Is this the best we can do?

02/12/2011 § 4 Comments

Really?! This is the best The Competitiveness Institute could do?

Look, when I started this blog, I promised myself I wouldn’t run down every stupid idea. I would be positive and constructive. Well, it’s my blog and I’ll rant if I want to (rant if I want to). (That, by the way, is a snowclone, a charming term.)

TCI had Prof Enright speak at their conference yesterday. Enright worked with Porter on the 1991 book on New Zealand competitiveness. So far, so good. What did he come all the way from Hong Kong to tell us?

Apparently, NZ is ‘still’ at a crossroads. He laid out two scenarios for the future. In one, NZ is able to use its advantages to its advantage, while in the other, the advantages don’t produce much of an advantage. So, the big take-away message (with chips) is that things could go well unless they don’t. Here, I’ll let the reporter tell us what the professor said:

In essence it’s the ability to develop competitive clusters of companies that can succeed against international competition in the domestic market and can inject themselves globally into those markets in a sustainable way.

If ‘competitive’ = ‘capable of succeeding’, which is all it really means, then he’s just told us that we will succeed when we have companies that can succeed. How is this any help for thinking about the economy of NZ and policies that might promote growth and/or the general welfare?

He is also fuzzy on the details. For example, what is a ‘strong’ government? I can provide examples of ‘strong’ governments I wouldn’t want in charge of the country. How about ‘strong education’? There is some dispute over how ‘strong’ the education is in NZ, and at what levels, and for what portion of the population. What about technical capabilities and Kiwi ingenuity, which he calls our ‘non-traditional advantages’? The innovation literature of the last umpteen years has lauded our capabilities and ingenuity. How, exactly, have they pushed us up the OECD growth table over the last 20 years?

Why am I getting myself in a lather over this? Because improving NZ’s economic growth is hard. It’s economically complex. It involves different people with their own plans and dreams, preferences, ideologies, skills, and resources. Lots of people have been trying to make sense of it for years. We have to get the mix right with workers, skills, business plans, management capabilities, infrastructure, institutions, government policy, international markets, innovations, and that je ne sais quoi that makes it all hum. In general, NZ doesn’t do too badly, just not as well as some other places.

We certainly don’t need someone flying in after 20 years, telling us we are ‘still’ at a crossroads, and offering to write us another report.

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§ 4 Responses to Is this the best we can do?

  • It is damned hard to think of low hanging policy fruit for NZ.

    We’ve gotten rid of most of the stupid, but tyranny of distance seems to have outpaced those gains; at least some evidence starting to accumulate that Internet is a stronger complement to agglomeration than substitute for it.

    Some potential gains to be had in fixing some of the silliness in land use planning, making housing more affordable and freeing up capital for other uses. Fixing WFF effective marginal tax rates could get a bit of distance, but would mean slower abatement and greater overall transfers so aggregate benefits unlikely to be huge. Imagine you’ve got your finger on the policy trigger – it’s hard to point to much you could do, even as omnipotent benevolent despot, to substantially improve growth and league-table rankings.

    And, of course, capitalizing on our competitive advantages and leveraging our synergies on a global scale. That’s the ticket.

    • Bill says:

      Oh, I forgot ‘synergies’! Silly rabbit.

      But, yes, that’s how it seems to me. I could think of a few changes to make if I were the despot, but nothing that would catapult us into a radical growth phase. And incrementalism isn’t a great rallying cry.

  • Hmm. It didn’t accept my hashtag on the last paragraph of the comment… [JonLovitzAccent … /JonLovitzAccent]

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