There’s a very interesting ‘occasional paper’ that’s just gone up on the MED website.
By its name ‘Enhancing Productivity: Towards an Updated Action Agenda’ you wouldn’t pick it to be a slightly subversive document (see it here).
But, along with hints coming out of the general science and innovation agenda, this thought piece by MED economist Roger Procter (‘not necessarily reflecting the views of the Ministry of Economic Development’) lays out some logic for picking winners.
That’s my term, and in fairness to Roger, he never uses it. Perhaps focused effort would be a better short hand, and go down better across the road at The Treasury.
One thing you can be sure of, Roger’s thinking won’t be happening in isolation; and here’s some edited highlights from the 63 page documents. Naturally, there’s a high degree of economic-speak, but read between the lines.
“New Zealand has quite good framework policies. However, to catch up with the higher income OECD countries, New Zealand will need framework settings that are up with the best in the world, not just good, along all important dimensions.”
“Evidence from other countries suggest that facilitative policies will also likely be necessary to improve New Zealand’s trade performance and support the restructuring described above towards knowledge manufacturing and services. ‘Virtually every hub of cutting-edge entrepreneurial activity in the world today had its origins in proactive government intervention’ (Lerner 2009). Facilitative policies have a place across all tradable sectors, but are particularly relevant to knowledge intensive manufacturing and services.”
Procter says the NZ government has to decide where to focus its facilitative policies, and the country is much more likely to be successful if it can build off a group of knowledge intensive manufacturing and services businesses that are already in existence.
“The existence of such businesses is prima facie evidence that New Zealand has the capabilities to produce competitively products that are similar to the products these businesses produce, in the sense of the capabilities needed to produce them.”
“Fortunately, New Zealand does appear to have a significant number of such businesses. Facilitative policies should therefore focus on growing on these businesses. Facilitative policies should also focus on growing new businesses that build on the capabilities that these existing businesses use. The objective is to get the set of related businesses and capabilities to the point where the increasing returns that each business obtains from the development of related businesses and capabilities anchors them profitability in New Zealand.”
Now, there’s a high tech sector review that was to report back very quickly, about now (see sticK story here).
Now, to repeat, we won’t call it picking winners, we’ll call it focused effort.
What’s the bet that some of the ‘facilitative policies’ thinking in Roger Procter’s paper is reflected in what this review reports back with?