Brain Drain is the Achilles Heel of New Zealand’s Recovery
Latest MasterCard Worldwide Insights Report Outlines New Zealand’s Potential post Global Financial Crisis
Auckland, 19 March, 2010: A brain drain of talent could be New Zealand’s Achilles heel in its continued economic recovery, according to the latest MasterCard Worldwide Insights Report.
The report’s author, Dr Yuwa Hedrick-Wong, Economic Advisor, Asia/Pacific, MasterCard Worldwide, said the combination of New Zealand’s strong entrepreneurial focus and its positive business environment may not be enough for a full recovery, unless the loss of talent across the Tasman is addressed.
The findings are contained in the most recent MasterCard Worldwide Insights report, ‘Growth Prospects of Australia and New Zealand in the Post-Recovery Global Economy’ which identifies areas of strength and potential growth for recovery post global financial crisis.
“New Zealand’s “Achilles heel” is the persistent out-migration to Australia with more than 20,000 New Zealanders migrating to Australia annually in recent times,” Dr Hedrick-Wong said.
“These are a particularly self-selecting group of people. They often represent younger, well-educated New Zealanders, typically with a greater risk-taking attitude which tends to result in their being more entrepreneurial.
“This is a damaging drain on the intellectual and entrepreneurial ‘gene pool’ of the country. It is not an exaggeration to say that New Zealand can reach its true potential, only if it can stop this haemorrhaging of talent,” says Dr Hedrick-Wong.
According to the Insights Report, one way of keeping this group in the local economy lies with investing in their talent and out-sourcing of the professional service sector.
“New Zealand’s workforce is highly educated and technologically savvy. Domestic services in health, education and technology all hold promising potential.”
New Zealand’s relationship with China
The report also shows that China’s imports from New Zealand are growing slightly faster than overall growth in China’s imports. This indicates that New Zealand was steadily expanding its market share in China over the 2000 to 2008 period.
New Zealand’s exports to China grew from US$400 million in 2000 to US$1.8 billion in 2008 with the share of exports subsequently growing from 3.2% in 2000 to 5.9% in 2008.
“China’s strong demand for New Zealand imports has been particularly beneficial during this quiet economic period. So, while continued growth in exports to Asia is one way to assist recovery, fostering domestic entrepreneurism is a significant opportunity to further accelerate New Zealand’s recovery,” said Dr. Hedrick-Wong.
Opportunities and challenges facing New Zealand
“To ratchet up economic growth, ‘brute force’ in the form of more capital and more labour will not be sufficient. What is needed is a combination of innovation and creative ideas,” said Dr Hedrick-Wong.
The report identifies that Total Factor Productivity (TFP) – which refers to how capital and labour can be combined in ever more efficient ways to produce more without necessarily increasing production inputs - will need to be raised.
“TFP is the essence of what is referred to as the knowledge economy and the future of New Zealand lies with expanding in this area.”
Based on research and analysis, the report uncovers New Zealand as an encouraging environment for entrepreneurs, citing the World Bank’s 2010 ‘Ease of Doing Business’ report which placed New Zealand’s overall business environment second only to Singapore.
”According to the World Bank, it’s estimated that it takes only three days to start a business in New Zealand, so the country should be thriving with start up businesses.
“Social mobility is strong in New Zealand, with 74% of individuals with a net worth of over $10 million being self-made; which compares very favourably with 66% in Australia, 61% in the UK and 59% in the US,” says Dr Hedrick-Wong.
MasterCard and its Suite of Research Properties
MasterCard Worldwide Insights is part of MasterCard’s ongoing research and analysis of business dynamics, financial policies and regulatory activities in the Asia/Pacific, Middle East and Africa region. Over 70 Insights reports have been produced since 2004. The reports do not represent MasterCard financial performance.
In addition to these Insights report, MasterCard also releases a series of Indexes, ranging from the MasterCard Worldwide Index of Consumer Purchasing Resilience to the MasterCard Worldwide Index of Consumer Confidence and MasterCard Worldwide Index of Women’s Advancement. MasterCard has also released a series of four books on Asian consumer insights, authored by its Asia/Pacific economist, Dr. Yuwa Hedrick-Wong and published by John Wiley & Sons. The MasterCard Worldwide Insights reports and Indexes are available at www.masterintelligence.com
About MasterCard WorldwideMasterCard Worldwide advances global commerce by providing a critical economic link among financial institutions, businesses, cardholders and merchants worldwide. As a franchisor, processor and advisor, MasterCard develops and markets payment solutions, processes approximately 22 billion transactions each year, and provides industry-leading analysis and consulting services to financial-institution customers and merchants. Powered by the MasterCard Worldwide Network and through its family of brands, including MasterCard®, Maestro® and Cirrus®, MasterCard serves consumers and businesses in more than 210 countries and territories. For more information go to www.mastercard.com. Follow us on Twitter: @mastercardnews.
About Dr Yuwa Hedrick-Wong, Ph.D. Economic Advisor, Asia/Pacific, MasterCard Worldwide
Dr. Yuwa Hedrick-Wong has served as strategy advisor for over 25 years to over 30 leading multinational companies in the Asia/Pacific region and today is the economic advisor to MasterCard Worldwide in Asia/Pacific.
As the economic advisor to MasterCard Worldwide in Asia/Pacific since 2001, Dr. Hedrick-Wong has been responsible for monitoring and forecasting economic growth and emerging business development trends in the region. In this capacity, he has devised market entry strategies, dissected and addressed public policy challenges, analysed business impacts of demographic and lifestyle changes, and assessed market-specific business development potential and constraints.
In order to tap deeper local knowledge and market-specific insights, Dr. Hedrick-Wong chairs a global knowledge panel of leading economists, policy analysts, academics and business strategists, with members including experts from China, Japan, South Korea, Hong Kong, Southeast Asia, India, Europe, Canada and the US for regular discussions, exchange of perspectives and knowledge sharing.
Dr. Hedrick-Wong is a frequent speaker at numerous international high-profile conferences and is also often invited to provide commentary in the media on current economic, policy and business issues in Asia/Pacific. He is a published author in consumer markets, economic development, trade and international relations.
Prior to moving to Singapore, he served for three years as Chief Project Economic Advisor in the British High Commission in Dhaka, Bangladesh; with responsibilities later extended to cover the Indian sub-continent. In the early 1990s he worked as a consulting economist in Sub-Sahara Africa on behalf of several multilateral institutions, covering the countries of Ghana, Nigeria, Uganda, Kenya and Tanzania. Before his African sojourn, he was managing partner in a Vancouver-based economic consultancy that provided investment and market advice on Asia to some of the leading Canadian companies and industry organisations.
As a student of philosophy, political science, economics and history, Dr. Hedrick-Wong received his education in these disciplines at Trent University and post-graduate training at Simon Fraser University and the University of British Columbia in Canada, where he received his Ph.D. His post-doctoral level training was in health economics, energy and environmental economics, and scenario forecast and planning.