New Zealand's Economy Needs an Industrial Policy Boost

Ngaire Woods, a professor of global economic governance at Oxford University and New Zealander, says the country needs to promote new industries to compete globally. She believes that the free trade market is becoming outdated as major economies like China and the US implement industrial policies.

Woods points out that these countries are 'weaponising interdependence' by using trade policies, subsidised credit, and investment controls to create economic alliances and strengthen their domestic industries.

In contrast, New Zealand's current approach of stepping back and letting the market do its work is no longer sufficient in a world where major economies are actively supporting national champions. Woods suggests that the government should focus on creating sectors where Kiwi companies can compete vigorously with each other and develop the 'industrial policy muscles' needed to succeed globally.

This mindset shift is crucial, as global supply chains are now being viewed through a geopolitical lens, with countries prioritizing economic alliances and resilience over mere efficiency. Woods notes that New Zealand needs to adapt quickly to this changing world and take proactive steps to make its economy more resilient and competitive.