The Knowledge Wave’s Bitter Wake-Up Call

Apropos of nothing – except for the current vibe coming out of Wellington. Let’s be frank about what went wrong with the Knowledge Wave circa 2001 and 2003. I remember sitting in those early conferences – all optimism and powerpoints about our gleaming tech future. But in reality, we were trying to bolt a Silicon Valley dream onto a country that runs on milk powder and tourist dollars.

Here’s my reflections on why it fell flat:

  • First up, we misread our infrastructure reality. Sure, some parts of the country got its fibre and some towns got their “innovation precinct,” but try running a tech startup from Tokoroa, Benmore or Gore. The regions got left behind, which is a story most of us who live there know all too well.
  • Second – and this is where the policy wonks got it wrong – we thought we could stem the brain drain with fancy innovation strategies. But, as I learnt over the summer holidays – engineers in Melbourne are making twice what they’d get in here, so no amount of “innovation” rhetoric will keep them here. Our best and brightest kept jumping the ditch, and fair enough too.
  • Third, we forgot what every first-year economics student knows: market size matters. We’re a country of 5 million people at the top of the world. You can’t build the next Google when your home market wouldn’t fill a decent-sized Chinese city.
  • Fourth – and this is where my time in both the public service and business really hits home – we had this cultural disconnect. The Knowledge Wave crowd were dreaming up software empires while our business strengths were finding clever ways to grow green grass.
  • Fifth, we never cracked the capital problem. I’ve sat through countless meetings watching good ideas wither because we don’t have the investment ecosystem. Our venture capital scene is about as lively as a Dunedin winter. Sorry Dunedin.

And frankly the current obsession with hard science funding is classic cargo cult thinking. We’re pouring millions into labs while completely missing what actually drives tech success. When you look at Silicon Valley’s biggest wins – your Facebooks, your Ubers, your AirBnBs – what made them stick wasn’t groundbreaking physics or chemistry. It was deep insights from social science into human behaviour, social networks, and how people use technology daily.

Take ChatGPT – sure, there’s complex math under the hood, but its success is all about understanding user psychology and social interaction patterns. The real innovation gold isn’t in test tubes or particle accelerators – it’s in understanding how humans tick, how communities form, and how trust builds in digital spaces. It’s like we’re building fancy rockets without learning how people want to travel. Or even worse, building surveillance and military alliances before securing the social license.

Now, here’s where I get properly stuck in – this current talk about hitching our wagon to the American military-industrial complex and playing in the AUKUS sandbox is the Knowledge Wave mistake all over again. Different decade, same flawed thinking. What gets my goat is this idea that we should focus on pure science and cosy up to the Americans. It’s my usual question – have any of these decision-makers met any Kiwi businesses?

Our sweet spot isn’t theoretical physics – it’s practical innovation. It’s taking something real – like farming or tourism or online-design-and gaming – and making it smarter, more efficient and available to more people. Let me be clear – I’m not saying we should turn our backs on high-tech industries or international partnerships. But we need to be pragmatic about who we are and what we’re good at. The Americans aren’t interested in us because of our pure science capabilities – they’re interested in our strategic location and our political stability.

What we need – and I’ve been banging this drum in academia and business pages – is an innovation strategy that plays to our strengths. That means getting serious about agricultural technology where we’ve got natural advantages, securing and actively governing our water assets, making our tourism industry smarter and more sustainable, and using our reputation for trustworthiness to build digital services that work for the Asian century – not the Anglo-past.

The Knowledge Wave failed because it was a photocopy of someone else’s success story. We don’t need another photocopy. We need to write our own story – one that makes sense for a small, distant, but clever country that’s good at adding value to the basics of life. And for heaven’s sake, let’s stop pretending we will be the next big thing in rocket science. We’re better off being the best version of ourselves.

Just my two cents, for what they’re worth. However, with inflation, maybe make that five cents.