No.8 fencing wire ‘innovation’ no longer enough

Published on the 24/02/2010 | Written by Newsdesk

The traditional, resourceful Kiwi ‘You can fix anything with No.8 fencing wire’ take on innovation once served us well, but no longer. An IBM study found Kiwi innovation flatlined between 2000 and 2007, and then nosedived…

Kiwis pride themselves on being innovative, but just how true is this nowadays, especially in the wake of the recession?

IBM New Zealand sought to find out by partnering with the University of Auckland, to delve into just how innovative we are by industry sector. It undertook a similar exercise in Australia, with the Melbourne Institute, some time ago.

Launched this week, New Zealand’s inaugural ‘Innovation Index of New Zealand’ aims to provide policy-makers, investors and analysts with an “insight into a key driver of growth and competitiveness in the New Zealand economy,” says IBM.

However, the results of the study aren’t good. After rising by 13 percent between 1998 and 2000, NZ innovative activity remained virtually flat for the next seven years, when it fell six percent in the wake of the recession.

Launching the Index, IBM Chief Technologist Dougal Watt contrasted this “stagnating” performance with Australia’s performance, with its Innovation Index registering 25 percent growth for a comparable period. While Australia’s economy is underpinned by mineral wealth, Watt says he’s not sure this fully accounts for the disparity.

Innovation ‘key driver’
“Innovation performance is widely acknowledged as a key driver of economic prosperity, particularly in mature economies, so it’s important to understand our strengths and weaknesses when it comes to this important driver of growth,” says IBM New Zealand managing director Jennifer Moxon.

The concern is that the No. 8 fencing wire approach – the traditional inventiveness of New Zealand farmers – can only take you so far. While it’s good for a quick one-off fix, it doesn’t address on-going issues, says Greg Farmer, general manager for global technology services for IBM New Zealand.

The NZ Innovation Index study looked at 16 industry sectors, both commercial and non-commercial, to see how innovative they have been over the past 10 years. Seven aspects of innovation were looked at: research and development; patenting; plant variety rights; trademarking; design registration; productivity; and organisational, managerial and marketing reforms.

In New Zealand, not surprisingly, the agriculture, forestry and fishing sector proved the most innovative. “It is the only sector where innovation activity has consistently increased year-on-year since 1998. In 2008, the rate of innovation activity was double the 1998 base rate and almost double the national all-sector average,” says IBM.

However, the surprise success story was manufacturing.

This under-rated sector has done well, despite the vagaries of the exchange rate, says Watt. It registered a 30 percent innovation improvement over the 10 years, which Watt says isn’t entirely down to Fisher & Paykel.

Tourism, however, went backwards in terms of innovation over the 10 years, registering a -32 percent drop.

Auckland University Business School’s Professor Basil Sharp, one of the principal researchers, says the trouble is “some organisations in New Zealand view investment in innovation as a luxury not a necessity.”

The worst hit industries since 2008 have been construction, registering a 15 percent innovation decline; accommodation, cafes and restaurants (12 percent); and property and business services (down 11 percent).

Links: A copy of the New Zealand innovation activity report is available at:

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