With technology being predicted to become New Zealand's number one exporting sector, the time has come to set out the vision. CEO of the Centre for Advanced Engineering and author of the recently released book Innovate! Richard Bentley shares his thoughts on how we can speed up the process with Idealog.

Professor Shaun Hendy (9 August) commented on the slow progress New Zealand has made toward the development of a technology-based exporting sector. As he reflected, the occasional successful start-up is not nearly enough.

In my recent book Innovate! , I present a detailed analysis of the state of our fifteen export-focused sectors, their prospects for growth, current thinking on being innovative and how our government supports exporters.

I find that amongst our advanced manufacturing sector we have a number of sophisticated exporters like Buckley Systems and Fisher and Paykel Healthcare, and that there is an emerging group of exciting businesses. However, the new paradigm amongst wealthy nations is to be preeminent in advanced manufacturing - as manufacturing especially has extensive spillovers to the wider economy. As a consequence, new manufacturing technologies and processes are appearing, markets are becoming more competitive, and large multinational companies are adapting their businesses to tackle the very niche markets that our companies supply.

We also have exciting but unrealised opportunities in medical technologies, ICT, textiles, and in minerals developments, but our manufactured food, agritechnology and biotechnology sectors are fragmented and underperform. Thus our emerging technology-based economy has the feel of still being in start – up mode, and this seems to be reflected in recent data that shows exports as a percentage of GDP slowly falling, why the government’s often stated goal of doubling exports has been quietly dropped, and why our productivity remains so low.

So how do we address this challenge? The wealthy countries of the OECD are proactive in developing innovative, competitive and growing technology-based economies. They create environments where businesses grow through easy access to science and technology, where businesses work together and collaborate as opportunities emerge, and where resources are focused on science and technology development and transfer that’s good for business development.

In contrast, and since the 1980’s deregulation of our economy, our governments have adopted a passive approach to developing an innovative economy and to the development of business. This is why we have very poor interactions between business and researchers, and very few business facing centres of technology. This dysfunctionality, which I call the technology vacuum, was first revealed in the authoritative report Powering Innovation way back in 2011, as Shaun noted, and there has been no attempts to remedy the situation. Compounding the situation has been the collapse of the manufacturing - focused CRI Industrial Research Limited from low sales.

Paradoxically, we have a superb science system, led by the universities and the Centres of Research Excellence (the CoREs), and we have numerous world class scientists. However, nearly all the science research vote continues to be allocated to university scientists on the basis of best science and not to research needs informed by business.

Government, having stripped itself of all its technology capability, needs to form a new Innovation Council comprising the universities, business and NZTE, to look into the situation in each of our fifteen important export sectors and to work out how government could assist them better. Each has its own issues and opportunities. These initiatives will give businesses better access to the science and technology capability in our universities, they will create environments that encourage more coordination, collaboration and innovation between export businesses, and they will deliver OECD type energised innovative environments.

My preference, set out in detail in Innovate!, is to create a network of university-based technology hubs, effectively a technology – focused business facing version of the CoRE network. They would be wholly funded by government and established for example in robotics and sensing, IT for manufacturing, cyber technologies, technical textiles, agritechnology, and advanced food, to name only a few areas to illustrate. These are the technologies that underpin the development of a competitive exporting sector. I would scrap the R&D grant system as it does not create innovative firms or innovative collaborative sectors, and I would put these funds into the network. The hubs would also become the place where businesses within sectors meet, collaborate, agree sector strategies and inform research needs as occurs at the Auckland University - hosted Product Accelerator. And I would collapse the economically focussed CRIs and Callaghan Innovation into this network.

Governments create innovative economies not markets. A step change in effort by our government is required to bring Sir Paul Callaghan’s dream of a sophisticated significant technology-based export sector to a reality and to reduce our dependence on commodity agriculture exports and tourism.

