New Zealand's Creative Economy

[Keynote address to Asia Society seminar and ministerial luncheon on New Zealand's Creative Economy, New York City, 1.15pm Tuesday, 24 February New York time]

You've heard this morning about New Zealand's creative industries from some of those who are directly involved.

I want to tell you about what the New Zealand Government is doing to create the conditions for those creative industries to flourish - to create the conditions in which new ideas, new thinking and innovation can drive our economic development.

As a Government we often assert our intention to transform the New Zealand economy. And we mean it. It's shorthand for a vision that informs much of what we're doing - in economic and industry development, education and training, research, science and technology.

New Zealand is unusual amongst developed nations in having an economy still heavily reliant on the production of agricultural commodities. Our economy is transforming as we add value to this sector - we now export as much wine as we do wool - and develop our creative and knowledge-based industries.

We need to accelerate that transformation in a way that is sustainable and valuable in the long term.

Some of you will know that New Zealand, beginning in the mid 1980s, entered a remarkably rapid and far-reaching period of market-based economic reforms. We are, as a result, a very open and deregulated economy.

The Government I belong to has maintained that, but in addition we are taking a more proactive approach to economic development than our immediate predecessors. We believe that a modern Government has a positive role to play in a modern economy - as a leader, a partner, a broker, a facilitator and, occasionally, a funder.

The Government's strategy centres on improving our capacity for innovation. We must achieve by intelligence, innovation and coordination what other economies might achieve by virtue of their size, concentration and proximity to markets.

So we are investing heavily in education and industry training. We are adapting our immigration policies so that they help rather than hinder our search for specialist talent and skills. We are enlisting the talents of New Zealanders who live overseas.

We are taking a carefully targeted, focussed approach to attracting quality foreign investment. We are aggressively promoting exports and we are re-shaping the national branding of our country to align it with contemporary reality.

That reality is smart, innovative, technologically advanced, creative, successful. And it's found in a land the size of California with the combined population of Brooklyn and Queens.

As a government, we also put a lot of energy into improving market access for our exports, through trade policy work via the WTO and APEC, and through pursuing bilateral trading agreements.

America is one of our biggest trading partners, with NZ exports of $4.1 billion last year and imports from this country totalling US $3.7 billion. But our relationship is much broader than trade.

Hundreds of thousands of our respective citizens visit the other's countries each year and we share much in common as long-standing democracies. We share a relationship that Charles Swindells, your Ambassador in New Zealand, calls ". fundamentally strong, deep and healthy . built on a bedrock of shared values, culture, language and history". Increasingly we are becoming business and investment partners, and I will refer to some examples soon.

While there is little serious disagreement in New Zealand over the idea that Government has a constructive role to play in the creative economy, how that role is played out in detail is now the subject of experimentation, debate and refinement.

There are a number of sectors that have high growth potential and offer special opportunities in the next phase of New Zealand's growth. With the help of considerable private sector analysis and advice the Government has selected three for particular attention: the creative industries, biotechnology, and information and communications technology.

New Zealand has unique strengths in all three sectors, but they have also been chosen for special attention because they contribute to growth throughout the economy. Advances in ICT, for example, can lead to increased agricultural productivity, while the creative industries have spill-over benefits for sectors such as design-led manufacturing.

Because you've heard a bit about our creative industries already, let me focus briefly on biotechnology and ICT.

Our key biotechnology and agritechnology strengths relate to our key primary industries - agriculture, horticulture, forestry and fisheries - as well as pest and environmental management.

New Zealand agritech practice is sophisticated and leading edge. And we are building on this applied expertise in the development of allied fields, such as human health and pharmaceutical research.

AgResearch, the Crown Research Institute that has traditionally focused on the science of agricultural productivity, is now pursuing such opportunities. In their own words, they are now "more determined than ever to be more than just a food company". They are not the only ones.

The biomedical sector in New Zealand is small by international standards but it is one of our fastest growing biotechnology fields. A number of innovative companies have grown out of excellent research at Auckland University, for example.

Professor Garth Cooper, who recently starred on the cover of The Journal of Clinical Investigation here in the States, has developed a compound known as Laszarin. Its potential for treating heart disease has put it in the FDA fast-track pipeline. Garth's work has already resulted in the establishment of Amylin Pharmaceuticals, based in San Diego, which is listed on the Nasdaq with a market value of $US 2.4 billion.

Much of New Zealand's biotechnology knowledge comes from government- funded research in Universities and Crown Research Institutes. Private sector expenditure on research and development in New Zealand is low by international standards, although it is increasing. The Government is very keen to support that growth and international linkages are a key part of the strategy.

