After the announcements of the Prime Minister’s Science Prizes earlier in the month, Rod Oram wrote a piece for the Sunday Star Times, where he discussed the type of science that won the top prize. As I wrote at the time, Jeff Tallon and Bob Buckley from Industrial Research Ltd in Lower Hutt were awarded this prize for their discovery of a ceramic material that remains a superconductor at temperatures close to the boiling point of liquid nitrogen.
In his opinion piece, however, Oram claimed that research into high temperature superconductivity is the wrong type of science for New Zealand. He wrote:
We have virtually no experience, scale or markets in these areas of science, technology and manufacturing. From a commercial perspective it was completely the wrong science to pursue. We must focus instead on the life and environmental fields where we have the scale and the leadership to attract international collaborators.
Oram is by no means alone in seeing New Zealand’s future lying solely in the life and environmental sciences. Despite the fact that high-tech manufacturing sector is now our third biggest export earner, the central dogma of New Zealand economic thinking seems to be that we can’t compete in this area.
I disagree. In new knowledge-based industries, small chance events can snowball to deliver competitive advantage to a region as an industry grows in scale. I’m going to look at this in more detail as I work my way through Philip McCann’s paper – for now lets look at a few examples.
In the 1930s, the US electronics industry was firmly established on the eastern seaboard. It would have seemed inconceivable to any analyst that in fifty years’ time, the industry would have shifted across the continent to distant San Francisco. Similarly, in the 1980s, who would have guessed that the world mobile phone market would be dominated by technologies developed in Helsinki, a city the size of Auckland on the wrong side of the Baltic, or that the 3D movie industry would come of age in a sleepy seaside suburb of Wellington?
I have heard many explanations for why the semiconductor industry came to be localised in Silicon Valley, from the presence of San Francisco’s large ham radio community in the 1930s to the fact that William Shockley’s mother lived in Palo Alto. These explanations are only offered post hoc of course; no one would suggest we base our economic growth strategy on ‘maternal proximity’ theory.
So while we may not be able to say what conditions are sufficient to establish regional high-tech industries, there are certainly lessons to be learnt about what might be necessary. The regional presence of a world class research university such as Stanford or the University of Helsinki may be essential to deliver the large number of skilled knowledge workers that will be needed. My analysis of Finland shows how a region can develop scientific and engineering capability in a new field in less than a decade. Public investment can also be important — Silicon Valley was supported by decades of military contracts before its semiconductor industry was able to deliver competitive consumer products.
New industries have to start somewhere. Provided New Zealand can supply our nascent high temperature superconductivity industry with the right people and sufficient levels of investment, Lower Hutt is no more disadvantaged than San Francisco in the 1930s, Helsinki in the 1990s or Miramar in the 2000s.
In order to ensure that new industries can be started in New Zealand, we need to be prepared to invest in talented people and their ideas, whether they are in superconductivity, making movies or kiwifruit. We simply don’t have enough of these that we can afford to pick and choose among them: we must support bright ideas where we find them.