Engineers Launch Plan for Economic Development
A plan to return New Zealand’s economic performance to the top half of the Organisation of Economic Co-operation and
Development (OECD) has been launched by the Institution of Professional Engineers New Zealand (IPENZ). Prosperity
through Productivity – a Plan of Action identifies the government’s Growth and Innovation Framework as being inadequate
to bring New Zealand into parity with countries which have been traditionally seen as economic peers.
The policy focuses on four key areas that have contributed to our low rate of growth in labour productivity and
formulates a plan of action to advance New Zealand’s economy.
Firstly, the public sector funding of research and development has been directed towards the creation of intellectual
capital value in areas where there are no realistic opportunities to attract private sector capital to pick up and use
the research results and this must change if we are to enhance our competitive edge.
“We need to incentivise private sector investment by redefining the role of Crown Research Institutes so that their
primary measure of success is private sector co-investment. There should be a move away from picking winners by
allocating public sector research and development investment in predetermined sectors towards co-investment with the
private sector in any activity where there is reasonable evidence of the prospect of taking new intellectual capital
value to market,”said IPENZ Chief Executive, Andrew Cleland.
Secondly, investment in human capital has been overly directed into less productive areas of the economy. This has
contributed to an inadequately and inappropriately skilled workforce that cannot deploy or derive benefits from any
physical capital investment made. Our private sector workforce has inadequate capability to effectively use research and
“Provision of support for programmes that build participation in education within economically-critical disciplines to
internationally acceptable standards is essential. Firstly, long-term assertive actions are required to address the key
shortfall in engineering and technology at all levels from trades to PhD. Secondly, scholarships and bursaries provided
for postgraduate study must reflect the market cost of engineering and technology graduates so that they can be
attracted to higher degrees,” he added.
Thirdly, investment has favoured private sector financial capital in property rather than input into physical capital
and innovation which could result in the creation of products and services for sale.
“There is a national need to develop leading edge technological literacy through strategically-focused tertiary
education initiatives in engineering, technology, creative design and their nexus with business and maintain a
light-handed regulatory and compliance structure so that the private sector can do what it does best – develop
prosperity,” said Dr. Cleland.
Finally, there are concerns that shortfalls in our national infrastructure are affecting our economic efficiency to the
extent that the international competitiveness of some industries may be at risk.
“Our government can take steps to overcome shortfalls in national infrastructure by continuing to increase public sector
capital investment programmes in key infrastructure and adopting policies that encourage further private sector input,”
Dr. Cleland added.
Prosperity through Productivity – a Plan of Action presents a strategy for change and economic growth. It highlights
current government policies and proposes strategies to transform New Zealand’s economy.
“Government has a vital role to explain the issues to the people of New Zealand and achieve their acceptance on a way
forward. The issues that people need to understand are the nature of labour productivity and the value New Zealand will
derive from increasing it – we need sufficient prosperity to be able to afford high quality social, educational, health
and environmental services,” Dr. Cleland said.