New Zealand must be wary of getting "carried away by the rhetoric" of the knowledge economy, says Associate Education Minister Steve Maharey.
"What we require is a sense of reality of what that means for this place at this time," he told the Lincoln University Staff Council Forum last week.
"We are not going to be able to compete with the US in information and communications technology, or even with Finland - which is to say, effectively, Nokia.
"That doesn't mean we won't have individual success stories, but we need to clearly define what will be at the centre of New Zealand's drive for prosperity." Maharey says.
The minister believes New Zealand's success as a knowledge economy would be based on "leveraging off our unique location and low population density", using up-to-date technology and producing added-value niche-oriented products.
In his speech, the minister lauded the New Zealand wine, tourism and film-making industries for their success so far.
He also says research instutions need to work together more if they are to access more government funding.
Outlining government policy at the forum, he says this would be reflected in tertiary funding in 2003.