APEC CEO Summit: What is next for New Zealand?

by Sir Peter Gluckman
New Zealand from space with stars above. Elements of this image furnished by NASA.

Remarks to panel discussion at APEC CEO Summit 2021

Sir Peter Gluckman
12 November 2021

NZ cannot avoid the challenges of geographical position and size. Covid-19 has emphasised its isolation, at times reinforced its willingness to be somewhat complacent in its idyllic remoteness, and dependence on ruminant-based exports.  The challenge for NZ is to recognise that what might have been a strength at one time can become a weakness as the country goes forward.

Climate change will alter food exports over time. It and technological developments such as the virtual will challenge high volume tourism. Export education will be replaced by new development in individualised electronic education.

At the same time NZ faces the internal challenges of how to evolve into an indigenously inspired multicultural society and democracy where diversity is empowered and treasured. This can be an area where NZ could lead the region in thinking through how to properly engage diversity in a socially cohesive manner, given unprecedented rapid changes which are upsetting social norms and cohesion in so many places.

More generally, the relatively passive approach NZ taken to its increased isolation over the past 20 months must be rapidly reversed. The urgency to rebuild and create new relationships is critical. The world is moving on and NZ needs its thinkers, leaders, entrepreneurs and indeed so many others to connect again in ways beyond the virtual.

Small countries cannot do everything but they can be excellent at some things and partner with others to create critical mass. In that context the marked divergence NZ has taken over the past 30 years in failing to adequately invest in upstream research is coming home to roost. While NZ continues to invest about 0.6% of its GDP in public R&D and despite bipartisan proclamations over many years to address this gap, other small, advanced economies of the world invest at about twice that rate.  With higher public investment, the private sector responses have contributed enormously to other economies. Yes, there have been a few kiwi unicorns, but the ecosystem necessary to be a meaningful competitor in the global economy remains under-developed. Unlike in other countries, the private sector has been remarkably passive in advocating for R&D; again, this may reflect the comfort of the past 20 years.

The need for a more compelling and integrated strategy for AI and what follows is self-evident. Government uses data a lot and while NZ was an early mover, the opportunities that could have been created have stalled. Indeed, all governments must give much greater attention to sustaining trusted oversight of how they and the private sector use these technologies – the challenges of adaptive regulation are high, and the emergent challenges ahead with AI, quantum, the metaverse and so on demand both strategic thinking and citizen engagement. There is no overall NZ digital and post-digital strategy owned at the highest level as recommended by the OECD.

The need to develop, retain and capture talent competes with approaches from comparable countries.  It is impossible to imagine a vibrant future for NZ without a much greater investment in this area. On the other hand, NZ has seen major tech companies move to set up data centers and in the case of Apple, an R&D Centre in Auckland.  Thus, the opportunity to create a suitable ecosystem is there, but focus and a clear and integrated strategy is required.

NZ’s current economy is strongly biologically based; the challenge will be how to evolve the sector in the face of climate change and technological advances. Climate change and food security issues create competing pressures. Biotechnological approaches can partially reduce this tension, but attitudes formed a generation ago with a different set of technologies still inhibit the country’s options. There is a need to revisit this dialogue to determine how to use the vast experience and reputation within the NZ food system optimally to approach climate change, environmental degradation and economic opportunity. But such discussion is difficult in the context of the current way NZ avoids complex conversations.

Covid has taught all of us that nothing is simple.  There are always trade-offs. There will be diverse views on how to proceed – that is the nature of a healthy diverse society. But decisions moving ahead need to be much broader and long-term; this needs discussion not dominated by short-term partisan politics if NZ is to position itself better in the face of rapid technological change.

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