By Michael Parker*
What is the Auckland waterfront going to look like in 20 years? And how is Auckland going to become - in Mayor Len Brown’s formulation - the world’s most liveable city?
There are a lot of different answers to these questions, but they all share one common theme: Auckland’s waterfront is not going to become the envy of every other Pacific city, and Auckland is not going to become the world’s most liveable city, by accident.
We need a plan.
Two years ago I wrote and published "The Pine Tree Paradox". The intention of the book was to set out such a plan.
The book suggests that the New Zealand economy would grow faster, and we would be able to stop our 50-year slide down the OECD’s GDP per capita rankings, if we pivot the economy from one based primarily on agriculture to one based primarily on innovation.
I made the argument that rich countries in the 21st century do not get richer through services, agriculture or manufacturing. They get richer by turning great ideas into innovative, successful companies.
What does that have to do with Auckland’s waterfront and “live-ability”? Well, lots.
If we want New Zealand to be an innovation economy, we need to compete globally for talented engineers and mathematicians and scientists. We need to offer exciting careers and a terrific lifestyle. That means more than just the beautiful beaches, islands, lakes and mountains that make New Zealand unique. And it means more than the skiing, sailing and vineyards that makes the New Zealand lifestyle as attractive as any the world over. It also requires a great city.
An innovation and technology quarter
So here is one way the Auckland waterfront could evolve over the next 20 years. What if, rather than focusing the waterfront largely on retail, tourism, hospitality and the wharves, we turn the waterfront into an innovation and technology quarter?
What if the area from Wynyard Quarter east housed innovative New Zealand companies that were global leaders in their fields, offering high-quality and well-paid jobs to New Zealanders and attracting talented people from all around the world who wanted to live in New Zealand and work in a challenging and financially rewarding environment?
What if there were not just one or two companies like this, but dozens? Some of those companies would employ hundreds or maybe thousands of people. This cluster of companies would be tremendously competitive with each other and - through this intense competition - would effectively ensure that, to compete in the field, you had to be in New Zealand. And it would all be driven by Kiwi ingenuity - with a healthy dose of Australian, English, Norwegian and Chinese ingenuity too.
The area around the waterfront would buzz with activity. These companies would need - among other things - advertising agencies, lawyers, consultants and investors. Employees from these companies would - in some instances - splinter off into start-ups. Some of these start-ups would succeed too. The employees of these companies would support their share of restaurants, bars, art galleries, clothing designers and furniture shops. Much of this would be on the waterfront too.
Setting aside urban design considerations, these companies would be profitable, wildly profitable. And they would pay taxes. New Zealand would run budget surpluses. We could expand services to the elderly and the sick. We could improve education at the primary, secondary and tertiary levels. We could increase the police force to make the country safer. We could improve housing and roads and infrastructure. We could increase our funding of development programmes in the rest of the world. We could do all those things that we dream about New Zealand doing, and be all those things we dream about being, but can’t currently because we don’t have the money.
What would these innovative companies actually do? Well, it’s tempting in mid-2012 to suggest that they would be involved in social networking or renewable energy or – given it is New Zealand we are talking about – agricultural innovations. However, it is tremendously difficult to predict with any certainty where demand for innovation is going to come from one or five or 20 years out, what form innovative ideas are going to take and when they will strike.
As a consequence, the best that we can do is attract the smartest, most innovative thinkers that we can to New Zealand and wait for the ideas to start flying. And that is where the core proposal in my book comes from: we need a great research university in Auckland, preferably on the waterfront. That university will attract the first wave of innovators and will become the first step in the innovation cluster I outline in the book. Everything I outline above follows from the great, research university.
Two Years On …
I have been thrilled by the support I have received since "The Pine Tree Paradox" was first published. Of course, New Zealanders are not unique in looking at a new idea, disregarding the 98% of it with which they agree and gravitating towards entrenched positions in relation to the 2% of the idea to which they object. There has been plenty of that too.
However, the common thread I hear when discussing the book is that we all wish we were more competitive in high value-added, innovative sectors; we wish there were more opportunities for Kiwi ex-pats to return home; and we wish we could reverse our 50-year decline in our economic standing.
