This appendix sets out the feedback gained through stakeholder workshops held in October 2023, expanding on the themes identified in the body of this report.
The October stakeholder workshops were deliberately designed to take an open approach and draw out different views and perspectives on the productivity challenges and opportunities approaching Aotearoa New Zealand. Participants at the workshops were selected to add diversity, depth and breadth to the conversation, and to ensure real-world input. Attendees represented a wide range of perspectives across the public, private and NGO sectors about the challenges facing Aotearoa New Zealand’s future. A full list of the organisations represented at the workshops is provided in Appendix C.
The workshops uncovered two types of findings:
- A range of specific “topic areas” that might have been valuable to explore through potential Productivity Commission inquiries, should the Commission have continued its work. These topic areas are not examined in detail in this report, given the planned disestablishment of the Commission and its inquiry function, but short summaries of the high-impact topic ideas developed are set out in Appendix B.
- Broader themes and reflections about the conditions that are necessary, and the challenges that need resolving, to ensure that government’s investment in improving productivity is meaningful. Themes were identified based on issues being raised by a broad base of participants across all workshops, or where strong views were identified within a particular context.
This appendix provides an examination of these broader themes and reflections. These themes illustrate the importance of viewing productivity – and the potential opportunities to improve it – from a broad perspective.
Theme 1: Long-term investment in improving productivity, taking an intergenerational perspective, is fundamental
Participants expressed concern that the prevailing policy approach of successive governments over the past decades is not effectively addressing the “big issues”. This included explicit acknowledgement of the tension between addressing immediate issues and focusing on profound, long-term challenges and how Aotearoa New Zealand can navigate these in light of existing system barriers and the palatability of change. Overall, long-term investment (and the right policy environment to foster it) was seen as key to improving productivity outcomes for Aotearoa New Zealand.
A central issue raised related to the importance of thinking intergenerationally – reflecting a perceived increasing divide between the focus of younger generations to act urgently in the interests of survival and the preference of older generations for comfort and stability. Participants perceived that an intergenerational perspective was often absent in policy thinking, reflecting gaps in understanding where the costs of addressing challenges may fall over time, and who will bear these costs. This included a perceived tendency to inadequately consider the costs of maintaining things as they are.
One advantage identified by participants, particularly in relation to taking an intergenerational perspective, was the potential contribution that te ao Māori could make in shaping distinctly Aotearoa New Zealand approaches – a reflection also identified through the Commission’s internal thinking about Aotearoa New Zealand’s productivity context (see page 17). The long-term perspective and collective approach central to a Māori worldview were seen to provide a distinct, and potentially competitive, advantage for Aotearoa New Zealand as compared to other countries, if those foundations could be effectively learned from and built upon.
One specific opportunity identified was the potential for long-term investment in industry policy, which was seen to be lacking. Participants raised concerns about the connection between industry policy and the flow of investment and implementation, with initiatives like pilot programmes often being funded temporarily but lacking ongoing commitment due to the impact of political cycles. This was seen to create an unstable environment for the deep, long-term investment needed to support change.
Theme 2: A willingness to confront high-complexity, whole-of-system challenges is necessary to meaningfully lift Aotearoa New Zealand’s productivity performance
Participants raised that, in the context of the importance of addressing longer-term, profound issues impacting Aotearoa New Zealand’s productivity, it is important to be willing to confront high-complexity, whole-of-system challenges.
It was recognised that addressing these longer-term challenges requires consideration of the broader system barriers – for example, the dynamics of power and constitutional settings which keep things as they are – which may be impeding necessary change.
Participants raised a number of examples of interconnected “system dynamics” – that is, features of various system that participants perceived as potentially pre-determining Aotearoa New Zealand’s future trajectory or closing off productivity potential. Participants perceived these system dynamics to be under-addressed or not considered adequately in national policy settings – adding impetus to the importance of taking a whole-of-system approach. Some examples of the dynamics identified included:
- the quality and extent of infrastructure, such as transport and energy, which play an important role in determining the potential for economic development (and therefore productivity)
- the effectiveness of the education system in equipping the workforce with relevant skills and fostering innovation, influencing economic potential
- the critical impact that sustainability of natural resources has in relation to economic activity, and the future trajectory of specific industries such as agriculture and tourism
- the dominance of certain industry sectors and the extent to which this may influence the legislative agenda in favour of their own interests
- the state of innovation ecosystems, including research and development initiatives, which influence Aotearoa New Zealand’s ability to stay competitive and foster new industries
- the nature of Aotearoa New Zealand’s relationships with other countries – in particular its international commitments and trade agreements – and the influence these may have on future economic trajectories
- the impact of trends relating to social cohesion, inclusion, equity and diversity – for example, related to demographic shifts that will see a significantly larger share of the population identifying as Māori, Pasifika, and Asian by 2040 (see also Theme 4).
