Top Scoops

Book Reviews | Gordon Campbell | Scoop News | Wellington Scoop | Community Scoop | Search


Rowan Simpson on Callaghan's legacy

If you’re interested about technology’s role in New Zealand’s economic growth, read Rowan Simpson’s April 4 post is a must-read.

Simpson has written an insightful analysis of Sir Paul Callaghan’s1 vision. He examines how the advice has played out since his death nine years ago.

He runs through, and updates, the seven common myths Callaghan talked about in presentations. I was at a couple of these talks and found Callaghan’s approach to the subject matter resonated.

Callaghan didn’t pull his punches. Nor does Simpson.

Missed opportunities

In simple terms, New Zealand has failed to pick up Callaghan’s challenge. There’s, at best, limited progress.

Or as Simpson says, there is a lot of work to do.

There’s a lot I could comment on here, but I want to pick out two issues for now.


The first is tourism’s role in the New Zealand economy.

It’s a subject that has had a lot of coverage since New Zealand closed its borders at the start of the Covid pandemic.

Simpson writes: “…it’s a mistake to think that we could grow more prosperous on the back of more tourism. This is because each additional job in this sector, as it’s currently configured, drags the overall average (GDP per job) down.”

For New Zealand to prosper we need the average GDP per job to rise. And that means moving jobs out of tourism into more productive areas.

Yes, there are regions that depend on tourism. And while tourism does lift a group of people out of abject poverty, it doesn’t lift them up as much as other economic sectors.

The hand-wringing over the future of New Zealand tourism is well meant, but misplaced. We may see short-term gains, but public money could be better spent in almost any other sector.

Let’s do that.

Economic distortion

Simpson doesn’t mention my second point: New Zealand’s rocketing property prices. Yet property has diverted investment from productive innovative sectors.

Why risk investing $100k on a software-as-a-service start-up that might fail? You can earn a guaranteed 20 percent return using the money as a house deposit. That way you get leverage and preferential tax treatment.

This is not the place to discuss a capital gains tax or any other ideas. It is the place to speculate that an obsession with property hamstrings innovation and economic growth.

  1. His name lives on with Callaghan Innovation.

Rowan Simpson on Callaghan's legacy was first posted at

© Scoop Media

Top Scoops Headlines


Ian Powell: Pay Freezes, Health Systems And Medical Specialists

What has a pay freeze got to do with a universal public health system? Actually quite a lot. Health systems, especially public hospitals which handle the more complex and urgent cases that the rest of the system can’t fix, are by their very nature ... More>>

Forgetting Citizenship: Australia Suspends Flights From India

As India is being devastated by COVID-19 cases that have now passed a daily rate of 400,000, affluent and callous Australia has taken the decision to suspend all flights coming into the country till mid-month. The decision was reached by the Morrison ... More>>

Digitl: UK Spy Chief: “The West Has To Go It Alone On Tech"

“Cybersecurity is an increasingly strategic issue that needs a whole-nation approach. The rules are changing in ways not always controlled by government. More>>

The Conversation: Without The Right Financial Strategies, NZ’s Climate Change Efforts Will Remain Unfinished Business

When it comes to climate change, money talks. Climate finance is critical for enabling a low-emissions transition. This involves investment and expenditure — public, private, domestic and transnational — that demonstrably contributes to climate ... More>>

Dr Terrence Loomis: Does Petroleum Industry Spying Really Matter?

Opinion: Nicky Hager’s latest revelations about security firm Thompson and Clark’s ‘spying’ on climate activists and environmental organisations on behalf of the oil and gas industry and big GHG emitters makes entertaining reading. But it does ... More>>

Mixed Sight: New Zealand, The Five Eyes And China

The Five Eyes arrangement between the United States, United Kingdom, Canada, Australia and New Zealand has always resembled a segregated, clandestine club. Focused on the sharing of intelligence between countries of supposedly like mind, it has shown that ... More>>