My proposal is the simplest way I can imagine of making that happen.
I have been delighted that "The Pine Tree Paradox", and no doubt a number of other recent events, has resulted in the establishment of The Education and Innovation Foundation. The Foundation shares my concerns as to New Zealand's economic prognosis and is seeking to inform and promote debate around available options, including the way forward that I proposed in the book.
Funded by a small group of supporters, the Foundation is in the process of commissioning a feasibility study to put some hard, independent analysis around some of the assertions in the book. I understand that the Foundation is hopeful it will have something to share publicly by the end of this year.
My prescription two years ago was that New Zealand needs to develop a cluster of world-class innovative companies. The decline in our living standards and wealth relative to the rest of the OECD has been a function of our reliance on agriculture at a time when rich economies get richer by developing ideas, not by growing trees or making wine. Accordingly, we do not need to abandon agriculture, but agriculture will not return us to the top of the OECD league tables in terms of GDP per capita.
For that, something else is required; specifically, innovation and an ecosystem to support and foster it. At the heart of this ecosystem of innovation sits a world-class research university. The criticisms that I have received over the last two years have largely fallen into three categories.
Why a new university is needed
First, why is an entirely new university necessary when Auckland already has a perfectly good university? When I say New Zealand needs a “world class research university”, I mean a university that sits in the top 10 rankings alongside Stanford and Harvard and MIT.
The path to get there is a long one but the first step is ambition.
Currently, there are plenty of universities in New Zealand but none of those universities has stated a long-term ambition on anything close to the scale I am advocating. It will not happen by accident.
I have presented the proposals in "The Pine Tree Paradox" to various members of University of Auckland’s leadership including the Vice Chancellor. The sub-text of these meetings has been clear: take the ideas in the book and run with them, make them your own. To date, they haven’t. Therefore, I am persevering. The University of Auckland may change its position and adopt the ambitious goals that I am outlining. It may seek to become a world-class research university but, until it is clear that this is happening, I will continue to progress my initiative.
The second most common response to the book is: we already have a robust innovation sector. My response is: not yet, we don’t. I am not talking about smart people doing interesting things and making a few bucks as a consequence. I am talking about an entire sector of the economy that regularly throws off successful start-ups that are embraced globally and become wildly profitable and that - by employing ever-increasing numbers of people and paying taxes - drive New Zealand’s standard of living higher.
The third most common response I get to the ideas in the book is: could we actually do it? Are New Zealanders hard-working enough, innovative enough, industrious enough and intrepid enough to make this work? Do we embrace new ideas and new challenges with sufficient abandon to build a world-beating innovation hub on the Auckland waterfront? I believe so. But I really don’t know.
We can't blame previous generations anymore
Successfully hosting and winning the Rugby World Cup last year demonstrated that we enjoy the sensation of the world seeing us - even if only for a moment - as our better selves. It is intoxicating. I know we can do that more often, and with loftier and more ambitious goals. I believe this is such a goal. I also know that the challenge of first funding and building a great research university on the waterfront is a perfect leading indicator.
If we can get around our fear that it might not work and get over petty arguments about whether modern cities need functioning ports smack in the centre of town (name another large, dynamic city that does) or whether universities are elitist (maybe they are; but higher tax revenues that fund neo-natal health care and lower infant mortality are most certainly not), we can build a great, research university.
Whether the university is an offshoot of the University of Auckland, a green-field private institution or something else is perhaps the least important detail in all of this. The most important detail is that it happens. And if it does happen, the rest - developing these globally competitive innovative New Zealand companies - will be comparatively easy.
Since I published the book, I turned 40. Now, after two decades as an adult watching New Zealand’s continuing economic slide versus the rest of the OECD and - among other things - our deteriorating health metrics, I have to acknowledge that all this is no longer Arnold Nordmeyer’s fault, or Robert Muldoon’s fault or Roger Douglas’ fault, or my parents' fault. It’s my fault. And it’s your fault too.
Lamenting lost opportunities is - obviously - a waste of time. But there is nothing wrong with wishing that things were different. Wishing that things were different is the first step to achieving change. The second step is coming up with a plan.
