Mori Economy, Science and Innovation

potential opportunity and value

presentation to Mori Economic Summit 05 May 2011

Dr Ganesh Nana Chief Economist

Mori Economy, Science and Innovation presentation to Mori Economic Summit 030511 slide 1

Headline
The opportunity by 2060 $12bn extra pa in GDP from Mori economy 150,000 additional jobs pa in NZ economy
* over 50,000 in professions and 30,000 in skilled trades

The risk

doing nothing could see by 2060

35,000 less jobs pa in NZ economy
NB: all values expressed in terms of 2010 $s, with all figures representing the change on a baseline business as usual projection of the New Zealand economy

Mori Economy, Science and Innovation presentation to Mori Economic Summit 030511 slide 2

Project brief
Why this?

science effort innovation

Mori economy

Mori Economy, Science and Innovation presentation to Mori Economic Summit 030511 slide 3

Project brief
Why not this?

Mori economy science effort

And, if so, can we quantify potential benefits?

innovation

Mori Economy, Science and Innovation presentation to Mori Economic Summit 030511 slide 4

Issues, challenges
information communication

attitudes to risk
governance and management structures

capability and capacity

Mori Economy, Science and Innovation presentation to Mori Economic Summit 030511 slide 5

Asset base of 2010 Mori economy

collectively-owned assets
and businesses of self-employed and individual employers using more robust method and wider coverage than earlier estimates

Mori Economy, Science and Innovation presentation to Mori Economic Summit 030511 slide 6

Asset base of 2010 Mori economy

total = $36.9bn
* trusts & incorporations = $4.0bn * other Mori entities = $6.7bn * businesses of self-employed Mori = $5.4bn * businesses of Mori employers = $20.8bn

Mori Economy, Science and Innovation presentation to Mori Economic Summit 030511 slide 7

Asset base of 2010 Mori economy

by industry
Agric, Forestry, Fishing Mining Manufacturing Elect, gas & water
Construction Wholesale trade

Retail trade Accommodation Transport Communications Finance services Property services Education
Other services

$bn 0 3 6 9 12

Mori Economy, Science and Innovation presentation to Mori Economic Summit 030511 slide 8

Growth in asset base 2006 to 2010

from $16.4bn in to $36.9bn
increase of $20.5bn due to:
* wider coverage and more robust assumptions: $11.6bn * price inflation: $3.1bn

* real growth: $5.7bn

= real growth of 18%, or 4.3%pa

Mori Economy, Science and Innovation presentation to Mori Economic Summit 030511 slide 9

Comparability with 2006 estimate

Or, accounting for 2006-10 growth
$bn real growth from 2006-2010 30 40

20

capital goods price inflation from 20062010

wider coverage and more robust assumptions

10 2006 previous base estimate

0
asset base of 2010 Mori economy
Mori Economy, Science and Innovation presentation to Mori Economic Summit 030511 slide 10

Different dimensions of Mori economy

INCOME GDP
other 91.9% Mori 8.1%

EXPENDITURE GDP
other 87.4%

Mori 12.6%

PRODUCTION GDP
other enterprises 94.1% Mori enterprises 5.9%

$10.3bn out of NZ total of $187bn

Mori Economy, Science and Innovation presentation to Mori Economic Summit 030511 slide 11

The 2010 workforce

Employers Mori Non-Mori Mori as % of total 5,690 109,140 4.9% Selfemployed 12,920 202,360 6.0% Employees 200,298 1,388,490 12.6%

Mori Economy, Science and Innovation presentation to Mori Economic Summit 030511 slide 12

The future Mori economy

Scenarios tested
Production focused productivity improvements in all sectors of Mori economy

Export focused increase in export volumes and sales due to innovation of sales/marketing of goods and services from Mori economy RS&T investment increased but obstacles to application and commercialisation remain
Do-nothing productivity of asset base erodes as maintenance efforts lapse

Mori Economy, Science and Innovation presentation to Mori Economic Summit 030511 slide 13

change in Mori GDP compared to baseline

2010 $bn
15 12 9 6 3 0 Increased productivity Investment focus Improved export effort Doing nothing

Scenario comparison

In 2061 cf baseline +21% Mori GDP +22% Mori GDP +1% Mori GDP -5% Mori GDP

-3
2021 2031 2041 2051 2061

Mori Economy, Science and Innovation presentation to Mori Economic Summit 030511 slide 14

Potential benefits and opportunity costs

difference in JOBS compared to baseline
Increased productivity Investment focus 150 Improved export effort Doing nothing 000s 200

100

50

-50 2021 2031 2041 2051 2061

Mori Economy, Science and Innovation presentation to Mori Economic Summit 030511 slide 15

Key findings
compelling evidence of step change opportunity gain to NZ, as well as to Mori economy

requires more than just investment

communication and behaviour change necessary need genuine relationship between scientists, innovators and Mori entrepreneurs collaboration and leadership potentially central long-term development of skills and capabilities of workforce critical

Mori Economy, Science and Innovation presentation to Mori Economic Summit 030511 slide 16

So, what now?

agree to tackle challenges to build genuine two-way relationships

lead and foster behaviour and mindset change backed up by informed analysis commit to long term
note do nothing option is too risky

Mori Economy, Science and Innovation presentation to Mori Economic Summit 030511 slide 17

Last words
asset base measure is only part of story use of asset base is critical increasing performance of, and income from, Mori economy is necessary to ensure
* protection of asset * improved opportunities, jobs and incomes for Mori (and non-Mori)

* development and kaitiakitanga of cultural, social, community and environmental assets and values of Mori and all New Zealanders

Mori Economy, Science and Innovation presentation to Mori Economic Summit 030511 slide 18