1. SIT Skilling the Community 160709 slide 1 Skills required by the NZ economy presentation to Skilling the Community – Preparing for the Upturn Southern Institute of Technology 16 July 2009 Dr Ganesh Nana Chief Economist Editor, BERL Forecasts Business and Economic Research Ltd

2. SIT Skilling the Community 160709 slide 2 Agenda the current NZ economic situation preparing for the upturn ‘tertiary’ role what next?

3. SIT Skilling the Community 160709 slide 3 Unemployment

4. SIT Skilling the Community 160709 slide 4 Employment annual change

5. SIT Skilling the Community 160709 slide 5 Employment Annual growth: Mar 09 cf Mar 08

6. SIT Skilling the Community 160709 slide 6 Anatomy of employment growth 418,000 extra jobs over 10 years to March 2009 *reduction in unemployment of 19,000 *increase in ‘population’ 288,000 *where did other 111,000 come from?

7. SIT Skilling the Community 160709 slide 7 Anatomy of employment growth 1999-2009

8. SIT Skilling the Community 160709 slide 8 Labour force participation rate

9. SIT Skilling the Community 160709 slide 9 Labour force participation rate

10. SIT Skilling the Community 160709 slide 10 Labour force participation rate - females

11. SIT Skilling the Community 160709 slide 11 Labour force participation rate - females

12. SIT Skilling the Community 160709 slide 12 Labour force participation rate – 55-60yos

13. SIT Skilling the Community 160709 slide 13 Net migration to NZ from regions annual totals

14. SIT Skilling the Community 160709 slide 14 The Achilles’ Heel of the NZ Economy

15. SIT Skilling the Community 160709 slide 15 Preparing for the upturn … “Looking beyond our present circumstances, our future depends on our ability to export.” Budget Speech, July 1980

16. SIT Skilling the Community 160709 slide 16 How many are needed? Projected change in employment by occupation 2007-2026

17. SIT Skilling the Community 160709 slide 17 Which skill is (most) important? using economic model to explore impact of increase in particular skill types laboratory-type experiments ask: *which skills provide biggest boost to economy?

18. SIT Skilling the Community 160709 slide 18 Model experiments Indirect impact on GDP of additional person

19. SIT Skilling the Community 160709 slide 19 Economy is integrated system focus on particular skills ignores relationships inherent between industries and sectors similar to asking what industry is most important?

20. SIT Skilling the Community 160709 slide 20 Economics is … liquidity swap rates house prices interest rates inflation leverage debt hedge funds ratings people machinery & equipment land buildings water technology skills & knowledge experience businesses networks innovation

21. SIT Skilling the Community 160709 slide 21 A sobering thought … Of NZ’s 20-40 year olds more than a quarter of a million (268,000) have, AT BEST, a level 1 qualification and, remember, the majority of these will remain in NZ’s labour force for the next 20 years (if not longer) this group will play a significant role in NZ’s productivity performance for the next 20 years (at least)

22. SIT Skilling the Community 160709 slide 22 Transforming the New Zealand economy needs: more people with more skills of all skill types … and there is economic and social justification to support all skill provision * vocational * trades * academic * professional

23. SIT Skilling the Community 160709 slide 23 Key components of NZ labour supply growth the traditional flow *new entrants from school the untapped potential *those already in workforce the new flow *those previously ‘not in labour force’ *migrants

24. SIT Skilling the Community 160709 slide 24 ‘Tertiary’ role (1) Attract and train: secondary graduates in vocational and professional skills lower skilled people in the workforce to increase generic, or specific skills older people with skills that enable them to keep working engage mature people not in the labour force to begin learning, and assist them to staircase

25. SIT Skilling the Community 160709 slide 25 ‘Tertiary’ role (2) to recognise that the ‘non- traditional’ flows are (potentially) an important source for increases in overall skills

26. SIT Skilling the Community 160709 slide 26 “Growth in New Zealand will be propelled by technological change, investment and higher productivity.” Budget Speech, July 1978 Preparing for the upturn (2)