Get off the Grass

Book excerpt: While we New Zealanders live off the cow's back, our long-term economic prognosis looks grim. Our economic growth lags behind Australia and other countries in the OECD. Our universities fall each year in international rankings. We export 24 per cent of our university graduates. The country's lack-lustre economic performance following the free-market reforms of the 1980s is often cast as a paradox: why haven't sound economic policies led to growth? In this book two of New Zealand's leading thinkers tell us to 'get off the grass!' - and explain how we might do so. Shuan Hendy and Paul Callaghan argue that the New Zealand 'paradox' can be explained by our struggle to innovate. On a per-capita basis, OECD countries on average produce four times as many patents as New Zealand. Why is this? What determines a country's capacity for innovation? Shaun Hendy and Paul Callaghan take a quantitative look at how innovation works both in New Zealand and around the world. They show that economic geography plays a key role in determining rates of innovation and productivity. If New Zealand is to grow its economy more rapidly it must overcome geography to build nationwide communities of innovators, entrepreneurs and businesses. It must get off the grass and diversify its economy beyond the primary sector. Hendy and Callaghan pose deep challenges to the country: Can New Zealand learn to innovate like a city of four million people? Can New Zealand become a place where talent wants to live? Can we learn to live off knowledge rather than nature? Are we willing to take science seriously? In a brilliant intellectual adventure that takes us from David Ricardo and Adam Smith to economic geography and the science of complex networks, Shaun Hendy and Paul Callaghan pose the tough questions and provide some powerful answers for New Zealand's future.