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1 New Zealand Economic wealth : Is it good enough? How we trade Nothing is sacred: Defining resource use Paying for the future: Fiscal responsibility or irresponsibility Knowledge capacity Earthquake central: shocks A sclerosis of governance or not Climate change Population structures and diversity Identity, perception and culture

New Zealand 2050

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A description of the key drivers that will shape the future of New Zealand in 2050 as part of the www.tourism2050.com project

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Page 1: New Zealand 2050

1

New Zealand

Economic wealth : Is it good enough?

How we trade

Nothing is sacred: Defining resource use

Paying for the future: Fiscal responsibility or

irresponsibility

Knowledge capacity

Earthquake central: shocks

A sclerosis of governance or not

Climate change

Population structures and diversity

Identity, perception and culture

Page 2: New Zealand 2050

Population Structures and Diversity

Indicator 2010 2050

Population (thousands) 4 303 5 349

Male population (thousands) 2 126 2 661

Female population (thousands) 2 177 2 688

Population sex ratio (males per 100 females)

97.7 99.0

Percentage aged 0-4 (%) 6.8 5.5

Percentage aged 5-14 (%) 13.5 11.1

Percentage aged 15-24 (%) 14.6 11.4

Percentage aged 60 or over (%) 18.2 29.2

Percentage aged 65 or over (%) 13.0 23.2

Percentage aged 80 or over (%) 3.5 9.0

Percentage of women aged 15-49 (%)

48.8 40.7

Median age (years) 36.6 43.1

Population density (population per sq. km)

16 20

Indicator 2010 2050

Population (thousands) 4 303 5 349

Male population (thousands) 2 126 2 661

Female population (thousands) 2 177 2 688

Population sex ratio (males per 100 females)

97.7 99.0

Percentage aged 0-4 (%) 6.8 5.5

Percentage aged 5-14 (%) 13.5 11.1

Percentage aged 15-24 (%) 14.6 11.4

Percentage aged 60 or over (%) 18.2 29.2

Percentage aged 65 or over (%) 13.0 23.2

Percentage aged 80 or over (%) 3.5 9.0

Percentage of women aged 15-49 (%)

48.8 40.7

Median age (years) 36.6 43.1

Population density (population per sq. km)

16 20

Page 4: New Zealand 2050

Economic Wealth: Is it Good Enough?

Wealth Distribution Per Cohort (2007)

According Gareth Morgan (2006) New Zealand is on the brink of a retirement tsunami, a tidal wave of ageing baby boomers is about to swamp a dwindling number of taxpayers.

Page 5: New Zealand 2050

How We Trade

Trade and Enterprise (2010): Export Composition in 2009 ($58b)

Primary -Unprocessed

24%Primary - Processed

25%

Mfg - Simply Transformed

7%

Mfg -Elaborately

Transformed14%

Misc/Confidential Trade

4%

Tourism16%

Education3%

Services & Royalties

7%

NZ Exports 2009

Page 6: New Zealand 2050

6

How We Trade

Median Earnings $NZ by Sector 2008

$21,730 $21,700$13,170

$38,900

$24,010$33,170

01000020000300004000050000

Agric

ultu

re,

Fore

stry

and

Fish

ing

Reta

il Tr

ade

Acco

mm

odati

on

and

Food

Serv

ices

Tran

spor

t,Po

stal

and

War

ehou

sing

Arts

and

Recr

eatio

nSe

rvic

es

Tota

l Ind

ustr

y

Source: Statistics New Zealand (2010)

Page 7: New Zealand 2050

7

Paying For the Future

Population ageing is important fiscally because 25% of government spending is currently spent on the 12% of the population aged over 65.

Population ageing is likely to cause a slowdown in economic growth because of the shift to a relatively smaller working-age population.

Government debt as a % of GDP (Source: New Zealand Treasury)

Page 8: New Zealand 2050

8

Knowledge Capacity

Hungary

Czech

Republic

Portugal

United St

ates

Poland

Germany

United Kingdom

Switz

erland

Italy

Ireland

OECD avera

ge

Netherlands

Finland

France

Canada

Australia

Norway

Sweden

Denmark

New Zealand

-60

-30

0

30

60

90

Growth in percentage point between 1997 and 2007 Deviation from OECD-19 average 2007

Average relative earnings growth at the tertiary level of education between 1997 and 2007 and average relative earn-ings at the tertiary level of education deviation from the OECD average (2007)

%

Source: OECDDegrees in tourism, performing arts, visual arts, and graphic and design arts earned between 10 and 20 percent less than degrees in humanities.  A tourism degree resulted in 11% more earning compared to non graduates in the same field, compared to the national average of 25% (Scott 2010)

Page 9: New Zealand 2050

9

Knowledge Capacity

Slovak RepublicMexico

AustraliaIceland

NetherlandsCzech Republic

NorwayPoland

GermanySpain

TurkeyNew ZealandLuxembourg

AustriaPortugalCanada

United StatesIreland

BelgiumDenmark

KoreaHungary

FranceSwitzerland

ItalyUnited Kingdom

FinlandJapan

Greece

0 10 20 30 40 50 60 70 80 90

78.86 59.52

56.21 54.92

53.86 52.69

51.10 49.69

48.22 48.22 48.02 47.77

46.66 46.35 46.10 45.65 45.52

43.92 39.64

37.08 37.04

36.21 35.60

32.71 31.25 30.63 30.61 30.46 30.06

Broadband average monthly subscription price, Oct. 2008, USD PPP

Listen to Futurist Dr Patrick Dixon discuss why consumers won’t wait here and the future of mobile technologies here

