Speech To The Association of Polytechnic New Zealand Marketing Forum ConferenceEnterprise and Commerce
Last month, when the Government launched the $223 million Bright Future Package, I said New Zealand was at a cross-road.
We face two choices.
We can stand still and rely on commodities to pay our way as we have in the past.
Or alternatively, we can decide to join the leading nations of the world who are forging a bright and exciting future based on knowledge and ideas.
But, we don't have much time to act.
It is easy to overlook the pace and scale of change that is going on around us.
A powerful force is sweeping across the world: globalisation.
Technology has broken down national barriers.
The smallest of businesses can now export to the world, a process that will dramatically accelerate as e-commerce penetrates national economies.
Ideas and labour markets are becoming less and less constrained by national borders.
And the ways of thinking and acting that have served people well until recently are being re-evaluated and challenged.
Today an idea that is conceived in Japan, can be developed in Canada, manufactured in Australia and sold in Chile.
This revolution has profound implications for all aspects of the New Zealand economy and society.
Much of the public's focus tends to be on the new technologies that are being produced at an exponential rate.
But, it is people - and the ideas in their heads - which are the most precious resource as we approach the 21st century.
As educationalists, I know you appreciate the value of human capital.
But, more than ever, knowledge is the most important factor in determining the standard of living.
If we are to successfully compete with our neighbours who are already ahead in building knowledge economies, we must find new ways to create wealth.
We must become more innovative and entrepreneurial.
And to achieve this we must have a first rate education system, attuned to the ever-changing needs of a globalised world.
Our students must know how to use existing knowledge, but that is not enough.
They must also learn to create new knowledge.
MIT in the United States, estimates that 80% of the products and services that today's five year olds will use as adults, have not yet been thought of.
This carries big challenges for tertiary education providers, which will need to be light on their feet to adapt and evolve in the knowledge age.
They will have competition from around the world, given the development in distance learning.
It also brings challenges for Governments, who are major investors in tertiary education.
You can justifiably be proud of the achievements of our tertiary sector.
But we have to improve the quality and focus of education if we hope to keep in step with the Irelands and Singapores, which are building strong economies based on educational excellence.
Excellence is fundamental to the knowledge economy.
It is only by pushing beyond our limits that we will discover the possibilities that lie outside current frontiers.
If education is going to provide the human capital needed for the knowledge society, it has to be at the cutting edge of demand and be responsive to the rapidly changing needs of students, employers and communities.
To do this our tertiary institutions must develop more productive and effective relationships with enterprise and other research organisations.
To survive in the knowledge age we will not only need to maintain our current skills, but continually improve them throughout our lives.
Every New Zealander will need to participate in post-school education of some sort several times in the course of their lifetime.
This means that the traditional distinctions between tertiary education and industry training are becoming increasingly irrelevant and unproductive.
There are huge opportunities here for tertiary providers to develop programmes and relationships with enterprise to fulfil the evolving needs.
The Bright Future Package, along with recent tertiary funding announcements, are the first steps towards preparing New Zealand for this challenge.
But it is a challenge that has to be embraced by all involved.
Tertiary education and the knowledge society
From 1986 to 1996 there was effectively a doubling of participation in tertiary education.
In particular, the participation of Maori and Pacific Island students in tertiary education has increased considerably.
Between 1994 and 1998 their participation rates grew by 24 per cent and 30 per cent respectively.
However, participation in tertiary education needs to become universal and on-going if we are to become an oasis of excellence and innovation in the South Pacific.
The recently announced tertiary resourcing policies will provide for a wider range of learning opportunities for our students.
From 2000 all domestic students, including those at Private Training Establishments, who are enrolled in quality assured courses, will receive Government subsidies in the form of the Universal Tertiary Tuition Allowance.
The new subsidy system will respond quickly to changes in student and enterprise demand - as subsidies will be delivered on actual, rather than forecast enrolments - and will treat all students fairly.
Students in Private Training Establishments (otherwise known as PTEs) should no longer have to pay significantly higher fees than those taking similar courses at public tertiary institutions.
Many PTEs to date have also focussed on serving educationally disadvantaged groups, including large numbers of Maori students.