Richard Bentley (CNZM) has worked in New Zealand industry and in the science and innovation system for nearly four decades – see his website. Innovate! Transforming New Zealand’s technology-based economy was published in August 2017 by Steele Roberts, Wellington.

| An IDEALOG article   |  September 13,  2017   |||

Trade Minister Todd McClay says he expects the NZ-European Union Free Trade Agreement to be formally launched later this year after the European Commission and New Zealand both finalised their respective negotiating mandates.

“It’s extremely important the European Commission and New Zealand have completed this next step,” Mr McClay says.

“European Commission President Jean-Claude Juncker also announced tonight in his ‘State of the Union’ address that he is seeking approval to launch negotiations and aims to conclude the NZ-EU FTA by late 2019.”

“An FTA will give New Zealand companies an opportunity to significantly increase trade with the EU.”

“Two-way trade with the EU is worth more than $20 billion a year and creates thousands of jobs and opportunities for every region and city of New Zealand.”

Mr McClay says the Bill English-led Government will be pushing for a high-quality, comprehensive FTA.

“More than 8500 jobs are created in New Zealand by every billion dollars of exports,” Mr McClay says.

“That means a deal with the EU that increases trade has the potential to create thousands more jobs for Kiwis.”

The European Commission will now send its negotiating mandate to the European Council. Approval is expected later this year.

| A Beehive release  ||  September 13,  2017   |||

An award-winning online marketing campaign has helped New Zealand Trade and Enterprise (NZTE) build a database of over 65,000 consumers in China.

Developed for the WeChat platform, the campaign has been built around NZTE’s annual Taste NZ programme, which aims to promote New Zealand food and beverage products in a number of Asian markets.

NZTE engaged United Media Solutions (UMS), a digital marketing company based in New Zealand and China, to create and run the WeChat campaign for Taste NZ in the People's Republic.

“The aim of the platform was to create a group of people with the potential and interest to keep purchasing New Zealand products,” said Maxwell Shi, NZTE’s regional marketing and communications manager for Greater China.

The promotion was structured around a set period, in which consumers received a Taste NZ voucher every time they purchased a New Zealand product online.

That voucher included a QR code that consumers could scan using their WeChat account. Every consumer who scanned the QR code received points that could then be used while shopping for other New Zealand products. Regular competitions and prize draws were also held.

The programme has built a database of 70,000 members, which NZTE and UMS have drawn on to analyse consumer insights and promote other New Zealand brands and products.

“This database is our asset, and our aim is to increase this and further promote New Zealand companies and products to that database of consumers. We’ll do this by leveraging the database with incentives to buy New Zealand products,” said Shi.

The NZTE team has plans to grow the programme to reach 100,000 active consumers over the next two years.

The campaign recently won the Best International Social Media Campaign at the 2017 New Zealand Social Media Awards.

Aiming to strengthen its position in the international arena, NZTE travelled to Hong Kong last week for Asia Fruit Logistica. The government agency helped coordinate the country’s presence at the show – alongside Horticulture New Zealand, New Zealand Apples and Pears and NZ Plant and Food Research – with 28 New Zealand horticulture companies exhibiting.

“Most of the New Zealand companies represented here don’t have an in-market presence in Asia,” Shi told Asiafruit. “Our role is to help them connect with key markets so they can facilitate exports and grow their business.”

| An Asiafruit release  ||  September,  2017   |||

 Leinster Leader - The latest in sensor technology systems, seed drills, rotary milking systems and even a dual electric drive utility bike will be on show as New Zealand agritech returns to Ireland following a successful presence at the National Ploughing Championships in 2016.

The strong agricultural partnership between New Zealand and Ireland will continue to prosper as 13 leading New Zealand agricultural companies descend on Screggan for the 2017 National Ploughing Championships.

Companies such as world-leading in-shed farm automation technology provider LIC Automation (Saber) and specialist seed drill manufacturers, Duncan Ag and Aitchison will return for the second year running. As well as displaying their market leading technologies, they will introduce exciting new products to the Irish market for the first time.

The New Zealand pavilion will also feature some highly anticipated new additions, such as UBCO Bikes, manufacturers of dual electric drive, all terrain bikes and Waikato Milking Systems, leaders in advanced dairy technology.