Page 10: New Zealand 2050

10

Identity Perception and Culture Please indicate how much you agree or disagree with each of the following statements about NZ in 2008

Agree % Disagree % Neither agree or disagree %

Strongly agree %

Strongly disagree %

NZ is a bit old-fashioned 15.59% 45.49% 21.28% 1.06% 16.02% NZ is a great place to raise a family

25.07% 0.73% 2.61% 70.80% 0.59%

NZ is like Britain in the 1950s 6.64% 35.48% 30.49% 1.09% 25.87% NZ lives in Australia's shadow 23.39% 40.44% 15.16% 2.51% 18.17% NZ is doing a great job seizing all its opportunities in the global economy

31.65% 21.74% 37.73% 5.12% 3.20%

Maori and Pacific Island cultures are an important part of what makes NZ unique

48.36% 4.00% 8.06% 38.32% 0.99%

NZ is strongly environmentally conscious as a country

48.86% 9.68% 12.36% 27.22% 1.39%

NZ puts too much emphasis on "work-life balance"

3.34% 50.94% 32.18% 0.99% 12.26%

NZ "punches above its weight" in global affairs

33.30% 23.42% 31.78% 7.93% 3.14%

NZ is too much of a career dead-end for the most talented Kiwis

38.32% 23.62% 26.69% 8.72% 2.35%

NZ isn't really doing as well as Kiwis give themselves credit for

26.99% 29.07% 36.37% 4.16% 2.97%

NZ is a great place to invest in business venture

27.22% 14.77% 53.12% 3.11% 1.26%

I'm optimistic about NZ's economic future

53.22% 10.14% 29.34% 6.21% 0.79

NZ is a great place to retire 37.23% 1.22% 4.29% 56.43% 0.30% NZ arts, film and literature are world-class

45.56% 7.73% 20.55% 24.51% 1.06%

NZ is doing a great job promoting its image in the rest of the world

52.82% 4.53% 10.80% 30.99% 0.53%

NZ has really moved ahead in the last 10 years

45.85% 6.31% 22.93% 22.93% 1.65%

Iden

tity Percep

tion

and

Cu

lture

Page 11: New Zealand 2050

11

Identity Perception and Culture

Too New Zealand, rugby is the symbol of national identity which is the cornerstone of conversations, stories, life and culture and some would say there isn’t anything else …and it is the All Blacks KaMate haka that is the symbol this identity (Yeoman 2010)

Some people might see a New Zealand identity in aspects of New Zealand history or in New Zealand achievements in sporting, artistic or other endeavours, while others might see it through a sense of national characteristics or traits, or through national symbols and icons. Mäori culture may form one aspect of national identity, since it is both unique to New Zealand and a part of our identity in the outside world (Cultural Identity 2009)

Page 12: New Zealand 2050

12

A Sclerosis of Governance

"There have been numerous attempts since the 1980s to make improvements to

regulatory processes. The problem is that politicians have poor incentives; they must get

re-elected, and the political cycle is short. Politicians are vulnerable to interest group

pressure, and at times invite that pressure by pandering to various interest groups in search of votes. It's unfortunate, but it's a fact of life

in a democracy” (Hide 2010)

Page 13: New Zealand 2050

13

A S

cler

osi

s o

f G

ove

rnan

ce

New Zealand’s Global Competitiveness Index Results (Source WEF 2010)

Pillars World Ranking Score

Institutions 5 6.03

Infrastructure 35 4.64

Macroeconomic Stability 33 5.24

Health and Primary Education 4 6.43

Higher Education and Training 11 5.49

Goods and Services Market Efficiency

8 5.20

Labour Market Efficiency 11 5.12

Financial Market Sophistication 3 5.69

Technological Readiness 23 5.24

Market Size 59 3.89

Business Sophistication 34 4.64

Innovation 23 4.10

Page 14: New Zealand 2050

14

Nothing is Sacred

California spends approximately $400 million annually running national parks and beaches. California’s budget deficit is now $24.3 billion and Governor Arnold Schwarzenegger is proposing closure of 220 state parks to reduce this deficit (Young, 2009).

Page 15: New Zealand 2050

15

Earthquake Central

According to the ‘Its Our Fault’ project the major fault running through Wellington is 50% less likely to rupture than previously thought. New findings show the Wellington fault ruptures every 900 years and last ruptured about 300 years ago. Therefore, a catastrophic earthquake is predicted for 600 years (GNS Science, 2009).

Watch the TV programme, Aftershock which simulates an earthquake in Wellington

Page 16: New Zealand 2050

Climate Change

Direct effects………

• Shipping reasonably low value goods long distances

increasingly unsustainable.

• Potential emissions trading regime, bio fuels and

energy efficiency.

• Increases in temperatures of between 1.8 and 4.0

degrees.

• Extreme weather, rising sea levels and changed

rainfall patterns.

• Higher temperatures in the South may boost primary

sector productivity.

• Relatively favourable climate may mean NZ becomes

a preferred holiday destination (potential to attract

talented migrants)

• Strengthen competitive position but disrupt global

supply chains.