Category Archives: Opinion

Govt Aims to Improve Science Dialogue

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The Prime Ministerial advisor on science, Prof. Peter Gluckman is hoping to facilitate a better dialogue both within the science community and between scientists and the New Zealand government. He may have an uphill climb ahead of him.

In a recent radio interview Gluckman made it clear that his brief was simply to provide advice and to act as a translator to both government and public on science issues, it was not his role to become involved in politics. But when pressed on the subject of why the National government killed both the Fast Forward initiative and the R&D tax incentive scheme, he refused to comment. This suggests that (at least in public) he will be obliged to moderate his tone on some topics.

Professor Gluckman said better scientific literacy was required across the whole of society because we were having to deal with more complex issues such as climate change and the ever increasing impact of technology on our personal lives. He also indicated that it was his view that the science funding system was overly competitive and that this was dampening creativity; perhaps foreshadowing some much needed change in this area.

Prime Minister John Key recently gave a speech on economic direction. It was clearly signalled that, in terms of science research, the government is now primarily interested in supporting the agricultural sector as a bridge to greater economic prosperity. Unfortunately that confines us to a future of increasing pastoral pollution, high carbon output and enslavement to commodity prices that continually devalue in real terms.

But Gluckman agrees with his colleague Paul Callaghan that science must remain “an integral part of the innovation system” and that we need more high tech companies like Navman, Rakon and Weta Digital. If we are to improve economic productivity then science needs to connect with business, both within New Zealand and abroad, he stated. It will be interesting to see if he can similarly persuade the Prime Minister.

Le B’astard!

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French rugby representative Mathieu Bastareaud brought shame and embarrassment to my city and my country last week with his serious assault allegation. Although the truth has now emerged about his drunken idiocy there seems little likelihood of proper redress.

Of course if any ordinary member of the public made a false complaint to Police they would immediately be up on a charge. But the local Police and NZ Rugby Union, who “diligently” investigated the claim, made sure the touring French team were well beyond our shores before they released their findings – and its not like it is an offence worthy of extradition. So it is very unlikely there will be any legal recourse in the case.

Mercifully, rugby receives relatively little media bandwidth outside of Australia and New Zealand (contrary to popular belief here), so I’m unsure how much international coverage this incident actually received. Perhaps then it is a moot point. But the fact that a number of highly placed individuals colluded to protect the errant player and the arrogance shown by some involved has led to a few analogies being drawn with another infamous insult involving a certain rainbow coloured vessel.

Perhaps that analogy is a little harsh. After all we have plenty of examples of our own immature, drunken sportsmen getting into trouble whilst on tour. Nothing new there. What continues to rile me is that our society tolerates this kind of behaviour even at the expense of national reputation. It is the kind of slur a small, geographically distant nation can ill afford.

Worth-Less

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I really wanted to begin this week with something positive. But the bad news just keeps coming for this government. Last week’s sordid fiasco over alleged impropriety on the part of Cabinet Minister Richard Worth was the latest in a long line of stuff ups stemming from bad decision-making around political appointments.

First there was the ill-advised addition of Christine Rankin to chair the Families Commission, then poor Melissa Lee got thrown to the lions in the unwinnable Mt Albert electorate. Now the resignation of a Cabinet Minister. It raises questions about the political judgement surrounding the original appointments and about the level of talent that the Prime Minister has at his disposal.

I actually posted a comment on Twitter in mid-April predicting that Richard Worth would be “gone by lunchtime”. Although it had become self evident that he had an unhealthy predisposition towards self-destructive behaviour, even I was surprised how rapidly the end came for him. As for Rankin, I’ll give it 12 months before she exits with another nice golden handshake amidst a cloud of controversy. Nice work if you can get it. 

I have a little more sympathy for Lee however. I admire that she is an Asian woman that has succeeded with her own business in the male-dominated world of media. I also think her media colleagues were a little unfair in talking up the back story from the disgruntled former employee. To make matters worse, she has also been saddled with the near impossible task of attempting to wrestle Helen Clark’s former seat from Labour. It will certainly be a character building experience and perhaps that was the rationale.

