Speech To The 23rd Association for Tertiary Education Management and 1999/AAPPA Conference
International Plaza, Wellington
9.15am, Monday September 27, 1999
By Hon Max Bradford
Minister for Tertiary Education

Embargoed Until Delivery

Good Morning,

I am delighted to be here, and to have the chance to reflect on the important role you all have to play in the coming months and years.

Conferences like this are an important opportunity to put aside day to day tasks, share views and focus on the challenges ahead.

And the challenges that are before you all are formidable.

As tertiary institution managers you have already had to operate in smarter ways as demands on resources have increased.

But the increasing speed with which the world is changing means you will have to box even more cleverly if you are to keep your institutions moving forward.

On your shoulders falls the task of helping to come up with new strategies to enable your organisations and economies to prosper in a world where ideas and labour markets - as expressed by the ability of people to find jobs throughout the world - are becoming less and less constrained by national borders.

The tide of globalisation sweeping the world is changing everything.

Technology has broken down national barriers.

Indeed, the whole concept of nationhood is under threat, at least as far as distinguishable government boundaries are concerned.

Cheaper transport means students now shop in different countries for an education rather than a different city.

The internet has turned the world into a giant supermarket for education and the dissemination of ideas, as well as products and services.

And the ways of thinking and acting that have served people well until recently are being re-evaluated and challenged.

In the knowledge economy, companies look at the world as a single market, not separate markets divided by national borders.

Operations are split into different pieces, with each piece located wherever it is most efficient to do that particular operation.

Today, the idea that is conceived in Rome, is developed in France, manufactured in Korea and sold in Chile.

For tertiary education providers ‘best in country’ is no longer good enough.

Tertiary institutions are competing on a global basis, not only for the top students, but for the best lecturers.

Students of the future will increasingly be raised in one country, educated in another and work in yet others.

The only way to survive in this new environment is to adapt and excel.

Benjamin Disraeli’s 1874 comment that: "Upon the education of the people of this country, the fate of this country depends" has never been truer.

But for the purposes of this speech, I would like to modify the quote a little.

Today, as globalisation, specialisation and interdependence are inexorably melding us together, Disraeli's words could be:

"Upon the quality of its education providers and researchers, a country’s fate rests”.

In the knowledge age, countries like New Zealand face two choices.

We can stand still and rely on traditional primary commodity products to pay our way as we have in the past.

We can be content to produce imitations of existing products and use lower wages and costs to be competitive.

This would condemn New Zealand to a middle income nation-status.

Or, we can join the leading nations of the world who are forging a bright and exciting future based on knowledge and ideas.

Put simply, if countries want to continue to be in the ranks of advanced nations, they have to develop innovative capacity.

They have to be able to develop new ideas, and find new ways of generating wealth.

Harvard University Professor Michael Porter said of New Zealand last year:

“The only way to keep our prosperity growing is through our capacity to innovate, to produce higher and higher value products that others can’t produce, or will only produce after years of delay while they try to catch up on us.”

Underlying all this is the need to have a first rate education system and a genuine commitment to excellence.

Learning to use existing knowledge is not enough.

Students must also learn to create new knowledge.

If education is going to provide the human capital needed, it has to be at the cutting edge of demand and be responsive to the rapidly changing needs of students, employers and communities.
People and ideas must be able to move readily between business and research in order to keep university research focussed and relevant, and to provide business with the creativity and ideas it needs to flourish.
Student training will need to be aligned with a country’s fields of uniqueness and strength.

Tertiary institutions in New Zealand and elsewhere must develop more productive relationships with enterprise and research organisations.

They must establish networks across disciplines and institutions and create collaborative research ventures.

And if countries and tertiary institutions do not have the expertise they need they should find ways to acquire it.

Singapore for example, has set out to attract world class foreign universities to set up branches in the island State.

Singapore’s goal is to become an education hub, like Boston, and in doing so provide its people with the expertise to excel in the knowledge economy.

Already it has attracted INSEAD, the European institute of business administration based in France and the University of Chicago Business School to set up branches.

Another top US business school, Wharton, is collaborating with the new Singapore Management University to set up a research centre.

MIT will conduct post-graduate engineering courses in Singapore and the Georgia Institute of Technology is to jointly set up a logistics institute.

In addition, the medical school in Johns Hopkins University is setting up a post-graduate medical research and education centre.

Developments like this are a wake-up call.

We have to act quickly to ensure we keep pace with others in the knowledge economy.

