Putting a toe in the Knowledge Wave
Colin James's article for the NZ Herald dialogue page, 6 August 2001
They came, they conquered with words and they went -- back home to countries that innovate, that organise, that are upwardly mobile.
Behind they left some energised and better networked people and even a good intention or two and some others a bit more aware of the hard choices ahead if we are to "catch the knowledge wave" to the top league.
Lavishly provendered and run like clockwork, studded with foreign and expatriate luminaries, John Hood's and Helen Clark's conference looked very much like the sort of jamboree of elites you summon to call the people to arms in the teeth of crisis.
Except that Clark flatly declared there is no crisis. She also said on radio that the government had an economic strategy and she didn't want to hear only policy demands of the government. Mid-conference, she whacked Don Brash for pushing policy she disapproves.
So why did she co-host it?
A generous interpretation of her hot-and-cold attitude is that she was prodding conference-goers to self-start change -- a sort of Kennedy-esque, "Ask not what your country can do for you. Ask what you can do for your country."
Whether because of her comments or not, that is the tack the conference took.
Embedded in the recommendations is a lot of implied policy and government action. That cannot be avoided in any gathering dealing with national matters. But it did not amount to the usual passing the buck to Wellington.
Many recommendations, even if they had a policy dimension, were aimed at self-starting without the government. Notable were calls for venture capital and other funding for social entrepreneurs.
This makes an opening for business proponents of small government to link with fellow-entrepreneurs in social services and thus get innovative, and maybe more effective and cheaper, social investment.
Some in business do this now. It is not charity -- or should not be because business's responsibility is to make wealth, not succour the weak. It could be hard-nosed business, if, long-term, it led to scaled-back government and lower taxes and a better educated and motivated workforce than the government delivers through its factory.
The conference laid down another challenge to business: stop treating universities (and other educational institutions) as foreigners. Business's usual ready riposte is that educators treat business as foreigners. But the very fact of Hood's promotion of this hui is a signal that he, at least, wants to link business and educational entrepreneurs.
Guru after guru at the conference made the powerful point that in knowledge-successful countries, education is geared not just to developing the individual but also to enhance individuals' and the country's economic prospects and performance.
Few teachers are going to reorient themselves without carrots and sticks. The government, which pays teachers' wages, is stuffed with teachers. Only if educational managers and business work jointly will the mindset in Wellington and the cloisters change. As the Irish luminary, Edward Walsh, told Competitive Auckland in June, "if enterprise and the universities come together and make a case to the government, the government listens" -- made separately, their cases are special pleading.
Not that Ireland is an automatic model. Its poverty level is among the highest in the European Union. Finland is heavily dependent on one company. Israel has Palestine. This gathering underscored the truism that this country can cherry-pick ideas from others but has to find its own way.
And that way implies hard choices. Hard choices for households, consuming less and investing more; the debt road they are on leads ultimately to servitude. And hard choices for politicians, switching scarce budgetary resources from redistribution into investment in the broadest sense. Renaming benefits "social investment" doesn't qualify. Rescuing very young children from home lives that don't encourage learning and reading does. So, of course, does making policy much more enterprise-friendly.
The frightening and challenging point underlined at the conference in speeches by foreigners and expatriates who are at the cutting edge internationally, was that the world information revolution is still at an early stage, with biotechnology about to drive it to another level.
Just as the industrial revolution nationalised what had previously been local economies, the information revolution is internationalising what were, when our leaders acquired their world-view, national economies. And just as the industrial revolution caused social havoc and shocking personal disorientation and was accompanied by periodic anarchic attempts to stop it, so, on both counts, is the information revolution (witness Seattle, Toronto and Genoa).
Government politicians habitually refer to this acceleration of globalisation as "the problem". But a "problem" will elicit a defensive policy response, which will not galvanise individuals, business and interest groups. One common feature of the countries profiled at the conference and a subterranean theme of many of the other speeches was that globalisation must be seen as a "challenge" and "opportunity", if positive policy and individual responses are to follow.
And those responses will need to be nimble -- another recurrent conference theme. They will need to be imaginative. They will need to be quantum leaps, not incremental. A government and populace hoping a tweak or two will do the trick will be unpleasantly surprised.
A number of speakers from a range of disciplines made this point, directly or allusively. The policy environment and the government involvement must be shaped to facilitate, or at least not inhibit, imaginative action by individuals and groups.
Can this government do that? Not if it fears being seen as re-running Rogernomics. That was at the root of Clark's (over-)reaction to Brash.
In fact, a good deal of economic discourse has moved on from that battlefield, the broad premises now having been established as economic orthodoxy, to be flouted by countries at their peril. The question is what to do next -- and the message from the conference's economic contributions is that considerable policy change is needed.
A growth strategy is not just a clip-on. Resources must be reallocated. Policies that impede development must be revisited and facilitative policies substituted. Only the deaf could have missed that message at the conference.
Otherwise forget catching up with the top half of the OECD, on which Clark has set her sights. We will quietly, though respectably, meander on, with 2-3 per cent growth.
To step up to the Budget's target 4 per cent will need a change of popular mindset.
Has this conference provided an opening? Even a year ago it could probably not have been held because the country remained enmeshed in the Rogernomics argument. Clark's "rebalancing" has safety-valved much of the public anxiety and resentment that dogged public life and enterprise through the 1990s.
Some union leaders at the conference said they are prepared to carry hard-choice messages to their members. In the "social cohesion" theme sessions there was a warm realism. If the conference has provided a trigger for some hard talk, it will have worked.
But a conference is a conference and the conferors go home to mundane matters. To make good expatriate David Teece's musing to them that we might be "on the cusp of significant forward momentum" some powerful leadership will be needed. That is what the conference put on Clark's desk. She will need help.