Smart shall inherit the earth

By SIMON COLLINS

For a man who once spent six months negotiating with Zapatista rebels in the Mexican jungle, advising New Zealand on its economic policy must seem a breeze.

Juan Enriquez-Cabot, director of the Harvard Business School's life sciences project in leafy Boston, joins three other US residents and one New Zealander as keynote speakers in the "knowledge" segment of the Knowledge Wave Trust's leadership forum today.

His basic message is uncontroversial - the main source of human wealth has shifted from agriculture to industry, and is now moving to technology, or "knowledge".

But many New Zealanders will choke on his detailed conclusions.

It is "talent" that creates wealth now, he says, and talented people want countries that will treat them not as citizens but as "shareholders", letting them patent their ideas and take a cut every time someone else uses them.

Attracting talented people will not make for justice or equality. Precisely the opposite: "Since Africa has become irrelevant to the knowledge economy, most people have abandoned an entire continent to its fate."

The "language" of the knowledge economy in this century will be genetics. In New Zealand terms, genetic engineering.

"Societies and peoples who understand the genetic alphabet are likely to live longer and get richer," Enriquez writes in his 2001 book, As the Future Catches You.

"European countries have specially strong anti-genetic lobbies ... So, many great minds are flocking to the centres leading the life-science revolution, Maryland, Boston/Cambridge, San Francisco/San Diego."

Enriquez, 43, speaks from experience. Descended on his mother's side from Boston's Cabot family, he grew up in Mexico, went to university in the United States, then returned to head Mexico City's Urban Development Corporation.

He created an enclave within the city where the rules were geared to attract the rich and talented.

"We built a city of 200,000 people within Mexico City for most of the high tech in Mexico," he says.

He did the job so well that Mexico's Secretary of State made him his chief of staff and economic policy co-ordinator.

In 1994, when native Mayan people in the southern state of Chiapas attacked local cities, Enriquez was part of a four-person team sent to negotiate with the rebels who named themselves after the early Mexican revolutionary leader, Emiliano Zapata.

"We arrived and said, in five languages, 'We are sorry, you have not been treated the way you should have been treated as human beings'," Enriquez said.

Despite this, it took weeks to get negotiations started, and more weeks to get a tentative agreement.

He then spent 18 months "trying to bring together an Opposition coalition" to replace the Institutional Revolutionary Party (PRI), which had ruled Mexico for 70 years. But he moved to the US after being told there was a price on his head.

"It sounds odd in New Zealand. It isn't odd in Latin America," he says. "I'm not particularly brave or different from most of the people who have tried to do this [organise opposition parties]."

At Harvard, he was a fellow in the Centre for International Affairs and then at the David Rockefeller Centre for Latin American Studies before shifting to the business school.

When Vincente Fox of the right-wing National Action Party defeated the PRI in 2000, Enriquez was asked to go home, but declined.

"At some point I'll go back to Mexico," he says. "Right now I'm playing on a world stage. I can have an impact in a series of countries, including New Zealand."

With this background, it is not surprising that chapter two of As the Future Catches You opens with an African folk tale on the law of the jungle:

"Every morning a gazelle wakes and thinks, 'To stay alive, I have to run faster than the fastest lion'," Enriquez writes.

The message is that there is always a significant incentive for gazelles (and small or new countries) to learn to run faster.

Just over the hill a lion has realised, 'I have to run faster than the slowest gazelle, or I'll go hungry.'

Enriquez says in his book that even lions can starve if they get lazy or if gazelles get smarter. So can great empires.

"Many countries, regions and people learn the consequences of this tale the hard way."

Before the industrial revolution, he says, human societies did not vary much in their material conditions.

In 1750, people in the richest country were about five times as rich as people in the poorest country.

This changed with the advent of machinery that suddenly multiplied a person's labour a hundred or a thousand-fold.

It has changed again with the "knowledge" age in which first software and now genetic information have become private property which hundreds of millions of people must pay to use.

Smart people are now the key source of wealth.

"In a knowledge economy, if you could convince Bill Gates to move [to your country], you could double your gross national product," Enriquez says.

"It means that if Microsoft moves its headquarters from Washington State to Mexico, Mexico becomes a very rich state.

"That's a very interesting transaction. It means you don't have to move factories. It means you don't have to acquire land."

In this new age, physical commodities are worth only a fifth of their real value of 150 years ago.

"The global market is flooded with grain, milk, steel, plastic, oil ... "

Conversely, "the top 20 per cent of society, which understands, works in or invests in technology, is getting richer - a lot richer".

"Because tech companies need few people to generate great wealth, and because only the educated tend to get stock options, salary disparities continue to widen rapidly.

"In 1982, a chief executive officer earned, on average, 42 times more than a factory worker. By 1999, the difference was as much as 475."

But smart companies do well only if they take out patents on the technology they develop or discover, including the uses of particular genes and organisms. There is no room for a soft heart.

"I suspect that a lot of the scientific ethos in New Zealand was inherited from Britain," Enriquez says.

"Britain has very good science. That's where DNA happened, penicillin, Dolly [the cloned sheep].

"But there's an ethos that you shouldn't be making companies off these things, you shouldn't be patenting, there should be knowledge that is given out freely.

"That's very generous, but it doesn't do a hell of a lot for your economy."

The World Intellectual Property Organisation says only 82 world patents were granted for every million Britons in 1998, and 103 for every million New Zealanders.

In the US, the comparable figure was 289, in South Korea 779, in Japan 994.

In India and China it was one.

As Enriquez sees it, smart people "are moving toward industries and countries that treat them like shareholders instead of subjects".

He notes that 79 per cent of Indians and 85 per cent of Chinese doing doctorates in science and engineering in the US intend to stay in the US after they graduate, compared with only 33 per cent of South Koreans. (The figures do not separate out New Zealanders).

In India, he says, "many graduates find it very hard to start a new company because of myriad traditions and regulations".

The lesson: "A government's task is to grow, develop, keep, attract talent and make sure this talent creates and protects new knowledge that can launch new companies. Otherwise, there is no economic growth."

Part of this task, he believes, is making sure the population understands science and technology, especially the "language" of this century, genetics.

Until now, healthcare has been mainly emergency intervention. As we understand more about the roles of each gene, he expects medicine to shift towards personalised prevention based on each individual's genetic strengths and weaknesses.

"We will protect our bodies by eating nutraceutical foods, using soaps and cosmetics, taking daily pills that are targeted to our specific genetic conditions," he says.

He accepts that New Zealand's isolation gives it a unique chance to brand itself as "green" and organic, avoiding genetic modification.

But he warns against "demonising" genetic science in the process.

"The first thing you have to understand is that everything you grow in New Zealand is genetically modified," he says.

"You want a natural dog? It's called a wolf. You want a natural corn? It certainly doesn't look like corn on a cob.

"It's very important, if you choose to go the green route, that you do not also kill off science. If you adopt a strategy saying scientists are bad people because they do XYZ, well, scientists may choose to live elsewhere or not become scientists."

In a book passage that may be taken to heart at the Knowledge Wave forum, he writes that one way to figure out where a country is going is to spend a day at one of the innumerable seminars on its future.

"In some cases, these seminars focus on information technology, genetics, nanotech ...

"But in most cases, debates and papers focus not on the future but on history, culture, current political problems.

"And the smartest get so distracted looking in their rearview mirror that they end up crashing into the future."

Herald Special Report - February 18, 2003:
Knowledge Wave 2003 - the leadership forum

Herald feature: