What we consider important now, may not be so in the future. New Zealand is heading for significant change over the next 40 years. Our population is estimated to double to 8 million by 2050. So how do we plan for this growth and manage change? How do we remain competitive on the world stage?
Today, the power of technology is doubling every year; LinkedIn, valued at an estimated $4.3b, is worth more than Fiji; and revenue from the Facebook simulation game Farmville exceeds that of New Zealand’s wine exports.
With all this change, we will face many challenges: inequality in income levels and educational attainment; labour force productivity; population density and housing pressure; rising health expectancy; the crime rate; and an aging population.
Today, over-65s account for 12% of the population but receive 25% of government spending. By 2050, the increase in over-65s is estimated to be 150%, and 400% for the over-85s.
New Zealand 2050: Where are the opportunities?
So how do we plan for this growth and manage change? How do we remain competitive on the world stage?
AgITO and New Zealand Trade and Enterprise have proposed two possible future trajectories for New Zealand by 2050.
In the first, we have failed to build on our legacy as a primary sector leader and many nations have overtaken us in terms of primary product volumes, quality, efficiency, cost effectiveness and market positioning. Consequently, New Zealand is a small, aging and irrelevant country that makes a living on offering low-value tourism. Most of our productive assets and land are owned by overseas investors and our standard of living is very low so our children have left to seek opportunities overseas.
The second trajectory, which Hayes Knight believes to be more accurate, suggests that having focused on investment into R&D and innovation, New Zealand has become the world leader in export product quality and innovation, particularly in the primary sector and food production. Our scientists have successfully continued to address environment challenges such as carbon emissions, clean water supply and harnessing renewable energies. By investing in innovation and intellectual property, New Zealand industry has become ‘weightless’, making significant earnings from licensing and investment management. The country has invested into complementary industries and enjoyed decades of economic growth and prosperity.
New Zealand has many comparative advantages: a sustainable reputation in the international market based on a clean and green image, low population density, renewable energy, an abundant supply of water, a society with a ‘can do’ attitude and a stable business environment. Sir Richard Branson has highlighted the tremendous opportunity Christchurch has to rebuild the city with green businesses at the hub.
To maintain and build on these advantages and gain a competitive edge globally, we need to create a new economic vision based on a clean economy with wealth creation through five pillars – clean energy, clean transport, clean industry, clean agriculture and a clean environment.
Our future global advantage should be based on the development of innovative thinking, providing low carbon intensity, high value goods and services, produced from renewable energy sources through efficient resource processes.
Currently we are great at exporting raw products so that other countries can profit by converting these into value-added products. We need to understand how and where to add value in the value chain so we can reclaim some of the profit we give away to other nations.
We often believe that yesterday’s solutions will overcome tomorrow’s problems and that past trends or patterns will continue. So we neglect opportunities offered by the future. The challenge is to spot new trends and exploit them early to create a competitive advantage over those less prepared.
There are signals of what lies ahead all around us, we need to see them and act to capture and maximise the opportunity, while mitigating any risk. We need to find ways to differentiate ourselves, increase our productivity and be prepared to take on world markets by focusing on adding value to the value chain.
New Zealand has one opportunity to keep a step ahead in respect of our primary resources and our clean green image. The time to act is now. Striving for a weightless economy will enable our country to be agile and to leverage off our other skills. The future is already here – let’s embrace it.