It's refreshing to click on a headline in the form of a question and have the article explain why it's the right question to be asking, and not just following Betteridge's Law. I lived in New Zealand for about 5 or 6 years, and I saw huge numbers of people just living on welfare because they could - that's probably got a lot to do with low GDP. Normally, I would see that as a bad thing, but I think New Zealand's relative lack of corruption and the friendly disposition of almost everyone illustrates there is more to life than productivity, and the results of the atmosphere and culture speak for themselves. As fiscally conservative as I may be, I had to admire that. Additionally, I hate frivolous lawsuits, and having the government compensate you so readily for injuries really seemed to reduce the way people would resort to "just sue them". Perhaps there's moral hazard and I'm not smart enough to know how one would quantify that, but again - I had to admire that.
A good friend of mine studied abroad in Australia, and then met and moved in with a Kiwi and then lived in New Zealand with him for a while.
He has now moved to the US with her. Her brother is a good friend of mine, and is incredibly irritated with his lack of drive and motivation. I've hiked with the guy, and I don't think he's lazy at all. He just doesn't value money, and his view on life is that he's going to teach school, and do whatever it takes to make his lifestyle match his income, rather than the other way around.
He told me that this is a cultural thing in New Zealand. Nobody pressures you to achieve a certain level of material success. The view is that if you are self-sufficient, then you've arrived. Nobody judges you for not being a "good provider."
Me, as an American, I envy this. I have tremendous pressure from my extended family to make money, so I do. (Plus, in this country, you can't have a decent school system and/or health insurance unless you have a good job)
"Nobody pressures you to achieve a certain level of material success."
I live here in New Zealand and thats quiet true. There are 3 billionaires in NZ and almost no one knows who they are. The only guy that is living a noticeable extravagant lifestyle is Kimdotcom, but that guy's german.
I would disagree that "poor are decidedly disliked" here as a rule. There are plenty of "poor" that are accepted, liked and even esteemed. Think of the starving artists, musicians, olympic athletes, working class poor, the startup set, etc. There is dislike for the poor that resort to crime, thuggery, drugs etc. At least this is how I see it from my middle class perspective.
> Think of the starving artists, musicians, olympic athletes, working class poor, the startup set, etc
Maybe you are right and I am just cynical. But I have felt that some of these groups (with the exception of working class poor) are tolerated because of their success potential than for their status as individuals. And even with that a large number of people appear to disdainful of unsuccessful people in these fields.
And about the only people who seem to like the working class poor are politicians who see them as a voting bloc of sorts.
Since the days of our founding fathers we have valued hard work and initiative and I'm glad that many of us still do. Personally I respect the working class poor and I feel that most of my peers do also, it gets sticky when efforts are made to artificially raise their positions with handouts rather than hands up. I don't think that the others are tolerated for their potential, rather esteemed for their initiative and dedication.
Even those who "hate the poor" here don't hate the poor, they hate the lazy. They simply equate being lazy with being poor. But if you're poor and working (or even poor but not imposing on society) then even the right-wingers I'd know of would have tons of respect.
If anything the desire for status seems to be reviled more and more in America too.
the other person is wrong, the poor are definitely hated in america. they are villianized as lazy welfare queens. remember the 47 percent thing with Romney? turn on fox news for 10 minutes, John Stossel even villianizes the homeless. they also try to get rid of school lunches/food assistance for the poor.
Fox News is the most watched cable news channel, so surely their views align with some portion of America. Even if its not the majority view, its still a powerful force.
Be careful with the dissonance between your social circle and "everyone".
(In this case for instance - living in the midwest puts me into contact with a very large number of people who's beliefs align nearly perfectly with the television narrative).
One thing you have to remember is that in general, Americans are culturally one of the most generous nations in the world. Broadly speaking, that includes foreign aid and domestic welfare as well as voluntary charity. But at that same time, the US is an industrious nation that prizes hard work. It's a fine line to walk and people fall through the cracks in the system.
Nevertheless, it's extremely uncharitable IMO to suggest that the poor are "hated" in America.
You mean the same country where the word "social" is used as a slur? Or where if somebody receives welfare they are looked down upon and called lazy?[0]
Broadly speaking, no, foreign aid given by the US is barely top 30 per capita.
I don't disagree, the dissonance comes from conflating source to truth. It was once expressed in the adage, "It must be true, I read it in the newspaper!" which of course has no such authority. And more importantly how it is true is important as well. My philosopher friends go on and on about this. Critical thinking is really helpful here, and yes there are many folks who are not critical thinkers.
what’s your point? everyone knows this. Who said I dismissed them because they were from those sources? use logic just for one second. The original person that the poor aren't looked down upon, and i responded by listing people/shows that look down on poor people. What the hell does that have to do with judging a point by its source? its a totally different subject. I agree with you, judge the logic, not the source. That's why I disagree that only women or minorities can have an opinion about issues concerning them.
That's the media for you, and not necessarily "Fox" or whatever x-wing group you seem to dislike. Fox news is only seen as "bad" because it doesn't exaggerate reality to the side that the majority like. The other news media outlets do the exact same thing, just towards the other side of the narrative.