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This is an update and epilogue following the serialisation of Parker's book, The Pine Tree Paradox, by interest.co.nz.
The Introduction is here »
Chapter 1 is here »
Chapter 2 is here »
Chapter 3 is here »
Chapter 4 is here »
Chapter 5 is here »
Chapter 6 is here »
Chapter 7 is here »
Chapter 8 is here »
Chapter 9 is here »
Also see a Double Shot interview with Parker here.
If you would like to buy a copy of the full book, you can do so by credit card here » (Visa or Mastercard only.)
----------------------------------------------------
Michael Parker is an equity analyst living in Hong Kong. Originally from Wellington, he has spent the last decade in San Francisco, New York and - on good days - Waiheke. He has a law degree and bachelor of commerce from the University of Otago and an MBA from NYU. You can contact him here »
This article was first published in our email for paid subscribers this morning. See here for more details and to subscribe.
59 Comments
Corny Corny Corny idea. Innovation we need. But whats that got to do with a waterfront site, or a specialist university etc etc. The whole thing will just become another mediocre institution. With most of the effort going into marketing itself for it's own funds and pumping the networks etc.
We also need implementation about business. Lifting the act of management of existing enterprises, such as Dairy or Tourism, or forestry. Ensuring that we continue to own them and extracting the benefit. Which New Zealand is currently very poor at.
Nothing wrong with the pursuit of knowledge, there's no such thing as enough.
But our current tertiary entities fail, due to something I call 'interdisciplinary genuflection'.
Zoology can prove that the belief part (not the historically/socially investigative) of theology is flawed. Physics can prove that the belief part of Economics is flawed. Yet the flaws are taught and believed.
Just remember that all the thinking, when related to the energy needed to 'do' anything, can only make the use of it more efficient. And that thinking can be done, free, anywhere, and peer reviewed by skype.......
Talking about the architecture is secondary and will always have lovers and haters. I've seen it in person and it's pretty damed cool. I also saw a leak inside. What is important is they did it with a grand plan:
http://www.scholars-on-bilbao.info/fichas/MUSEUM_NEWS_The_Bilbao_Effect.pdf
"The museum attracts an average of 800,000 non-Basque visitors a year (compared to less than 100,000 before GMB opened), possibly a world record for any third- or fourth-tier city. Despite attempts to emulate the Bilbao effect elsewhere in the world, very few new museums or galleries outside capital cities have succeeded in getting so many visitors. For example, the National Centre for Popular Music in Sheffield, England, opened in 1999 and projected 400,000 visitors a year. Seven months after opening, just over 100,000 people visited. The museum went bankrupt the same year it opened.
Bilbao did not construct the museum simply for the sake of having an iconic building; this was one answer in a quest to address a number of serious problems The building was one answer in a quest to address a number of serious problems. The city suffered an extremely high unemployment rate, up to 25 percent. Traditional industries had become obsolete, and the city center hosted a busy riverport plagued with severe traffic congestion. Other troubles included violence from extremist Basque separatists, urban deterioration, pollution and a poor public transport system. The city determined to tackle these problems through a holistic plan. It created a new a subway line, new drainage and water/air clean-up systems and an airport; residential, leisure and business complexes were built in town, while new river and sea waterfronts, a seaport and industrial and technology parks were built away from the urban center. The icing on the cake was the construction of the Guggenheim Museum"Surely Chch should be more deserving of this attention. Though they seem to be more interested in building a colluseum than a silicon valley or a Bilbao.
And thus why you need Architects, the designer of systems. A city is a system, as is a building. We think we can get the same result here with engineers and accountants. While I don't like the look of the musuem and could pick faults just from a photograph, look is the wrong method of assessment. It is all about how a space feels, if it is good then people want to be there, wrong and they won't. I haven't been there so I can't judge.
But coming back to the university idea here, the problems we face are first and foremost about people. A fancy looking building on the waterfront won't change the dysfunctional systems of governance we have. An overhaul of local government is your start point.
Architects through their own pompous and arrogant fault have lost control of their profession, for they should be the paramount leader in design projects. Engineers and accountants should support Architects, not the other way around. But they lost the plot and lost the trust in NZ.
