Wednesday, July 6, 2022

Kiwis told to get off the grass

New Zealand should look to diversify its innovation more widely than just in agriculture, argue the authors of a provocative new economics book called Get off the Grass.

The book was launched last week by co-author Shaun Hendy, professor of computational physics at Victoria University, who wrote it with the late Sir Paul Callaghan, also a physicist and one of our most celebrated scientists.

Callaghan, who died of cancer last year, was knighted for his internationally recognised work in nanotechnology and magnetic resonance and for his efforts to bring science to the people.

Over-reliance on agriculture is potentially dangerous, as the Fonterra botulism scare demonstrated, and will not restore NZ to the high position on the Organisation for Economic Co-operation and Development (OECD) ladder to which it aspires, the authors says.

The primary sector is expected to achieve most of the national goal of doubling exports to $64 billion annually, 40% of gross domestic product (GDP), by 2025.

Instead an objective should be to expand greatly manufactured and knowledge-based exports with a high product value per unit weight and per employee, they say.

“To seize this opportunity, NZ will have to get off the grass.”

SPLIPPERY SLOPE: Over-reliance on agriculture is dangerous, the authors say in new book Get off the Grass.

Resource limitations will prevent the four-fold expansion needed to meet our economic goals, they say.

Producing just 2% of the world’s milk, which is less than the annual increase in world demand, we would struggle to feed the population of Mexico City.

The authors argue the so-called NZ paradox, that our economic growth has not followed our laissez-faire credentials for prosperity, must result in more concerted efforts in future to plug the “knowledge gap”.

That is attributed to two lost decades, between the mid-1970s and the mid-1990s, during which our GDP per capita – a proxy for prosperity – fell from 110% to 80% of the OECD average.

Although growth has resumed since that period, the knowledge gap remains.

The authors say the “number-eight wire” claim to Kiwi innovation is a national myth.

Innovation has not flourished where it was expected to, and where it did was in countries with less ideologically driven approaches to science and innovation policy.

It is not enough to expect our few economic champions to lead in innovation.

For good financial reasons, Fonterra follows a business model that favours exclusive development and control of key technologies and discourages the sharing of intellectual property.

However, NZ researchers are collaborating via the public research organisation, even if the companies they work for are less inclined to share.

Hendy and Callaghan draw heavily on Scandinavian experiences, particularly those of Finland and Nokia.

Starting from similar base positions as agrarian countries of our size, none of the Scandinavian countries focused on primary sector research and development to diversify their economies.

“Unfortunately, NZ’s public science system has never seen a serious contest of ideas at the strategic level that might have challenged its narrow focus on the primary sector,” they say.

It has backed much the same set of priorities in its science and innovation system since the 1920s.

Diversifying the research portfolio while increasing research and development spending, but not at the expense of primary sector work, should be an immediate priority of the Government, Hendy and Callaghan say.

Our Kiwi self-image draws on the taciturn, self-reliant high-country farmer.

“Alongside celebrating our farmers, let’s celebrate our achievements as the first navigators of the Pacific and the people that smashed the atom,” they say.

“We don’t have to work harder than everyone else in the developed world, we just need to get off the grass and work smarter.” 

  • Get Off The Grass: Kickstarting New Zealand’s innovation economy, by Shaun Hendy and Paul Gallaghan, published by Auckland University Press, RRP $34.99.
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