Resilience looks different depending on where you sit. For some nations it means a dramatic increase in defence spending. For others, it is about securing energy supply, derisking global supply chains, or reducing dependence on hostile or unreliable trading partners. The common thread is that countries are actively debating how to strengthen their economic and strategic foundations in an increasingly unstable world.
Does resilience for us mean improved access to markets that continue to operate under World Trade Organisation rules? Does it mean lowering energy costs so manufacturers can remain viable? Or does it mean investing more seriously in defence so we can play a credible role in a Pacific region that is increasingly shaped by great-power competition?
These questions are often bundled together under what has become known as industry policy. Around the world, governments are openly discussing where and how they should intervene to support long-term national resilience.
Industry policy can take many forms. It might involve direct subsidies, regulatory change, targeted public investment, procurement preferences, or support for research and development. Sometimes these policies are clearly justified. Few would argue, for example, that Europe should not be strengthening its domestic defence industrial capacity. At other times, industry policy is far less defensible – subsidising unproductive incumbents is a familiar and costly mistake.
In New Zealand, however, the debate about industry policy has been remarkably muted.
We remain stuck in arguments from the 1980s, too often dismissing any discussion of strategic investment as “picking winners” or “corporate welfare”. While that scepticism can be a useful starting point, it ignores a basic reality: New Zealand already has an industry policy, and we have had one for decades.
We have chosen agriculture and tourism as our national winners. We invest heavily in agriculture through publicly funded research organisations, and we support tourism through taxpayer-funded promotion and infrastructure. These choices have served us well. Both sectors have been central to our standard of living over many years.
But we need to be honest about what this is. It is industry policy.
If we refuse to acknowledge that fact, we will simply continue backing the same sectors by default, without seriously engaging with how the global environment is changing – or whether additional investments are needed to strengthen New Zealand’s future resilience.
At its core, resilience requires prosperity. A country cannot become more resilient if it cannot generate sufficient wealth to pay its national bills. Resilience and prosperity must be considered together.
That leads me to a clear proposal for New Zealand’s future industry policy we should invest far more seriously in science.
Despite repeated commitments from governments of all stripes, New Zealand’s investment in science and research remains well below that of our peers. We currently spend just over 1.5% of GDP on research and development. Across the OECD, average spending has risen to around 2.7%, nearly double our level.
The consequences of this gap are visible. In 2023, New Zealand recorded around 441 patent applications per million people. Denmark, a country we often compare ourselves to, recorded approximately 1860.
We have recently restructured our public science system, and that reform was necessary. But reform without investment will not deliver results. Nor should science funding be limited to research that is immediately close to commercial application. A healthy science system requires investment across the full spectrum, from investigator-led basic research to applied, business-focused development.
All science carries the potential for discovery that benefits society, whether through new industries, improved public services, or deeper understanding of the world around us. It is also how young scientists learn to do science properly – by exploring questions whose value may not yet be obvious.
Investing in science as a system will not deliver instant returns. But over time, it is difficult to imagine any public investment that offers greater long-term benefit. Scientific capability underpins productivity growth, innovation, and higher-value employment.
To maximise that return, we must also ensure that knowledge generated in our universities, research institutes, and laboratories can be widely used – not only by start-ups, but by existing businesses, community organisations, NGOs, and government agencies. Our science system should also be open to global collaboration and investment. If overseas firms can help commercialise New Zealand ideas, that should be welcomed. They will pay for access, and the proceeds can fund the next wave of discovery.
Science-based jobs are among the highest-paid in any economy. Expanding them would lift national prosperity and, in turn, give us greater freedom to invest in health, education, and defence as the world becomes more uncertain.
Choices about how we allocate public money are never easy. But in an era of sustained global instability, avoiding those choices is itself a decision. If New Zealand is serious about resilience, the most powerful step we can take is to radically improve how we invest in science.
