The Way Forward
Government policy approaches toward the Internet should start from two basic principles: avoid unnecessary regulation, and question the applicability of traditional rules
(Werbach, 1997).
Internet opens up global markets
Throughout our history, New Zealanders have shown a remarkable ability to respond in a positive way to world events. Just as the first shipment of refrigerated meat aboard the SS Dunedin in February 1882 opened up new overseas markets for our primary products, so the Internet opens up new markets for our knowledge exports. These include such products as software, technology, education, film, television, Web design, telecommunications, financial services, call centres and others, all of which can travel down the information superhighways to the world at the speed of light.
The market must lead. The government's first job is to remove obstacles, and champion the way ahead
New Zealand has a unique contribution to make in the global advance of the knowledge economy. The New Zealand way is to set the conditions for the marketplace to lead. If, despite all our best efforts, there are clear and demonstrable market failures, the government must intervene only long enough to set things right. When it becomes apparent that new markets have emerged elsewhere, and the conditions are not yet in place here for them to succeed in New Zealand, the government must step forward to remove the obstacles, and to champion the way ahead.
Setting out a vision and a clear direction
Leadership by government is vital for New Zealand to develop rapidly as a knowledge economy. In other countries, government leadership has been instrumental in the development of a knowledge economy strategy. In New Zealand, individuals and businesses look to government for leadership, for a clearly articulated vision and a sense of direction. They seek reassurance that as a country we are clear about where we are heading and how we are going to get there.
New Zealand's economic reforms have been predicated by a belief that the role of government is to create an environment where a fair competitive marketplace - unfettered by government regulation or incentives (or impediments) - will allow investment to flow to those areas of greatest return. The "level playing field" where government does not pick winners or losers.
Where government intervenes, the results must progress us towards becoming a knowledge-driven economy
However, it is clear that in regard to human capital development, no true market exists. The government is the only significant provider of education, and the most significant provider of research and development. In addition, government determines immigration policy. The key focus of many of these government interventions should be on advancing our progress towards the knowledge economy. By showing vision and active leadership in all the important areas, the government sends a powerful signal to people about how important the knowledge economy is for New Zealand's social and economic well being.
We must have a sense of urgency
Government's recent moves to gain the views of people in business, education, research, and local government on how to advance New Zealand's economy are a positive sign. However, much more is needed to create a national focus on developing a knowledge economy. Government leadership is essential if we are to catch up with the well-advanced knowledge economies. If the government is serious about getting New Zealand on the fast track to a knowledge economy, it must clearly and publicly articulate its vision of New Zealand's future and describe what we must do to get there.
We've won against the odds before … we can again
New Zealand demonstrated its ability to compete and win the America's Cup at San Diego in 1994. Our yachtsmen and yacht designers are now sought by people and organisations from all over the world. Their knowledge and expertise are valuable intellectual properties that can be exported to the world just as effectively as our agricultural and horticultural products, for potentially greater return. Throughout our country one can find example after example of Kiwi ingenuity, differentiation, and knowledge that would have tremendous value on the world market, if only they had the proper marketing, financing, and management. New Zealand will take its place in the vanguard of nations that lead the world into the new millennium if we appreciate that our unique intellectual capital is marketable and if we commit ourselves to realising the value of their potential.
What must we do to meet the challenges? In the first instance, we must formulate policies to embrace and to exploit the potential of the knowledge economy. The government already intervenes in two key areas of the knowledge economy: education and research. Failure in these areas will result in slow development in all other areas. Failure to act at all will hinder our economic growth as well as our national interests. The stakes are high. If we fail, the fruits of the Knowledge Age will simply by-pass us. We run the risk of being increasingly marginalised. But the reward of success will be that we benefit fully from the global knowledge economy.
With total commitment, in less than 10 years we can be a knowledge-driven economy
If we were starting from the basis that Singapore and South Korea did, New Zealand's transformation into a truly knowledge-driven economy would be expected to take about ten years. However, given that we already have a good education and telecommunications infrastructure, and an open, competitive economy, we should be able to make much more rapid progress. Based upon our research to date, we outline the following components to a national strategy to support and accelerate the development of a knowledge economy in New Zealand.