Both sides of the media play on peoples' emotions. The real question is: are you intellectually honest enough to entertain views and thoughts for their own merit without dismissing them flatly just because "they're from Fox", "John Stossel", or "Romney".
what’s your point? everyone knows this. Who said I dismissed them because they were from those sources? use logic just for one second. The original person that the poor aren't looked down upon, and i responded by listing people/shows that look down on poor people. What the hell does that have to do with judging a point by its source? its a totally different subject. I agree with you, judge the logic, not the source. That's why I disagree that only women or minorities can have an opinion about issues concerning them.
Outside of a few possible sports, running, soccer, etc. I doubt there are more than a handful of poor athletes that are able to compete. Most Olympic activities require intensive training and use of facilities that doesn't come cheap. Hours spent training are hours not spent earning enough for food and housing, and I don't think caloric and nutritional intake from a soup kitchen would be enough to sustain an athlete.
The startup set are almost all wealthy, if not in assets then definitely in schooling, parenting, confidence. Where did all the most successful entrepreneurs grow up, go to school, what professions are their parents in. It's a pretty homogenous group really.
The poor are treated like shit in the US (and in most of the world), and their concerns and opinions mean nothing to those in power.
Nonsense.
Starving artists and athletes like who? The esteemed poor? like the people who get lambasted for buying red bull with food stamps?
Americans idolize thugs who make money (biggie smalls, chris brown, dick cheney)
and those who realize they have enough ignore the rich
If you only could. The problem is that in the US a great portion of taxes are locally raised and spent, and the way of dealing with poverty is to price the poor out of areas where they aren't wanted.
To get access to halfway decent schools you need to move to the suburbs, and what's available there in housing is hugely outsized. You cannot save on heating, cooling, cleaning and enclosed space, nevermind the commute, because that economic option does not exist. So you bite the bullet with everyone else and you cannot choose not to play the game.
I'm not sure you can't get halfway decent public schools in the cities, but they tend to be local to wealthier neighborhoods. And suburbs in the area I'm from tend to at least have apartments and townhomes, which are a nice middle ground (at least as far as saving on heating, cooling, cleaning, space, cost). The commute still sucks, of course.
In NYC at least, you don't have to live in a pricey neighborhood in order to get your kid into a good public high school. Your kid will, however, have to do well on a standardized test.
If only. That would be a great form of funding community governance. Where local communities help themselves up, instead of practically begging for scraps from a wealthy government that really doesn't care until it gets them votes.
Change has to come from within. And it won't come so long as people think like you. i.e. "Change can come when funding comes from better places" Which completely ignores the real problems and real difficulties facing real people in those places you seem to not want to live in. Ask yourself why you don't want to live there.
Local funding means wealthy neighborhoods are lavished with infrastructure, and can provide top of the line schooling and opportunities for their precious offspring.
Meanwhile any child unlucky enough to grow up poor is greated with decay and dysfunction at every turn, is never given the education nor the opportunities to succeed, or have interests much above basic survival. Upward mobility is basically zero. Welcome to feudal America.
Property taxes are very regressive in the sense that rich people typically live with other rich people. Ghettos and shanty towns are a direct result of thinking such as yours.
Ah yes, so it's my fault that groups of individuals decided to not take care of their neighborhood, right. Sorry, no, but people need to take responsibility for their own actions. And I will in no way share blame for a second generation further ruining their kids' futures because they're too short-sighted and expect the rest of us to do it for them.
We as a society can only share blame for one generation. The next one is on the parents.
No, I'm saying it's the parents' fault for their children remaining poor. Or did you not read anything I wrote and just blatantly jumped to conclusions?
As someone who has come from a poor family, I know full well what sacrifice and hard work can do to uplift your children's prospects in the world. Even if that means drastic life changes. And as a consequence of that, I will not accept peoples' excuses for remaining in poverty. Nor will I share the blame for their failings.
If someone is a bit more ambitious but still wants a mix of the aforementioned lifestyle I would recommend Australia. Much bigger population and resources and better opportunities than NZ with a good safety net that doesn't cost the government much and doesn't suffer rampant abuse. I wouldn't recommend NZ for an American, except for perhaps retirement; it would just be too tough, the isolation and small pop. would be crushing for someone used to living in a giant country of 330M consumers.
I don't know if I'd go that far. As an American who lived in NZ for a few years I got a very pacific northwest vibe from the NZ cities. If you like Portland or Seattle, Wellington is sweet as.
Hah .. I spent the first 25 years of my life in NZ (10 years in Wellington) and have lived just outside of Seattle since 2007. I tell people that the PNW is the closest to NZ that I've seen in America, both culturally and landscape.
I lived in NZ (mostly Christchurch) for about a year, and I think your characterization is way too general. NZ has a similar population to Colorado (where I now live) and a similar land area. It is far away from where my family lives (and hence I am not still there), but "crushing" "isolation" it is not.
Kiwis are some of the warmest folks I have ever met. When my wife and I arrived at the airport our friends had forgotten which day we were arriving and had a 3 hour drive to get to us. The random woman who's phone we borrowed proceeded to argue with our friends over the phone about who's house we would stay at that night.
We saw similar hospitality everywhere we went. Its a stark contrast to the US.