The problem for the rest of the country is that whilst the traditional media are salivating over this tedious daily reality TV fest, there are far more important tasks at hand that are not getting proper coverage, like exploring why the government is not fully addressing research, science and technology commercialisation and entrepreneurship as a basis for the economic recovery.

Cow-shit and Candyfloss Overcomes High Tech

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In an interview for Unlimited Magazine, physicist and technology entrepreneur Paul Callaghan recounts meeting Prime Minister John Key at a business function. The PM had just stepped off the speaker’s podium where he had been talking up agriculture and tourism and expressing scepticism about the value of New Zealand’s technology sector to the economy. If that is the kind of leadership we are faced with, then I fear that the devaluation of our economic potential will continue unabated.

And before I’m accused over being overly harsh, let’s just look at this government’s track record since taking office well over six months ago:

  • Research & development tax credit reduced then cut altogether.
  • Fast Forward programme wiped and replaced with identical project with less funding.
  • I.T. worker redundancies from government agencies.
  • Negligible budget increase to RS&T vote.
  • Major cuts to tertiary education funding.
  • NZ Innovation Centre loses $15M in funding.
  • Reported $100M net loss to market development assistance programmes for exporters.

To be fair, we all knew that the Budget needed to be tough – even if Key and English can’t agree exactly why. Certainly borrowing to fund superannuation and tax cuts doesn’t make good fiscal sense; but neither does knee-capping your research, science and technology capability. To its credit, the government did provide additional resources to the Marsden Fund and a one-off operational grant to REANNZ the high speed research network. In the latter case, they obviously could not be seen to allow the research network to fail, whilst at the same time pouring billions into digging trenches for a brand new domestic network for which a proper economic business case has yet to be made.

Investing in and commercialising research will never be cheaper than today and you can be sure that our competitors in America and Europe are continuing to do it. I’ve said it before – when I look around town, it is the businesses that have invested in developing new technology that are still growing. It seems like the government is signalling it wishes to play less of a role in this arena. Dairy commodity prices are dropping again, so too are visitor numbers. The PM’s support for agriculture and tourism is no doubt uplifting for the cow-shit and candyfloss brigades, but it does little to bolster our GDP per capita output in the long term.

Wool to Weta by Paul Callaghan is available at all good bookstores and explains why research, science and technology is important to the New Zealand economy and why a unified vision is needed.

$10M Windfall Saga Reflects Desperation

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The story of the errant business owner who absconded with over $10 million has captivated news audiences in an otherwise quiet week. But the incident is deeply troubling in that it also reflects something of the nature of a society in which consumption and short term gain are idolised at the expense of industry, thrift and common sense.

Although the purpetrators have a three week head start on the Police, the fact that they made no attempt to cover their tracks would tend to suggest that their foolish escapade will be short-lived. It is reported that one of the group has even been bragging about her exploits on a social media site. Perhaps this information is a cleverly planted red herring; but that is giving them way too much credit for intelligence. So it leaves us to ask what drives an individual to such desperation. Surely Mr Gao must realise that his days as a playboy millionaire are numbered? Will a few weeks of idol leisure be worth the several years of imprisonment that will almost certainly follow?

I think the answer to that question lies deeply ingrained in the fabric of our society. We live in a heavily consumerist world in which (empowered by marketing) short term satisfaction and easy credit prevail over wise personal choices and old fashioned hard work. In fact, part of the blame for the present economic crisis lies with those that gave in to the overtures of banks and realtors and who overly extended themselves financially because of a desire to clamber aboard the property pyramid. One only needs to look at the rapid rise in the numbers of mortgagee sales to understand where that road has led.

Last week I wrote about the lack of vision. That short-coming is not only the domain of government. As a society we must all begin to think more about sustainability and building enduring economic wealth. For most of us, in the absence of a $10 million windfall, this is the only path to prosperity.

 

Mayor Banks Gaff Embarrases Technopreneurs

Last week I attended the XMediaLab event in Auckland at the kind invitation of the organisers. XmediaLab is a highly polished global networking and workshop event aimed at digital media entrepreneurs. Many of the international guests are successful investors and entrepreneurs themselves and they are all highly articulate and thoroughly interesting people to hear speaking. So it was in that context that I was hugely embarrassed for all New Zealanders when Auckland Mayor John Banks stood up to address the opening event on Thursday evening.

