Fixing the economy: Thrive while others sink

Last updated 05:00 19/12/2012
Tide power
TIDAL POWER: We need heavy investment in alternative energy options because these options may take decades to research and invest in before they make a real impact.

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Below are suggestions on actions to enable New Zealand to economically thrive in a changing world over the next decade while other countries founder:

1. Invest in energy

The International Energy Agency reported that peak oil was reached in 2006. Assume oil will be NZ$10/litre at the pump within a decade. Our agriculture has a much lower energy footprint than overseas production (lamb produced in New Zealand is about a quarter of the footprint of a lamb produced in Britain even after it has been transported half way round the world). We need to artificially raise the price of energy now for homes, businesses and farms to trigger a transformation that will keep New Zealand's economy in the lead in a powered-down world. We also need to begin heavy investment in alternative energy options such as tidal power, because these options may take decades to research and invest in before they make a real impact on the New Zealand economy.

2. Promote ethical standards

Consumers are increasingly using buyer pressure to demand goods produced ethically, without child labour, sustainably, healthily, with low toxic residues and with high animal welfare standards. New Zealand is high on most of these counts, though is slipping on sustainability. We get a 20 per cent premium on our food products, which is likely to rise to a 40-to-50 per cent premium, and access to markets that are blocked to other producers. We need deliberate strategies to exceed ethical standards and to market it. For example, grass-fed cows produce milk with the highest level of anticancer agents of any source, but these qualities cannot be replicated in grain-fed cows.

3. Grow skills

Surprisingly, innovation does not correlate with the quality of the idea or technology. Instead, innovation is driven by an individual who is simply captivated by their own idea and is determined to make it happen. This is like parents who dedicate their lives to raising their own children, regardless of whether they are the smartest or prettiest. People become innovators when they have rich and broad experiences, use creativity often, make decisions, solve problems and do practical things. So education needs to focus on encouraging these qualities. National standards, exam-based assessment, and a focus on theory in schools and universities discourages innovation. We need to assess the performance of educational institutions on their performance in developing these wider range of skills in students.

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4. Fund innovation

We spend about $1.2 billion on science and technology, but the main output is publications, read by a handful of other academics, and having almost no impact on uptake. Remember, it is people that drive uptake, not ideas, no matter how brilliant the idea. So funding of science should require recipients with a track record in innovation (making ideas happen), or at least a clear and committed pathway to drive the whole process from idea to innovation.

5. Reduce alcohol abuse

Massey University academics calculated that the cost of the use and abuse of alcohol, including intangibles, was 10 per cent of GDP. A former police commissioner declared that 90 per cent of all crime was fuelled (not caused) by alcohol. Other social ills from alcohol abuse include unintended teenage pregnancy, family poverty, family breakdown, student dropout, violence, and lost work productivity. Abuse of alcohol is a drag on the social and economic prosperity of New Zealand. We need a large-scale social marketing campaign to make drunkenness (not drinking) socially unacceptable.

These five actions would help New Zealand to thrive in a changing world.

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