Can the Kiwi Fly? Achieving Productivity Lift-off in New Zealand

New Zealand’s poor long-run productivity performance has puzzled domestic economists and international observers for decades. To provide answers, this article sketches out the broad reasons why lifting productivity has proven so difficult. Against the background of ongoing changes in technology and in the global trading environment, the article also puts forward a number of high-level policy suggestions aimed at countering the economic forces that have constrained productivity, including opening the economy to new opportunities for international connection, and encouraging capital deepening, greater competition and more effective innovation. Getting this right requires a deep understanding of New Zealand’s productivity track record and potential in the 21st century global economy and presents a major challenge for the New Zealand public sector. Material living standards in New Zealand