You're selling the US short. When I was there last year, I was passing through Gettysburg, and stopped to get something to eat. You might expect a town like Gettysburg to be really over tourists, but whilst I was trying to figure out how to make a parking meter work, the first random stranger walking past offered first to give me done change, because he thought that was the problem, and then once I had explained that I was a clueless Aussie who couldn't figure out how to make the damn thing work, showed me what I was doing wrong.
Or when I was in a small town in Virginia with a friend, we were in a shop, and discussing whether the museum there would be open the next day. The shop assistant overheard and offered to call them for us. Even people in DC were wonderfully polite and friendly! So much so that I'm heading back for another holiday in a couple of weeks time.
Just in case people aren't aware, this advice presumably doesn't apply to New Zealanders. We have specifically been targeted over there so that many benefits don't apply. It's rather sad - Australians qualify for benefits in New Zealand.
We don't all live in crowded cities or sprawling suburbs. My neighbor has a 1/4 mile drive from his house to the road. On my street, there are only 5 houses. And this is only 10 miles outside town! A couple minutes south and the density trends towards one house per mile.
It's like that where I am in eastern Canada people go out smoke weed and drink every weekend if not every night!
Most have menial jobs just enough to get by with government assistance.
Yet everyone goes to Cuba, the Dominican Republic, Mexico every year and they make nothing. I can see how all-inclusive vacations became so popular.
I work with 20-year-olds who laugh if they are sent home at work for doing something wrong or if sent home due to some issue at work. A few have travelled all over Europe, Australia, South America yet make nothing as a salary I probably make four times what they do but can't see how they can afford it let alone me.
People are OK with you if you pay your bills nobody freaks out or looks down on you if you aren't super successful or even if you don't work full-time.
Oh god, that was the most hilarious (yet accurate) description of Quebec I have ever heard... Thanks!
> I probably make four times what they do but can't see how they can afford it let alone me.
I'm sorry to break it to you but you are paying for it through taxes. Ok, that's an over-generalisation but there is some truth to it. It's very easy to get by without a salary in Quebec due to the multitude of governmental services (I recall reading that over 50% of Quebec's economy is driven by the public sector). I have a friend who is on welfare and still manages to go to Cuba every year.
Personally, I'm a fan of the attitude (not caring too much about work/money) on an individual level. For a while, I was living the 3 months freelancing / 3 months vacation lifestyle and it was great. That being said, I'm not a fan of the governmental policies which promote it at the expense of other equally admirable attitudes (e.g. entrepreneurship/hard work). It's not all fun and roses. The economy of Quebec has been suffering a lot from those "big government" policies and Quebec has now become one of the poorest province in Canada despite its abundance of natural resources and highly educated population. Of course, I implied here that there is a cause and effect between those policies and the economy but not everyone would agree with me on this. In fact, a sizeable fraction of the population (http://en.wikipedia.org/wiki/Quebec_solidaire) actually advocates for economic degrowth...
Ok, I'm definitely going off topic now.
> If your family invested tremendous amount to raise you and send you to a good school, is it bad that they want you to be successful?
I have trouble here with the word "invested". There's nothing wrong with giving your children a good education, and there's nothing wrong with wanting them to be successful for themselves and on their own terms. But an "investment" is exactly the wrong way to look at it. An "investment" is something people expect a return on. Having your child do well in life is not a return to you on your "investment".
Look again at what JPKab wrote:
>> I envy [the lack of pressure in NZ]. I have tremendous pressure from my extended family to make money, so I do.
Someone who feels this way is not living their own life.
I work hard to make money and be successful too. But I don't do it because someone else wants me to. I do it because I want to, and I do it the way I want to do it. So I don't envy the bucolic New Zealand lifestyle. It's right for some people, I'm sure, but it would bore me to tears in a matter of days. (I'm not saying I couldn't live in NZ, but I would still want to do the kind of work I'm doing.)
I used strong language quite intentionally. JPKab needs to figure out what he/she really wants to do in life, and that's going to require putting an emotional wall up to block out all that pressure. It won't be easy, but the reward will be an authentic life.
I had not heard of Betteridge's Law, so I had to look it up [0]. Given I only just became aware of it due to your comment (thank you, by the way: good comment) it feels strange to be pedantic about it, but the question in the headline is not a yes/no question and therefore seems immune to Betteridge's Law. :)
I went through the same exercise and came to the conclusion that the commenter just name-dropped Betteridge to sound smart. (At least that is what I would have done.)
Right - Betteridge's Law does not apply very well. My point was more that an article that presents an open question is interesting food for thought - as opposed to articles devoid of substance that seek to answer everything in their headline. Now that you know the term, look in the comments every time you see a '?' on the front page, and you'll see the law mentioned. It is not a claim to be smart, as the peer claims, it is an indication that I spend too much time on HN.
Not necessarily higher but at least equal to the best. According to its HDI[1] New Zealand is ranked 6th, bellow the USA but above Japan, Switzerland and South Korea.
This is similar to the way that European countries seem to lose out to the US in wages yet when you take into account the time spend on holidays and lack of overtime you see that the gap essentially disappears.