Under the theme of smarter farming, the New Zealand pavilion aims to grow the longstanding and successful partnership of two leading agricultural nations. Farmers visiting the New Zealand pavilion will get an exclusive insight into the efficiencies and innovations of industry-leading products and how New Zealand and Ireland are working together to continuously improve and develop on-farm systems – working smarter, not harder.

Keeping in theme with smart technology, Irish farmers will be able to ‘virtually’ explore a New Zealand farm through a unique virtual reality (VR) experience.

Daniel Taylor, New Zealand Trade Commissioner to the United Kingdom and Ireland says:, ‘All of the companies representing some of the best of New Zealand agriculture are delighted to be back in Screggan this year following an excellent Ploughing Championships last year. We’re looking forward to continuing to build on our relationships developed last year and further growing our partnership with Irish farmers.”

“I am convinced that the shared experiences and similarities between farming in New Zealand and Ireland, coupled with the innovation our companies display, we will continue to forge a strong and mutually beneficial relationship for Irish and New Zealand agriculture,” says Mr Taylor.

Companies exhibiting at the New Zealand pavilion include:

   * LIC Automation, a world leader in integrated and innovative ‘Saber’ in-shed farm automation and sensor technology systems with a proud history dating back to 1909;   * UBCO Bikes, a newcomer to Screggan for 2017 UBCO manufacture dual electric drive, all terrain bikes for use around the yard and further afield. UBCO bikes come complete with power outlets and USB ports, as well as accessory lugs for equipment;   * Duncan Ag, market leaders in the manufacturing of robust and user-friendly machinery for seed drilling and forage feeding;   *Waikato Milking Systems, the third largest manufacturer globally of rotary milking systems provide advanced dairy technology options to simplify milking routines to ensure more efficient milking, better mastitis control and higher productivity; and,   * Aitchison, a company with a proud 40-year history of machinery manufacturing and specialising in seed drills and spreaders whose size, flexibility and rugged construction are well suited to the Irish market.

The New Zealand Pavilion will be located at stand 268, Row 11, Block 3 at the National Ploughing Championships from 19-21 September 2017, in Screggan, Tullamore, Co. Offaly.

| A LeinsterLeader release  |||  September 12,  2017   |||

Business and community leaders from across Alabama are traveling in Australia and New Zealand this week, seeking to boost exports and strengthen trade ties in the region.

The 17-member delegation kicked off a series of briefings with U.S. Commercial Service officials in Sydney, as well as appointments with area companies.

Later in the week, the group will travel to Auckland, New Zealand’s primary commercial hub for a similar slate of meetings.

“Alabama has strong, and growing, relationships with both Australia and New Zealand, and we want to build on those bonds,” said Greg Canfield, secretary of the Alabama Department of Commerce, who is leading the delegation.

“This trade mission is about helping our state companies find new markets for their goods and services, so they can create jobs and make new investments in their communities back home,” he said.

Alabama exports to Australia reached nearly $298 million in 2016, rising 11.6 percent from the previous year, according to Commerce Department data. Top exports included transportation equipment as well as paper, chemicals, machinery (except electrical), and computer and electrical products.

Motor vehicles were by far the largest export shipped to Australia in the transportation equipment category.

Meanwhile, state exports to New Zealand last year totaled $68.7 million, jumping 63.6 percent from 2015. Transportation equipment also led the way here, but in a change from previous years, aerospace products and parts, instead of motor vehicles, constituted the largest transportation equipment category.

Other top Alabama exports to New Zealand included chemicals, paper, plastics and rubber parts; and machinery (except electrical).

‘International footprint’

Hilda Lockhart, director of the Department of Commerce’s Office of International Trade, said Australia and Alabama have a strong relationship in both trade and investment. The free trade agreement with Australia allows Alabama companies to be competitive in this far-reaching market, she said.Members of a trade delegation visit Sydney, Australia, in search of more business for Alabama companies. (Made in Alabama)

In addition, New Zealand is a natural fit for Alabama exporters as some distributors cover both countries.

