The government's recently released Tertiary Education Strategy 2025-2030 signals a shift towards harnessing the sector to address New Zealand's long-standing productivity issues. But the strategy and its goals aren't necessarily aligned.
Author
- Rod McNaughton
Professor of Entrepreneurship, University of Auckland, Waipapa Taumata Rau
Universities and polytechnics are now expected to promote innovation, accelerate commercialisation and build significantly stronger entrepreneurial capabilities. Measuring those things will be the challenge.
The strategy identifies "particular gaps in market-driven entrepreneurial skills" and instructs universities to expand entrepreneurial education, especially for graduate researchers.
It also acknowledges that more people will build careers through self-employment, freelancing or portfolio work.
In parallel, a new national intellectual property policy gives academic staff the first right to commercialise government-funded research, signalling a stronger expectation that universities will generate new ventures and technologies.
The country wants more innovators, founders and risk-takers. Yet several elements of the strategy, especially the way performance may be assessed, risk unintentionally discouraging the very entrepreneurial pathways it aims to promote.
The wrong metrics?
Graduate earnings are one example. Early-career income is widely used internationally as a marker of labour-market relevance, and the strategy treats it as a key success measure. But entrepreneurship rarely begins with high or stable income.
Founders typically experience several years of irregular or low earnings before ventures become viable.
When systems use earnings as a key indicator, the fear is universities will shift focus toward producing graduates for established, well-paid sectors, and away from entrepreneurial endeavours.
But earnings are only one of several tensions.
The strategy's strong emphasis on labour-market alignment, employer co-design and responsiveness to current skill shortages can tilt institutions toward preparing graduates for today's jobs rather than tomorrow's industries.
Many entrepreneurial opportunities emerge in sectors too new to appear in occupational forecasts, from synthetic biology and climate technologies to AI and autonomous systems.
Innovation depends on experimentation and exploration, not simply meeting existing demand. Students will become innovators when exposed to new knowledge, not legacy skills.
Establishment versus experiment
The strategy highlights efficiency, tighter accountability, and improved retention and completion rates. These metrics reward predictable, linear progression.
But entrepreneurial careers are often nonlinear: students may take breaks to build prototypes or pursue opportunities, and researchers may divide their time between academic work and emerging ventures.
Under an overly prescriptive framework, such behaviour can appear as inefficiency rather than evidence of ambition.
Even the strategy's treatment of vocational and foundation learning reinforces traditional employment pathways. It emphasises work-based training and immediate workforce attachment.
Yet for many, including Māori, Pacific and regional communities, micro-enterprise, social entrepreneurship and locally-driven innovation are vital tools for economic resilience. A narrow employment lens risks sidelining these and other forms of entrepreneurial value creation.
Stronger industry involvement presents another challenge. While collaboration with employers is essential, those invited to shape curricula are typically large, established firms.
Their priorities differ from those of emerging industries and new ventures. If incumbent voices dominate programme design, the system may become less open to disruption, experimentation and the needs of smaller firms and emerging industries.
What other countries have learned
Several countries, including the United Kingdom, have already confronted these tensions. The Knowledge Exchange Framework , for example, assesses universities on employment outcomes as well as on commercialisation, licensing, community enterprise and research partnerships.
The UK-based Institute for Fiscal Studies suggests assessing medium-term trajectories rather than early-career earnings by using the highest earnings of graduates three to five years after graduation, taking into account prior attainment, demographic characteristics and subject studied.
This demonstrates the potential complexity of trying to get such measures right.
The New Zealand strategy identifies the metrics, but not their detailed definition. The details will matter if we truly want to encourage more innovation and entrepreneurship - not just more students graduating on time, hoping to find jobs.
The strategy does send a strong and welcome signal that innovation and entrepreneurial capability are essential to the country's future. Its emphasis on commercialisation, creativity and adaptability is aligned with international evidence on what drives productivity in modern economies.
However, as the next step, we must ensure the strategy's performance measures align with its ambition.
Entrepreneurship rarely looks like a high salary, a tidy CV, or even timely degree completion. It does look like risk-taking, refining and long-term value creation.
It is messy and takes time. If tertiary institutions are judged primarily on short-term, conventional indicators of success, they may be pushed to prioritise safer pathways at the expense of innovation.
If that happens, the system risks promoting entrepreneurship in theory, while constraining it in practice.
Rod McNaughton does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.
