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Economic Transformation

The information revolution now complements the earlier agricultural and industrial revolutions. Both computer-based information and communication technologies (ICT) and DNA-based biotechnologies are part of this information revolution. Our challenge is to adapt this major revolution in information technologies and capabilities for greatest benefit to New Zealand.

Presently the majority of our export products are derived from our comparative advantages in animal and plant growth, natural resources and landscapes. These have enabled us to overcome the tyrannies of small size and distance. Continued research and application of new technologies have maintained high rates of productivity growth and cost competitiveness in food and fibre production. In turn, this has helped position many of our products at the top end of the price range, because we are now deliberately emphasising qualities that command a price premium products such as lamb, orange roughy, greenshell mussel, fine wool and new varieties of fruit. New Zealand is unusual in achieving first-world living standards from a resource-based economy.

However, not all our products command premium prices and many, in technical terms, remain commodities that embody little ‘information’ and are subject to variable and declining prices over the long term. This poses major risks to our ability to sustain and improve our living standards. Embodying more ‘information sophistication’ into each product will help us distance ourselves from downturns in commodity prices. The major reason why the information revolution is so important to New Zealand is because the associated computer technologies and biotechnologies allow us the means to embed that sophistication, to ensure the whole economy produces products that sell on image and performance rather than price competitiveness alone.

It is also essential that we diversify our economy beyond its traditional base of food and fibre, not least to avoid risks such as devastating animal and plant diseases, drought and the continued impact of commodity price cycles. There will be three complementary paths to successful economic transformation:

Firstly, we will need to reinforce existing strengths by applying new knowledge, skills and technologies (especially ICT and/or biotechnology) to our major existing sectors such as food, beverages and fibre, manufacturing, tourism and export education. To accelerate the transition to sophisticated food, textile, manufactured and tourism products and services will require a substantial increase in the education and training of the existing workforce, including a focus on basic literacy and numeracy, so that all New Zealanders can apply new technologies in the workplace.

Secondly, we will need to build upon these existing strengths by identifying opportunities to develop new sectors from existing sectors. We must do so by using research and development and creative skills such as (art, design and marketing), to create genuinely different, valuable opportunities from existing sectors. For example, our current biological industries are beginning to form the base for an entirely different range of products such as pharmaceuticals associated with healthcare and robotics processing industries.

Thirdly, we will need to create new strengths. These new strengths will be found in wholly new industries underpinned by a broad set of creative skills - arts, design and engineering, science - and harnessing startling new technologies. The new technologies include telecommunications, software and computing technologies, intelligent decision-making systems, optoelectronics, advanced materials, nanotechnologies, biotechnology, and new technologies that integrates these.

In essence then, for New Zealand to achieve its vision we need to create:

a nation that has a unique, complex and enduring identity around which creative knowledge industries and businesses can focus, where the humanities, arts and sciences each make substantial contributions to the creation of our knowledge society, and where Maori and Pacific peoples make original and distinctive contributions;
an enduring focus on creativity, invention, innovation and entrepreneurship, underpinned by high levels of literacy and numeracy and intensive levels of education and training, in particular within the existing work force;
a comprehensive set of educational pathways to cater for modern lifestyles and employment patterns, informed by vastly better links between employers, unions and the tertiary education system;
an increased focus on products and services that are too small for multinationals to compete in yet are too technically sophisticated for developing nations, especially where this builds on our existing strengths;
the development of clusters and webs of organisations in which the value created is more than the sum of the parts. Such clusters and webs will often transcend national boundaries. Tertiary providers will have a key part to play, alongside businesses, research institutions and central and local government agencies;
a prosperous modern economy in Auckland, a city that is largely independent of, and quite unlike, the biological mainspring inherent throughout the rest of New Zealand; and
the traditional barriers between different disciplinary areas, including those between the arts and the sciences, are being broken down. As Creative New Zealand Chair Peter Biggs has noted, the creativity and imagination which are intrinsic to the arts, are a critical part of New Zealand’s competitive advantage. Our ability to imagine and reflect our distinctive cultural identity is what will set us apart internationally.

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