I think it's more that architects are focused on buildings. When was the last time you heard of a world famous, visionary city planner. Ghery gets all the press for Bilbao but no doubt there was a briliant team behind the total city plan and i'm sure there was a line of politicos ready to take the credit for thier success. So you can't blame the most talented for wanting to focus on structures that they can have some ownership over without the likes of Jonkey going in for the tripple handshake.
Town planning is a branch of Architecture and shared the same core degree, specialisation coming at masters level. Like all professions there are levels of competence, but being able to see the big picture is simply a natural quality a good architect has. If not an Architect then who else? But yes what you say if correct. Certainly there were architects and firms that steered well clear of the Queens Wharf project for the reasons you outline.
Zoology can prove that the belief part (not the historically/socially investigative) of theology is flawed.
That's a big call. Zoology can certainly prove that a literal interpretation of the Bible with regard to evolution is flawed, but there is a huge amount of the belief parts of theology that zoology has no relevance to.
"than the do with the true fundamentals that drive their markets."
I've heard other people say this; I dont think that there are true fundamentals. its like physics. the true fundamentals are still unknown the further you look into it. What do you think the true fundamentals are?
"persuit of knowledge for it's own purpose is one of the biggest wastes in the world."
And also one of the cornerstones of the Renaissance and Industrial revolutions that catapulted the Western Nations way ahead the rest of the world in their material quality of life, their life expectancy, their lower child mortality and general technological advantage in almost every area.
Other than that perhaps a waste.
Step back a level mist. The theory behind bearings, gears, cables etc/astronomy/philosphy etc had to come from those (Plato/Aristotle/Da Vinci etc) who were in pursuit of knowledge for the sake of it. Just because the knowledge was used by others for status/development doesn't disprove Ralph's statement. His only error may be the reference to the Renaissance period.
Agree with the cheap energy/labour/industrial labour yet this and the surplus funds come only after someone pursued knowledge.
With due respect.
You state I am wrong but fail to specifically exactly what you think I am wrong about.
If you don't think knowledge had anything to do with either the renaissance or the industrial revolution then you are simple.
If you don't think knowledge was pursued for it's own purpose I suggest you are mistaken. Simply because pursuit takes place within a framework (patronage for an example) completely misses the point.
Also, patronage was not invented by Florence. The Ottomans next door were (at this time) richer than Florentines, more scientifically advanced than Florentines, just as motivated by war as Florentines and practiced patronage like the Florentines. Therefore to propose rich patrons motivated by fashion as the major cause seems very weak to say the least.
Lastly, neither cheap labour nor coal were new at the time of the industrial revolution. Coal as a easy energy source was exploited centuries before even the renaissance (let alone the industrial revolution). To suggest the presence of both together were a cause of the industrial revolution is wholly insuffcient to explain the timing of it.
"If you don't think knowledge was pursued for it's own purpose I suggest you are mistaken. Simply because pursuit takes place within a framework (patronage for an example) completely misses the point."
The framework the actually and only thing that allows the pure research. Your assertion that it is 'missing the point' shows that you dont understand that warfare is the only reason that this research is done. yawn away. you are asleep already.
The Centre of Innovation at the University of Otago is a quite striking building. Same intent as this pinetree nong. DCC had involvement. The problem that emerged was that all the sweat and focus was about the building. Not much time and energy left for the 'innovations'.
The explanation by JackJill should be quote of the day! Bernard ? Please ?
......."obviously the building, itself, does the research. thats why you need special looking ones- they do special research. and an innovative looking building does innovative research. simple really".......
I decided this guy was a phony when all the phonies I knew started spruiking his book.
We have universities already, that in many ways are quite good (but of course could be much better). His waterfront ideas smack of "The White Elephant"
Look we just need to do the basics better. His plan could potentially bankrupt Auckland. He is living in a mid 2000s paradigm when many of the world's largest cities were trying to outdo the other with grandiose and unaffordable architectural "statements"
I knew I'd seen something of this ilk before. Remember the Porter Report, flavour of the month with spruikers in the early 90s?
