Like it or not, labour mobility means that we do compete directly against the Aussies in the markets for skilled people, where we obviously need to do better. But how? I got a couple of clues while across the ditch last week.
I was intrigued to read the Aussies complaining about lack of policy attention on innovation. Most of it was printed or is gated, but basically, they’re saying that the Rudd government seems to not really care. There was a major review of the innovation system last year but it seems to have dropped off the agenda for this government. This should be good for us.
I also read commentary trying to debunk the view that Australia has done well simply by having the dumb luck to have a mineral-rich and incredibly large and empty country. The argument was that there was heaps of innovation in the minerals sector, so it wasn’t all dumb luck. True enough, but neither is it rocket science. They are optimising the production, management, distribution, marketing etc of the stuff in which they already have an enormous comparative advantage.
Like the criminals, we also have a land-based comparative advantage: agriculture. We’re doing OK with ours I suppose. Certainly dairy is being well supported by governments: the latest rush of free-trade agreements has been very good for Fonterra. But we probably need to think more creatively about innovation more in this sector. An obvious boost would be to allow farming of native species like Weka and Kereru. But the big problems are surely in meat & wool and at this point I am bereft of ideas for those guys, except that I think they should consider the merits of switching to vegetarians as customers (ie fewer animals, more plants).
More generally, I liked Rick Boven’s recent thoughts. I also agree with Doug that the CRIs need to be reformed dramatically. And with WH that we could do more with competitions, though the recent Queens Wharf debacle shows that such things need to be well conceived from the outset.