“As our companies say, it only takes one strong partner to do business here,” Lockhart said.

Alabama companies represented in the delegation include Atlas RFID Solutions, Warren Manufacturing and Regions Bank, all of Birmingham; Irrigation Components of Daphne; PowerSouth Energy Cooperative of Andalusia; MechOptix of Madison; Pinnacle Solutions Inc. of Huntsville; and Quality Valve Inc. of Mobile.

Also part of the group are representatives from the University of Alabama, the U.S. Department of Commerce and the Mobile Area Chamber of Commerce.

“This trade mission is comprised of multi-industry companies ranging from automotive, aerospace and high-tech equipment, which are among some of the best industry sectors for both Australia and New Zealand,” Lockhart said. “Both countries are very receptive to U.S.-made products because of quality and service.”

As on all trade missions, the Commerce Department has partnered with the U.S. Department of Commerce Foreign Commercial Service to set up prequalified appointments to identify potential buyers and distributors.

“The companies with us are working to grow their international footprint in new markets, and we feel very positive that they will be successful on this trip in doing so,” Lockhart said.

Strengthening business

Irrigation Components is changing its distribution model and looking for new distributors after many years of operating in Australia and New Zealand, said Ramsay Geha, vice president of international sales and a member of the trade mission delegation.

The company provides irrigation parts for gear boxes, center drives, sprinkler packages and alignment controls, and it is the world’s leader in center pivot spare parts sales. Irrigation Components operates in more than 40 countries, all major agricultural areas.

“Export sales are about 40 percent of our business,” Geha said. “Export was what established our company, and we are seeking to revitalize and strengthen this portion of our business.”

Atlas RFID Solutions sees tremendous opportunity for its business in Australia and New Zealand.

“Despite having worked on very large industrial construction projects in Australia, we have done so on behalf of U.S.-based contractors and have never worked directly with any Australian or New Zealand-based companies,” said Robert Fuqua, the company’s president and CEO. “We believe that having a more established presence in the region will open doors for more opportunities to provide value to local construction contractors.”

Kevin Bube, vice president of client operations, and Ben Whipple, program manager, are representing the company in the trade mission delegation.

“We are always looking for innovative industrial construction companies to whom we can deliver value through our proprietary materials readiness solution, Jovix,” Fuqua continued. “Companies who are prone to technology adoption are prime for our solution, which focuses on increasing craft productivity and schedule adherence through material readiness.”

Presently, Jovix is deployed in four countries, and exports account for more than 65 percent of Atlas RFID’s annual revenue.

“We have previously participated in trade missions to China, Hong Kong, Norway and Sweden. These trips have provided great value by aiding us in learning about the local business ecosystems and allowing us to create lasting relationships within those markets,” Fuqua said.Austal USA launches the future USS Omaha from its shipbuilding facility in Mobile. The Australia-based company is one of south Alabama’s largest employers. (Austal USA)

Trading partners

In addition to business meetings, delegation members also will attend networking receptions hosted by Consul General Valerie Crites Fowler of the U.S. Consulate General in Sydney and Acting Consul General Craig Halbmaier of the U.S. Consulate General in Auckland.

Among the 50 states last year, Alabama was Australia’s No. 2 trading partner in exports of pulp, paper and paperboard mill products and its No. 4 trading partner in motor vehicle exports.

Meanwhile, the state imported $106.5 million of goods from Australia in 2016.

Other key ties between the state and the country include Australian shipbuilder Austal USA, which has a major manufacturing operation in Mobile.

For New Zealand, Alabama ranked as the No. 1 trading partner in exports of pulp, paper and paperboard mill products, and the state was No. 2 for exports of resin, synthetic rubber, artificial and synthetic fibers, and filament.

Alabama’s 2016 imports from New Zealand totaled $10.1 million.

This story originally appeared on the Alabama Department of Commerce’s Made in Alabama website.

| AnAlabamaNews release  ||  September 12,  2017   |||

FreshPlaza | A tech company that helps farmers improve crop yields will list on the Australian Securities Exchange today.