Right. I used to criticize New Zealand a lot because it doesn't jive with my mind's ideas of how government should work, until a friend pointed out how much New Zealand was #1 in many areas that are considered signs of an ideal society. Makes me question my ideas :)
I genuinely think it's time for an overhaul of how we rate standard of living. Consumption is not a good measure, and it's too closely tied to "more money means better"
On the other hand, Norway, Sweden, and Finland are all above the line, meaning they have higher GDP per capita than predicted. The only nordic country below the line is Denmark, and they are barely below the line.
So, you are saying that the nordic countries are similar, but the very paper this blog post is based on shows they are not at all economically similar.
On the other hand, Norway, Sweden, and Finland are all above the line, meaning they have higher GDP per capita than predicted. The only nordic country below the line is Denmark, and they are barely below the line.
Oil revenues make such comparisons tricky at best. You would need to consider the hypothetical case of a New Zealand with lots of oil to sell, or a Norway without any.
How exactly Sweden, Finland, Denmark and Iceland benefit anything from oil? It's only Norway that has significant oil reserves, and all other have none.
Well, there's Ikea, Nokia, and... hmm, I'm not sure what economic factors are important in Denmark and Iceland. But I'll bet they're very different than those prevailing in New Zealand, whatever they are.
The nordic countries are known for high taxes, excellent social welfare benefits, free healthcare, free education, low crime, low corruption, high quality of life and so on.
Sure they have some big companies but with a few exceptions they aren't build on innovation nor entrepreneurship. Most large companies in the nordic countries are quite old and the new ones that start there quickly move to the US, England or Asia if they want to scale.
Early-rising New Zealander here (it's 5am folks!).
Bullet points for starters:
1. We are genuinely relaxed people, life is good, weather not too hot or too cold, food easy to get or grow, housing not horribly expensive, healthcare obtainable for all, education as close to free as we can make it and an overall low crime and corruption rate. So the majority of us go to sleep at night, overall, not worried about losing our livelihood one day to the next or not having enough to eat. Similar in this respect to the Northern Europeans.
2. Tall poppy syndrome. We don't like people standing out from the crowd in terms of personality, flamboyance, income - to fit in, you maintain a level of 'bloke/girl next door'. Even if you have tons of money or you are flamboyantly dressy. If not, cue media outcry and attacks, so you move overseas where you can disappear among the masses.
3. Geography! You have no idea how expensive it can be to live here. We work hard to export all our fine goods to you and work harder to import the things we love.
4. The knowledge economy
We are messing up here. Internet is too expensive, kids are not getting properly schooled in computing skills and we don't place a high enough value on STEM. If the government really really focused on STEM the next 10 years our next gen kids could have incredible lives, where distance is no barrier thanks to internet access and quality of life is incredible (those mountains, sheep and rivers/lakes are totally as amazing as you see in the photos).
Yes, as another person who resides in NZ here, this is the problem. Our government doesn't realize just how important the Internet is and high-tech companies are to the economy and does nothing to foster them. The PM often refuses to meet even the largest, most promising tech companies (the biggest three) because he sees most of the countries value in agriculture.
As someone who works in high-tech company, I can't see any reason to stay here once we've got a big enough base to support ourself. We'll probably shift to the US.
Hi, how expensive is it? I mean, I live in Southern California, and a 3 bedroom house 17 miles inland is upwards of $500,000. Checking real estate in NZ, houses can readily be found within blocks of the beach for $300,000 NZD (257,000 USD). Seems like a pretty good deal to me...
Outside of Auckland, it's reasonably affordable. In Auckland, the average price is quite high relative to incomes.
Most of my friends who entered the market recently were looking at prices of between $650k-$850k for something smallish in an OK area.
This was for houses which were not new builds (70s/80s) and would need a bit of work to get up to scratch (insulation, plumbing, kitchen/bathroom remodelling).
So I've just been sitting and building equity and cash reserves. Who knows when/if it will return to earth, but I don't feel comfortable leveraging up that much, so as a single buyer, I'm sitting this one out.
Given its comparative geographical isolation, it makes sense for NZ to invest in it's digital economy.
NZ has its own competitive advantages:
(1) An educated population;
(2) An English-speaking population (yes, this is an advantage. Regardless of the rise of the East, English is still the international language of business.)
But, clearly, it has certain disadvantages. Geographical isolation is one of those. It is difficult to close your trade deficit efficiently if your manufacturers are pummelled by shipping costs (and expensive labour costs). It's products are almost always going to be more expensive than it's competitors.
So, what should NZ do?
An obvious solution would be to invest in intangible exports (that's the technical terms for non-physical exports); exports that will bring money and jobs into NZ without having to saddle the costs of shipping.
This is what has happened in most of the west. But in most of Europe, we have invested in financial intangibles rather than digital intangibles. That's gone okay (hmm, okay might be a stretch). But it is unlikely to be the right move for NZ because it hasn't got an established financial center nor access to the Euro markets. (Actually with the rise of the China, which is geographically close to NZ, it might have a go at snapping up some of the renmimbi trade).
What does a country do with a highly educated workforce that needs to export intangibles? Software is the obvious solution.
Invest in Computer Science education at school, write an attractive set of tax laws for digital start-ups, and invest in high-tech infrastructure (i.e, be the first country to roll-out 5G).
In fact, the more I think about the it, the more this makes sense. As NZ is a comparatively small country with few concentrated geographical centres, it could roll-out super-fast broadband, 5G, etc, on the cheap.
