To do more than catch up, we need to clean up and green up
New Zealand's financial issues could be solved by surfing the green wave, writes Phillip Mills.
"Catching up" or closing the gaps with the larger, more powerful Australian economy is often where we set our sights when it comes to adopting economic goals as a nation.
And rightly so. Current forecasts have our GDP per capita slipping below those of Kazakhstan and Botswana by 2025.
Business and political leaders agree we need to get our growth ticking at a faster rate. But I believe we lack a gutsy vision as to how we're going to lift our game and there's a sense of Groundhog Day in a lot of the commentary I'm reading.
Our tired old economy is flagging despite relief from the recession. We work longer hours but achieve lower productivity than others in the Organisation for Economic Co-operation and Development. Our social systems are groaning. Our exports and tourism are under threat as international media and bloggers slag us off for the gap they perceive between our 100% Pure New Zealand brand and our actual behaviour. And as a small, pastoral economy, we risk being sucked dry by spiralling resource costs due to the increasing affluence of emerging economies.
We need an entirely new economic engine to power us into the future.
I believe we will find that engine in developing and commercialising "clean technology" (cleantech) - products and services that improve performance, productivity or efficiency while reducing raw materials, energy consumption and waste.
This isn't just another short-lived green fad. It's commonsense capitalism that benefits us all.
The "green wave" may be slow rolling at present but international commentators such as the Harvard Business Review say it will, over the next decade, gather force for an economic boom on a scale to rival the information age and the industrial revolution.
Cleantech is an area in which New Zealand has many comparative advantages - if we move fast enough.
The emergent, cleantech market presents a compelling opportunity for New Zealand to:
* Reverse our slide down the OECD tables by creating major new industries and adding significant value to our largest current ones
* Inspire new jobs and retraining
* Boost the value of our exports
* Enhance brand value and reduce the risk of significant brand damage to our exports and tourism markets
* Cut costs for businesses and improve efficiency
* Reduce our exposure to risks such as escalating foreign oil and resource costs, carbon costs and tariffs.
* * *
While naysayers dwell on the cost of developing and implementing clean technologies, the opportunities far outweigh the costs.
Denmark, with a similar population to New Zealand, decided to champion wind energy and now supplies more than half the world's wind turbines, The Danes have added tens of thousands of high-value jobs to their economy, reduced their carbon intensity by a third in 10 years, dramatically reduced their exposure to imported energy costs and created a new export business almost the size of Fonterra - earning $15 billion annually in exports alone.
To "do a Denmark", New Zealand needs to identify our greatest opportunities - clean agriculture and renewable energy sources are the obvious candidates - then pin our ears back and go for them.
It's encouraging that hundreds of Kiwi companies are quietly leading the way. They include start-up companies such as Lanzatech - making ethanol from flue gases; to Todd Energy - investing in tidal power generation in the Kaipara. Our biggest exporter, Fonterra, also outlined its benefits from climate change, energy and sustainability strategies at the World Environment Day symposium in June.
Local supporters of the cleantech revolution now number more than 100 senior business leaders and we're urging the Government to set up a joint government and business investigative committee to identify the best opportunities and the most efficient ways to capitalise on them through a cleantech strategy for New Zealand.
We need the same visionary leadership that inspired creation of our hydro dams and state forests; the Vogel government's development of the telegraph system, national railways and shipping links and the introduction of refrigerated shipping that opened our farming industry to the world.
Rather than playing catchup with Australia, let's surpass our trans-Tasman cousins with a strong, clean economy that enables us to live our values and is viable over the long term.
Phillip Mills is executive director of Les Mills International. He received a World Class New Zealand Award for New Thinking in 2009