Partners to One Vision Dairy Industry Technology Conference

Mr Chairman Ladies and gentlemen. Thank you for the invitation to speak to you all today.

Science and technology keys to the future The theme of your conference "Partners to One Vision" is very apt. In a world that is becoming increasingly more global, it is important that New Zealand Inc has a very clear vision of the future in order to meet the challenges that lie ahead. The key to the future lies in science and technology. And in embracing technological change.

As we look forward to the new millennium it's increasingly evident that tomorrow's market is in new products and ideas, most of which are yet to be invented.

None of this is new. The Government and others have been saying it for sometime.

Indeed as a participant in your industry I know only too well that innovation and enterprise are the keys to survival.

But the message is worth repeating. Why? Because the world is on the cusp of a knowledge revolution. And for New Zealand and the dairy industry to succeed in this new global knowledge economy, there are a few simple, but vital ingredients.

Our food and fibre industries need an even more highly skilled, science and technology literate workforce. We need to keep ahead of the game with research and development. And as a country we need to foster and grow our international linkages in order to succeed. It means changing our rules and our structures to encourage others capital, knowledge, technology and marketing skills to grow our dairy industry faster.

Staying ahead and staying flexible relies on knowing more than our competitors, and being able to use that knowledge quickly.

A big part of using knowledge effectively is good information and communications technology. The world is becoming increasingly globally interconnected.

But having a highly skilled workforce, plenty of research and development, and brilliant information technology won't do us any good without the last ingredient - the right mind-set. That is the key to a successful future. That is an area for change. Too many in our country are pessimistic about what we can't do instead of optimistic about what we can do!

A century of progress We have come a long way in just a century.

Certainly the Dairy Industry of the 1900's bears little resemblance to the Dairy Industry of today.

In 1900 telephones and the electric light were new. Few people had running water, ice kept our milk and meat cold, and the only way to travel off the ground was in a balloon. The era of scientific medicine was only just beginning. If animals or people were sick or injured, they needed a strong constitution, or plenty of luck, to survive.

Tied together by technology Today our world is tied together by technology. We can travel to any part of the globe in a matter of hours and conduct transactions by phone, fax or computer almost instantaneously. Life expectancy has also risen dramatically. Although where we have come from is interesting, of far more importance is where we are headed.

As a food-producing nation one of the most challenging trends we have to face is keeping ahead of technological advancement. Particularly in the area of biotechnology.

Real agricultural commodity prices In the long term as this graph shows, New Zealand's only path to prosperity is through change and adaptation. Since I began in the diary industry nearly 30 years ago, farmers' returns per kg of milk solids has been halved in real terms.

We need to keep generating new kinds of food and fibre products and cultivate new markets. We need to develop secure supply chains and ensure delivery of top-quality goods and services to our customers.

New Zealand needs to be in the business of selling more specialist consumer products, rather than bulk commodities. First world food consumers are increasingly interested in what they are eating. This potential match provides many opportunities.

Certainly the Dairy Industry has been following the path to prosperity by designing and developing new manufacturing processes and new products. For example in Russia, the NZDRI by working with dairy companies and the New Zealand Dairy Board, has helped to formulate a butter that suits the climate, the tastes and the eating habits of Russian people.

As a result, it is not New Zealand butter that is being sold, but "Russian butter" made up of New Zealand components, developed and manufactured in New Zealand and given New Zealand branding to highlight the quality of the product.

The ability to develop new world-beating products is what will stand our primary industries in good stead in the knowledge-based economy of the future.

The knowledge revolution New Zealand as a whole needs to prepare for a future in the global knowledge age. In this new age, the ability to access, develop and apply knowledge will be the key drivers of productivity and growth. Innovation and knowledge will enable new and improved products and technology to be created to maximise market advantage.

The increasing pace of change If we look at just one aspect of the knowledge revolution - the impact of communication technologies, we can see a classical exponential curve with one technology feeding off the next to give an ever-faster pace of change. Faxes in the 1970's. Cell phones in the 1980's, CD-ROMs, the Internet and worldwide web technology within the last few years. Think of the immense impact technology has had, and is likely to continue to have, on the dairy industry and your competitors in the future.

Take the Internet. Its pace of adoption eclipses all other technologies that have preceded it. Traffic on the Internet is doubling every 100 days. Technology like the Internet offers changes in selling and distribution channels. People can now purchase all of their groceries on the Internet and have them delivered without going near a supermarket or shop. Distributors can now sell products worldwide without an overseas agent.

But here we are in 1999 and we have barely started on the curve. What new technology will come next and what impacts will it have? I'm told total human knowledge has doubled over the last seven years.

Growth in science and technology jobs While we cannot predict the future, we know that New Zealand will need to be more literate in science and technology.

Because science and technology underpin innovation, there is increasing demand for people trained in these areas.

Between 1981 and 1991 the number of jobs in the areas of science and technology in New Zealand grew by 55%, while growth in overall employment for the same period was only 33%.

Innovation Edward de Bono tells people around the world that "competence, information and technology - historically the main building blocks for enterprises have become commodities. In former years you could gain a break on your opponent by cutting costs or adopting new technology. Now everybody is doing roughly the same thing, and the new information systems are available to all. The creative wealth of the future will be innovation."

New Zealand is known as a nation of innovators with our number 8 wire kiwi ingenuity. In future the ability to create wealth will not be bound by physical limits but by your ability to come up with new ideas. The opportunities are unlimited. Solving problems