> (Actually with the rise of the China, which is geographically close to NZ, it might have a go at snapping up some of the renmimbi trade).
The geographical 'closeness' of New Zealand to China can be overstated. The distance between Auckland and Hong Kong is only slightly less than the distance between Los Angeles and Santiago. I'm not sure that many US Americans would consider Santiago geographically close. The basic fact about New Zealand is that it really is not geographically close to anywhere and this is why it was the last significant habitable chunk of land on the planet to be settled by humans (within the last 1000 years). New Zealand is actually very close to the centre of the 'water hemisphere'.
When you say that China is geographically close to NZ, do you mean that it's closer to NZ than other big players like the US and Europe? I ask because I got confused due to the order you listed the countries and thought you were saying that China was closer to NZ than others, and it's not really. Even considering NZ's distance, China isn't too much closer than the US. Wellington to Los Angeles is almost exactly the same distance as Wellington to Beijing, for example.
Paradoxically I'm not sure this is true at all. It turns out that the tyranny of distance can make software even harder to do than tangibles. Why? Because software is intimately driven by ___domain and end user requirements. It's just not possible to build the right stuff unless you're intimately in contact the people who need it. If you're sitting in NZ, you simply can't appreciate what the driving needs are in an economy 50 - 100 times as big. (Obviously I'm generalising here - there are a few domains where you can - but in general, looking across the vast expanse of the software industry). And it turns out that for those areas where you can do the software remotely - there are nations with billions of people who are seeing the same opportunity.
I code in NZ for a German company. We are very competitive on price compared to Germans, and very competitive on quality, compared to Indians. It's a happy middle ground.
Yep, it can be. So there is a requirement to occasionally work later hours if you liaise with Germany - which is mainly our management and proxy product owners. But with solid backlog groomings, the need to speak to Germany is minimised - if you're grooming a story for next sprint two weeks ahead, any questions can be resolved by email. We run proxy product owners who have responsibility for understanding stories sufficiently to act in the product owner's stead.
That said, the time-zone is an advantage when it comes to deployment - a 4am deployment German time is happily within normal 9 - 5 hours in NZ.
Admittedly, when we travel to Germany for quarterly planning, you realise that being able to walk up to the product owner's office and discuss things in person is far more efficient and far better for resolving things faster. But at the end of the day, we can run 3 Scrum teams in NZ for as much as it cost us to run 1 Scrum team in Munich when we tried it as an experiment - the business team accepts the downsides of distance and time-zone simply for the efficiencies in euros.
I guess that's an upside of being a low-wage economy - we're still competitive despite our stupidly high dollar.
Xero is a NZ startup success story but they have moved their main offices to Australia and the US. Tiny population and geographic and time-zone isolation are big obstacles for anyone trying to do things on a global scale.
As someone in Australia our decrepit internet makes it impossible to do anything resembling a startup. I can't imagine New Zealand would be so bad that they need to move here.
While as a fellow Australia I bemoan the woeful state of our internet, I don't think it makes it "impossible" to start a startup, in fact I know many startups in Sydney and elsewhere. It makes it more difficult, yes, and limits your options, but it's not impossible.
I can think of several reasons to move to AU from NZ as a startup; a greater talent pool and larger investment community for starters. It's by no means a slam dunk, but they're valid reasons.
Having lived in NZ for a couple of years working at Victoria University of Wellington, the other piece of the puzzle is NZ suffers from crippling brain drain: their best and brightest students immediately head over to Australia where they can make more money and use the exchange rate to pay off their student loan quicker.
My read is that kiwis tend to come back when they're ready to start a family, but during those vital 18-25 years when the entrepreneurial spirit is strongest, they're simply not in the country. They're elsewhere.
The kiwis I talk to that are in that demographic here at Google all seem to be want to go back to NZ, but only if the prospects are there, such as Google opening a real-deal engineering office. But it's hard to convince companies that that is a worthwhile venture when Australia and NZ have freedom of worker movement.
Without the population to lead NZ forward, and with no companies willing to invest to drag it forward, I don't think we'll ever see NZ be richer and more productive. But as other commenters have noticed, I think NZ is perfectly happy with that, because they're happy with their lot, which is something to be envied.
As a kiwi, the brain drain is something that always bothered me. Right from the beginning of high school I knew that I would end up working overseas for several years, regardless of whether I really wanted to or not. And that's exactly what I'm doing right now -- I live in London, saving twice as much as I could in NZ. I don't enjoy the lifestyle here at all, and I want to go back to NZ as soon as possible to start a family, but the opportunities available in Europe (and the rest of the world) simply dwarf those available in NZ.
The good news is that immigration from Asia, India and the Pacific has given the country a significant population of people who culturally are more likely than Europeans to help with population growth. So who knows, maybe in 10-20 years the population will be large enough for the brain drain to sort itself out.
I saw the same thing when I lived in New Zealand (just under 4 years, 4 years ago) and worked at the University of Auckland in a non-academic technical role. Personally, however, I'm a counter example of what you describe. I'm an American who recently started a PhD program in the states, who would quite like an academic position in New Zealand when all is said and done!
That was my experience as well. The few folks who managed to work remotely for an overseas company did really well, but pay rates within the country were a lot lower than I expected.
