Note: This column represents the opinions
of the writer and as such, is not purported as fact
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Today's column was inspired by a discussion that started in the Aardvark
forums yesterday about, of all things, the price of petrol.
As everyone will surely have noticed by now, the price at the pump has just
leapt by a significant amount -- despite the NZ dollar being at its strongest
level in over seven years.
Although we'll all be aware that it costs a few dollars more to fill up
the tank, we will also discover before long that this increase permeates
every aspect of our economy. The most obvious side-effect will be an increase
in the price of moving goods around the country, or indeed, around the world.
NZ's exporters are already having a tough enough time in the face of a
strengthening NZ dollar so the last thing they need is to have the cost
of getting their products to the market hoisted as well.
The Aardvark PC-Based Digital
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Yes, at last, this feature
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While savvy businesses can pare costs of such things as electricity consumption,
labour, etc -- freight costs will always be pretty much beyond their control --
and that has to be a big worry for a small, geographically remote country
like New Zealand.
What's worse, an increasing number of people who are very much in a position
to make informed comment, are suggesting that the planet's oil reserves
are running out much faster than was previously thought. One only has to look
at how our own Maui natural gas reserves have petered out well ahead of
schedule to see that it is pretty easy to over-estimate the size of
such resources.
As a nation which is so very much reliant on the physical exports of primary
produce, we should be worried -- very worried.
If oil prices continue to climb and if the unthinkable should happen in that
the planet's reserves start to run out -- we're pretty much stuffed.
Even if we produce the best lamb, beef, apples, timber and dairy products
in the world, the massive cost of delivering these goods to markets that are
half a world away will price us out of the market.
What's more, thanks to GM/GE, our target markets are looking set to massively
boost their own production of food and other primary produce, thus making
them even less reliant on our wares.
NZ's chance to compete on quality rather than quantity is already becoming
a distant light as it appears we are content to play follow-the-leader in the
area of GM/GE. Surely it makes a whole lot more sense for us to remain GM/GE-free,
thus retaining a unique selling feature, than to try and compete on volume
and cost?
But hang on -- haven't successive governments announced their commitments
to building a knowledge economy here in NZ?
Well, as we all know, talk is often cheap -- and that very much appears to
be the case with government and the plight of our knowledge industries.
In order kick-start a knowledge economy here we need at least two things:
- Access to plenty of *true* venture capital
- Access to an affordable broadband service
Right now I think I'm pretty safe in saying that, despite all the crowing
and self praise coming from government, we have neither.
Much of the money that could be going into the creation of new knowledge
industries is being ploughed into the property market where it actually
does nothing at all to earn export dollars or create real wealth.
And then we have the Commerce Commission's decision to burden NZ's
hi-tech players with an effective DSL monopoly (albeit at the wholesale
level rather than the retail level), something that will guarantee that
NZ's broadband prices will remain wildly out of sync with the rest of the
developed world.
We still have time to build a KBE here in NZ -- but not much.
If we wait until our traditional exporters are dropping like flies it
will be too late. Although we have many very bright people here in NZ
who *can* generate masses of valuable intellectual property, if we leave
it too late we may find that the only export we have are the very people
we need to create a KBE.
The news wires already report that a growing number of Kiwi exporters
are near breaking point and the situation looks as if it will only get
worse. Helen, Michael, Jim -- the time for action is NOW!
Given the huge surplus that's been accumulated through over-taxing,
maybe it's time we introduced some real tax incentives for R&D
so as to stimulate private-sector venture capital investment and make it
easier for burgeoning KBE companies to get their offerings to market.
Ignore the Commerce Commission's about-face on local loop unbundling
and put the interests of TAXPAYERS before those of Theresa and Co.
Now get to it -- actually do what you're being paid so handsomely to do.
If any Aardvark readers want to share an opinion on today's column or
add something, you're invited to chip in and have your say in
The Aardvark Forums or, if you prefer,
you can contact me directly.
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