Fostering innovation in a small open economy: The case of the New Zealand biotechnology sector

The New Zealand Biotechnology sector is worthy of study for several reasons. While there is a large and growing international literature on economic aspects of biotechnology innovation these studies concentrate on the United States and Europe. The New Zealand biotechnology sector may be expected to develop along a different trajectory as a consequence of a markedly different set of initial and framework conditions. Government has indicated a strong interest in fostering innovation and aims to concentrate on selected areas where New Zealand may be able to develop a new comparative advantage. One such area is biotechnology, which would build on New Zealand’s existing comparative advantage in the primary sector (dairy, forestry, meat, wool and horticulture). This paper describes the preliminary results of an ongoing study that aims to fill some of the gaps in our knowledge of innovation processes in New Zealand while using the international literature as a benchmark. The paper focuses on the drivers of innovation in the biotechnology sector; the role of networks and other linkages; the role of government and industry, the role of human and venture capital, and data from patenting

Does New Zealand have an innovation system for biotechnology?

While there is a large and growing international literature on economic aspects of biotechnology innovation (e.g. work by Carlsson, McKelvey, Orsenigo, Zucker and Darby) these studies concentrate on the United States and Europe. The New Zealand biotechnology industry may be expected to develop along a different trajectory as a consequence of a markedly different set of initial and framework conditions. This paper presents the results of an ongoing study that aims to fill some of the gaps in our knowledge of innovation processes in New Zealand while using the international literature as a benchmark. The size and structure of modern biotech activity in New Zealand is described and compared to other OECD countries using biotech patent data and results from the New Zealand and Canadian biotechnology surveys. The paper then focuses on factors affecting innovation in biotechnology; framework conditions, government policy R&D funding and the role of networks and other linkages

How Can Economists Help Clear Landmines and Unexploded Ordnance?

Millions of mines lie in or on the ground in 62 countries resulting in thousands of deaths and injuries each year. Most mines are cleared using probes and hand held mine detectors; although sniffer dogs and a variety of machines are becoming more common. Clearing landmines is very expensive with costs often reaching US$10 per square metre; over US$1.5 billion has been spent on clearing mines since 1992. Most of the organisations involved in mine clearance have concentrated on technical aspects and put less emphasis on the most cost effective way of getting the job done. This paper reviews the contribution that economists can make in the area of humanitarian mine clearance and describes the development of a software package and manual designed to help managers decide which combination of machine and manual methods should be used to clear minefields to the required safety standard at the lowest cost.Mine Clearance, Cost Effectiveness Analysis, Software Model, Environmental Economics and Policy, Food Security and Poverty, International Development, International Relations/Trade, Land Economics/Use,

Which future for the Hurunui? Combining choice analysis with stakeholder consultation

The future of the Hurunui River and its catchment has been hotly contested between those who seek to store and/or divert water from the river in order to increase agricultural production and those who would like to see the river undeveloped and the quality of natural resources in the river and catchment improved. The Canterbury Regional Council wished to develop an approach to manage catchment nutrient loads across the region in order to achieve the objectives of its Natural Resources Regional Plan (NRRP) for water quality and aquatic habitats. Our approach, combining stakeholder consultation with choice analysis, was developed and tested in the Hurunui catchment in 2010-2011. The policy objective of the choice experiment was to describe and quantify the preferences of Canterbury Region residents with respect to existing conditions (the status quo) and potential future land use and water quality scenarios for the catchment. It was envisaged that this quantitative information on preferences across the region would be used by policy makers at the same time as they considered the outcomes of the stakeholder deliberative process. At the conclusion of the consultation process there was ‘general acceptance’ of a future development strategy for the Hurunui catchment that would maintain water quality in the main river at 2005-2009 levels while improving the tributaries to 1990-1995 water quality. Results from the choice experiment are broadly supportive of this approach. Canterbury region residents would require substantial compensation (mean $244-$315 per household per year) before they would accept a decline in water quality in the main river or in the tributaries. Willingness to pay for improvements in the main river is lower with a mean of $25-$33 per house hold per year

Valuing trout angling benefits of water quality improvements while accounting for unobserved lake characteristics: An application to the Rotorua Lakes