Working at a distributed company, I really wish more Kiwis would apply to my company if only so I could have an excuse to go visit. :)
Living in NZ is, by and large, a lifestyle choice for smart, capable New Zealanders. It's trivial to work in Australia [1], reasonably easy [2] to work in the UK, and NZers have a good enough reputation to go to any other majority English-speaking country with little trouble.
Because the country is so small - and generally without a class system - it's possible, on a relatively small income, to have everything you might want. This has sometimes been reported as the "three Bs" - a boat, a BMW and a beach house [3]. To have those three things in the UK without being born into them, you might have to have a business that employs 100; a decent tradesman working alone in NZ can get those by their early 30s.
I think a short answer is "because it doesn't want to be."
[1] When traveling from Canada to Australia for work on my NZ passport, I was held up for some time explaining why I was traveling, who I worked for in Canada, who I was going to see, etc. If I had instead said "Hello, I want to live in your country forever, and claim benefits", they would have rubber-stamped my passport and allowed me on my merry way.
[2] Changing, even over the last few years, with the whim of the UK government
Are boats and beach houses that much cheaper in NZ? In the US, you have to be quite wealthy, or quite an avid sailor, to own anything more substantial than a dinghy. Houses anywhere near a semi-desirable beach community cost >$1M. Even successful people in their 30s don't often buy second homes in that price range.
Claiming benefits is no longer automatic for NZ citizens in Australia. It was stopped over a decade ago, with the Australian pollies happy because of the reduced welfare load, and the NZ pollies happy because of the reduced exflux of young adults.
New Zealand is in the lower-right quadrant, which I'm interpreting to mean that it is predicted to be 20+% above the OECD average, but it is observed to be at 20% below, i.e. -40% below expectations
So the top-left quadrant would be the best performers, right? Those that were expected to be below the OECD average but are observed to be higher, e.g. Norway with a +25% above expectations?
(Now that I wrote this out, it makes more sense to me...I was having trouble divining where exactly the USA stood by being in the top far right, but it's more about the distance from the line)
The graph is claiming that countries should appear on the line - above the line are doing better than average; below the line are doing worse than average.
Vertical distance from the line is what you're looking for, so NZL is a crazy distance below. NOR, GRC and IRL are the furthest above the line.
However, another way to view this graph is to say that structural policies have no predictive power.
If you take out the outliers: the countries away from the central blob (e.g. Greece, Portugal and USA: all countries with exceptional circumstances), then the correlation is gone or perhaps even negative - meaning this is a poor model and a pointless exercise.
I went to the real source [1], which provides this data: http://i.imgur.com/d46JG8Q.png, and plotted it. The R(square) value for the fit it 0.2. The Pearson r is 0.44 with a p-value of 0.02 i.e. potentially useful. Taking out Greece, Portugal and USA changes the R(square) to 0.002, the Pearson r to 0.05 with a p-value of 0.8, i.e without the outliers there is no correlation between the values.
So, indeed, the outliers are driving the association... However, one is not permitted to cherry-pick data, so the "outliers" have to be left in.
[1]Barnes, S., Bouis, R., Briard, P., Dougherty, S., and Eris, M. (2011).The GDP impact of reform: a simple simulation framework,OECD Economics Department Working Papers, no. 834, Paris, France: OECD.
>However, one is not permitted to cherry-pick data, so the "outliers" have to be left in.
I respect why you think this, but I don't agree. Identifying points on the graph which don't fit with the pattern of the rest of the data is a reasonable way to identify outliers. Even if you choose not to exclude those, there's a greater problem:
Correlation is not robust if it depends on 2 or 3 points being in just the right place. And, robustness is one of the things you really ought to check for if you calculate Pearson's r. If you get different results with outliers in and out, that's a problem for your results.
In my opinion, any significant result here is just statistical noise.
I agree that the statistics on this association are pretty lousy, even with the outliers in. However, one would preferably find an specific reason to exclude outliers, rather than rely on intuition.
> Meanwhile, Singapore is small, but sits athwart what has been, for hundreds of years, one of the busiest trading lanes on the planet.
You might want to revise that sentence. Singapore was nothing 100 years ago.
Wikipedia:
Singapore ceased to be part of the British Empire when it merged with Malaysia in 1963. Singapore lost its hinterland and was no longer the administrative or economic capital of the Malay Peninsula. The processing in Singapore of raw materials extracted in the Peninsula was drastically reduced due to the absence of a common market between Singapore and the Peninsular states.[5]
Since Singapore's full independence in 1965, it has had to compete with other ports in the region to attract shipping and trade at its port. It has done so by developing an export-oriented economy based on value-added manufacturing. It obtains raw or partially manufactured products from regional and global markets and exports value-added products back to these markets through market access agreements such as World Trade Organization directives and free trade agreements.[5]
By the 1980s, maritime trading activity had ceased in the vicinity of the Singapore River except in the form of passenger transport, as other terminals and harbours took over this role. Keppel Harbour is now home to three container terminals. Other terminals were built in Jurong and Pasir Panjang as well as in Sembawang in the north. Today, the port operations in Singapore are handled by two players: PSA International (formerly the Port of Singapore Authority) and Jurong Port, which collectively operate six container terminals and three general-purpose terminals around Singapore.
