DIVERSIFICATION OF INDUSTRY DISCUSSED

Press, Volume CIII, Issue 30511, 5 August 1964, Page 10

DIVERSIFICATION OF INDUSTRY DISCUSSED

“Industry must increase and diversification can come only from our own primary products,” said Mr D. W. King, chief engineer of the Dairy Research Institute, at a meeting of the Canterbury branch of the New Zealand Institute of Chemistry held at the University of Canterbury. Mr King was one of a panel of four speakers who addressed the meeting on the subject, “Industrial Development in New Zealand.”

The panel, under the chairmanship of Professor S. R. Siemon, professor of chemical engineering at the university, was asked if New Zealand should diversify industry and manufacturing and rely less on traditional primary products.

Mr King said it was impossible to alter the general trend of exports quickly, and only political aid would bring a fast diversification. The panel agred that diversification should not be at the expense of products which met a ready market already. Dr. R. J. Earl, a chemical engineer at the Meat Industry Research Institute, said economic considerations must determine what types of industry should be diversified. There were dangers in both the importing and exporting of raw materials. To import them cost money. To export them made New Zealand dependent on an overseas market which tended to be unstable.

“Unless a new industry increases the country’s wealth we should be careful,” said Dr. J. B. Stott, senior lecturer at the Otago School of Mines. “We should prefer to foster existing industries rather than undergo the expense of creating new ones.” Dumping Prevented

“Any new industry must have a market,” said Mr W. W. Olsen, mill manager for the Tasman Pulp and Paper Company at Kawerau. “New industries must have protection from dumping by other countries. Some apparently high-cost industries are justified in their existence because they prevent dumping. In reply to a comment from the meeting that many industries were over-subsidised. Mr Olsen said the newsprint industry was the only primary industry in New Zealand that had no subsidy. He preferred to think of the £lB million spent on Tauranga Harbour as an initial impetus for the industry rather than a subsidy. He said a lot of industries in New Zealand tended to rely too much on the Government instead of doing things for themselves. Professor Siemon then asked the panel whether industry started initially for a domestic market should be protected.

It should be protected to the degree that it is not damaging export industries and that the protection is not maintained for too long, said Mr King. He said there could be no absolute standard for what constituted too long a period. “High living standards can inflate the cost of a product to an uneconomic level,” said Mr Olsen. “We have continued to get overseas equipment because of its higher efficiency return.” “The money spent on coal research in New Zealand is between Id and id a ton,” said Dr. Stott in reply to a

question about the sufficiency of scientific effort in New Zealand industry and what the role of the Government should be. “Britain spends about l)d a ton.” “This is not enough,” he said. “There is no-one working on the logistics of powerproduction. There seems to be an objection to the stimulation of co-ordination in the coal industry, although the newer industries are better off in this respect.” There was not enough scientific effort, but the blame for this rested partly on the scientists, who stood too aloof, said Mr Olsen. The Government had done much to provide stimulation but it was up to the scientists to do something themselves. The question of salary scales had long been a bone of contention and here industry should take the lead itself.

The panel agreed that industries controlled by overseas interests offered few incentives to New Zealand's scientists as most of the research done for these firms was done overseas. Serious Defects

Professor Silmon asked the panel what they thought of the education of scientists in New Zealand. They agreed that there were serious defects in the present training and recruitment policies. “Our margins of skill in New Zealand are very low,” said Mr Earl. “Our technologists are not sufficiently rewarded for the effort they have put into their training or the skills that are required of them. This has created a gap in the personnel of many industries.” “Of the 100 graduates of the Otago School of Mines in the last 10 years only three have stayed in the coalmining industry in New Zealand,” said Dr. Stott. “There must be something drastically wrong with our system. The graduates felt they had no future in this country and they have gone into the bigger industries overseas where they get more satisfying positions. Our own managers have usually come up the hard way and have no scientific training.”

Mr Olsen said New Zealand technicians were not sufficiently specialised. The youth of most of the New Zealand industries was the chief factor in limiting the operational skills within them, he said.

The panel agreed that there was not enough overseas material available to industry. Time and money wasted in duplicating research was a factor limiting the progress of New Zealand industry. The last question put to the panel dealt with the effect of rapid population growth on industry.

Mr Olsen summed up the feeling of the panel by saying that it depended what sort of economy was desirable. If New Zealanders liked the present economy they would have to spend money in developing more diverse industry.