New Zealand productivity still lags

Friday 2 May 2014

New Zealand's productivity is getting better but it still lags behind other OECD countries. A new report from the Organisation for Economic Co-operation and Development says New Zealand still has a large productivity gap (27 per cent) to other OECD countries because of a lack of investment in "knowledge-based capital" and international connections.

It says New Zealand's policy settings should generate gross domestic product per capita 20 per cent above the OECD average, but we are actually more than 20 per cent below average. This affects New Zealanders' income and wellbeing and comes in spite of the economic upswing.

The report, released by the Productivity Commission, said it wasn't easy uncovering the root cause of the country’s productivity gap. Investment in physical assets and years spent in education are roughly the same as other countries covered in the report and having relatively high numbers of unemployed and low-skilled workers employed also didn't explain the country's underperformance.

Instead the OECD work finds the gap reflects weakness in knowledge-based capital which has become increasingly important in driving productivity gains in the digital age. Knowledge-based capital ranges from things like product design, inter-firm networks, research and development, and organisational know-how. While New Zealand ranks well in software investment and trademarks, the amount of R&D undertaken by the private sector is among the lowest in the OECD.

This reduces the capacity for frontier innovation and businesses' ability to absorb new ideas - the technological catch-up. Cross-country surveys also show the quality of management is below average in New Zealand, which lowers productivity gains from new technology.

Options of harnessing new mobile communications technologies is a focus for this year’s MobileTECH 2014 series that is scheduled to run in New Zealand on 12-13 August (as well as Australia for the first time the week before, on 5-6 August). Last year’s inaugural event that ran in Wellington SOLD OUT. This year’s event will be showcasing a wide range of mobile technologies and innovations, including; smartphones, tablets, mobile apps, satellite mapping and communications, robotics, aerial drones, remote sensors, electronic tagging, intelligent data, M2M, real-time analytics and cloud-based platforms.

The focus is on this region’s primary industries – and improving communication from those developing and at the forefront in adopting and using these new technologies. Further information on this new technology series can be found on .

Source: Stuff

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