New Zealand's ICT sector would perhaps also surprise you with the range of innovative and internationally connected companies it has produced.

A good example is Navman, a world leader in marine navigation products and one of our fastest growing companies. When it started on day one in 1987, Navman was already a global company, having New Zealand-designed product made in Singapore for sale in the USA. Today it has units in China, Australia and New Zealand and Brunswick Corporation, a Fortune 500 company and one of the world's largest marine manufacturers, has taken a 70 percent stake.

In this month's issue of Worth Magazine, George Buckley, Brunswick's Chairman and CEO explains the attraction of Navman. Mr Buckley says that Navman is "full of able, creative and energetic people", and the company will "serve as a model for the Brunswick of the future". And the response of Peter Maire, the founder of Navman is that ".we can be more entrepreneurial now that we have deeper resources".

That's what global connections can do, to everyone's benefit. Being part of Brunswick allows Navman to be plugged in to a global market leader, while ensuring some of Brunswick's world class technology is transferred back to New Zealand.

Another interesting New Zealand innovator is Applied Research Associates NZ, usually just called ARANZ, which is a world leader in the analysis and manipulation of multi-dimensional datasets. Its technology is used for applications as diverse as movie making, geological mapping and medicine.

In a classic New Zealand story, ARANZ began seven years ago with the development of a hand-held 3D laser scanner for carcass measurement in the meat industry. The scanner was then picked up by brilliant people at Weta Digital, in Wellington, to create digital models for creatures in The Lord of the Rings movies.

New uses for the technology keep emerging and it has recently been selected by Hanger Orthopedic Group, the largest prosthetics and orthotics provider in the US, as it primary 3D data device, providing faster, less invasive and more accurate ways to create prosthetics than traditional casting methods.

Companies like Navman and ARANZ - and people like Garth Cooper - are, I believe, driving the growth in New Zealand of exactly the kind of creative economy Richard Florida has written and spoken about so perceptively. New Zealand is ripe for growth and transformation of this nature, and hungry for it.

When I think of the role of people in the creative economy, I am inclined to think of people on the move. The phenomenon of a highly skilled, highly mobile, global workforce is growing and is likely to become permanent, as the global movement of capital has already become.

Every western nation is joining this quest for talent, as aging progressively turns demographic profiles from upward triangles to inverted triangles. We are reaching out to our expatriate community for help. The best part of a million New Zealanders live offshore and many are in a position to contribute to the New Zealand innovation system.

An example of this is the Kiwi Expat Association, or KEA, which now has chapters in several world centres, shortly I understand to include New York. KEA is essentially a private sector initiative, conceived as a global networking organisation. A supporting Government policy programme finances the movement of expats back to New Zealand for a sabbatical, typically with a New Zealand business.

A good innovation system depends on many different relationships. The thicker that web of relationships, the more chaotic it is, the better. The classic linear analysis of an idea making its way from basic research to applied research to pre-commercial development and successful entry into a grateful global market is mostly fantasy.

In practice, innovation is most likely to flourish where scientists and entrepreneurs mingle to the point where the distinctions are lost. Where academics flick in and out of commerce, or for that matter the policy arena. Where clever people look back on a career so eclectic and varied that describing it to a stranger becomes a burden. Where venture capitalists, technologists, marketers, designers and lawmakers live and work amongst each other.

New Zealand is on its way to being this kind of place. We're a young, informal, open country and we have always been outward-looking, keen to understand and connect with the larger world beyond our shores.

Why are we like this? Our history - our short history - must be part of the explanation. A thousand years ago there were no humans in New Zealand. Then the Polynesians arrived, having travelled huge distances across the Pacific. Much later the European 'Age of Discovery' got under way - and when they found New Zealand that age closed. So our nation was formed by the collision of two cultures that were exploratory and curious. It is the only place on Earth where that collision occurred and it is a collision that reverberates, creatively, today.

I like Richard Florida's analogy of scientists as the stem cells of an economy, able to generate an unlimited range of ideas that grow into new products, technologies and industries. I think New Zealanders are like that too - we pop up all over the global economy in all kinds of roles, always bringing a uniquely Kiwi brand of originality, initiative and no-nonsense practicality. We're like that at home also, which is what gives me such optimism about the economic transformation we are setting out to achieve.

A final word: I would like to congratulate the Asia Society on the sophistication of their programmes. By hosting events such as you offer a broader context to the wonderful art of my compatriots on the second floor. Their creativity is obvious and their work stands proudly here in one of the world's art capitals - just as our creative businesses and businesspeople do.

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