Study Says NZ Must Use Neo-colonization Model to Boost Trade

A New Zealand think tank in its recent report titled “Plugging the Gap” stated the country should establish innovation centres at prominent international locations as it had been done successfully by small prosperous nations. This report proposes 14 policy directions to improve the success of businesses trying to establish themselves in international markets.

The New Zealand Institute pointed out New Zealanders were inventive, and had a high rate of business start-ups, including several entrepreneurs aspiring to succeed internationally by selling differentiated goods and services. Although there were many success stories, a number of businesses going international found it difficult to pool in the capital required and struggled to assemble the talent needed to be successful, it added.

“Around one quarter of skilled New Zealanders now live abroad. NZ Institute of Economic Research estimates that another 410,000 New Zealanders could immigrate to Australia by 2025 if per capita GDP growth continues on its current track,” the institute warned.

Besides, the institute advocates tax-based incentives for the venture capital industry and a fund to allow more New Zealanders to invest in new ventures targeting international markets. The new study also finds IC&T, niche manufacturing and value-added goods and services based on primary production are high productivity sectors where differentiated exports can be grown.

On the environmental front, New Zealand should look to other successful small economies that are aggressively pursuing low carbon or green economy strategies for inspiration, the institute says. Among them are South Korea with an outlay of US$85bn on environment-related industries for five years from 2009, Denmark which has committed DKK700mn to developing and commercialising clean-tech and Singapore with and allocation of S$700m for green-tech growth.

The New Zealand Institute is a privately funded think-tank that promotes creative, pro-active and independent thinking with focus on key issues that have a major impact on New Zealand’s economic, social and environmental future by engaging with New Zealanders to develop solutions to address these issues.

By Jose Roy