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New Zealand Manufacturers and Exporters Association

OECD and Productivity Commission Report: Here's the Missing Link - 21 March

Today, the Productivity Commission published its final report on the Tertiary Sector. At the same time, the OECD Environmental Performance Review of New Zealand strongly highlighted the need for a fundamental change in our approach to building wealth sustainably in this country. The need to create an effective education system that can provide much needed skills to facilitate growth and innovation in high-value activities, such as manufacturing, connect these reports, say the New Zealand Manufacturers and Exporters Association (NZMEA).

“The OECD report clearly shows that with New Zealand having the second-highest level of greenhouse gas emissions per GDP unit in the OECD, a continued emphasis on increasing primary production and tourism will not allow us to meet our international climate change obligations. We need to create wealth by growing our high-value industries. The biggest handbrake on growth there, however, are skills shortages that are crippling in some instances now and will only get worse with the rapid technology changes occurring in high-value manufacturing, for example.” said NZMEA Chief Executive Dieter Adam.

“One could have expected an 18-month review of our tertiary education system by the Productivity Commission to at least recognise, let alone address, the fact that we have a largely publicly funded tertiary education system that fails to deliver what New Zealand needs to grow its wealth as a nation. Unfortunately that is not the case – the Productivity Commission has widely missed the mark here in providing a response to skill shortages.

“Instead, we get a strong focus on the academic side of the tertiary sector and the suggestion that more free-market initiatives will enable to tertiary sector to meet its future challenges. As if we didn’t have enough problems currently maintaining quality in a sector where some barriers to entry are low and oversight can be patchy at best. The Commission’s report also aims to make the system even more student-focused, instead of offering suggestions for how to develop a well-functioning and efficient education system that balances the need to meet student desires with the overall needs of our economy to grow on a sustainable basis.

“A balanced system could be achieved, for example, in part by incentivising studies in areas that we know have current and future skill shortages. For example, the incentives offered by government to those taking up apprenticeships in priority trades and construction in 2013. At the same time, businesses also need to be supported to do their part in training and up-skilling their own workforce.

“The Productivity Commission’s report does have some positive suggestions, particularly the need to review and improve careers advice in schools, and expanding the idea of lifelong learning, helping people continue to gain new skills and adapt to changes over time. All in all, however, it substantially misses the opportunity to address one of the more important issues we are facing as a nation – how to equip future generations with the ability to find rewarding careers in an economy subject to strong winds of change.” said Dieter.

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