Theme 3: Aotearoa New Zealand struggles with achieving transformative change and underinvests in building deliberate transition pathways
Participants reflected on Aotearoa New Zealand’s approach to change and the balance of effort that is expended on optimising existing systems, processes and strategies as compared to exploring emerging opportunities and innovations or even envisioning and experimenting with transformative, disruptive ideas.
There was acknowledgement that the further into the future, the less certainty there is about what will be needed and therefore the less confidence policymakers can have about what it is important to invest in. However, there was seen to be a mismatch between the ambition that Aotearoa New Zealand expresses as a nation and what it chooses to do – or not to do – to deliver on that ambition.
A key challenge identified was managing change effectively, and how policymakers can design clear and deliberate transition pathways that enable Aotearoa New Zealand to move from one paradigm to the next – for example, to address some of the constraining system dynamics identified in Theme 2. These movements were acknowledged to require deliberate design and commitment – some of which may be hard – to phase out old systems, approaches and ways of doing, and to design and move into new systems, new approaches and new ways.
A specific example of the challenges that Aotearoa New Zealand faces in building deliberate transition pathways was identified in relation to the transition to more regenerative models – for example, moving Aotearoa New Zealand to a circular economy by 2050, which was part of the vision of the country’s first emissions reduction plan.[9] A circular economy is one in which waste and pollution is designed out, resources are used for as long as possible, and products and materials are recovered and regenerated at the end of their lifecycle.
Workshop participants suggested that the challenge of making this transition was particularly hard for Aotearoa New Zealand given the strength of its primary industries within the economy and under-representation of secondary and tertiary industries, particularly manufacturing. Participants also noted an overemphasis on the first phase of transition – minimising waste and pollution after the fact – rather than the full range of changes required to embrace a genuinely regenerative model.
Theme 4: Policies that promote fairness, inclusivity, and effective participation by all are foundational for productivity
Participants emphasised social cohesion and the maintenance of the social contract as a core foundation for productivity and productivity growth, consistent with discussion earlier in this report about social cohesion as a global challenge. In particular, the importance of sustaining levels of trust in public institutions and in government was seen as central to enable continued effective governance. This focus on trust supports productivity by ensuring that government can put in place, and maintain, rules and systems that provide certainty and enable individuals and firms to operate effectively, limited only by constraints that are well-understood and democratically supported.
Fundamental to this discussion was recognition that significant challenges to social cohesion are posed by settings that may lead to, or be seen to lead to, negative impacts on:
- distributional fairness between populations, including the allocation of resources and of the benefits that productivity growth can bring
- equality of outcomes across the population
- citizen participation in democratic decision-making.
Participants recognised that the core foundations of society and the economy, which improved productivity depends upon, may be at risk without policies that promote fairness, inclusivity and effective participation.
This focus on fairness, inclusivity and participation also links explicitly to the recognition in Theme 1 of the importance of intergenerational thinking and the importance of preserving and protecting the rights of future generations. By building an intergenerational perspective more actively into government policy and decision-making, long-term productivity can be supported and enhanced so that the benefits that accrue to the current generation do not come at the cost of limiting opportunities for generations yet to come.
Theme 5: Achieving long-term change requires a clear vision for the future
Underlying much of the discussion was the acknowledgement by participants that having an agreed vision for what New Zealanders want Aotearoa New Zealand to look like in the future is essential. Such a vision is needed to guide the setting of priorities for effort and investment, to drive productivity improvements in the parts of its economy where they are most needed to align with this vision.
Workshop participants identified that a lot is known about Aotearoa New Zealand’s productivity challenges, including as a result of past inquiries undertaken by the Productivity Commission. There was general agreement that recognising the gaps in, and impacts of, previous work is essential to expand existing knowledge and ensure that government does not duplicate previous efforts. Addressing knowledge gaps was seen to be crucial to building a more comprehensive understanding of the factors influencing productivity and how Aotearoa New Zealand can act on these meaningfully.
Having a clear – and shared – vision for the future that is grounded in robust evidence and analysis would require investment in new ways of thinking about the future that Aotearoa New Zealand and its people want. Some discussion related to the increasing use and value delivered by “foresight tools” internationally. For example, Singapore has created a Centre for Strategic Futures as part of its Prime Minister’s Office. The Centre is intended to support the building of a “strategically agile public service ready to manage a complex and fast-changing environment” (Centre for Strategic Futures, 2021). These tools can help governments to think ahead, and to identify critical issues and the dynamic and evolving responses and changes which may be needed over time.
Aotearoa New Zealand currently makes limited use of these tools and approaches. Greater investment in them could support work towards building consensus, and mandate, for the shared future that Aotearoa New Zealand is working towards.
Participants discussed and raised concerns about the perceived shallowness of expertise in long-term and futures-based thinking throughout Aotearoa New Zealand. This included comments about the importance of maintaining institutions with responsibility for undertaking long-term, futures-based thinking. This concern links to the first of the themes identified through stakeholder engagement (Long-term investment in improving productivity, taking an intergenerational perspective, is fundamental), but also to the broader insights and opportunity areas identified in the body of this report.