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Hands up who thought agriculture would be our most innovative sector, beating film, manufacturing and tourism by a long shot? And hands up who thought all the hi-falutin’ talk of ‘economic transformation’ under Helen Clark, has almost zero effect on the key innovation indicators since 1998?

A new study into the last 11 years of innovation, by IBM and the University of Auckland, reveals some surprising truths about the state of our economy and a dismally well known one: if it wasn’t for agriculture, fisheries and forestry we would be a significantly poorer country.

The IBM Innovation Index, based a similar study run by IBM and the Melbourne Institute, tracks a suite of measures including productivity, R&D, IP intensity and  organisational innovation. The overall conclusion: “After rising by 13 percent between 1998 and 2000, the Innovation Index remained virtually flat through to 2007. In 2008 the index fell by six percent.”

Dougal Watt, the chief technologist at IBM New Zealand is dismayed by the disparity between agriculture and rest of the economy. “Agriculture, with the likes of Zespri and the aquaculture industry, are clearly leading the way in terms of R&D investment and in clever marketing—controlling the value chain from grower to customer. But a standout negative against all this is the tourism industry which continues to be fragmented, cost-conscious and dominated by lifestylers.”

With tourism such a large export earner, New Zealand must find ways to improve the return on investment, he says.

The study is one building block in IBM’s ‘Smarter Planet’ strategy to work with government and businesses to make better use of data to solve key problems such as city gridlock, spiralling health costs, and business productivity.

Watt worries that the dramatic drop in innovation from 2008 marks a wobble in the famous Kiwi nettle. “A recession is a good time to invest in innovation, not to withdraw from it. One of the great Kiwi attitudes is that we believe we can do anything—it’s part of our heritage.”

If there was ever a time to reach for our innovative streak, now’s good.