-Sean Doherty

Sir Paul Callaghan famously declared: “New Zealand is poor because it chooses to be.” Nearly 15 years on, with the decision to dissolve Callaghan Innovation the agency bearing his name, these words ring truer than ever in 2025.

At this turning point, New Zealand must decide: Will we finally address the innovation deficit by embracing high-value manufacturing, or continue on a path of slow, incremental change?

The productivity trap

New Zealanders are admired for their work ethic and creativity. Yet, the nation continues to lag behind its global peers in productivity and prosperity.

The key reason? An overreliance on low-value, commodity-driven industries rather than advancing technology-rich, high-value sectors.

Despite technological progress worldwide, New Zealand’s per-capita prosperity growth has not matched high-value, knowledge-led economies over the past two decades.

International comparisons

• Israel, Singapore, and Ireland are cited as examples of nations that have transformed through purposeful investment in advanced research, tech-enabled manufacturing, and robust support for innovation and entrepreneurship.
• These countries consistently invest in science, technology, and high-value manufacturing, creating dynamic economies with sustained prosperity.

The power of innovation

Sir Paul Callaghan stressed that true prosperity can only be achieved by focusing national efforts on innovation-intensive sectors.

Efforts to “pick winners” in areas like biotech, agritech, and clean tech have delivered mixed results, highlighting that the most transformative advances come from empowering New Zealanders to innovatively solve challenges and seize opportunities—often in surprising, unscripted ways.

“Prosperity doesn’t grow from following the script of what other Governments are doing; it emerges from innovators taking risks and building new niches.”

Time for a new roadmap

The closure of Callaghan Innovation and changes to science agencies will achieve little unless policy, business, and scientific leadership rally behind a new, bolder strategy. This pivotal moment calls for action:

1. Backing High-Tech manufacturing

• Shift from reliance on mature primary industries.
• Direct support toward world-class, high-value manufacturing and tech businesses.

2. Long-Term science & manufacturing investment

• Match countries like Australia and Israel not only in words, but in actual investment and coordinated strategy.
• Ensure business and academics can leverage cutting-edge R&D for commercial impact.

3. Commercialisation partnerships

• Forge commercialisation models where both businesses and research organisations genuinely benefit.
• Move beyond short-term, low-risk projects to support ventures with the potential for step-change growth.
• Ensure that Manufacturing is a key part of the new advanced technology public research office (PRO)

Breaking the cycle: Personal reflection

With five years’ experience in New Zealand’s innovation system, the pattern is clear: Quick-win, low-risk projects rarely deliver the bold transformation required. The solution?

Championing bold leadership and relentless adoption of new technologies. In the workplaces where this happens, teams are energised and engaged—and businesses become both more profitable and sustainable.

A call to manufacturers: Engaging government

Every encounter with a Government Minister is a chance to advocate for the future of New Zealand manufacturing. Here are focused questions to elevate the conversation:

• What long-term strategies does the Government have to strengthen and grow the manufacturing sector in New Zealand?
• Is the recent investment boost enough to truly improve productivity, or are further policy measures targeting productivity needed for lasting impact?
• With a projected shortfall of 23,323 manufacturing employees by 2028, how will government policy address workforce shortages?

Staying informed and asking these critical questions can help ensure that government policy aligns with the real needs of New Zealand manufacturing and drives the necessary transformation.

*Hanga-Aro-Rau Workforce Development Council & Deloitte, “Post COVID-19 Workforce Development Needs in New Zealand’s Manufacturing and Engineering Sectors” (2022).

*OECD Science, Technology and Innovation Outlook 2023.