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Business- Government Partnership For Innovation and International Competitiveness : The New Zealand Story since 1999

Nigel HaworthThe University of Auckland

CONFIEP Seminar “Experiencias Internacionales de Promoción del la Innovación”

Lima, 3 September 2008

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Background Project

ECLAC project on "Public-Private Alliances for Strategic Export Development”

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New Zealand

Cohesive, modern, democratic, stable society

Geographically remote, at the end of supply chains and trade routes

Small, relatively urbanised, highly-educated, globally-orientated population (4.2 million)

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New Zealand: the economy

Open to FDI; committed to WTO About 350,000 enterprises

– easy to form– Most small, high rates of formation/closure

Growth: averaging 3%+ over recent years Unemployment very low: 3-4% in recent years Productivity (especially MFP) poor Wages relatively low R&D performance poor (50% OECD average; private

sector less than 50% R&D spend)

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Post 1999 Vision: Integrated Economic Transformation

1999: rejection of market fundamentalism– Impact of path dependency

Vision: Economic Transformation– Growing globally competitive firms– A world class infrastructure– Innovative and productive workplaces– Environmental sustainability– Auckland: an internationally-competitive city

Key supporting factors:– Sustainable through electoral cycle– Social inclusion– Committed stakeholders

Goal: to regain top half of OECD

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Economic transformation: R&D and Innovation

Strong fundamentals Improved, better resourced, better focused

policy: R&D framework Innovation at company and sector levels Priority sectors (esp. biotech, ICT, Cultural Industries) Improved funding Focus on the relevant and the commercial

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Economic transformation: improved workplace productivity

Employment relations framework legislation focused on partnership and productivity

Stakeholder-driven initiatives in: Workplace productivity improvement Employer-trades union partnership

Supported by: New qualifications framework in compulsory education Growth (numbers and funding) in tertiary education Renewed focus on skill training (including numeracy and

literacy)

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Economic transformation: global connectedness

New Zealand Trade and Enterprise: ‘one stop shop’

Regional business development Industry initiatives Company initiatives Internationalisation programmes

Supported by: Strong commitment to WTO , APEC etc NZ diplomatic focus on trade advantage

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Economic transformation: public-private partnerships

Sustained commitment to stakeholder engagement especially with business

Tripartism Both vision and implementation:

Foundations of economic transformation Board level leadership and membership Task forces, consultative measures Access to ministers Example: Growth and Innovation Advisory Board (GIAB)

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Economic transformation: Implementation

Leadership at top political level (Prime Minister)

Committee of main ministers driving process ‘Whole of Government’ approach

High quality, technically competent public service

Monitoring of policy by Treasury, Department of Prime Minister and Cabinet, PM’s own office

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Economic transformation: Principles of Government Support

Emphasis on – Support and facilitation, not direction– Targeting (e.g.)

Prioritised sectors, High-end, high value-add, high-tech International potentia SMEs

– Capability building important– Applied, relevant outcomes

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Economic Transformation: Principles of Support contd.

– Part user-pays (e.g. 50% model)– accountability– Competitive tendering (e.g. for research funds)– Wide range of support limits from $5k to multi-

million– Partnerships/collaborations encouraged

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Economic Transformation:Evaluation

Of vision (ministers and stakeholders e.g. Growth and Innovation Advisory Board)

Of implementation Of agencies (e.g. By Ministers, Treasury, DPMC, other

ministries, GIAB) Of schemes

By delivery agencies (including private sector) By monitoring agencies

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Overall current performance (2007)