Export data released today from Statistics New Zealand shows a continuing and disturbing trend in the New Zealand economy — we are exporting less high-valued manufactured goods (down 12.5 percent) and less high-valued manufactured goods as a proportion of total exports.
Compared to other small, developed economies — some of the richest countries in the world — our economic complexity significantly trails Finland, Denmark, Israel, and Singapore. These countries make things!
They manufacture integrated circuits, cell phones, wind turbines, and medicines that other countries can’t make. This is their competitive advantage that enables them to pay high wages on the back of high export receipts.
By comparison, New Zealand largely produces commodities, which most countries can also produce. As a result, we have to produce more commodities at a cheaper price to compete with the rest of the world. This ‘commodity thinking’ is about competing on price, which means lowering input costs like lowering environmental standards and lowering wages.
We do not support National’s commodity thinking which is driving a low wage pollution economy. That why we announced a major new investment in innovation as the first of our economic priorities this election.
Innovation is one of the best ways we can add value to our exports. Economies that innovate do better over the long term, creating good jobs that pay well and enable us to live quality lives within environmental limits.
Innovation lies at the heart of a smart, green economy.