Banks was clearly out of his depth and had obviously not been properly briefed as to the purpose of the event. His “off the cuff” speech was appallingly condescending towards the event organiser and his pathetic attempts at humour were cringeful to say the least. He obviously completely missed the point that the event was about building international connections, not belittling them. We can only hope that the offence will quickly be forgotten and that with the support of NZ Trade & Enterprise we will see the event return to our shores in 2010. But…perhaps not to Auckland. Enough said.

Innovation, Property Rights and the Political Economy

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In recent months I have noticed an elevated volume of commentary relating to the overlap between economic development and the political expression of property ownership rights. Part of this debate has been driven by sea changes on the political landscape and new analysis of the role previous governments have played through intervening in markets. Last week’s OECD report card on New Zealand fanned the flames of this debate to a new level.

The report suggests that previous governments have consistently failed to address historically poor levels of productivity and innovation. In the face of a global economic emergency there is a strong call for urgent action to reconfigure policy on this front.

“New Zealand’s living standards remain well below the OECD average. This is entirely attributable to persistently low labour productivity, which in turn is related to economic geography as well as structural policy factors. The small size and remoteness of the economy diminish its access to world markets, the scale and efficiency of domestic businesses, the level of competition and proximity to the world’s technology frontier. This points to the need for a “New Zealand policy advantage”, that is, a set of structural policies attractive and welcoming enough to overcome the geographic handicap and attract the drivers of prosperity – investment, skills and ideas – to New Zealand.”

Innovation, property rights and the political economy are intertwined. For example without a robust framework for the protection of intellectual property there is little incentive to innovate and generate economic returns from new ideas. But implicit in the OECD calls for macroeconomic restructuring is the suggestion that Crown assets be sold to address fiscal debt. This remarkably unoriginal idea seems to mysteriously surface every time a National government is elected.

Some have argued that New Zealand’s historically interventionist approach has discouraged investment in innovation and critical infrastructure. However, hurried or ill considered sales of State assets (originally funded by taxpayers) in some respects seems contradictory to ongoing academic arguments that favour less intervention, more consistency and the protection of unalienable rights to property. How do we reconcile these positions? Should we be doing so? As was once proposed, would it not be better to leverage the capital invested in State owned enterprises to create new, high value spin-off ventures?

Of course the situation is complicated in New Zealand by the fact that Maori have strong views in terms of property rights, securing favourable State regulation and the connection this makes with their own economic development aspirations. But can we promote a free and unfettered market with strongly protected property rights on the one hand whilst at the same time contemplating separate justice and electoral systems and the wholesale transfers of property assets based on race? External investors no doubt also weigh these risks when considering New Zealand as a destination.

Rural Towns Left to Wither

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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?

Jobs Summit Lacked Innovation

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Predictably the sketchy proposals emerging from last week’s “Jobs Summit” ranged from mildly interesting to the completely ridiculous and I’m left wondering how many will actually come to pass. But the ideas fest, hosted at Manukau City, was not actually about generating sensible approaches to the economic crisis, it was about putting on a display of unity and generating some positive buzz. Ironically, the business leaders at the conference will likely preside over hundreds of layoffs themselves in the coming months.

I like that John Key is an ideas man and is prepared to entertain novel concepts. But his sidekick Bill English made it very clear going into the summit that the state of the nation’s finances would not allow for a great deal of additional expenditure. By lowering expectations ahead of the summit he allowed the government to wiggle out of addressing any meaningful economic reform. His comments may even foreshadow some backpeddling on big ticket sacred cows like tax cuts, broadband and superannuation.

I guess my real concern is that the Jobs Summit hoopla has eclipsed the fact that economic realities have shifted so much that we really need to make a quantum leap in how we approach investing in our future as a nation. I’m not convinced that the summit properly addressed these issues. Borrowing cash to dig cable trenches and build a cycleway will simply not cut the mustard in my opinion.