In the 1990s the Port became more well-known and overtook Yokohama, and eventually became the busiest port in terms of shipping tonnage
Singapore and its development is a unique case, so I think it's hard to compare it to other countries. It's still a very interesting story: http://www.amazon.com/gp/aw/d/0060197765
Singapore may have been nothing 100 years ago, but trade through the region has been busy for much longer. Hence when Singapore decided to develop, it looked to the preexisting trade patterns, and developed accordingly.
Adam Smith noted cities were founded on "navigable rivers", because that's how trade works. Still true today for cargo ships. But today the internet is a river everywhere, for information goods.
New Zealand is the most beautiful place in the world, in my travels (circumvented the globe, but not been everywhere). Though I'm biased towards mountains.
So, theoretically, beauty+internet makes it a great place for software developers (and other information goods and services producers).
OTOH, NZ has prevented software patents (one of the few countries in the world to do so). Although many software developers love this, consider the question: will it increase investment in patentable inventions, or decrease it?
But in a way it's irrelevant: NZ itself is a tiny market. What counts is patents in other markets, US, Europe, Asia.
To explain the joke: Yes, he caught that error of mine, but I found a retrospective justification as a way to get out of it, as a joke. That's why he replied "Well done!"
Kiwi here - spent the first 25 years of my life in NZ (Taranaki and Wellington) but relocated to the USA (a year in the Bay Area, then just outside Seattle since 2007).
A few observations of factors that may be considered:
- Distance from markets impacts competitiveness of exports
NZ has a very strong entrepreneurial culture but perhaps the challenges above or wrong choice of markets to target make that less effective econony-wise than it could be? There's an interesting read on that at http://pando.com/2013/05/14/number-8-wire-entrepreneurialism....
That's just a cruel joke and yet another data point in why Kiwis (rightly) think Aussies are pricks to them.
You may have missed that it's actually friendly sibling rivalry between the two. Most of the kiwis I've known make their own comedic jabs at Australia. It's all in good fun.
the government takes big stands on things ... No American nuclear ships allowed to dock there
This really isn't that big a stand. If NZ was where Borneo is, I doubt they'd have made that stand. NZ has effectively zero military needs due to its isolation. The closest potential threat to NZ is Indonesia, which is a quarter of the planet away. Not that Indonesia has any such desire, but Australia and PNG don't have the amount of armed forces required for an occupation, and the small islander nations just don't have enough people (with a few living off NZ aid in the first place).
Economist John Quiggin claims that low NZ performance relative to Australia is because of its central bank being fighting inflation to the point of causing unnecessary recessions.
Edit: Please note that the gravity model of trade is an approximate empirical observation of trade, not economic growth. Australia is just as isolated as is NZ and yet fares better.
Compared to Australia, New Zealand has a significant Maori / Polynesian population. If you combine a part of Australia with a part of Fiji, you would get similar mix of people and also a similar economic output to New Zealand. While this obviously doesn't explain all of it, it is important to consider the historical and demographics reasons as well.
If I were in charge of NZ, I'd probably try to bring in something like pacific fibre, even if it required government subsidy. After that, a focus on making the legal system and business environment very attractive to certain kinds of tech businesses -- maybe that is privacy and security, maybe a very permissive IP regime, maybe something else.
The variance of the past few years (between 1:1 to 1:2) is quite high. I guess theoretically the biggest difference between the two countries is the mineral wealth of Australia?
I suggest that much of Australia's good performance will turn out to have been a bit illusory. We were extremely lucky to experience a significant terms of trade increase from ~2003 onwards, as world iron ore and coal prices increased.
Unfortunately for us, we pissed all that windfall up against a wall. I don't think we posted a current account surplus at all throughout the resources boom years. Instead, Australian banks borrowed money from overseas to lend to Australians so they could sell houses to each other for ever increasing amounts every year. The Australian economy grew because we borrowed from overseas. Existing property owners got to feel richer. As soon as we start to pay back all the debt in a significant way, our economy will shrink. Just as the dependent to worker ratio has peaked. We will have nothing to show for it. Certainly not fast internets.
>Australian banks borrowed money from overseas to lend to Australians so they could sell houses to each other for ever increasing amounts every year. The Australian economy grew because we borrowed from overseas. Existing property owners got to feel richer. As soon as we start to pay back all the debt in a significant way, our economy will shrink.
Sounds like the exact same finance became dominant in every other Western economy.
I was raised in New Zealand, and spent the first half of my life (so far) there. I'm now happily raising a family in Melbourne, Australia. Some observations:
- many of the people I knew in IT in New Zealand have left, especially for Australia; when I was there, this was known as the 'brain drain'
- growing up in New Zealand, there was a strong anti-intellectual current to the culture, especially amongst Maori students (I came top in my year for Maori language despite there being fluent speakers in my school, because I did assignments and they didn't)
- successful people in New Zealand are often criticised because of their success; this is known as 'tall poppy syndrome'
- New Zealand is, politically speaking, entirely socialist; even their 'right wing' party is in favour of a welfare state, taxpayer-funded education and healthcare, and a wide range of 'sin taxes' and legislation designed to protect people from themselves (a.k.a. the 'Nanny State' to its critics)
- Universities there simply aren't as demanding as overseas; my wife cross-credited a psych. degree from Australia, and she was more than half way through a NZ undergrad degree after one year of a degree in Australia
Note that I haven't listed NZ's many positive characteristics. Just saying that all of the above contribute to an environment that in my experience is less productive and less entrepreneurial than Australia.
