This week’s editorial

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

9 thoughts on “This week’s editorial”

  1. Question about Danish farming – has any research been done into the sustainability of a) the practices that produce such efficiency and b) the growth itself?

    1. Oh hush, you!

      Well, yes there has, feel free to dig around on google coz there’s lots of it and I don’t have time to dig into it, but:

      At a high level, on the Environmental Sustainability Index, Denmark comes in at 25th in the entire world!!! Well, NZ comes in at 14th, so they’re doing better than you’d expect from their wealth. Whether that means they’re doing enough, is an entirely different matter.
      http://www.yale.edu/esi/
      (p142 in Appendix B, if you want to dig)

      At a farm level, I’ve a paper here that says they’re not just dumping more fertiliser onto farms, they’re doing a good job of making a given amount of fertiliser work better. So that’s handy. I won’t send it to you, coz its dense econometric jargon and even I, with my mighty brain, can barely make head or tail of it.

      Yes, they farm intensely, some of their farms are multi-story. Is that neccessarily unsustainable? I hope not.

      There’s another question that I haven’t mentioned, that of animal welfare. NZ cows getting to gambol freely in the fields and go off on exciting adventure holidays and the like; Danish pigs being forced to work downt’ pit for thruppance every fortnight an’ tha…

  2. cultural issues

    given the pre-eminence of tall poppy syndrome in NZ (uhh, so to speak), relying on one saviour, unless it’s in a sport related area (eg America’s Cup yachting tech) is unlikely to succeed.

    Kiwi’s just don’t like to see people do well. Unless they’re sports people.

    Graduated, incremental, government supported improvement of a nice, safe industry like agriculture (“everybody likes farmers, bro”) is much more likely to fly, from a sociological perspective.

Leave a Reply

Your email address will not be published. Required fields are marked *