Touche. Another bloody report filled with grandiose dreams and cliches. All the talent and ideas that we need are already here. Just need to make thousands of incremental improvements, be it agriculture, manufacturing, marketing or energy efficiency. Everyones searching in vain for the magic bullet.
I have to agree with wtf. Progress by thousands of incremental improvements, generation after generation. There is no magic bullet. Parker asks "Are New Zealanders hard-working enough, innovative enough, industrious enough and intrepid enough to make this work?" Therein lies the problem. We can build any number of beautiful innovation centres, but where do we get the right kind of people to fill the buildings? They do not become the right kind of people by attending the institution. I was disorganised when I started university and I left as a disorganised person. However I did become more cunning at passing examinations. Unfortunately this particular skill had no further application. What amazed me when I entered the workforce was how many clever people there were who had never attended a tertiary institution. There seems to be an international preoccupation with education as a magical transformer of society. Governments in particular buy into this and try to push everyone to "get educated" at great expense. As usual, it results in a misallocation of resources.
Well, summertime break was filled with factory shift work (12 hour shifts), + bit of student allowance, + then student loan, + bit of support from the folks = a job now in a field very much removed from what my degree was in. But yeh, during the varsity year, there were a lot of fishing trips between semesters.
I'm not convinced that a waterfront University is the answer to our prayers....I have a Commerce degree and the costs outweighed the benefits...the problems with tertiary system are as follows:
- Too many holidays - 20 weeks holidays per year is an inefficient system
- Mismatch with job market - many degree courses don't actually assist you in getting a job (e.g. Bachelor or Arts)
- Not enough jobs - many courses are producing too many graduates for jobs that don't exist (e.g. sound engineering, film production etc..)
- Students making poor decisions - many students choose study that isn't suited to their personality type, which is a waste of their time and Govt funding (i.e. misallocation of resources).
- Use of technology - many universities are failing to leverage the internet to deliver their programmes. Inefficient.
In my view, the best way to boost GDP per capita is to give people equal access to capital. At the moment it's too difficult to save or borrow enough capital to undertake worthwhile business ventures. It's ridiculous. Give people access to capital and they will do the rest.
Economic success is determined more by how wealthy your parents are (because they can lend or gift you capital), rather then how talented you are.
"Use of technology - many universities are failing to leverage the internet to deliver their programmes. Inefficient."
Suggests you have no clue on what universities are actually doing...or any clue on the costs and time to do it. The answer is there is a huge amount done online and more coming, the disadvantage is the products cost the earth and the quality isnt good (enough).
"Students making poor decisions" totally agree, I listened to a student the other day on the train who was getting a media studies degree, busily lamenting it was a mistake and the jobs that did exist looked crap....like WTF....
"Bachelor or Arts" of? anyway, yes because too many ppl do theoretical degrees that are pointless (see above comment). In a way they are great because they teach you to think. So a % of the population with a high enough IQ (120+) to benefit should do them. Probably though a lot less than now where today a degree is seen as essential to get a job that doesnt involve packing shelves......
regards
The commercialisation of education, turning tertiary education into big business funded by student loans, appears democratic on the surface but I suspect its just another way to milk the population and generate some economic activity. Most jobs do not require a tertiary qualification. On the job training is far more useful. Qualifications are now used as a way to stratify candidates so gaining some piece of paper becomes a self fulfilling necessity
I totally agree - it should be broken up - it's nothing but a racket run by socialist champagne charlies disguised as a self funded business. Same as a PPP
2 sides.
Yes, the idea of a degree is its meant to teach the ones with higher IQs to think and not so much vocational aims. So my issue is that too many ppl are or have to do a degree just to get a 1/2 way decent job. Its almost become a school leaving certifcate, if you dont have a degree your future is a countdown till operator.
No, many jobs are now more specialised and complex necessitating a higher "basic" education to do them well....
regards
"Use of technology" - Auckland University requires all students to physically attend lectures....not a good use of technology...one video of a lecture could be recorded and then delivered online year after year....Massey is the only University with a good distance learning programme but still can be improved...and then there are others such as Open Polytechnic.
Often to stop fraud/cheating.
