Recovery, it is the word of the day as businesses try to return to something like normality. For many in New Zealand this will feel like enough, but I think we must go further and grasp the opportunity to truly transform our economy with sustainable growth.
Shovel ready projects and other economic stimulus will be important in minimising short to medium-term unemployment, and keeping our communities intact. But in parallel, we have the opportunity to build a more productive and resilient economy, capable of generating the returns we will need to repay the mountain of debt we have provisioned.
Already we have a blueprint. I had the great pleasure of briefly working with Sir Paul Callaghan in the last few years before his passing as he set out his vision of New Zealand as a place where talent wants to live. Sir Paul’s words were straightforward about our challenges and prophetic in the context of the impacts of COVID-19. He questioned the over reliance on tourism and agriculture, and called for more diversification and a focus on technology and talent.
The latter were evident in our public health response to COVID-19, ironically with Dr Shaun Hendy leading the charge with the advanced modeling that helped us achieve great outcomes in containing and eradicating the virus. Shaun is a former co-author and collaborator with Sir Paul, and the approach taken by his Te Punaha Matatini research centre is all about applying complex systems and data analytics to our contemporary challenges.
We need to take that same focus and commitment to technology and talent and make it our Kiwi growth story, beyond our reliance on traditional industries and low value commodities. We have started down the higher value track over the last 20 years, and seen companies like RocketLab, Buckley Systems, Fisher & Paykel Healthcare and Datacom as leading examples. But we need more businesses like them and we need more of them at scale.
We also need more leading edge companies, and to back some winners and help them grow faster. Successful large businesses spin off successful start-ups and entrepreneurs. We also need to transform businesses in sectors like manufacturing, agriculture and tourism by deploying Industry 4.0, effectively digitising as many of their processes as possible. The EMA through our TMN brand is about to embark down this path in the manufacturing sector working alongside Callaghan Innovation and Beca in an exciting programme to explore Industry 4.0 opportunities. We are also working alongside other industry groups with MBIE, Callaghan Innovation and NZ Trade and Enterprise on broader plans for advancing manufacturing.
We will need higher skills and the recent merger of the polytechnics into NZIST gives us some critical mass alongside our universities in driving vocational outcomes.
This will also need to involve more local capital investment. New government funding for Callaghan Innovation, NZ Growth Partners (formerly NZVIF) and greater local investment by the NZ Super Fund and ACC will play important parts in this expansion. So too will more open government procurement to create local market opportunities for our firms. Australia has similar visions for its economic recovery and there will be opportunities in their manufacturing, Defence and infrastructure sectors.
Above all I believe we need a long-term business led approach to transforming our economy. Businesses grow economies, not governments. But together we can manage an aggressive approach to change. It will challenge bureaucrats and business people alike to embrace change at this time. But this is precisely the moment when we need to grasp the opportunity.
Will you join us?