Creativity vs commodities

All our eggs (and milk, meat and timber) are in one basket. Let’s mix it up a little.

All our eggs (and milk, meat and timber) are in one basket. Let’s mix it up a little

Jason Smith

Creative metrics

New Zealand is the land of milk and honey. With seemingly limitless verdance, the El Dorado of the South Pacific remains fresh due to rain-washed skies and pure light. Kiwi milk has sweetness because our cows eat abundant grass rather than grain. Creamier cream rises to the top.

More than bees dance in the clover. Our top-performing seven revenue-generating merchandise exports are commodities: dairy, meat, timber and logs, fish, kiwifruit, wine and oil. Agricultural primary production is the long-term leader of the pack. While most manufacturing is in the past, oil is on the rise. Texas Tea is strong and black but there’s an ocean’s-worth of Taranaki Tea, a heady cocktail that includes milk.

Perhaps alarmingly, there is a cloud to this silver lining. Over the past 20 years, the percentage of New Zealand’s merchandise export revenue that comes from our top seven commodities has grown from 30 to 50 percent. Simply put, this means New Zealand’s economy is reliant on fewer and fewer industries, with a lack of diversity and therefore robustness of the overall economy. Recent research by BERL* highlighted this trend and its dangers as we continue swimming (or drowning) in milk and floating logs abroad to be made into valuable somethings by someone else, somewhere over there.

Merchandise export & intellectual property graphs

Sources: Statistics NZ, BERL, IPONZ

A decade of knowledge economy thinking in New Zealand appears to have done little to broaden our possibilities and spread our talents. We spread butter instead. The trend for registration of new ideas, whether trademarks, patents or designs, continues downwards. A negative correlation may exist between the rise in commodities as a percentage of exports and the fall in intellectual property protection, as there are many factors at work here. The ominous possibility of a link between these two trends, however remote, is thought provoking if not downright scary.

Innovation and creativity-led economic transformation appears to have taken the road of least resistance. Urban, ideas-driven creative industries are stimulating activities, but adding value to traditional primary sector industries is happening more and more. Softer butter is better, smarter ice cream is sweeter. This may be cold comfort, though, when faced with the prospect of the many clever things yet to be imported while our export basket contains fewer eggs.

It’s time to get cracking in this fool’s paradise.

* BERL and Institute of Public Policy, ‘The Auckland Economy,’ March 2010. BERL ref #4869