New Zealanders are kidding themselves if they think the economy is ready for the information age.
That is the sobering conclusion of a report on New Zealand's readiness for the knowledge based economy, put together by the Association of Crown Research Institutes, in conjunction with the Information Technology Association and Federated Farmers.
While substantial gains have been made in recent years, the economy is still lagging behind the rest of the OECD - and getting further behind, the report concludes.
"While the growth in high technology exports improved between 1970 and 1994, the starting point was low and, apart from Greece, we are far behind other OECD nations. Our current level of high technology exports are similar to those of other nations 25 years ago and we are losing rather than gaining market share."
While New Zealanders are enthusiastic early adopters - the report cites the statistic that the country has the highest number of Web hosts per capita in the world - that technology is largely imported.
That is why the study recommends tax incentives for research and development - which are under consideration by the new government - so more local firms will develop their own technologies.
The study also recommends encouraging high to medium-tech "clusters" of the sort that have developed around Christchurch.
"As New Zealand's technological firms are small, government institutes such as universities and Crown Research Institutes have an important role in cluster formation."
The study also urges better co-operation between universities and CRIs, and a reduction of the number of universities from nine to three. The high-value courses in technology, engineering and sciences rely on expensive equipment and are very costly to teach. If sufficient resources are to be directed into those areas there will need to be a rationalisation of the tertiary sector, the report says.
New Zealand produces fewer such graduates than any other OECD country, and more arts and law graduates than any other.
"It is almost as if a 'colonial imprint' still deeply affects our culture, expectations and education - a nation that produces unprocessed commodities to send to the UK and is populated by administrators, rather than engineers, to make this happen."
In a presentation with the report, Itanz executive director Jim O'Neill said there is a need to avoid over-emphasising the bad aspects of the present situation.
"The glass is half-full, and we need to remember that."