Dr Andrew West, Chairman of Innovation Waikato, has suggested that if the current generations making decisions on New Zealand’s economy were a management team the Board of Directors would have sacked them by 1965; at the latest.

Dr West noted this failure in a speech outlining an economic prescription for sustainable science-led economic growth in a keynote speech today to the Australasian Research Management Society in Christchurch.

“My generation of New Zealanders and the one before it have presided over a gradual, interminable decline in relative prosperity at least since 1950; that represents 60 years of retreat. The very best we have achieved is perhaps to have recently halted the relative decline, but most likely only for a limited period.”

Dr West suggested that New Zealand urgently needs a culture change that focuses resources and on investment, skills and innovation.

“We as a nation need to change how we behave, our future depends on it and the time for change is now. We need to address how households attempt to save their money, and the country needs to reduce the instability of our exchange rate; New Zealand needs to support the Government’s moves to establish a coherent economic strategy; we need to ensure we are educating students in the areas that we need and above all we must repair the scientific infrastructure and invest more in it,” said Andrew West.

“New Zealand is being left behind in public and private research and development spending, while the OECD average is 2.3% of GDP, Denmark and Singapore have achieved 2.6%, Australia has reached 2% with targets to raise it higher while New Zealand is languishing on 1.2%,” said Dr West.

Dr West encouraged the Government to raise capital gains taxation on housing. “We need to place more attention in areas of endeavour, particularly: food; fibre, biomaterials and bio-energy; liquid, gaseous and solid minerals; tourism; niche manufacturing; and niche services, of which health is an important component as it meshes so much with food,” he said.

The full list of priorities Dr Andrew West presented in his checklist are:
1. Remedy gross misallocation of capital
2. Invest in productive enterprise
3. Improve stability of exchange rate
4. Introduce an economic strategy and abide by it
5. Increase R&D investment to 3% of GDP
6. Repair scientific infrastructure and improve pay
7. Devolve scientific funding, incentivize collaboration
8. Boost valuable skills and domestic PhDs
9. Clarify the role of CRIs, emphasize science & technology and de-emphasize finance

“The very length of our relative economic decline places responsibility beyond government and also beyond individual firms. New Zealand has maintained a gold rush culture; one that is largely speculative, impatient and intra-generationally-focused, and that operates through an infatuation with investment in land and housing” Dr West said.

“Based on 2006 Treasury data Households are net spenders (to the tune of 9.5% of GDP) rather than savers” he said.

West believes student study priorities are not appropriate for economic growth. In 2007, students enrolled in agriculture, forestry and horticulture were 0.4%, compared with over 2% studying performing arts and 3.17% studying media and communication studies.

Dr West asks “How bad does it have to get before we act? The data that clearly indicate what is wrong have been with us for years; we simply need the courage to be decisive.”


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Sam Fisher
021 714209