Increase New Zealand's Share of Gross Domestic Product Derived from Knowledge-Intensive Industries
Our future economic success lies in innovative knowledge-based industries
- New Zealand's future economic success means reducing its dependence on commodity exports and increasing the share of its GDP in the innovative knowledge-based industries.
- We must invest in the knowledge-intensive sectors and train people young and old through high-quality education and life-long learning
In regard to information, we must:
- Ensure that the tax regime is not a disincentive to investment in R&D;
- Set a stretch goal for the contribution knowledge industries make to GDP.
Government to Take a Role in the Development of a Knowledge-Intensive Economy
Government must lead by example
The government's role is to lead by example. It must also challenge the private sector, the education community, and the research community to come up to the task. In particular, the government will need to:
- see education as the springboard for disseminating and implementing the knowledge economy strategy
- develop education policies to ensure that all students are exposed to ICT at an early age and that information literacy and computer skills are made a part of the national curriculum
- require all teachers to undertake fast-track courses in computer skills
- provide teachers with access to technology and on-going support to improve their skills and knowledge of ICT
- offer an approved course of information and communication technology at Bursary level to encourage more students to enrol in IT courses at university
- fund extra places in IT courses at tertiary level to produce more IT graduates
- fund post-graduate scholarships in IT, perhaps through Technology New Zealand, to stimulate more post-graduate research in areas of special importance
- ensure that computer and Internet access are available to every student in a tertiary institution
- ensure that within five years all primary and secondary students have adequate access to a computer and Internet connection
- ensure investment in education enables Maori to develop skills to participate in the knowledge economy
- promote on-the-job and institution-based training to up-skill older workers in areas important to the knowledge economy
- explore ways of making an investment in industry training to increase the number of workers able to participate in knowledge-based industries.
Deal with the Legal Challenges
The Law Commission's discussion document on electronic commerce has gone a long way in canvassing legislative issues that might be impediments to the development of electronic commerce. Its final report, due in late August, will recommend any legislative changes. Government needs to implement such recommendations quickly to signal its commitment to electronic commerce.
Champion the Development of a Knowledge Economy in New Zealand
Develop a clear vision and specific strategy
The vision of the knowledge economy, and the imperative for New Zealand to become one, must be stated and restated by all our leaders, so that everyone understands the challenge we face. In addition, the government must:
- ensure that it has a specific strategy for advancing New Zealand's progress towards becoming a knowledge economy, and determine the most effective public sector structure to ensure progress is well co-ordinated
- educate citizens on the nature of the knowledge economy
- encourage debate on how Maori and non-Maori knowledge can be used to advance national well being and give New Zealand brand distinctiveness that is universally valued
- establish and maintain the legal and regulatory frameworks for an information-based economy
- encourage private investment in knowledge industries, and encourage an innovation market to provide local sources of venture capital
- promote participation in international information society initiatives, such as the Fifth Framework networks, by becoming an Associate Member of the EU in the same way as Australia and Israel have
- launch a campaign to attract expatriate Kiwi knowledge workers to return to New Zealand
- review immigration policy to attract both permanent and temporary migrants with the right qualifications and experience for the knowledge economy
- support the creation of high-tech incubators for small and medium enterprises
- review our tax regime to ensure that there are no barriers to private investment in R&D.
We need partnership between all players, especially education and business
Finally, we must commit ourselves as a nation to a championing approach that brings together leaders in business, government, and education. New Zealand is small enough for us to be able to quickly make up lost ground. But we need to respect our innovators, our inventors, and our idea-generators, people working on the leading edge of change. We need all our politicians to be looking forward, to have the strategic vision, the understanding, and the experience to make the knowledge economy a reality.
Most importantly, we need an education system from which we can pull the skills that commerce needs of that system, not an education system that pushes unprepared students into the marketplace. Education needs help to understand what business needs. Without the assistance from business, teachers and schools will continue to design and implement course-work that does not prepare students for the real world of work. We need to look at our human resource as part of a "knowledge supply chain". The education system must support life-long learning. Population trends make it imperative that both young people and people of working age are encouraged and supported to engage in lifelong learning.
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.
Back to Top