Maybe if you asked them some detailed Qs rather than jumping to conclusions and you list just one Uni. My eldest can get videos of missed lectures on demand, has been able to for 3 years.....watches them at very odd times. Thank god I have 150gb plan which is another issue....the cost of broadband.
regards...
mist42nz....my real point is that many degrees are a waste of time & money, in economic terms - a misallocation of resources....what's the point of 3 years of study and a $40,000 student loan when you can't get a job at the end of it......B.A students may have great knowledge of Napoleonic wars, but they aren't much use to an employer.
JackJill...dumb example...to back up your argument you've picked an example (i.e. Google) that has a 1 in 2 billion chance of happening...so to follow your logic, it's OK for the Govt to fund pointless degrees because there is the slightest most remote chance we could end up with another Google...yeah right.
if people want to study Napoleonic wars that's fine...but at least don't have it subsidised approx 50% by the taxpayer.
The problem is you have based your book on a false premis, that we can grow. To grow takes more energy....not possible.
So basing any plan on that mis-conception is therefore ill-conceived and a waste of time.
Wait another two years and bin your book if you want....
regards
Regarding wages and incentives in research institutions. I had an interesting conversation with the head of HR at a CRI last year. I asked why they don't incentivise researchers with things like profits shares in commercialised research, new varieties etc. I was impressed with the answer. That organisation was based on motivated like minded scientists who loved what they were doing. As long as they were paid fairly they were happy. Individual incentives would destroy the co-operative culture and make productivity worse as people kept their work close to their chest and didn't want to share it. Not to say they weren't competitive and ambitious, just they were all working towards common goals. Monetary compensation was not their primary motivation. And they're profitable.
Interesting how different people have such different ideas on how to go about achieving innovation and inspiration. Purely by chance we had a 30 minute documentary on TV about an outfit called "500 Startups" located in Mountain View California in a grotty run-down building of 10,000 sq ft. This guy looks at your ideas and if it's any good he will fund your idea up to $75,000 to get it to the next level, and then if it's a goer will fund it up to $500,000. Doesnt need a flash building. And then coincidentally, the very next day, this article by author Michael Parker appears in interest.co.nz, recommending a different way, suggesting a guggenheim style building with sculptured metal cladding that changes colour as the atmospherics change would do the job. The architectural and engineering requirements (feats) of that building were astronomical. But would they achieve any better outcomes? Different strokes for different folks I guess.
See some of it here
http://www.youtube.com/watch?v=LmMiffnNaTk
and here
http://www.youtube.com/watch?v=b2AWVcuKryM
To answer your question - "Would they achieve any better outcomes?" - the answer is no, because it doesn't involve giving entreprenuers access to capital. Without capital not much can be achieved in business...hence why we have an economic system called "capitalism"...well it's actually feudal-capitalism because of family inheritance.
why waste the money, why not purchase unlimited access to a service like udemy for all NZers...... decide what skills NZ lacks and then let NZers get on with it for free....
like reading eggs and matheletics for big people
right now world hunger...
An answer to part of our problem is obvious, inexpensive, entertaining and exciting IMO. The NZ Patent Office is hidden in Lower Hutt. A smart gubernment would also place branch offices of the Patent Office in Auckland and Christchurch. They would also fund a traveling Patent Office road show that would continuously and repeatedly visit every other town, village and city in New Zealand- explaining teaching helping. It would be like a perpetual NZs Got Talent Quest, only we would be looking for and encouraging good ideas, not the next Boy/Girl Band.
We have wonderful ideas here, except they mostly wither on the vine, never Harvested. The “genius” idea of equating fancy buildings with “innovation” is pig sh*t stupid, to be polite. Have a look at Google Campus? Plain as. If anyone wanst to attract smart people, invest in Art, Fashion, bike paths, parks, public transport and cheap, blindingly fast internet. (Dunedin could have funded the second North American internet cable for what it has spent on the Stadium!! oh well)
Brilliant.
Out there in cyberspace and business and industry there are seperate
- Solutions looking for problems to solve
- Problems looking for a solution
How to get them together. The internet is the perfect vehicle. The solutions and ideas need (inexpensive) protection
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