CropLogic has raised the $8 million it sought in an IPO, and said it was even offered $1 million on top of that during the offer period. Forty million ordinary shares will be issued at 20 cents each, and the business will have a market cap of $25 million.

The New Zealand “internet of things” agriculture tech company, established in 2010, uses on-field sensors connected via wireless and satellite channels to collect data such as soil moisture and temperature, and rainfall, alongside other information to give farmers a predictive analysis of their efforts.

CropLogic’s current client base is predominantly potato farmers in the Pacific northwest region of the USA after the startup’s June acquisition of US agronomy services provider Professional Ag Services Inc.

The first seven years have been a hard slog financially, with the prospectus showing just $124,906 in revenue and $1.34 million net loss for the year ending March 2017 and similar numbers seen the previous year.

The $8 million raised in the IPO – which added to $3 million already secured in the past 12 months — would be used for business growth, market development, research and to “provide a healthy level of working capital”, according to CropLogic managing director Jamie Cairns.

| A FreshPlaza release  ||  September 12,  2017   |||

Trade Minister Todd McClay says the Government has agreed a negotiating mandate to upgrade the China Free Trade Agreement that will deliver thousands of jobs and be worth billions to our economy.

“China is a significant trading partner. Our FTA with China has helped New Zealand companies stay in business during the GFC and keeps Kiwis in jobs,” Mr McClay says.

“We currently have $24 billion of two-way trade with this large economy and impressive growth in education, tourism and goods exports.”

“Trade means jobs - we know 8500 jobs are created in New Zealand from every billion dollars of exports.”

“Upgrading the China FTA will increase trade and deliver more jobs in every region and every city of the country."

Mr McClay says the upgrade priorities for the Bill English-led Government include a better deal for dairy, forestry and wood processing exporters, new rules to enhance online and digital trade and better measures to deal with non-tariff barriers.

"We want to free up access and continue to level the playing field for kiwi exporters," Mr McClay says.

“We have set a joint target of $30b of two-way trade with China by 2020.”

“The upgrade will make it easier for us to hit this significant target. We are committed to delivering for New Zealanders.”

The adoption of this mandate follows MFAT-led consultation and engagement with the public and business. MFAT continues to welcome feedback on the China FTA upgrade via its website.

|  A Beehive release  ||  September 7,  2017   |||

On the Rural News website Pam Tipa writes that Trade expert Stephen Jacobi warns that if we don’t get Trans Pacific Partnership (TPP) through, we will be seriously ‘squeezed’ in the Japanese market.

This will be particularly in beef, but also in a wide range of primary products, he says.

“The Europeans and the Australians now have free trade agreements and the Australians already have a very strong advantage over us in beef and the Europeans will have that too once their agreement is ratified,” Jacobi, the executive director of the NZ International Business Forum, told Rural News.

“The Japanese have just put a safeguard on beef exports of 50% so that will damage our trade even further. You are talking about over $70 million of business, so it is quite a lot.”

Over time Australia and the European Union will “steal a march on us,” he warns.

This is not only in beef; the dairy, horticulture, wine and wood sectors will also be exposed.

“The real gains in TPP for us came from Japan in the end and not from the United States, and it’s Japan we don’t have an FTA with -- the only country in Asia we don’t have one with now,” he says.

Jacobi says the National and the Labour Parties should reach a bipartisan consensus on how to roll out the current TPP process. Negotiations are at a “delicate” stage.

“This is too serious for NZ to just leave to domestic politics in my view. That’s why we like bipartisanship,” said Jacobi, “We have an opportunity potentially to conclude the Trans Pacific Partnership before the end of the year among the 11 remaining parties, excluding the United State which has pulled out.

“It would be a lot easier to conclude that agreement if it wasn’t open to renegotiation.”

Labour finance spokesman Grant Robertson has said NZ should hold out for a better Trans Pacific Partnership (TPP) deal that includes blocking offshore buyers from buying existing residential homes.

Jacobi says if we reopen negotiations, other countries will come up with different issues and “we will see a repeat of the eight years negotiation we just spent trying to get TPP right”.

