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New Zealand’s innovation system is like a large industrial plant according to the New Zealand Institute.

“Where each department performs reasonably well given the resources and information available, and manages hand-offs to adjacent departments,” it says in a recent internationalisation strategy called ‘Plugging the gaps’.

“However the plant as a whole is underperforming because there are bottlenecks, missing functions and missed opportunities for coordination.”

The report proposes 14 policy initiatives to accelerate the export of high value differentiated goods and services based particularly on information, communications, technology, and niche manufacturing.

The institute says that many of the policy proposals identified are available because the NZ innovation ecosystem has not been managed as a whole.

“Instead, individual pieces have been proposed and adopted by governments, and numerous government and non-government agencies have made improvements within their scope of responsibility,” the report says.

It says the formation of the Ministry of Science and Innovation is an important step towards solving the problem, but isn’t enough.

“Several countries pursuing innovation strategies have established innovation councils or equivalent bodies, usually chaired by their Prime Ministers, which identify obstacles and opportunities, and mobilize resources,” says the report, written by Rick Boven, Catherine Harland and Lillian Grace.

They suggest that having the ministers for science and innovation, education, economic development and finance on an Innovation Council, along with their chief executives and leaders from industry and finance would create the conversations and shared understanding that are needed to agree priorities and quickly reallocate resources.

The report suggests following the Danish model, where in 2006 it launched a strategy called ‘Progress, Innovation and Cohesion’.

The Denmark strategy contains a total of 350 specific initiatives, which together entail extensive reforms within the fields of education, training and research as well as substantial improvements in the framework conditions for growth and innovation in all areas of society.

The strategy says, “Each year, the Government will publish a report that provides a picture of whether developments are going in the right direction and whether we are reaching our objectives in relation to education and training, research, entrepreneurship and innovation.”

Given the paucity of policy options to grow the economy, and given the Prime Minister’s stated enthusiasm for high value exports, could Mr Mapp’s announcement be Key timing?

Footnote: As this post was being written, Minister of Science and Innovation Wayne Mapp announced he will not be standing in the 2011 election.

It would be a pretty neat thing if John Key stepped into such a pivotal role……especially as he has often said that high value exports are the only way this country’s going to move forward. However, the word is it would be too much on his plate.

More’s the pity……but think about it eh John!