In our recent discussion with Luke Kemeys from Keep the Change and entrepreneur Simon Rolland, we unpacked why New Zealand’s economy is falling behind and what’s driving the shift. From mindset changes to structural challenges, this conversation explores what’s holding the country back and where the opportunities lie.
A Mindset Shift
There was a time when New Zealand prided itself on innovation – the classic “number eight wire” mentality. But today, that confidence appears to have faded, replaced by hesitation and a tendency to wait for conditions to improve rather than act.
Instead of pushing forward, many Kiwis have become increasingly risk-averse. This shows up clearly in how money is invested. Large amounts of capital sit in term deposits and housing, while comparatively little flows into businesses or innovation.
That shift matters. Without people willing to take risks and build, the economy loses momentum. As discussed in the episode, a strong economy isn’t built on passive assets alone – it requires people actively creating, hiring, and growing businesses.
The Business Gap
Another major factor in why New Zealand’s economy is falling behind is the structure of its business landscape.
New Zealand is facing an ageing demographic of business owners, with a significant portion over the age of 50. At the same time, fewer young people are stepping in to replace them or start new ventures.
This creates a compounding issue:
- Older businesses are less likely to adopt new technology
- Fewer new businesses are being created
- Innovation slows down across the economy
In fact, New Zealand businesses lag behind Asia-Pacific peers when it comes to investing in technology and growth initiatives.
The result? Lower productivity, fewer high-paying jobs, and slower economic progress.
The Talent Drain and Productivity Problem
The discussion also highlighted a worrying trend talent leaving New Zealand.
With around 200 Kiwis departing each day for opportunities overseas, the country is losing many of the very people needed to drive growth.
At the same time, productivity remains a persistent issue. Many Kiwis feel they are working longer hours for less reward compared to other countries. This isn’t about effort it’s about output and efficiency.
Contributing factors include:
- Limited adoption of technology
- Underinvestment in business growth
- A lack of scalable, high-performing companies
The Property Mindset vs Building Businesses
New Zealand’s long-standing focus on property also plays a role.
For many, buying property has been seen as the primary path to wealth. But as discussed in the episode, this mindset can limit broader economic growth.
Property can be a store of wealth, but it doesn’t always create:
- New jobs
- Higher wages
- Scalable economic output
By contrast, businesses drive employment, innovation, and income growth – all critical for a stronger economy.
Education, Risk, and Opportunity
Education also emerged as a key piece of the puzzle.
Traditional pathways – university, stable job, property – may no longer align with today’s economic reality. Rising costs, student debt, and slower income growth are putting pressure on younger generations.
At the same time, there’s a growing gap in practical business education:
- Financial literacy
- Cashflow management
- Entrepreneurship skills
Without these, fewer people feel confident starting or scaling businesses – reinforcing the cycle.
The Role of Culture and Tall Poppy Syndrome
Culture plays a bigger role than many realise.
Tall poppy syndrome – the tendency to cut down success – continues to influence behaviour. Business owners often feel pressure to downplay achievements or avoid standing out.
This has real consequences:
- Fewer role models for aspiring entrepreneurs
- Less open conversation about success and growth
- Reduced ambition at a national level
In contrast, other countries actively celebrate success, which encourages more people to pursue it.
Key Takeaways
- New Zealand has shifted from an innovative mindset to a more risk-averse one
- Investment is heavily concentrated in property and term deposits rather than businesses
- An ageing business population is slowing innovation and growth
- Younger talent is leaving New Zealand, creating long-term economic pressure
- Productivity challenges stem from underinvestment in technology and business growth
- Property alone won’t drive a high-performing economy – businesses are key
- Education gaps are limiting confidence in entrepreneurship and financial decision-making
- Tall poppy syndrome continues to suppress ambition and visibility of success
- Long-term improvement will require cultural, structural, and investment changes
Next Steps
If you’d like to watch more, check out this other episode below.
For a no obligation discussion to see how we can help you on the path to wealth, please contact us.
Disclaimer:
The information in this article is general information only, is provided free of charge and does not constitute professional advice. We try to keep the information up to date. However, to the fullest extent permitted by law, we disclaim all warranties, express or implied, in relation to this article – including (without limitation) warranties as to accuracy, completeness and fitness for any particular purpose. Please seek independent advice before acting on any information in this article.
