Our rocket trip to the future is waiting - if we all want to go

MATHEW DEARNALEY and SIMON COLLINS ask the experts how we can jet-propel ourselves to becoming a knowledge society.

When former United States President John Kennedy vowed in 1961 to land a manned spacecraft on the moon before the end of the decade, he probably had little idea how to pull off such an audacious stunt.

Nasa engineers were left sweating over his seemingly desperate ploy to lift American morale in the face of Soviet superiority in space.

Although Kennedy's presidency ended with an assassin's bullets two years later, the US remained committed to a goal which put astronauts Neil Armstrong and Buzz Aldrin on the moon on July 21, 1969 - just months short of Kennedy's deadline.

Now in 21st century New Zealand, Institution of Professional Engineers' president Tony Gibson invokes the moonshot as proof of what can be made possible by a conscious decision backed by a sense of national purpose.

Never mind that Kennedy's big talk left others scrambling to work out the detail.

The point was that as a leader, he made a choice for a nation which was prepared to rally around his vision.

Mr Gibson, an Auckland fire safety engineer, will use a special presentation the institution is giving next month to Government MPs to challenge them to make a similarly bold choice - to rocket New Zealand back to the top of the OECD economic table.

He has been leading seminars throughout the country on how we can emulate the likes of Ireland and Singapore and create the wealth needed to deliver health and welfare to all New Zealanders - if only we choose to do so.

Although the Labour-Alliance Coalition Government is committing money to industry and regional development - in marked contrast to the hands-off policies of the past 15 years - it is acting too tentatively for many people, including some strong supporters of economic liberalisation.

For the sceptics among us, Mr Gibson notes that when the Nasa engineers recovered from their shock, they began by imagining they had already arrived on the moon.

Then they worked backwards by asking themselves how they got there.

He says our retention of the America's Cup, with all its commercial and confidence-boosting spinoffs, was no more an accident than was the first moonwalk.

"The America's Cup victory provides a timely example and case study of how New Zealand can use technology transfer to take knowledge developed elsewhere, build on it with Kiwi ingenuity, and produce world-beating results."

Mr Gibson sees no reason why New Zealanders should not adopt a national vision to be at the top of the OECD economic table by 2015, and then work backwards in our imaginations to find out how we clawed our way up there.

He says that unlike the $25 billion Project Apollo moon landing, we do not need to start with enormous capital investment or huge industries.

But his prescription not surprisingly requires at least four times more engineering graduates than we have now, and an economy able to put them to full use in research, development, and the transfer of ideas and technology from overseas companies enticed to set up operations here.

This is what Ireland did so successfully by creating tax and other incentives for companies such as Motorola, Microsoft and Intel to build bases there, while its engineering and technology students among others enjoyed free education.

Droves of newly trained knowledge workers then gained priceless experience with the imported enterprises for a year or two before leaving to start their own businesses.

Mr Gibson will go to the Beehive next month armed with statistics showing that only 3.9 per cent of formal study programmes completed in 1997 were engineering courses, while commerce and business accounted for 22 per cent.

Also in his armoury are graphs ranking New Zealand second out of eight surveyed countries for our legions of lawyers and accountants, but bottom for engineers.

The country's eight universities are pulling out stops to boost their annual crops of information technology graduates to 1800 within three years, from 1000 in 1998.

But funding remains limited.

US telecommunications heavyweight Motorola said before deciding against building a major software development centre here that it would have had to interview at least 1000 graduates a year for its needs.

Even without Motorola, half the 120 final-year bachelor degree students in Canterbury University's electrical and electronic engineering course have received job offers before completing their exams.

High-tech companies such as Tait Electronics and Trimble Navigation advertise internationally for staff,and some students make no bones about telling their lecturers they will head straight overseas after graduating.

Opposition tertiary education spokesman Maurice Williamson suggests New Zealand follow high-tech leader Finland in setting annual quotas for fully funded student places based on society's needs, rather than student choice.

Students who miss out on these places would have to pay their own way, or find sponsors.

