Executive Summary
The Information Age is upon us. The cycle of technology development and implementation is accelerating. The number of Internet users world-wide continues to grow steeply. More than 50 per cent of Gross Domestic Product (GDP) in the major OECD economies is now based on the production and distribution of knowledge. We are leaving the Industrial Age behind and moving into the Information Age.
In the US, Australia, the United Kingdom, Canada, Finland, and Ireland, the growth of the Internet and other related new technologies have become the catalyst for the creation of "knowledge economies".
The new information and communication technologies (ICT) have created global markets for goods and services.
Countries that have encouraged their people through education and life-long learning and by investing heavily in research and development (R&D) are well positioned to take advantage of these new global markets. Australia, Finland, Ireland, Canada, Singapore, and the United States are countries which have embraced the knowledge economy (some still with a strong commodity sector), and are experiencing strong GDP growth as a result. There is much we can learn from them.
Along with globalisation has come the death of distance. Thanks to the Internet, New Zealand is no longer remote from the rest of the world. But New Zealand's economy is still too dependent on producing commodities for export. While efforts over the last fifteen years to diversify markets have been very successful, we still need to expand our limited range of products. We must take the next important step and transform New Zealand from a pastoral economy into a knowledge-driven economy.
For New Zealand, the Internet is the modern equivalent of the freezer ship that revolutionised our economy last century.
Finland in particular provides an excellent model for New Zealand to follow. It has transformed itself from a commodity-based economy to one that has embraced new technologies. The government has spent a lot of money on education, making information technology a key component of the school curriculum and producing large numbers of technical graduates. Finnish companies have invested heavily in research and development. High-technology as a percentage of Finnish GNP has increased fivefold in ten years.
New Zealand has many of the prerequisites needed for the Information Age, such as a good technological infrastructure and a culture of innovation. Already 40 per cent of households have a computer. Internet usage is very high. While traditional statistics do not enable us to say how much of New Zealand's GDP is created by knowledge, the IT sector, a critical foundation for utilising knowledge, accounts for 7 per cent.
We are weak in these key areas:
- the place of information and communication technologies (ICT) in education, the low number of graduates we produce in technical disciplines, and more widely, ensuring that all teachers and students are ICT-literate
- immigration policy, especially in attracting suitably qualified immigrants, including New Zealanders currently living abroad
- investment in R&D, especially by the private sector
- narrow export mix, with a low percentage of high-technology exports
- venture capital and entrepreneurship, where our would-be entrepreneurs often lack the necessary business skills, and there is only a small local venture capital market
- strategic vision, especially in championing the development of a knowledge economy, and communicating it to all New Zealanders.
If New Zealanders do not seize the opportunities provided by the knowledge economy, we will survive only as an amusement park and holiday land for the citizens of more successful developed economies.
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