Hard News: Fact and fantasy
628 Responses
First ←Older Page 1 … 5 6 7 8 9 … 26 Newer→ Last
-
In fact we can't pick winners. It's all well and good to talk about the need to stop subsidising bad things, but the jump to `let's subsidise my pet industry' is all too swift.
-
Sacha, in reply to
Stopping borrowing from overseas in order to fund our property obsession would be a spectacular start. That's the vast, vast majority of our trade imbalance.
This as well. On a roll, Mr Poole. Great to meet you and your other half last week too.
-
Sacha, in reply to
In fact we can't pick winners.
Other nations seem to manage. It's part of stewardship/governance; of being grown ups rather than distractable and indulgent teens.
-
Do they? Does it work? Are those countries rich, developed nations? Does it work in the long run, not just while the subsidises last? How often does it fail, and you don't notice?
-
Rich of Observationz, in reply to
I don't know anywhere that a conscious, government directed industrial policy has succeeded long term. The best you seem to get is the US approach of spending a fortune on weapons and hence creating a huge high-tech industry that then has spinoffs (even that goes wrong in places like the UK and Soviet Russia where the defence industry sucked up all the investment and skilled workers to the detriment of non-defence technology).
More typically is the Aussie car industry, where huge subsidies and import control keep them making gas-guzzlers that are twenty years past their sell-by date.
-
I for one find it hard to believe that it’s less safe to drink from or swim in the rivers of New Zealand (or some other named environmental disaster areas like Iceland) than it is in most of the countries named as top environmental performers – Central African Republic? Mali? Eritrea? Really?
I haven't visited those countries, but until I do, relying on people who are qualified experts in water quality and their impacts upon the environment and animals in them doesn't seem like an unreasonable choice.
Also it doesn't take long in wandering around NZ outside of conservation areas to find rivers that you shouldn't go near, let alone swim in. Drinking them would be repulsive.
Here's a photo of the Manawatu.
-
Bart Janssen, in reply to
In fact we can’t pick winners.
Other nations seem to manage. It’s part of stewardship/governance; of being grown ups rather than distractable and indulgent teens.
Kier is right. And this is also exactly what Sir Paul Callaghan said. You can't pick winners, but you can fund those who are winning. Essentially don't pour money into a sector because your pet theory says it will be of value (e.g. the new innovation centre), instead look around at those people who are succeeding and fund them.
Fund winners, don't pick them.
-
Matthew Poole, in reply to
look around at those people who are succeeding and fund them.
Fund winners, don’t pick them.
Or, at least, don't discourage banks from lending to those who are succeeding. We've lost innumerable ventures because getting domestic funding has been too hard, including the recent sale of a wireless charging technology that has massive potential (I'll be here all week) for electric transport. We've got a serious problem with the policy settings that have banks lending 95% on residential property but unwilling to lend $5k to someone who wants to start up a business (yes, really, $5k. They ended up begging on Facebook).
-
Fund ecosystems that support winners. Understand what winning looks like.
-
A large component of NZ’s ranking in that PLoS study is due to the very low Biodiversity score but the Yale study ranks NZ quite highly and rapidy improving on that mark.
According to the NYT, we've slipped from 1st in 2008 to 14th, so I'm not sure how that's an improvement of any speed.
-
Glenn Pearce, in reply to
Not on Biodiversity, if I'm reading the Yale study correctly.
-
Rich of Observationz, in reply to
The banking system basically lends on tangible security: property, plant and the like. It's role is not venture capital provision, for the very good reason that when people put money in a bank, they want it back.
Typical VC firms (especially the minority that work in innovative areas, as opposed to investing in bus depots and the like) expect a success rate between 3% and 10%. The rest of their investments will to some degree fail. That doesn't fit with "banking".
It would possibly be a good idea for the government to provide $5k level investments to people that want them, possibly in the same fashion as student loans, where you pay them back in income tax. Any other model is unlikely to work.
-
In light of the Hobbit buzz, interesting Guardian article (via Toby Manhire) about Denmark's creative rise and its connection with their homegrown film-making movement, Dogme. Also notes:
For politicians, the explanation may be even more prosaic. "Dogme is one of the reasons why a lot of creative stuff is happening," says Uffe Elbaek, the culture minister. "But it's sure not the only one." The boom in food, TV and architecture, he says, is the result of three decades of financial support. This has assisted the Danish Film School and the New Nordic Kitchen movement, and delivered grassroots funding for young creatives. Free university tuition hasn't hurt, either. "Now we see the fruit of that kind of public investment," says Elbaek.