Since it was elected, the government has astutely avoided making any comments about the need to invest in research, science and technology innovation. In fact the only promise they have made in this area is to kill off the R&D tax credit. They still don’t get it. The only businesses that are growing right now are precisely those that have invested in technology research and development. For example colostrum manufacturer New Image have exploded onto the Asian market. Even the horrendous balls-up in China by dairy commodity behemoth Fonterra has failed to suppress the demand for this high end, added value product.

Saving jobs in the breakfast cereal factories and assembly lines of South Auckland is important. But even more important is creating more high tech companies and developing our largely under-educated workforce. The lack of aspiration we currently demonstrate as a nation is reflected more and more in the ugly twin cultures of ethnic gangs and idiot boyracers that are furtively permeating our society and populating our streets with a generation of social rejects. What we really needed was an all encompassing social, economic and technological Innovation Summit.

Power to the Tweeple

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Last week’s “blackout” protest was a lesson in how readily Internet technology can be used to disintermediate traditional sources of information and motivate a community to action. It also showed how quickly informed debate can be subsumed by a vocal minority making clever use of the very same technology.

Recently I suggested that Twitter might one day seed a political revolution. Now Twitter users in New Zealand have put that theory to test by calling for others to black out all their online profiles (and blogs) in order to raise awareness of a protest against amendments to the Copyright Act. The section 92A amendment was originally proposed to counter illegal downloads of copyrighted material and supposedly places the onus on ISPs to disconnect offenders upon accusation.

I say “supposedly” because I have yet to locate a complete rendition of the new legislation. In fact an examination of numerous “prominent” blog sites that are supporting the protest fails to reveal any links to the complete text of the amended Act. So we are taking it completely on trust regarding their interpretation of the wording of the amendment. But there was an even more disturbing aspect to the manner in which this protest was conducted.

Spreading the word about the protest through viral means such as blogs, Twitter and Facebook has turned out to be hugely successful, with global media and some prominent individuals picking up on the event. But my heart sank when I read a tweet from an over enthusiastic supporter who suggested that Twitter users should “unfollow” anyone who didn’t conform to the blackout mandate. I wonder if anyone noticed the irony?

S92A is certainly an unjust and poorly drafted piece of legislation that both impacts on personal freedoms and has facist bully-boy overtones. Yet calls for the black-listing of non-protestors shows the same level of crass indifference as demonstrated by the politicians who drafted the amendment in the first place. Join our cause or suffer the consequences? So it was with some sense of relief that I discovered that at least one popular blog site has set up a forum to allow both sides in this argument to express some viewpoints. Some informed debate, including a discussion about the experience of other countries in such matters, would be refreshing at this point. Isn’t that how intellectual communities find consensus and move forward together in an open society?

Will the “Jobs Summit” Deliver?

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Almost everybody with half a clue accepts that another round of economic reform is required to address the challenges ahead. But the National government’s “100 days of (in)action” will soon look like an opportunity lost unless John Key can execute rapidly on some good ideas following next month’s “job summit”.

In case you hadn’t noticed, the perfect storm is gathering. Melting commodity prices, a tidal wave of leveraged debt plus cooling consumer spending has all but evaporated economic growth. The rainy day has arrived. The good news is that previous governments have been fiscally responsible by putting some of their pocket money in the piggy bank. The bad news is that they gave up on attempting to diversify the economy away from logs and animal protein, despite all the advice to do so.

Whatever happens, the prime ministerial “jobs summit” planned for next month will not be a panacea. However it is better than doing nothing, which is what the government appears to have been doing since the election in early November last year. A quick flick through government Minister’s press releases reveals that almost no new ideas or economic strategies have been announced since the election. What are they waiting for? Management theory suggests that business turnarounds succeed best when there are early wins and momentum for change is built up rapidly. Economic turnarounds are surely subject to the same laws of physics. So far the signs are not very promising

The “jobs summit” needs to be rebranded more broadly as a societal forum because it is not just about jobs or even money any more. It’s about dealing with a paradigmatic shift in how business, government and society operate within economies. If the government don’t understand this, we have a real problem. That’s why it troubles me that the forum has been proposed by a former investment banker and will be chaired by a stock exchange CEO. Aren’t these just the kind of people who got us into this mess in the first place?