Foreword
In today's information age knowledge has become the gold standard. If New Zealand is to prosper in the third millennium it is vital that we understand the implications of this change.
But time is short. Prices for our commodity exports are in decline and we face tight competition for markets. It is unlikely that the traditional foundations of our economy alone - farming, forestry and fishing - can deliver the level of growth needed for our future well being. If we don't change the way we compete in the global economy our way of life and standard of living are at risk.
Over the past 15 years New Zealand Government policy has focused on developing a modern open competitive economy in the expectation that this would encourage better use of our productive resources. These reforms have by and large been successful. Despite this, not enough of New Zealand's productive capacity has shifted to the knowledge-based industries that are delivering the fastest growth rates world-wide.
Nevertheless New Zealand has some excellent examples of knowledge-rich enterprises, particularly in electronics, software, biotechnology, banking, fashion design, filmmaking, education and some agricultural products. These are substantial achievements but there are simply not enough of them. This report looks at what more needs to be done, particularly in those areas where government continues to play a significant role in the economy. The foundation stones of the knowledge economy are human ingenuity and skill and a commitment to innovation through research and development. The New Zealand Government already invests heavily in the education system and through its funding of well over 60% of the measured research and development carried out in New Zealand. Are we getting the value we need from this investment?
ITAG's view is that the future of our country depends on the ability of the private sector to generate jobs and wealth and government's role is to minimise impediments to this. The issue today is for the Government to focus on ensuring that its current interventions - such as in education and R&D - are as focused as possible on taking New Zealand forward into the knowledge age.
This report provides a well-researched independent view of factors that lead to the effective development of a knowledge economy. As part of a growing debate on our future economic development, it provides options for the Government to consider in the ongoing discussions about New Zealand's future directions. It is a contribution from the IT sector to the growing realisation that New Zealand has a significant opportunity to become a knowledge economy - an opportunity we cannot afford to pass up.
Ralph Norris
Chair, Information Technology Advisory Group (ITAG)
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