-
BenWilson, in reply to
I don't know anywhere that a conscious, government directed industrial policy has succeeded long term.
Satire! Love it. Surely?
-
Mike McGinnis, in reply to
Peeling back the green veneer of NZ environmental policy has finally seen the light of day. This is particularly the case in coastal marine policy, and is the focus of my recently published Full Report on ocean governance in the country (see: http://igps.victoria.ac.nz/publications/publications/show/336). The green brand represents a double-edged sword: the country can live up to the brand or suffer the consequences when the brand is exposed by the international community. True leadership and political will is needed today in central government to move in a more sustainable direction with respect to how the country uses and protects its precious coastal marine ecosystems. Dr. Michael V. McGinnis, PhD
-
Matthew Poole, in reply to
The banking system basically lends on tangible security: property, plant and the like. It’s role is not venture capital provision, for the very good reason that when people put money in a bank, they want it back.
Sure, but they lend on rapidly-depreciating items like cars. This person just wanted a personal loan, but the bank wasn't interested. They'd have happily loaned money for a car worth far more, taking the risk of writing off much more than $5k.
-
Rich of Observationz, in reply to
Statistically, a large portion of people getting car loans pay them back, and if they don't, repossessing the car will provide an alternative payment method. The profitable interest rate is easily calculated.
Most bright ideas, as discussed above will fail. So the bank would need to either charge a huge interest rate or rely on the borrower paying for their turned-out-dumb idea out of other forms of earnings. Which they'll happily do on a credit card, provided the borrower has the earnings and so forth to make repayment likely.
-
Russell Brown, in reply to
I don’t know anywhere that a conscious, government directed industrial policy has succeeded long term.
The chaebol of South Korea would seem to fit the bill. Samsung, LG and Hyundai were actively supported and financed by their government for a long time. There was a fairly severe reckoning with the Asian debt crisis, but the winners amongst them won very big.
It's possible that industry development works best when you're actually industrialising, but I don't think it's tenable to say there are no success stories.
-
Bart Janssen, in reply to
I don’t know anywhere that a conscious, government directed industrial policy has succeeded long term.
There are lots of examples of successful government funding schemes, even in little old NZ. The problem is they all have one thing in commong, they fund quality first and tend to ignore any kind of strategic funding. This is a problem because it essentially says the politicians and all the strategic think tanks are not only useless they are worse than useless because they take money from successful non-targetted funding and put it into less succesful targetted funding.
Have a look at Isreal for S&T funding or the NSF versus USDA. It is indeed possible to have successful govt funding and stimulation of industrial success but you have to be able to step away from the controls once you've put up the money.
That might be your point, that govts that try to direct where you get success generally fail.
-
Paul Williams, in reply to
we need more of that #alchemy
Indeed, "silviculture"; I did say it'd be a while!
-
Rich of Observationz, in reply to
Most things work when you're industrializing. Look at Soviet GDP in the 1950s, for instance.
-
What I think does work is for government to create the environment through sensible policy: so for instance a policy of moving electricity rapidly to 100%+ renewables would help, because when everyone else has rapidly rising fuel bills, we wouldn't. As would improving public transport, taxing property speculation, free tertiary education and the like.
Putting huge dollars into a film industry that won't exist if the world's teenagers go and see Skyfall on Saturday, less so.
-
Sacha, in reply to
Genuine broadband now rather than in 6 years would seem an obvious one too.
-
Rich of Observationz, in reply to
Bit of a moving target, that. If we had FTTH now, people would complain that we didn't have 4G/LTE rolled out, as they do in country X.
And it's hard to see how consumer broadband will drive that level of economic growth when businesses have been able to get as much bandwidth as they want (and can justify paying for) for some time. What do you think Kim Dotcom has, ADSL?
-
"The banking system basically lends on tangible security: property, plant and the like. It’s role is not venture capital provision, for the very good reason that when people put money in a bank, they want it back."
That's the official story but it's such a crock. My bank sent me an invitation to apply for a personal loan. I called and told them I wanted one for capital investment in my growing manufacturing business, and could fund it from solid earnings int he day job. "No dice, can't loan for that they said". So my partner and I spun them a yarn that we were getting married in Europe, needed $50k to fund the event. "No problem" they siad and we got the cash.
We recently had the business banking manager out visiting after we received a small business award that they sponsored. We told him the story. "Yep, he laughed. Go on ya, that's exactly how it works inside the organisation.." They're not at all unused to customers doing the same thing.
Post your response…
This topic is closed.