Time To Harden Up

By Kate Pierson

Tough love can be a hard pill to swallow, particularly when you’re on the receiving end of it. Because whether it’s a bumped knee or bruised ego you’re nursing, most of us still have an inner child that is a big fan of being coddled.

Admittedly, cosseting has an addictive quality, particularly if you’re the one being indulged, but has the mollycoddling gone too far in New Zealand? Has all this societal spoiling led us to become little cry babies, afraid of a challenge and commercial competition?

Many would argue, yes, there isn’t nearly enough personal or professional rough and tumble going on in society today. And there’s a widespread concern that as a nation we’ve become too precious and too indoctrinated by the PC police.

When we look at New Zealand’s success in the global competitiveness scale, the truth is there for all to see and it isn’t pretty. In the 2010 IMD Swiss Business School’s Annual World Competitiveness Survey, New Zealand was at spot 20, behind its Australasian counterpart, the Land Down Under and replaced at number 15 by the Middle Eastern Emirate of Qatar.

And as much as we may be in denial about dragging our feet across the financial floor, it could be that the solution is staring back at us in the mirror. Perhaps it is we who need to change and it really is high time we removed the kid gloves, binned the band-aids, ditched the ‘woe is me’ attitude and swallowed a big glass of ‘harden up’.

It might be banned in schools, but perhaps it is time we gave ourselves a kick in the business behind and engaged in a good old fashioned game of business bullrush.

But, is that actually the case? Are we the problem or is it more complex than just giving ourselves a professional makeover? 2025 Taskforce chairman Dr Don Brash has some interesting thoughts on the matter.

The 2025 Taskforce was a part of the Confidence and Supply agreement between the National and ACT parties reached immediately after the 2008 election. A response to the need for New Zealand to gain some momentum on the financial front, the 2025 Taskforce is committed to the monumental task of closing the income gap with Australia by 2025.

According to the 2025 Taskforce, New Zealanders’ incomes were roughly equal to Australians in 1974. Since then, the salary chasm has progressively worsened to a point where in 2008, Australian per capita GDP was 35 percent more than New Zealand.

The 2025 Taskforce reports annually on its progress towards achieving this salary goal but it recognises the challenge is huge. In order for the income gap to close, New Zealand’s per capita gross domestic product must grow slightly more than two percent per annum faster than Australia’s for 15 years.

Of New Zealand’s need to up the ante, Dr Brash comments, “My starting point is that there is nothing wrong with New Zealand workers or business people. Traditionally New Zealanders are entrepreneurial and work long hours by international and OECD standards. We really need to look beyond the individual businesses and people.”

Dr Brash believes New Zealand businesses are inhibited by obstacles preventing their expansion and these restraints are associated with interest rates, taxation and exchange regulations. “It really is hard to blame the characteristics of the New Zealand people,” he concludes.

Upon the release of the IMD World Competitiveness Survey results in 2010, BusinessNZ chief executive Phill O’Reilly also made the point that a part of New Zealand’s decline on the competition scale comes down to the volatility of the world economy. “These results also relate to high government debt and people out of work, which impacts productivity, weak capital markets and export performance,” he explained.

In a late 2010 discussion paper released by the New Zealand Institute, it concluded economic prosperity is a worthwhile goal for New Zealand and the main driver of GDP per capita is labour productivity. Titled Internationalisation Success will Drive New Zealand’s Prosperity, the paper revealed that New Zealand’s private economy labour productivity is only 57 percent of Australia’s. Lifting labour productivity depends on improving the drivers of labour productivity; entrepreneurship, innovation, skills and talent, investment and natural resources.

The New Zealand Institute also met in December 2010 to review a list of major issues facing the country and agreed which are the top ten issues that, if resolved, would make the greatest contribution to the country’s long term success.

This list of issues included probing questions such as; Can New Zealand develop the depth of business and public sector skills required to deliver success for our exporters and local businesses?; can New Zealand accelerate the growth of export sectors?, and, perhaps most importantly, can New Zealand develop and retain a capable, resilient population that works together?

It would seem that final question has hit the nail on the head, so to speak. New Zealand needs to work as a whole to get more aggressive on the commercial playing field and work as an interactive nation to help our economy fulfil its potential.

Sure, Australia has left us for dust and taken a quantum leap forward, but it’s time to act on our goals to make chase. “If the country can be mobilised to resolve the ‘Top 10’ issues then the future for New Zealanders as a whole will be more assured,” New Zealand Institute Director Rick Boven says. “Efforts on many other important issues facing New Zealand will not stop and nor should they.  But to build the foundation for long term success we should focus on the vital few.”

Author: fatweb

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