How to really turn NZ into a knowledge-based economy

SO WE'RE TO become a knowledge-based economy. Both major political parties think it's a good idea, as do most of the universities, polytechs, IT journalists, entrepreneurs and the like that I've spoken to or read about.

SO WE’RE TO become a knowledge-based economy. Both major political parties think it’s a good idea, as do most of the universities, polytechs, IT journalists, entrepreneurs and the like that I’ve spoken to or read about. By the time you read this, both National and Labour will have announced their policies designed to bring about this state of "nerd-vana" that will help propel New Zealand into the next millennium. Neither party, however, goes far enough. Like a badly implemented electronic commerce package, they’re all flashy front end with very little change behind the scenes. To stretch the metaphor, they’re receiving purchase orders online, then printing them off, carrying them to the warehouse and sending out the product via carrier pigeon. The government seems to have gone so far down the track of removing itself from the day-to-day life of the very people it was put in place to serve (yes, serve) that it’s got little or no ability to reintegrate itself at this late stage. This push toward a KBE is a prime example. The first thing we have to ask is: what the hell is this KBE thing anyway? As far as I can tell it’s changing our economy’s emphasis from grass-based products (lamb, beef, milk, wool) to products which won’t be so badly affected by our vast distance from markets. We can’t bring north America, Asia or Europe any closer to us, so we should be producing things that are cheap to transport yet worth a lot to the purchaser. Software is an ideal example of this — it costs virtually nothing to ship, yet is sold for astonishing amounts of money. In fact, anything that involves the Internet as a medium is helping us as a KBE. The Internet defeats this "tyranny of distance" that has stifled New Zealand growth for so long. IT Minister Maurice Williamson has referred to the Internet as the "freezer ship of the 90s", which makes me cringe but isn’t far off the mark. Here’s what I think we should be doing to promote a KBE. We have to encourage New Zealand companies that are already in this field to forge ahead and we need to encourage foreign companies to set up here rather than in Ireland or Australia or wherever. Fundamental to both sides of the equation is the need for good-quality staff. The brain drain has to be stopped. We need to encourage those who have left New Zealand to come home to work and to bring their new-found colleagues with them. Neither party is ready to address the cost of being a student in New Zealand. Is it any wonder that tertiary-qualified staff pose such a flight risk when the cost of staying at home is so high? They are, in effect, being taxed for being educated. That’s as big a disincentive as government can introduce. We need to seriously look at our education set-up to see if we can’t work out a way to keep these people here once we’ve trained them. We also need to encourage more people to reach this level in the first place. Obviously we can’t compete with wages being offered overseas until we have an industry here that is as attractive to employees as the ones found elsewhere. That means we have to build up demand here for these employees and that means foreign companies setting up shop here. Again, neither party has addressed the issue of how to get companies into New Zealand or how to encourage companies already here. Tax credits for research and development seem the logical way — look how they’ve worked for Australia, Ireland and Israel. The problem we have to overcome is still that of distance — to the US we must seem to be on the edge of the world, but in this case it could well work in our favour. Service companies, like Symantec, for example, are boasting 24x7 uptime. They need a presence on the far side of the world to support those services that can’t possibly go down. They need literate staff on call during their graveyard shift and they can’t hire people in the US because there’s such a high level of demand. Currently they’re all going to Sydney but there’s no reason why they can’t come here instead. We need someone high up in government who is ready to bang the drum, press the flesh and generally get the New Zealand name out there as often as possible. We have a Minister for IT but as he himself told me he has no budget and no staff. If we’re to get into this market, and I think we should, we need to get serious. It’s not something that can be done half-heartedly, it’s all or nothing. Paul Brislen is Computerworld’s Y2K  reporter. He can be reached at, or phone: 0-9-377 902.

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