably started the habit. Auckland has been buzzing with business revival groups lately, each with a snappy title, bad coffee, sponsored stationery and a mission statement.

They have done their visions, goals and strategies and though they don't want the Government back in business, they do really. They felt they were contributing to Tuesday's package and, frankly, they were disappointed.

The goal was there - to lift us into the top half of the rich world's per capita growth by 2011 - but where was the means, the money?

Heaven knows how that goal got onto the board. One of the reports in Tuesday's bundle, from the Boston Consulting Group, worked out that it would take GDP growth of 5 per cent each year for the next 10 years to get there.

We had that sort of rate for a couple of years in the mid-1990s. As I recall, it came about not from visions, goals and public investment in selected activities, but from a decade of decisive governments that kept within their competence and did their job well.

So well that the exchange rate probably reflected their monetary and fiscal performance rather than the value of the country's production.

A property splurge, an immigration crackdown and two MMP governments have put paid to high growth and an overvalued dollar. Now, while we prosper on farm commodity returns we don't notice our descent, unless we travel, or worry whether our talented children will stay here. The loss of first-world incomes is a slow, painless sort of poverty and probably too late to arrest once we notice how well the neighbours are living.

What can we do? It's probably not enough to return to the conditions of 1994-1996. We squandered that boom on real estate and there is nothing to suggest that privately we would invest more productively a second time.

So a certain amount of public direction is the only alternative. But not this way.

Nearly a year ago Helen Clark assembled her Science and Innovation Advisory Council, gave it a room in Premier House and asked for "a formal innovation strategy and action plan to advance economic and social transformation".

Its suggestion now: "A leadership team to advance economic transformation." It has produced one of those reports littered with words such as "vibrant" and "unique".

"Taking into account our size and distance from major markets, our unique areas of strength and subtleties of culture, we need to create an advantage for New Zealand that our competitors cannot afford to imitate ... " Like what?

They have no idea, but they think it is likely to need the Government's attention to foreign investment, immigration and research and something called "a strategic approach to regulations".

The Government has settled on information technology, biotechnology and creative industries for prime attention. Unique? They are the suggestions every place puts on the whiteboard. But would you put money on them? That's the test.

Labour seems unlikely to risk the country's fiscal stability on its innovation strategy. For all its rhetoric it is as conscious of its limits of competence as any government since 1984.

Note its response to a suggestion that it offer financial inducements to foreign investment that generates new activity rather than takes over established firms.

The Boston Report calculated that to reach the 2011 growth target would require roughly four new operations of Fisher & Paykel scale to be set up here by that date.

New Zealand's existing attractions - no capital gains tax, a favourable labour market and excellent quality of life - are not well enough known, they say. We also needed "incentive expenditure" for "dynamic deal broking".

The Government choked on the idea, saying that "New Zealand is unlikely to win a bidding war with other countries".

It might have added that it wants investment that doesn't need to be bribed and pays tax for the benefits of doing business in a stable, well-governed place with law that upholds property rights and contracts, and is free of corruption.

In those conditions, new economic ideas are likely to come from well-educated people with flair. But not while they are sitting in seminars.