I had occasion to head home to the provinces for a family visit last weekend. What always strikes me is the character of the little towns along the way. Some of them have been dying off for years, only kept alive of late by the fact that the surrounding rural economy has been booming. But with commodity prices plunging, the underlying support from dairy (and oil) is falling away.

If city dwellers are feeling the pinch now, spare a thought for the rural towns. For some, almost nothing has changed since the 1950s. Their central business districts generally comprise a petrol station, convenience store and a public bar. Now with falling trade even some of the pubs and petrol stations have passed on. Weeds creep insidiously through gaping holes in ramshackle corrugated iron fences that surround overflowing car wrecking yards and the odd farm machinery repair workshop. It’s not rustic or charming, it’s decay; and it’s a testament to how decades of questionable government economic policy has left such towns unimproved.

The one beacon of hope amongst this desolation is the local school. Tidy, manicured grounds surround the elderly buildings, replete in yet another coat of standard issue Ministry paint. The school is the last remaining focus point for the community. But even the school is at risk as roll numbers dwindle and the same Ministry casts its bureaucratic ruler over the books. Not even community pride in the school can prevent the young people from leaving town as soon as they are able – there is nothing to hold them.

Some of the troubles faced by rural towns are simply geographical. No amount of government intervention can compensate for poor soil, challenging climate or remoteness. For those towns that do not have viticulture or glaciers or fishing quota, the future looks rather bleak. On a broader front, the withering of our small towns is related to the fact that New Zealand in general continues to lag behind in GDP per capita. There is simply not enough cash to go around, largely because we have underinvested in innovation as a nation. Our small provincial towns are a metaphor for the wider economy.

I mentioned that education is a beacon of hope, there was also another glimmer of light on the horizon last week. McKinsey run an annual exercise involving mapping global innovation. Auckland was the only New Zealand city that was polled, but it showed up in the top left corner of the data as a “hot spring” of innovation. In other words we are registering more technology patents each year, but only in a small number of areas. Now, it turns out that bubbling hot springs generally host a thriving microcosm of life. On that basis investing in science and technology innovation as a means to generate economic wealth seems like a good idea. So why is the government heading in the opposite direction?