As well as failing to provide our economies with the skilled people that are needed, countries like New Zealand risk becoming less attractive to overseas foreign students and the hundreds of millions of dollars they bring with them every year.

This is why ATEM’s bench marking exercise is so important, together with your staff development and exchange programmes.

To meet the demands of the 21st century, tertiary education institutions will need to operate according to world class standards.

Here in New Zealand we can justifiably be proud of the achievements of our tertiary sector, but others are moving ahead faster than we are.

We have to improve the quality and focus of our tertiary education if we hope to keep in step with the Singapores and Irelands.

In the knowledge age, New Zealanders will not only need to maintain their current skills, but continually improve them throughout our lives.
Every New Zealander will need to participate in post-school education of some sort several times in the course of their lifetime.
This means that the traditional distinctions between tertiary education and industry training are becoming increasingly irrelevant and unproductive.
There are huge opportunities here for tertiary providers to develop programmes and relationships with enterprise to fulfil the evolving needs.
The comprehensive $223 million Bright Future Package announced last month, was the first steps towards preparing New Zealand for this challenge.
Two taskforces are to be set up to study the best structure of our tertiary education sector for the knowledge age and to ensure that tertiary education meets the needs of employers, employees and New Zealand as a whole.
Over time we will have to develop fewer, but stronger research institutions and centres of excellence, rather than the one-size-fits-all approach which characterises much of New Zealand’s tertiary sector.
The Bright Future Package also includes policies that encourage people to build human capability, that reward success and that acknowledge the role of failure in promoting success.

The New Zealand Government is spending $30 million of new money and redirecting millions more to fund scholarships to help our best talent excel.

This includes $20 million on Enterprise Scholarships to be jointly funded with industry.
These scholarships will be available for both advanced study with a research component and advanced learning in technical areas.
This will ensure that research is better aligned with the needs of enterprise.
Ten million dollars a year will fund up to 80 Doctoral Scholarships to enable students to undertake doctoral level research with the provider of their choice.
To encourage our best talent into areas where it is needed, up to 1290 scholarships will be awarded each year to secondary students who excel and want to go on to study science, maths and technology at tertiary level.
These scholarships provide new opportunities for tertiary education providers to work with the enterprise and research sectors to further New Zealand’s knowledge base and foster innovation.

The Government is to create elite Post-Doctoral Fellowships to assist our best PhD graduates generate ideas and wealth for the nation.
A $36 million a year new Economy Research Fund will encourage researchers to delve into uncharted areas.
A raft of other policies has also been introduced to make ideas work for New Zealand and ensure that more of these ideas are turned into products.
But to reach this goal the tertiary, research, business and government sectors need to act with a common vision and purpose.
We can achieve sustained success in the knowledge economy by applying skills we already have as a nation - but in a much more deliberate and systematic way.
Fortunately, New Zealand already has a proud history of applying an innovative approach to the use of science and technology.

The Britten motorcycle and Team New Zealand’s success in the America’s Cup yachting are just two recent examples.

New Zealand expertise in hydrodynamics, boat design and construction and weather data technologies enabled Team New Zealand to win the prized America’s Cup trophy in 1996.

It will hopefully help New Zealand to retain the cup early next year.

New Zealand’s geographic isolation has helped protect us from many significant diseases affecting animals in other parts of the world.

As a result, we are recognised as having the world’s premier source of animal-derived biological materials.

New Zealand also has a long-standing capability in the design and manufacture of telecommunications and information technology equipment, almost entirely for export.

This sector is vibrant and innovative, and is receiving international recognition for providing specialised equipment and services.

We have a reputation for creating world-class motion pictures. In the field of computer animation we have proven ourselves to be world leaders.

Our newest and most ambitious project is the upcoming “Lord of the Rings” movie trilogy.

This project to turn JRR Tolkien’s famous novels into three movies has a budget of $360 million dollars - more than twice the value of New Zealand’s annual exports of our world-renowned wines.

We also have world-class expertise in sports science.

And and more recently our fashion designers have been making their mark overseas.

The challenge that faces New Zealand in the knowledge age is similar to many other countries.

It is to mount a sustained effort to better align our tertiary institutions to build on our areas of expertise and to develop others where there is great potential.

Only by achieving excellence will we suceed.

It was management guru Peter Drucker who said:

“The best way to predict the future…is to create it.

“One cannot manage change, one can only be ahead of it.”

I wish you all the best over the next three days as you consider the achievements of the past and devise strategies to meet the challenges of the future.

Ends.

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