Focus on innovation and the knowledge economy needed in post-Covid world

Thursday, 5 November 2020

Sir Peter Gluckman says a significant change in direction is needed if New Zealand is to develop the cohesive long-term economic policies it needs.

Auckland needs to be turned into an innovation hub and the country needs put greater focus on the knowledge economy, according to a group of leading researchers.

A report out of Auckland University’s Koi Tū: Centre for Informed Futures calls for New Zealand to develop some ''fresh thinking about how we do business'' and acknowledge the country's biggest asset was knowledge.

One of the authors, Koi Tū director and former prime ministerial science adviser, Professor Sir Peter Gluckman, said the country needed to have tough conversations about what it might do differently to sustainably improve its standard of living in the face of significant global uncertainty.

''We need sustainable long-term strategies for growth which extend beyond political cycles and support economic growth, social justice and the environment.”

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Professor Arthur Grimes says New Zealand needs to get serious about Auckland as an innovation base.

The report echoed Gluckman’s comments earlier this year that foreign companies could shift their research here to take advantage of New Zealand's Covid-free status.

All political parties have extended support for an innovation strategy over recent decades, but the policy settings and commitments to make it a reality are lacking, incomplete and disconnected, the paper says.

Another author, Professor Arthur Grimes, said multinationals companies were core to global innovation, but they had little productive or research footprint in New Zealand compared to similar economies that strongly welcomed foreign investment.

Many home-grown Kiwi businesses were developing in the IT, medical, agritech and manufacturing sectors, but the country did not yet have the critical mass of labour, capital and expertise needed to earn at scale.

“We need to capitalise on our current unique opportunity. People want to come here and invest here,” he said.

Grimes, a former Reserve Bank chairman and chair of wellbeing and public policy at Victoria University's school of government, said regional development was one driver of economic development in New Zealand.

But to succeed in the knowledge economy over the next 50 years, Auckland needed urgent support to develop into a hub of knowledge-rich businesses.

This should be linked up to industry-specific clusters in other cities, he said. Agriculture, for example, would probably not be Auckland-based.

The paper says Covid-19 has underscored how reliant New Zealand is on industries such as tourism, international education and primary sectors.

Priority areas for policy work are research and innovation, the role of cities, housing and taxation, and demographic and workforce issues.

Other authors behind the paper are Auckland University economics lecturer Ryan Greenaway-McGrevy, AUT’s chair of economics Professor Tim Maloney, and Koi Tū deputy director Dr Anne Bardsley.