These students will greatly benefit from being subsidised on the same basis as those attending public institutions.
The subsidies have now been designed to provide additional support to students enrolled in the innovative and developing areas of science, technology and research based post-graduate study.
These changes will help ensure that New Zealand produces graduates in areas that can develop our knowledge economy.
Elements of the Bright Future Package will address larger issues.
The 25 Five Steps Ahead forums held around the country in the lead up to the package formation, highlighted the need to place tertiary education in a wider context.
The more than 2000 forum-goers endorsed the need to lift the skill levels of New Zealanders, and stressed the necessity for more effective relationships between education, research, and enterprise.
There was also a strong consensus that the silo mentality that exists between the sectors needs to be broken down.
People and ideas must be able to move readily between business and research in order to keep university research focussed and relevant, and to provide business with the creativity and ideas it needs to flourish.
The soon-to-be established Higher Learning Sector Taskforce and the Enterprise Education Taskforce will tackle these issues.
For the first phase of these reviews, the Government intends to convene a group of eminent New Zealanders and international experts to develop a shared vision for New Zealand's tertiary education sector, including enterprise education.
Once this vision is realised, this group will divide to form the basis of the two Taskforces.
Higher Learning Sector Taskforce
The Higher Learning Sector Taskforce will focus on finding the best structure for New Zealand's tertiary education sector. The taskforce's proposed terms of reference will be released for consultation shortly.
The taskforce will consider the best arrangements to ensure the delivery of high quality and relevant education that is responsive to domestic and international developments.
A quality education system requires tertiary institutions with world-class reputations.
Over time we will have to develop fewer, but stronger research institutions and centres of excellence, rather than the one-size-fits-all approach which characterises much of New Zealand's tertiary sector.
Enterprise Education Taskforce
To ensure that current tertiary arrangements are meeting the needs of employers, employees and New Zealand as a whole, Government will also initiate a review of the role and effectiveness of enterprise education.
Employers need to be committed to enhancing human capital within the workplace.
They need to invest in education and training for their employees, not just in the specific skills needed for the immediate work, but also in more generic skills (such as problem-solving) that will enable their employees to both create, and adapt to, change.
The Enterprise Education taskforce will assess.
* how best to encourage a ‘learning culture' within enterprises;
* whether current enterprise education arrangements put effort in the right places for industry needs and the future needs of New Zealand; and
* access to life time learning opportunities.
Scholarships and Awards
Countries need policies that encourage people to build human capability, that reward success and that acknowledge the role of failure in promoting success.
The Government is spending $30 million of new money and redirecting millions more to fund scholarships to help our best talent excel.
This includes $20 million on Enterprise Scholarships to be jointly funded with industry.
These scholarships will be available for both advanced study with a research component and advanced learning in technical areas. This will ensure that research is better aligned with the needs of enterprise.
Ten million dollars a year will fund up to 80 Doctoral Scholarships to enable students to undertake doctoral level research with the provider of their choice.
To encourage more students to go on to study science, maths and technology at tertiary level, up to 1290 scholarships will be awarded each year to students who excel in their final school exams in these areas.
Up to 30 new full year study awards will be available annually to allow the best teachers to improve their skills in maths, science and technology.
These scholarships provide new opportunities for tertiary education providers to work with the enterprise and research sectors to further New Zealand's knowledge base and foster innovation.
* The Government has also introduced $7.25 million worth of elite Post-Doctoral Fellowships to assist our best PhD graduates generate ideas and wealth for the nation.
* A $36 million a year new Economy Research Fund will encourage researchers to delve into uncharted areas.
But this is only the beginning.
The New Zealand we want in the 21st century is an enlightened, dynamic and inclusive knowledge society in which all New Zealanders can participate, fulfil their aspirations and achieve their potential.
* To reach this goal we need to act with a common vision and purpose.
It was Isaac Newton who said: "If I have seen far it is because I have stood on the shoulders of giants".
Tomorrow's giants will be based on people, cooperation, competition and excellence.
All those ingredients for success are present to varying degrees within our tertiary sector.
The challenge for you now is to maximise those advantages to make yourselves, your institutions and your students giants of the knowledge age.
I wish you every success.