A senior Government source says he would be surprised if New Zealand took that route, although he believes we could well end up with a combination of funding methods depending on the recommendations of the Tertiary Education Advisory Commission.

Canterbury engineering graduate David Hayman, aged 24, e-mailed the Weekend Herald from Canada to say he was paying off a $35,000 student loan from a salary well over double what he could earn here.

He also completed a masters degree in Canada with a grant from local industry, entitling his benefactors to a big tax break unavailable to New Zealand companies, although the Government says it will consider making donations to universities deductible.

From California's Silicon Valley, Massey University graduate and software engineer Ben Wilde suggests New Zealand boost its technological base by attracting skilled Asian immigrants on the rebound from the United States.

He says many Chinese and Indian graduates working in the US computer industry on temporary visas will not be able to obtain "green cards" giving them permanent residency.

So he believes New Zealand should entice them here when their time is up.

The salaries they would earn would not be as high as they could make in the United States, but would exceed anything they could get in their homelands.

This would also make New Zealand more attractive to overseas companies, which could set up outposts here for half the cost of hiring labour in the world's software development hot spots.

New Zealand has a lot of catching up to do.

It has the lowest proportion of high-tech exports among 15 indicator countries, at 10 to 11 per cent compared with about 70 per cent for Singapore.

Even so, Manufacturers' Federation president David Moloney says high-tech exports have shown remarkably strong growth, from $897 million in 1990 to $2351 million in the year to this March.

A woeful lack of research and development is seen as a big impediment to a knowledge economy.

New Zealand is the only country which does not allow the costs of developing new products past the research stage to be immediately tax deductible, rather than having to be capitalised and depreciated over time - a serious dampener on software innovations.

Most countries allow at least 100 per cent deductibility. Britain will soon increase this to 150 per cent for small and medium-sized firms, and Australia is under pressure to boost its 125 per cent tax write-downs.

This has left New Zealand the most expensive place to conduct research and development. OECD estimates say every dollar invested here costs $1.13c, against 89c in Australia.

Despite the tax hurdle, Science and Technology Minister Pete Hodgson says New Zealand has one of the world's highest growth rates for information and communications technology patents.

He says the $43.6 million increase in the Government's research, science and technology spending this year is one of the largest in a decade - a jump of more than 10 per cent.

But New Zealand continues to languish behind Australia, which Professor Howard Frederick of Unitec's Centre of Innovation and Entrepreneurship says earned more than $60 billion from information technology in 1995-96.

We might also consider Britain's grand gestures in not only boosting the top end of its knowledge economy, but in digging into an $18 billion tax pool from state asset sales to eradicate youth unemployment.

Dr Frederick said in a report to the outgoing National Government that New Zealand was brimming with ideas and was small enough to gain lost ground if its leaders showed vision and promoted an education system supporting life-long learning.

The country was already being used as a testing ground for technological innovations by big international firms such as Ericsson and IBM, as well as by home-grown software luminaries like the Aoraki Corporation and Fisher and Paykel.

But he warned then that if we did not build fully on opportunities provided by the knowledge economy, we were doomed to survive only as an amusement park for citizens of more successful economies.

Now, he despairs that we are losing valuable time by taking only modest steps.

"We have everything in place all ready for takeoff, but no one has the mana to put a flag in the ground - the gang in Wellington have their hands on the handle but no one is pulling it."

Pathway to the future

The Herald's Jobs Challenge series is now in its fourth week of leading the way in a national debate on how to turn the country around.

Opinion leaders and readers have welcomed a forum in which to discuss the direction New Zealand should take in competing internationally and maintaining a quality of life locally.

We welcome your contribution in the weeks ahead, when we will tackle more of the key issues.

In next week's Weekend Herald, we will look at the issues of regional development.

On November 11, the theme is generating jobs in the community and how to break the culture of unemployment.

Responses from the Prime Minister and Leader of the Opposition will also feature.

The series will be summed up on November 18, when we ask: Where to from here?

Herald Online feature: The jobs challenge

We invite your responses to a series of questions such as: what key policies would make it easier for unemployed people to move into and generate jobs?