Our Real New Zealand Edge [2006]
I was reading a speech given by David Skilling, the head of the New Zealand Institute think tank, entitled : Lessons from the world’s economic laboratory: what can Australia learn from the New Zealand experience, which he gave in June this year to the Lowy Institute for International Policy in Sydney in late June.
This guy’s an economist, so he starts with a point against him, but he’s intelligent and persuasive, so I don’t disrespect him. But it’s so interesting when someone who claims to be from a social science won’t get down and dirty with the subject of such sciences – i.e. people.
In this paper [only nine pages and well-written] David discusses the relative economic performance of New Zealand and Australia, our differing approach to economic reforms, and our OECD ratings [they win by about the same margin they did in the Olympics].
But he goes on to suggest that New Zealand is a “knife edge economy” that needs to be “consistently close to best practice if it is to survive” and thus can show larger and more robust economies like Australia what might happen next and what to do about it.
We can be “the canary down the mine”. And further that as a place ‘on the edge’ he suggests that New Zealand is more likely to generate “independent, fresh thinking” than Australia might.
He’s right. New Zealand is a thin place. A comprehensive study I carried out on Australian social trends several years ago reinforced for me that there’s so much more fat in the Australian economy and that they can be a lot more self-indulgent if they choose.
Things like curing more people of cancer, retaining more of their own graduates, taking over smaller economies – like ours – which, let’s be honest, is what they’ve done.
I like our thinness. I think it’s an enormous part of who we are as people. Striving to keep up with the rest, slipping through the gaps to create necessary innovations, developing the kind of generalist overview that stands us in good stead overseas and working very hard so we can have what everyone else has.
The use of number 8 wire and baling twine – though probably today, CRC and duct tape – are defining New Zealand characteristics. Ed Hillary got to the South Pole with Massey Ferguson tractors. Peter Jackson’s Lord of the Rings was described by his [Australian] Director of Photography as “the biggest low budget film in the world”.
But frankly I don’t think Australia should pay us any attention whatsoever. I think their best strategy viz a viz New Zealand is simply to continue to import our brightest and best and to send back banks, supermarkets and shopping malls. Get annoyed when we beat you at rugby. Otherwise ignore us.
You can talk about the vitality and innovation that happens at the edge, but in reality that energy and difference is rarely successfully harnessed until the edge meets the centre. In very few cases has a New Zealand innovator and entrepreneur ever done something on their own, in the middle of nowhere and gone on to parlay it into a brilliant global success, still based in New Zealand.
Unless we were already the centre of something – like mid-scale pastoral farming.
It’s not beyond the capacity of small countries to do this – Finland has produced Nokia, Singapore has the world’s best airline, Denmark has Maersk, the world’s leading shipper, Ireland’s growing like a beanstalk. As the New Zealand Institute points out, most of those countries have about ten Fortune 2000 companies, compared to our one.
Even Iceland has more than New Zealand. [Ed - well it did till 2008] Fonterra is our only big international firm and arguably it’s only here because it can’t be sold.
In their most recent report, Developing Kiwi Global Champions, the New Zealand Institute is concerned that there are “so few medium and large sized New Zealand firms operating successfully in international markets.”
The statistic doing the rounds from this report is that New Zealand’s export performance is about the same in real terms as it was in 1990.
But really why would you? The firms that have tried it have mostly either had high profile failures or found it much more expensive than they’d imagined.
Ultimately most of those who’ve succeeded have either been bought by global competitors or moved their Head Office to be closer to those investments and the markets they support – typically to Sydney or Melbourne, but also London and New York.
So the successes aren’t even here to be counted. And the failures have weakened the balance sheets back home.
Unfortunately, in this case, the fresh innovative thinking at the edge is telling us – either go to the centre and do what you have to do to get ahead or stay here and have a life.
According to many different measures of quality of life, that’s something we can do just as well as USA and Australia – maintaining a strong sense of personal well-being, despite static export growth. Hey maybe we can export more well-being!
[Copyright Windshift Communications Ltd 2006] Distribute [unchanged] with impunity. Quote with attribution.
...frankly I don’t think Australia should pay us any attention whatsoever.
I think their best strategy is simply to continue to import our brightest and best and to send back banks, super-markets and shopping malls.
Get annoyed when we beat you at rugby. Otherwise ignore us.