“That’s the risk. Of course at this stage it is hard to say whether others will want to reopen negotiation. It is conceivable they might. It would be particularly damaging if the market aspects got reopened because that was a very delicately balanced exercise.

“For those reasons we would rather stay with TPP as it is at the moment. As you know, the risk for us is that if we don’t get TPP through we will be seriously squeezed in the Japanese market.”

“Calling for renegotiation is not a straightforward exercise and I don’t know that NZers would be very well served to be the ones calling for it.”

TPP has got to this stage against the odds, he says.

“Everyone assumed once the United States pulled out the others would dissipate and all credit to the Government and negotiators for keeping up this work.

“But the Japanese are key in this: they have put a lot of emphasis on this agreement for their own domestic restructuring so they clearly are not wanting to waste all that effort and that of course encourages other people to stay on board.”

| A Rural News release  ||  September 7,  2017   |||

TOKYO -- Low-fat, high-protein beef from grass-fed New Zealand cattle is becoming increasingly popular in health-conscious Japan.

 In a country known for gastronomic indulgence, not least its love of fatty, marbled wagyu beef, it may come as a bit of a surprise to see the burgeoning popularity of lean New Zealand meat.

But as demand for lean cuts rises from an increasingly health-conscious public, more and more grass-fed New Zealand beef has appeared on Japan's supermarket shelves.

In June, Co-opdeli Consumers' Co-operative Union switched from grain-fed Australian beef to meat from pasture-grazed New Zealand cattle for its home delivery service.

Livestock tends to be raised in a more environmentally sound manner in New Zealand than major beef-producing countries.

While the weather can be a bit dreary in the land of the long white cloud, abundant rainfall does make for rich and plentiful pastures. There are even farmers who specialize in grass for livestock feed, growing fiber-rich ryegrass and clover for its minerals.

Continue to read the full article here in the Nikkei Asian Review  ||  September 6,  2017   |||

“Globalization has changed, but in its earlier form, it was principally about opening up the possibilities of economic specialization, economies of scale, and economies of scope.”By Anand Swaminathan for The Politic

Dr. Alan Bollard serves as the Executive Director of Asia-Pacific Economic Cooperation (APEC), which promotes regional trade, economic growth, and sustainability. As Executive Director, Dr. Bollard presides over economic programs that are mandated by APEC’s leaders and ministers. Before his work with APEC, Dr. Bollard served as Secretary to the New Zealand Treasury from 1998 to 2002 and then Governor of the Reserve Bank of New Zealand from 2002 to 2012. He holds a Ph.D. in Economics from the University of Auckland.

The Politic: Can you describe the function of APEC and how it has developed over the years?

Alan Bollard: APEC is an organization that is promoting regional economic integration around the Asia Pacific region. It has 21 member economies, over almost the entire Pacific coastline. This includes big economies like the U.S., Japan, Russia, China, and a lot of smaller ones. Altogether, APEC’s member economies make up half the world’s GDP, and it is the largest organization of its sort in the world.

APEC came about around the end of the Cold War. It was the vision of a number of ministers around the Pacific Rim who realized that, if we could open up the barriers to trade and investment between economies, there was potential for very strong international economic growth.

Can you describe what you think are the benefits of international free trade and, more generally, the benefits of globalization?

Globalization has changed, but in its earlier form, it was principally about opening up the possibilities of economic specialization, economies of scale, and economies of scope. It used the theories of comparative advantage that had been well-established in economics for the last two hundred years, saying it is most efficient if production takes place in countries that have a comparative advantage. Typically, that used to mean that from WWII onwards, a lot of sophisticated production would happen in sophisticated economies like the United States. Whereas, some of the East Asian economies would provide a place for cheaper, lower-skilled assembly.

Over time, this has changed considerably and quite quickly around the Asia-Pacific. Trade has become very integrated, there has been a big growth in value chains. Highly integrated trade and supply chains have brought a lot of benefits to consumers. When we look at who is actually producing, we do see a switch where more developed Western economies have moved quickly out of manufacturing into services. The developing countries have taken over manufacturing.

