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We missed the knowledge wave

28 August 2015

I spied a very interesting article in the NZH this morning.

This story looks at what's gone wrong with Fonterra and the most striking part of it was a reminder of "the knowledge wave" hype which the government of the day rolled out back at the turn of the century.

I was at the time, and have continued to be an enormous skeptic of this "knowledge wave" initiative.

Conferences were held around the country and my own 7am News service was showcased at the 1999 APEC leaders conference in Auckland as an example of how NZ was capable of boxing well above its weight in the "knowledge economy".

We were promised big things back then. We were told that the tyranny of distance which shackled our ability to be a competitive exporter to markets that were 10,000 miles away would soon be gone. Instead of shipping commodity products such as milk powder, logs and meat half way around the planet, our export focus would embrace intellectual property that could be delivered in the blink of an eye through this new interweb thingy.

Well it seems as if my skepticism was well founded doesn't it?

Over 15 years after those first knowledge wave conferences, Fonterra is still shipping milk powder and we're still loading logs onto ships at the port of Tauranga. Refrigerated ships are also busy carrying our lamb and beef to those far-away markets, clocking up "food miles" in the process.

What went wrong?

Why did those promises of fortune made from the intellectual property created by "smart" Kiwis and their businesses never eventuate?

Well the answer is simple: we're just not that smart.

Now don't get me wrong... there some *very* smart Kiwis out there who, given the chance, could create the knowledge economy we were promised.

The problem is that as a nation, we're as thick as two short planks.

Ultimately it is the voters of a nation who determine the direction in which we head and sadly, the potential to really create a powerful knowledge-based component to our economy has been suppressed by the fact that we keep electing lard-heads to power.

National appears far more interested in pandering to the wants, needs and demands of its rural voter base. Not for them, the prospect of empowering a bunch of usually much younger (perhaps left-leaning) graduates with clever ideas and tonnes of sweat equity. That would be political suicide.

Labour is also more interested in servicing the demands of "the workers" who are still predominantly blue-collar in nature. Surely the rise of a new "rich" in the form of those who leveraged their intelligence and hard work to create valuable knowledge-based industries that employed graduates rather than labourers would also be political suicide.

And there's the problem...

None of these two parties really wants to look beyond the next election.

Forget about the long-term good of all the peoples of the nation -- the overwhelming imperative of our political parties is to get re-elected and that means giving priority to the short-term demands of their traditional voter-base.

And that friends, is why, despite lots of rhetoric from both sides of the house, we find ourselves still shipping dried milk, animal carcasses and tree-trunks -- 15 years into what was supposed to be a massive transition in our economy that would bring wealth and prosperity to us all.

As I said... we are as thick as two short planks... or should that be two short logs because we probably export logs to China and then import the planks *they* make from them.

Our idea of "value add" is to create a huge company like Fonterra and stick its branding on the same packets of milk-powder we've been exporting for many decades.

How crazy it is that much of the furniture you find at The Warehouse probably contains timber or wood-chops grown in New Zealand -- then shipped to China where it's turned into a flat-pack bookcase and shipped back to us. Value add?

NZ companies seem to think that "value add" is simply a process of applying a massive mark-up. This can be evidenced by the fact that Bunnings in Australia seem to sell NZ-grown timber at a lower price than Bunnings sell the same stuff right here in NZ -- yet we still buy it.

As I said, we're a nation that is collectively as thick as two short planks.

Sadly, I see little likelihood of a change in the foreseeable future.

Once we've finished selling all our silver (in the form of asset sales and NZ property sold to overseas investors), we're going to be right up shirt-creek without a paddle.

It saddens me greatly that we are now rolling out a nation-wide fibre-optic broadband system that, if the promises of a knowledge-based economy were honoured, would be empowering small enterprises all over the country to be more efficient and earn more in the way of export receipts for their intellectual property or services.

Instead we're already seeing that the biggest value of this UFB is that now we can import more lame TV shows direct from the USA using Netflix.

Opportunities lost :-(

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