Working Conditions, Not Taxes, The Problem with New Zealand, Say Expatriates

Since 1995, New Zealand has slipped badly in its ability to retain highly-educated people, according to a recent study cited in The Economist (10 July 1999). This alarming news has triggered widespread concern. Max Bradford, Richard Prebble and others allege that reducing marginal income tax rates will improve the situation and help NZ to become a "knowledge economy," but have not provided even anecdotal evidence for this claim.

For the past month, I have been part of an e-mail discussion group of young New Zealanders. We are mostly in our late twenties and early thirties, and received our undergraduate education in New Zealand. We have substantial postgraduate qualifications, advanced research experience and work at universities and entrepreneurial internet and technology companies, mostly overseas.

For us, small changes to tax rates are of minimal importance when contemplating a return to New Zealand. Neither are salaries the main issue. Most of us are prepared to accept a substantial reduction in real buying power in order to be working in New Zealand. The real deterrent is the lack of career opportunities in New Zealand, and the absence of a political commitment to improving the situation.

The underlying problem is a chronic lack of appreciation for, and investment in, areas that will fuel the much-discussed "knowledge economy." Symptoms include:

• a lack of commitment to excellence in research and development, and an excessive focus on short-term research.

• an often hostile relationship between government and the research sector.

• deteriorating working conditions and morale in many research-related jobs.

New Zealand, with its small population and isolation, cannot retain all its "high-flyers." However, wise policies can help a great deal. Unfortunately, recent government efforts have continued to make working overseas a much more attractive option than returning to New Zealand.

Here's how the government could begin to curb the brain drain, and perhaps ultimately reverse it:

1. Publicly articulate why a coherent research strategy is important to New Zealand, and then lead by example.

New Zealand citizens and companies have a low appreciation of the benefits of "intellectual" activities. Taxpayers will rightly expect to know why they should pay for research. A down-to-earth, intellectually honest awareness campaign is required.

Government funding for research in universities and CRI's is low, and the present government has already reneged on promises to increase it. Unlike the USA, for example, New Zealand does not have a large philanthropic sector, so public funding of research is essential. Moreover, compared to other OECD nations, New Zealand has a woeful record of industrial sponsorship of research.

What is needed is a "virtuous circle," rather than the vicious one we have now. More public and private research funding means more productive researchers, more effective research, and more useful applications in the form of technology, improved decision-making and better democracy. This encourages public and business confidence that research works, leading to more funding for research, which continues the cycle.

This cycle will not appear of its own accord; so far the magical "free market" has conspicuously failed to deliver one. Government must take the lead, with deeds, not just words.

2. Provide more support for active researchers at the beginning of their careers.

Early investment in talented people has a huge impact on their lifetime productivity, as we can attest from our own experience. Increased spending, wisely directed, is needed. Simply redirecting money that presently goes to more senior researchers will not help. Nor will sending New Zealand dollars overseas.

The recently announced "Bright Future Top Achiever Doctoral Scholarships" are a classic example of poorly thought-out expenditure.

Paying for talented young New Zealanders to complete PhDs at top international institutions looks great on paper. In reality, it's a colossal waste of money - good New Zealand students have never had trouble winning funding from overseas universities to support their PhD studies.

Worse still, under this scheme these talented people will be barred from competing on a global job market, and will instead be "bonded" to return to New Zealand for as long as they spent overseas. It's unworkable and perverse to ground high-flyers at the beginning of their research careers like this, by forcing them back into bad working conditions. The same $60,000 per year the government proposes to send overseas with each student could better be spent on the salary of a young lecturer at a cash-strapped and understaffed New Zealand university. Real jobs would truly provide incentives for overseas-based researchers and academics to bring home their skills.

3. Value fundamental long-term research, not just areas thought to have short-term commercial application

Basic, non-directed research has led to numerous inventions that improve our quality of life. The development of electronics, computers, advances in health care, and even the internet, all have their origins in decades of publicly supported research. And the key word is decades, not months.

Good research cannot be done to order; results are not predictable in advance, and serendipity plays a big role. The key is being able to recognize a serendipitous result for what it is. That means we need talented, well-trained, well-resourced and confident researchers, not those who are struggling to survive.

Finally, the current funding system in New Zealand focuses too narrowly on too few areas and too few people. This causes certain areas to wither and others to bloat, making the research community much less responsive to change. A better method is to spread the money around. The quality of research is what matters, not its "relevance" to poorly-understood short-term goals.