Skills lack worries IDC

Press, 27 August 1986, Page 37

Skills lack worries IDC

PA Wellington As uncompetitive New Zealand manufacturers buckle under deregulatory pressures, the Industries Development Commission chairman, Mr Ted Tarrant, believes skills are not being generated fast enough for the new tech-nology-intensive industries. In a study on the supply of technological skill, he says industrial production in all significant world economies has already moved away from material and energy intensive products and processes. “Replacement by knowledge and technology-inten-sive activity will be constrained until appropriate levels of technological skill are held across our labour force,” he says. He estimates that present economic policies may require 10 per cent of the labour force — some 150,000 people — to contribute to the economy by doing something not now being done. “Whatever that something turns out to be it will assuredly need mathematical and technological oriented skills in quantities not currently being generated.” Of the annual out-turn of New Zealand fifth-formers, only 23 per cent enter the community with any technological attainment. Mr Tarrant says "knowledge” workers in the next 10 years were expected to outnumber blue collar workers in all developed industries. With major markets like Europe, India, China, South Korea and Indonesia becoming net exporters of food rather than importers, and with surplus world food stocks, it seemed unlikely that food prices would rise relative to prices of manufacturers and services. He says there appears to be a strong case for: ® Private sector investors to reassess the capacity they have to generate future requirements of technologybased skills. • Getting the best balance of technology-related skills from the annual Government spending of $2500 million in

education, training and employment ® Parents, educationalists and sociologists reassessing the range of future work options.

Mr Tarrant, who has headed the Commission's efforts to make New Zealand industry more efficient over the past 10 years, says the direction towards being internationally competitive is desirable. But, in an interview, he said that high costs were the most inhibiting factor for New Zealand industry trying to add value to products. The second biggest problem, he said, was trying to add value “with technical and management skills we have not got and are not generating fast enough.” "When asking our industries to foot it in the world, you’re probably talking about half of New Zealand’s industry being vulnerable,” he said. "This half is vulnerable because our costs, like capi-

tai, transport, government and the welfare state, are higher than the countries with which we trade.”

Some business closures have resulted from recommendations in the IDCs 18 industry studies, and Mr Tarrant said the disappearance of pockets of uneconomic industry has been in the national interest

Where the cost of importing finished goods had been cheaper than buying the raw material, tariffs on the goods have been removed and local manufacturing industries have closed.

The removal of import licence protection for industry at the instigation of the IDC and similar bodies since 1950, however, has so far not led to the flood of imports feared in some quarters. In 1974 only 10 per cent of imports were consumer goods (excluding cars) and that uroportion remains about the same.

Consumer goods where there is some New Zealand

production represented only 3.5 per cent of total imports in the first nine months of the last trading year ended Jane — compared with 3.2 per cent in 1974. Consumer goods where there is no iocal production represented 6.3 per cent of total imports in the latest period, compared with 7 per cent in 1974. But Mr Tarrant was concerned that automatic moves to predetermined level of tariffs could in the future close some processing industries which earn net overseas funds.

Ironically the IDC, whose reports have led to lost jobs in certain industries, looks like losing either all or part of its job in the Government’s “quango hunt” Mr Tarrant had heard nothing officially, but said it was generally assumed that the IDC’s "broader function” will come under a new quango, the Economic Development Commission.