Trout angling is one of the most popular water-based recreational activities in the Rotorua Lakes. Despite the high demand for trout angling and other recreational purposes, water quality in some of these lakes has been declining over the past decades and initiatives to try to restore the lakes are underway. To compliment these efforts, this study uses the travel cost random utility models to explore how changes in water quality would impact upon angler’s choice of fishing destinations. The welfare impacts due to water quality changes and possible lake closures are also explored. These findings highlight the importance of discrete choice random utility models as a policy decision making tool for recreational-based natural resource managers in New Zealand. Additionally, this study represents one of the unique cases in travel cost random utility applications that accounts fully for unobserved site effect

Effects of maize fertilizer subsidies on food security in Malawi

This study employs spatial analysis to examine the impact of smallholder fertilizer subsidies on national and household food security in Malawi. It illustrates that at national level, food security is positively linked to fertilizer subsidies. However, at household level, maize production is heavily skewed with the south lagging behind the centre and the north. In the short-to-medium term, replacing the current countrywide subsidy program with a more targeted one is highly recommended. Furthermore, by diversifying into other crops or smallscale businesses, smallholders may be able to increase their income and hence food buying power

An assessment of the benefits of cleaner streams: A New Zealand case study

Water pollution is now considered to be one of the most important environmental issues facing New Zealand. Water quality in rivers, lakes and streams is generally falling alongside the increase in farming intensity, especially in dairying. Currently, technical and regulatory mechanisms to reduce non-point source pollution from agriculture are the focus of an intensive effort involving industry, researchers, regulators and other stakeholders. The research described in this non-technical paper aims to complement existing knowledge by developing appropriate methodology for valuing water quality improvements in New Zealand. It is envisaged that this type of information will assist the policy process by allowing decision makers to consider both the costs and the benefits of different levels of water quality improvements. This research is based on a case study of the Karapiro catchment in the North Island of New Zealand. It uses choice analysis to assess people’s preferences and willingness to pay for different levels of water quality improvement in catchment streams. Choice analysis methods ask respondents to choose between one group of environmental services or characteristics, at a given price or cost to the individual, and another group of environmental characteristics at a different price or cost. Each respondent is usually asked to repeat this exercise several times. The results from this study indicate that respondents would be willing to pay for cleaner water for swimming, for better ecological health (with eels, bullies and smelt present), for the presence of trout and for better clarity such that ‘you can usually see the bottom’. Respondent preferences were strongest for water suitable for swimming, followed by ecological health, presence of trout and clarity

The links between poverty and the environment in Malawi

Deforestation arising from conversion of forest areas into agriculture is a serious problem in Malawi. Cultivation of subsistence and cash crops is often cited as a major cause of this problem. This paper applies the von Thunen model to firstly, discuss competition for agricultural land and secondly, establish why the poor are closely associated with forests. Further, a regression analysis is conducted to examine the effects of changes in crop land use on changes in forest cover. Results indicate that cultivation of different crops has varying effects on deforestation. Cultivation of maize, primarily by the poor, appears to be the principal cause of deforestation while tobacco and pulses stand at second and third positions, respectively. Finally, a simple methodology is developed to estimate the extent of poverty-driven deforestation in Malawi

How Can We Predict Performance in Tertiary Level Economics?

The New Zealand Qualification Authority (NZQA) started to introduce a new qualification; the National Certificate of Educational Achievement (NCEA) in 2002. NCEA level 3 replaced the University Bursary Examinations in 2004. The main purpose of this paper is to investigate the relationship between the number and quality of credits gained at NCEA level 3 by students and their academic performance in a first year economics course - Business Economics and the New Zealand Economy at Waikato University. Other factors that could affect student performance are also investigated. Our analysis suggests that several factors can have an impact on student's performance in ECON100. These factors include nationality, semester, total number of NCEA level 3 credits and the quality of credits at level 3 in NCEA economics and mathematics.Qualification, Education, Testing, Teaching/Communication/Extension/Profession,

Valuing Trout Angling Benefits of Water Quality Improvements while Accounting for Unobserved Lake Characteristics: An Application to the Rotorua Lakes

Trout angling is one of the most popular water-based recreational activities in the Rotorua Lakes. Despite the high demand for trout angling and other recreational purposes, water quality in some of these lakes has been declining over the past decades and initiatives to try to restore the lakes are underway. To compliment these efforts, this study uses the travel cost random utility models to explore how changes in water quality would impact upon angler’s choice of fishing destinations. The welfare impacts due to water quality changes and possible lake closures are also explored. These findings highlight the importance of discrete choice random utility models as a policy decision making tool for recreational-based natural resource managers in New Zealand. Additionally, this study represents one of the unique cases in travel cost random utility applications that accounts fully for unobserved site effects.Environmental Economics and Policy,