This has had a distinct effect on the Asia-Pacific region. In APEC countries, at least half a billion people have come out of poverty and into middle-income in the last quarter of a century. Once they are in middle-income, these countries can generate their own growth and grow in more sophisticated ways. For example, these countries no longer have to simply rely on North American consumption or Chinese consumption.

We are very clear that a growth of trade has led to an improvement in living standards, broadly. When you look at how those benefits have been distributed within countries, it does become more complicated. Some groups have gained, and some groups have lost. That’s really where domestic social policies should come into play because they should be identifying the losing groups and helping them re-skill.

Responses to free trade differ throughout the world. Free trade has recently come under fierce scrutiny and criticism from people of all political orientations in the Western world. People have argued that trade has helped to demolish manufacturing in the West and enrich so-called elites at the expense of everyday workers. Do you think this criticism is justified and that there are real drawbacks to trade?

Sometimes people make this criticism about trade, and other times they make this criticism about globalization. Often times, there is an amalgam of things that they are reacting to, that are different from trade. These include migration, the growth of environmental problems, growth in foreign investment, an increase in automation, and a growth in trade. Some of these things are interrelated, but quite often we’re finding that complaints about globalization are not about free trade but about automation.

As to the popular concerns about this, some of it is simply harking back to the past that never existed. There seems to be a view in some European countries and, which certainly came up in the U.S. election, that these countries had a huge, solid manufacturing background and that they have lost that. We have to remember that, in the United States, less than ten percent of jobs are in manufacturing.

Even after World War II, less than third of jobs were in manufacturing. Where do people work? In services. But you would never believe that from the media teaching. Generally speaking, these manufacturing sectors are not nearly as important as most people seem to think. The Financial Times has a term for this, called “factory fetish.” Politicians love factories, but actually, most of them long ago departed the developed world. Jobs in the services sector have taken their place.

Why do you think there is so much of a fixation on manufacturing? Why do politicians consistently have this “factory fetish?”

Some of it is history. The United States’ major contribution to early economics was mass production—Ford factories and onwards. Right through to WWII these were very important.

But really after WWII, Japan took leadership of mass production and it moved around the world.

Factories are also physical things that you can locate and look at. They are very concentrated in terms of employment. That means if you have a factory closure, that event is highly visible. From a communications point of view, it is much easier to communicate about factories. Generally, the story about factories has been about closures rather than openings. Politically, factories are much more attractive from a labor and union point of view. Beyond that, I think some of it is illusionary.

Moving away from the Western world, how would you describe the current state of trade in the Asia-Pacific region? How are attitudes towards trade and globalization within the region?

There was a very positive view of trade and investment because the benefits were very visible right up until the global financial crisis. As a very rough formula for the previous twenty years, we broadly had eight percent average annual trade growth, leading to roughly four percent average annual economic growth, leading to roughly two percent annual GDP per capita growth. This meant people were almost twice as rich as their parents’ generation, which is very strong delivery for the region.

Now, in that period since the global financial crisis, trade slowed down very considerably. This didn’t happen all at once, because China was going through a commodities boom. But then we saw a slowing in trade, a slowing in growth, and a slowing in productivity growth.

Would you say that the positive attitudes towards trade are reflective of the general population in Asia-Pacific? Or do we hear these positive reviews mostly from higher-up and elite members of these nations?

It depends very much where you’re talking about. I’m in Singapore—Singapore is a trading hub and everyone knows that trade is very important. In a large economy like the United States, many people can feel insulated from these regional trade trends. In the Asia-Pacific region, generally there is a feeling that we can see the benefits of what trade has brought. But we do understand that things are changing, and that we have to communicate better to the wider population.

Also, there is a reasonable argument that, in the past, we’ve been convinced that trade and globalization are benefiting countries but we haven’t worried too much about the distribution of benefits within a country. But, there is the argument that with higher levels of globalization, we do need social policies that will stand alongside that. That includes labor market policies, health policies, social protection policies, and above all, skill and reskilling opportunities. What we think most directly impacts jobs is much more automation.

