I’m still worrying about economic growth and where it can come from:
DENMARK OR FINLAND?
Those of us who’d like to see New Zealand transform its economy often look to Scandinavia for examples of countries that have driven their growth through research. We can use their experiences as a guide to how our own research system might drive our economic growth. There’s a fundamental question here – if we want business R&D spending to improve, is that going to come from large companies in sectors where we traditionally do well, like Fonterra in dairy, or from large companies in new sectors, like Navman with GPS?
But Scandinavian economies differ from each other and those differences affect their research styles. Finland took a punt – they used research to move into an entirely new industry. Nokia transformed itself from a forestry company that also made odds and ends, like studded snow tyres, into the world’s largest manufacturer of mobile phones.
Denmark did something quite different. They’ve put a great deal of money into intensive agriculture. Their land area is a sixth of ours and their population a million greater, but they are net exporters of food and high value food at that – meat and dairy. Their farms are small, as you’d expect in such a crowded country, but they are very productive. That productivity has been rising at more than 3% per annum for the last twenty years and it continues to increase. Why? Because the Danes are great at getting science onto farms, helping them to, for example, get more benefit from the fertiliser and feed they use.
So which path should New Zealand take? I don’t know. Finland’s is a high risk, long-term strategy that needs a tolerance for failure. Nokia tried and failed at making personal computers and televisions and their research into what was then called radio telephony took more than thirty years to come to fruition.
Denmark’s approach is lower risk and incremental, but maybe lower payoff – Nokia is now six times the size of Fonterra. Maybe we should try for a bob each way?
And for people who really couldn’t give a monkey’s about long-term technological growth and its effect upon agricultural productivity, kittens:
awaits the Rhi-thuddage