3. NZ Government’s
Four Economic Priorities
1. Responsibly managing the Government’s finances
2. Building a more productive and
competitive economy
3. Delivering better public services within tight financial constraints
4. Rebuilding Christchurch
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4. Productivity Goal +2% pa
(labour)
Competitiveness Goal Incr GCR Rankings
Global Competitiveness Report
Base Line: 23/144 countries (2012)
Goal: Unquantified
Ministry of Business, Innovation and Employment
Statement of Intent 2013-2016
May 2013
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6. Our Productivity Paradox
“The mystery is why a country that
seems close to best practice in most of
the policies that are regarded as the
key drivers of growth is nevertheless
just an average performer”
• - OECD 2003
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7. World Economic Forum
Global Competitiveness Report
144 countries, 113 variables
Overall Rankings 2012 2013
New Zealand 23rd 18th
Australia 20th 21st
NZ ranks highly in:
ease of starting a business (1st)
lack of bribes (1st)
judicial independence (1st)
NZ ranks poorly in:
mobile phone subscriptions (48th)
availability of scientists and engineers (69th)
cluster development (64th)
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8. State of Cluster Development
World Rankings
Global Competitiveness Reports
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New Zealand 73rd
Australia 37th
10. What is Competitiveness?
For a Region:
1. firms are able to compete successfully in
the global economy
2. while supporting high and rising living
standards
HBS US Competitiveness Project
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11. 17 Essential Elements:
• MACRO ELEMENTS
– Macroeconomic policy:
– Effectiveness of the political system
– Protection of physical and intellectual property rights and lack of corruption
– Efficiency of legal framework
– Complexity of the national tax code
– K-12 education system:
• MICRO ELEMENTS
– Logistics infrastructure:
– Communications infrastructure:
– High-quality universities
– Context for entrepreneurship:
– s with strong linkages to the private sector
– Availability of skilled labor
– Flexibility in hiring and firing of workers
– Innovation infrastructure:
– Appropriate regulations
– Strength of clusters:
– Quality of capital markets:
– Sophistication of firm management and operations:
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12.
13. Building a more productive and competitive economy
Business Growth Agenda (BGA)
1. Building innovation
2. Building export markets
grow exports from 30% to 40% of GDP by 2025.
3. Building safe and skilled workplaces
4. Building infrastructure
5. Building resources
6. Building capital markets
Plus
Regional Economic Activity Report
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14. Developing Clusters requires:
1. Recognition in the BGA
2. Central government to establish a
contestable fund for industries and
regions to apply
3. A 5 year time horizon (review after 3?)
4. Teaching in Universities
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15. Conclusion
• Developing clusters will improve competitiveness
• Global Competitiveness Report
• HBS Project on US Competitiveness
• New Zealand is the “rock star” economy that is
failing to develop its clusters.
• The BGA is necessary but not sufficient to solve our
Productivity Paradox and improve CGR rankings to
where they could be.
• “Cluster Development” needs to be put on the BGA
• With a contestable fund to generate action.
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