How important has automation been in displacing manufacturing jobs? How will automation continue to shape the future of work?

We can’t be absolutely definitive about these questions because we haven’t been that good about forecasting technological change and its impacts on the economy. Most economic studies find that when you look directly for determinants of job loss, you find that two-thirds might be due to automation. So clearly, automation is having a big impact. It has had a large impact on manufacturing jobs. But the way that automation is going now, it’s actually impacting services much more and that’s where we should be looking to in the future. In the past, automation used to be applied to things that involved heavy lifting and mechanical repetition. But now, it’s being applied to things that involve intelligence and learning and different systems.

What is the future of trade and globalization, given the advent of the Trump administration and protectionist sentiment throughout the Western world?

Quite apart from the growth of protectionist thinking, it did look like we might have seen the growth in regional supply chains in the Asia-Pacific slowing down. Now, I’m not saying that the regional supply chains were slowing down, but that the growth of regional supply chains was slowing down. It looked like they had exploited a lot of the advantages of the economies of specialization. In addition, there has been one other very big economic development in the ten years since the global financial crisis, and that’s the energy revolution.

The other big development will be the development of services trade. Services trade is not that developed in the Asia-Pacific region, but it is starting to be. That happens not only from moving goods across the region in ships, but also from moving data across the region on the Internet. It depends much more on things like telecommunications, roaming data charges, digital movements, cybersecurity, and those sorts of things. Already, data movements have increased fifty times over the past decade, according to McKinsey.

It was reported that there was an APEC trade ministers’ meeting in late May, the first since the election of Trump. If you are able, can you describe the discussions during this meeting? How do other members of APEC feel about the Trump presidency?

Yes, we were doing a couple of things there. We were all pretty interested to hear from the new United States trade minister Trade Representative Robert Lighthizer. He had only just been appointed a few days previous to that meeting. We wanted to hear a lot more detail about the new U.S. administration, what it proposes on the trade and globalization side. But we need to hear a lot more detail about what that means, what their concerns are. We did hear some of that from the U.S. Trade Representative. He talked about trade deficits, possible bilateral developments, and a number of multilateral areas.

We’re looking for what we think is best practice around the region. APEC is quite a good organization, both for the U.S. and other member economies, because it is voluntary. It is not like a WTO, or a TPP, or a RCEP, which are legally binding. We are not. We are just a test kitchen. We try things out, we incubate new ideas. So, we’re a place where it’s quite easy to try things out, and if you don’t like them, then you don’t have to be part of them.

Certainly, the U.S. wants to see services trade continue and grow. They’re very focused on digital economy and that kind of commerce. But also, to be realistic, they made it clear that they will be focusing on NAFTA renegotiation. And we’ll watch how that goes.

I know the annual APEC Leader’s Summit will be held in November, and Vice President Pence has indicated that Trump will be attending. What are your expectations for that meeting, and what do you expect Trump to say?

It will be quite a big and important event. We expect to get all the leaders of twenty-one economies and that includes the very big economies. Many of them will have met in other fora by then, and particularly at the G20 Leaders Meeting in Hamburg, Germany. What they do in APEC meetings is that they review all the work I nominated and give directions for the year ahead. What we do is follow the directions of 21 economy leaders. I imagine they’ll be looking at how we communicate the benefits and costs of globalization in all of this. It’s helpful that it’s a few months away, because I think we’ll have more clarity in quite a few of the details.

What advice would you give to college students who want to learn more about international trade and the global economy?

Well, students are very lucky today. They’ve got massive opportunities compared to what used to be the case. They’re operating in an international world. Just within APEC, we have something like one million student movements, cross-border movements going on. I think there are great opportunities available, and my advice is to take advantage of them. There are great opportunities for being and remaining mobile in the world. There are many chances to help preserve many of the hard-won benefits of internationalization because, until the 1980s, it simply wasn’t like that. You simply couldn’t study and work across borders in the way that you can today.

This interview has been edited for concision and clarity.