17 September, 2011

100 more companies can transform NZ economy

Many readers will have seen Sir Paul Callaghan advocating the merits of manufacturing and technology to lift New Zealand's economic performance (as opposed to more dairy farming or tourism, the current favourites, even though we lack the natural resources to lift those land-based industries much further). Sir Paul challenged us to create 100 more companies of comparable size to our existing leading manufacturing and technology businesses. His proposal is based on a simple fact: manufacturing generates 2-3 times more GDP per job than dairying or tourism. Now someone has prepared a graphic tool to extrapolate the economic and job impacts of those additional businesses. I suspect the underlying assumptions and formulae are too crude to make this tool a serious economic predictor, but it does illustrate how manufacturing and technology outperform dairying and tourism in lifting GDP per capita (which flows through to higher wages and better public services and infrastructure).

And in case anyone still mistakenly thinks manufacturing is dead, here's one chart showing current jobs by industry (click image to enlarge).

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