Wednesday, August 19, 2009

Brain industries, not dairy and tourism are the way forward for New Zealand

Yesterday in Wellington I attended a keynote speech by a Dr Paul Callaghan, the Alan MacDiarmid Professor of Physical Sciences at Victoria University. The presentation was titled “Beyond the Farm and the Theme Park: transforming New Zealand's culture and economy.”

Dr Callaghan delivered fascinating insights into the economics of New Zealand’s future wealth creation possibilities and challenges. Of particular interest was his contention – that if New Zealand aspires to grow its way back to GDP per capita parity with Australia – it will not be through dairy or tourism. It would have to be through high revenue per employee “brain” (high tech) businesses. Below I attach some relevant quotes from a Herald article Dr Callaghan wrote back in February. This article, titled after his book “Wool to Weta” fully articulates the arguments from his keynote yesterday.

“New Zealand exports commodities, but the long-term trend for commodities - as graphed by The Economist - shows localised peaks when times are good, but the overall trend is relentlessly down.

“To match Australia's per-capita prosperity, we would need to lift our GDP by US$30 billion a year. Where might we earn that money?

“Adding US$30 billion per year would mean, on the face of it, multiplying our dairy exports by five, or our tourism by four. . And even if we could increase dairying or tourism, there are problems.

“I doubt that it would be feasible to double Fonterra's production, let alone increase it by a factor of five, and I doubt whether we would want to quadruple the numbers of tourists visiting New Zealand each year, from 2.5 million to 10 million.

“I want to suggest another model for New Zealand export business, and one that has few downsides. looking at largely brain-based business, it does seem, overall, that high-technology companies come out quite well. They consume little energy. They do not emit significant greenhouse gases or dump nitrates in our lakes. The Resource Management Act is no bother to them at all, and, as their products are valuable, they are perfectly happy with a high New Zealand dollar value. And these businesses reside in perfectly attractive buildings and surroundings. In short, they are sustainable, environmentally and socially benign and there is no limit to the numbers of such companies which we might enjoy, except to the degree that our brains and enterprise make such businesses possible.

"Clearly New Zealand would benefit if many more such "knowledge businesses" were to form, but what can we do to seed that process?

THOUGHTS: Dr Callaghan’s logic puts an end to the mantra that the dairy industry and tourism industries are where the weight of R&D investments should go to secure New Zealand’s future prosperity.

KEYWORDS: New Zealand, Growth, Agriculture, Tourism, High-Technolohy, Sustainability

Saturday, August 08, 2009

Shrinks & climate change: driving the sense of urgency for action

I have closely followed the published climate change scientific research over the last seven years. It is clear that the planet and its inhabitants are at the cusp of experiencing dramatic climate change, which has been caused by human activity over the last hundred years.

Failure to act with a sense of urgency – at global, national, community and personal level – invites disaster.

Looking back – it seems that 2006 was the year that individuals, consumers and citizens finally got it – that climate change is real and dangerous. This was the year of Al Gore’s movie “An Inconvenient Truth” and the release of the “The Stern Review on the Economics of Climate Change”...

...yet despite the growing consensus of concern and the experience of climate change symptoms - sea level rise, floods, droughts, floods, water scarcity, famine, disease, economic volatility…

…why do we as a species seemed unable to act? It’s as if we will really live out the boiling frog fable.

But wait – from an unexpected source - yet obvious in hindsight - has come a very powerful insight, which offers the pathway to building effective global consensus and action…. Read on...

Psychology is to blame for humans not acting on climate change
The American Psychological Association (APA) Task Force on the Interface Between Psychology and Global Climate Change has just reported its findings.

The taskforce examined decades of psychological research and practice that have been specifically applied and tested in the arena of climate change. The task force's report offers a detailed look at the connection between psychology and global climate change and makes policy recommendations for psychological science.

"What is unique about current global climate change is the role of human behavior," said task force chair Janet Swim, PhD, of Pennsylvania State University. "We must look at the reasons people are not acting in order to understand how to get people to act."

The report cites a national Pew Research Center poll in which 75 percent to 80 percent of respondents said that climate change is an important issue. But respondents ranked it last in a list of 20 compelling issues, such as the economy or terrorism. Despite warnings from scientists and environmental experts that limiting the effects of climate change means humans need to make some severe changes now, people don't feel a sense of urgency.

The task force said numerous psychological barriers are to blame, including:
  • Uncertainty – Research has shown that uncertainty over climate change reduces the frequency of "green" behavior.
  • Mistrust – Evidence shows that most people don't believe the risk messages of scientists or government officials.
  • Denial – A substantial minority of people believe climate change is not occurring or that human activity has little or nothing to do with it, according to various polls.
  • Undervaluing Risks – A study of more than 3,000 people in 18 countries showed that many people believe environmental conditions will worsen in 25 years. While this may be true, this thinking could lead people to believe that changes can be made later.
  • Lack of Control – People believe their actions would be too small to make a difference and choose to do nothing.
  • Habit – Ingrained behaviors are extremely resistant to permanent change while others change slowly. Habit is the most important obstacle to pro-environment behavior, according to the report.
The LA Times adds: The report also gets into useful specifics. It draws on past studies on people's behaviour in disaster situations. It examines what science knows about how you can get people to alter their behavior and what doesn't seem to work at all, no matter how fine and dandy an idea may sound. One example: People are more likely to use energy-efficient devices if they're given feedback, right then and there, about how much energy/money they're saving, rather than if they have to wait until they get their power bill.

THOUGHTS: Thank you shrinks. You have given us some powerful insights, from which we could build the much needed tools to rapidly acheive a global consensus on the sense of urgency and action on climate change. Is it now or never - literally?

The full report:
"Psychology and Global Climate Change: Addressing a Multi-faceted Phenomenon and Set of Challenges" – American Psychological Association – August 2009

The APA press release
"Psychological factors help explain slow reaction to global warming, says APA Task Force" - American Psychological Association – 5 August 2009

From the LA Times
Psychology is to blame for humans not acting on climate change, psychologists say – Los Angeles Times – 5 August 2009

From The New York Times
Is the Climate Problem in Our Heads by Andrew C. Revkin – The New York Times/Dot Earth blog – 5 August 2009

KEYWORDS: Psychology, Climate Change, Strategy, Sense -of-urgency