In New Zealand's technology sector, you're pretty much groomed to expect to have to move overseas to achieve anything worth something. All through university it was reiterated to me that I should move overseas to get the job I want and the money I want.
The problem is, this behavior is down to the fact that it's true, you do have to leave NZ to get anywhere in life (for the most part, unless you're happy only hitting it small). The most desirable companies to work for in the technology sector of NZ are essentially Xero and Vend right now, with your other choices being large corporates (Fujitsu, Datacom) or very small early stage startups with small amounts capital.
Startups don't thrive particularly well in New Zealand either, because there's nobody with enough capital to invest in them, so they often don't survive long enough or seek capital from overseas (like Xero/Vend, again, the exception to the rule).
The only natural thing to do is to move to a country with (a) more money, (b) more incentives, (c) more interesting work/problems to solve. The government of New Zealand does little to improve the situation and does not care about the technology sector much, doesn't work hard on getting better internet (we only have one cable to the outside world, and it's expensive to get bandwidth on it!) and doesn't encourage new, young companies to found here.
We just don't have much going for us here, in general, in the technology sector, but it's starting to change with initiatives like this from local government at least: http://hightechcapital.co.nz
It's sad. I wish the government would focus directly on optimizing NZ for technology companies, improve the internet, foster and encourage them (maybe even invest in them), help them get started in the world and meet investors. Some initiatives exist, like the Kiwi Landing Pad, but it's just not good enough yet.
I'll slip in the (in)famous Muldoon quote on the brain drain. He commented on smart Kiwis leaving for Australia, saying it raises the IQ of both countries. The political solutions haven't got much better of late, and despite PM Key trumpeting how bad the brain drain is, he hasn't done much to halt with his years in power. He has possibly exacerbated it.
http://i.stuff.co.nz/national/7779840/Key-changes-tack-with-...
90% of my friends immediately left the country after university. This is mostly due to low income employment and lack of potential career development.
Like most kiwis I moved to Australia (two and a half years ago now), my income increased by 50% just by making the move. People in Australia (Melbourne) also seem a lot happier and successful (by their own measures, whatever they might be).
For my friends and I, other than the beautiful landscape there wasn't much holding us to New Zealand and quality of life is better in Australia.
Oh I should have mentioned that New Zealand does indeed have much better technological infrastructure than Australia though, two years after moving to central(ish) Melbourne the maximum internet speed is less than 1/10th what we had back in New Zealand years ago.
> Most of the rest of New Zealand’s productivity gap…appears to come from an underinvestment in knowledge-based capital.
I'm from the 'West Island' (Australia) but the culture is very similar. Money is made from physical things, technology is a semi necessary, semi dubious expense that should only exist as part of 'doing real things'. This is one reason a lot of Australians and Kiwis who have an interest in technology leave.
Singapore is also a tiny island with a limited population that has to import most everything. Over 40 years they've somehow created a culture of hard-working over-achievers and have one of the highest GDPs per capita in the world (they're currently #3). Being dependent on imported goods doesn't seem to be much of a problem here, so perhaps the secret lies in their carefully planned cultural shift. (But if it were me, I'd much rather be a Kiwi with a lower income and laid back lifestyle than a Singaporean with high expectations and a life of hard work).
Singapore is not nearly as isolated as NZ is. It's on a major ocean shipping lane and is just a bridge away from Malaysia. The problem isn't that NZ is reliant on imports (all countries are to a degree), it's that it is expensive to ship things there since it is out-of-the-way.
That being said, there probably is also a cultural element. I wouldn't really say it was a cultural shift. It's more that the relative stability and increasing globalization in the latter half of the 20th century gave Singaporeans the opportunity to realize their entrepreneurial ambitions.
Singapore is on every shipping lane between east Asia and every ___location west of East Asia until you hit the far end of Europe and Africa. You effectively have to specifically go out of your way to avoid it.
New Zealand is so isolated that there's an entire continent between them and "through traffic" shipping lanes.
A non-insubstantial amount of Singapore's GDP comes from tax evasion and money laundering from corrupt businesses and individuals.[1] Most corrupt Asian wealth is stored or laundered through Singapore. From Ferdinand Marcos[a], Robert Mugabe[b], Suharto's closest advisors[c], the Chinese princelings[d], Burma's military junta[e], Russia's oligarchs[f] etc etc.
This is in addition to their 'legal' tax avoidance-derived GDP. In 2012, Apple did $14 Billion in revenue in Singapore, which was more than they had in the rest of Asia combined, yet they didn't have a single store or manufacturing center in the city-state.[2] Microsoft actually beat Apple to setup a Singapore-based affiliate for the same purpose.
I'm curious to see how they fare in a decade after these sources of 'income' are greatly restricted in the global crackdown.[3]
One of these days, I'm going to devote a few hours to calculating how much of Singapore's GDP / Tax base only exists due to their status as a tax haven.
