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Why colder countries are more innovative

Colder countries are more prosperous. Ergo, cold climates drive innovation.

As I stamped the frost out of my toes at the Mystery Creek Fieldays I reflected on how odd it is that we choose to live in such a cold country, especially when a warm one is just over the ditch.

At least one reason is that cold countries are more prosperous: think Britain, northern Europe, North America and Japan. Warm places, with notable exceptions such as Taiwan, California, Hong Kong and now Perth, have singularly failed to produce intergenerational wealth and breakthrough technologies.

why cold countries are more innovativeThe Human Development Index put together by the UN shows that Europe and Central Asia consistently outperform tropical South Asia and Sub- Saharan Africa. The temperate north United States controls 70 per cent of the economy, leaving the south far behind.

Mere coincidence? I think not! Jared Diamond, author of Guns, Germs and Steel, points to evolutionary reasons behind the warm/cold split. The cold kills germs, giving cooler countries a long-term advantage over the disease-ridden equatorial regions. What’s more, the original, warmer, breadbaskets of the world were the first to be exploited and first to be environmentally destroyed. As the last country to be inhabited, we’ve inherited a rich harvest.

Cold is a driver of innovation. When food falls from trees and fish jump from the warm ocean, there’s no great pressure to manufacture homes, clothes or store wealth for the future. It’s no surprise that Scandinavians have such a rich history of savings, including now wise investment of oil wealth. But so much for history. What can miserable, wintery blasts do for us today? Two things.

First, cold weather drives away the pussies.

The oft-bemoaned exodus of Kiwis to Australia leaves us with a brainier country. Last month Statistics New Zealand revealed that we are net importers of skilled migrants. As former Prime Minister Rob Muldoon once said, migration to Australia lifts the IQ of both countries. We suspected as much when Russell Crowe shifted but thanks to Stats NZ (and The GC) now we know it for sure.

What we’re left with in New Zealand is a class of hardy pioneers who choose to live and work here. We may miss out on the volume of talent they enjoy in northern parts but on average we have a smarter class of citizen, as evidenced by our high educational outcomes and better taste in swimwear.

The second advantage of our cold climate is the enforced shift from volume to value business.

Come again, I hear you say, New Zealand as value-driven? Aren’t 60 percent of our exports commodities? Yes, they are, and we’re getting poorer for it. We’re losing the slow race on the commodity front. Things grow faster in warmer climates. When Sam Morgan invested in Leitissimo, the Kiwi-owned dairy operation in Brazil, it was because it boasted productivity five times greater than that of a Waikato farm. Parts of Asia and Africa show similar returns. Why do you think China’s on the march through both of those continents?

In a globalised economy we cannot compete on volume, as the Australians do. Therefore we have become experts in agri-efficiency and agri-technologies. Fieldays is bristling with examples of IP that’s been enforced by the need for greater productivity, efficiency and intelligence. The agritech industry is estimated by NZTE to be worth $3 billion, generating $760 million in export sales. Fieldays is an antidote, if you need it, to the growing sense that Australia’s two- speed economy is worth worrying about.

But a reflection about Fieldays is not complete without a farmer-style moan. The boss of an agritech company complained about the number of tyre- kickers he was forced to meet. “The public!” he grizzled. He grizzles dangerously. One feature of the primary industries is the growing sense of ‘town versus country’ divide. Fieldays is a rare moment for both to see up close what’s happening down on the farm.

And what is? The reality is that farming is not a bucolic scene of rolling hinterland. It’s industry – and the sooner we learn as investors, citizens and consumers that the future of farming is a high-tech, information-driven, value-added enterprise then the sooner we’ll become the Switzerland of the south Pacific.

The other sort of place, I think, is called a banana republic.

Vincent Heeringa is the publisher of Idealog and never misses an episode of The GC. Gangsta as, bro!