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There’s been a lot of talk lately about why New Zealand should be more like Denmark. So, I went and did some research to find out why.

A few decades ago, Denmark looked a lot like us: a small, rural country with a heavy reliance on primary exports like dairy and meat. But instead of staying put, they evolved. They backed their primary sector, then used it as a launchpad to create billion-dollar biotech companies, global food innovation, and world-leading wind energy.

Here’s the result:

• Denmark’s GDP per capita is over NZD$120,000
• New Zealand’s is around NZD$80,000

That’s a gap of nearly $40,000 per person - or to put it collectively – an extra $200bn of GDP every year - and it didn’t happen by accident.

When Denmark backs a sector, they go all in — and they stay the course. Below are three examples of things Denmark does well:

1. Public-Private Co-Investment Funds

Through Vaekstfonden (The Danish Growth Fund which holds almost $7bn of assets), Denmark co-invests with private capital into high-growth sectors like food innovation and Agritech — sharing risk and scaling faster. They have funded over 5,400 companies since 1992, supporting startup and SME’s at all stages.

2. Export + Cluster Support

Exporters get access to finance through EKF (Denmark’s export credit agency) and entire industries are supported through clusters that connect research, education and capital.

3. R&D Grants and Tax Incentives

Denmark offers strong R&D tax credits and direct grants to value-add businesses, especially those lifting margins beyond the farm gate.

In short, they’ve taken a strong farming base and used it to build an even stronger innovation economy.

Are we falling behind? A straight look at NZ’s future and our current productivity trap.

This isn’t about bashing New Zealand. It’s about asking the harder question: are we using our existing advantages, or are we coasting on them?

New Zealand is one of the most resource-rich countries in the world — great soils, clean and plentiful water, stable democracy and a brand that sells. Yet, when you dig beneath the surface there’s a growing concern that we’re falling behind.

Unfortunately, there’s a hard truth: New Zealand has one of the lowest productivity rates in the developed world. From a 2022 survey New Zealand’s productivity (in GDP per hour worked) was USD$55. In Denmark, its USD$105. The OECD average is USD$90-100.

Perversely, we actually work longer as well – 15% more than the OECD average. That means we work longer hours to produce less value than the rest of the world.

Too often, the systems around us such as infrastructure, regulation and access to capital aren’t set up to reward ambition or drive scale.

Denmark, once as rural and export-dependent as us, has reinvented itself with biotech, wind turbines, and billion-dollar health companies. Meanwhile, we’re still fighting the same old battles: productivity, red tape, a creaking tax base focused on dividing revenue rather than growing it, and an overcooked housing market.

Every day we see Farmers with incredible growth ideas but not the capital to support these. Capital in New Zealand follows property rather than supporting start-up, business development, and technology investment.

In contrast, countries like Denmark made bold bets decades ago. They poured investment into research, education, and industry clusters. Today, they’re exporting high-value IP, not just raw commodities.

Where’s our National Direction?

One of the most significant differences between New Zealand and the countries pulling ahead is this: they have a long-term plan.

Whether it’s energy, high-tech, capital management or food innovation, nations like Denmark, Ireland, or the Netherlands back certain industries to the hilt. There’s alignment across government, education, and capital — and they get out of the way once the flywheel starts turning.

In New Zealand, we change direction every election cycle. The result? Underinvestment in infrastructure, slow reform, and capital flowing into unproductive areas — especially property. We’ve built a system where houses make more money than farms, factories, or IT.

And when your economy isn’t generating sufficient value in other sectors, the burden of earning export dollars falls even more heavily on agriculture, but without the necessary tools for evolution.

Farming is carrying the load.

Let’s be clear — farming is still the backbone of New Zealand.

Our sector delivers over 80% of New Zealand merchandise export earnings. When COVID hit, it was the farmers and food processors that kept this country afloat.

We’ve modernised, adapted to new markets, and are evolving farming practices.

We are already a world leader in the production and export of high-quality dairy ingredients. And there are excellent examples of value being added beyond the farm gate — like First Light Foods, Lewis Road Creamery, Halter and Te Pa Wines to name just a few.

Our economy needs more of that and the systems to support it.

What Needs to Change?

Here are six things that New Zealand could do, and that farming could lead on:

1. Rewire the Capital System

We need better access to patient capital for on-farm innovation, infrastructure, and land use change. That includes private investors, co-investment models, and non-bank funding. If traditional banks won’t step up, we need a system that will.

NZAB is already pioneering this shift — matching farmers with private capital, offshore funds, and non-bank lenders to back growth, especially where traditional banks are hesitant. The capital appetite exists, and we will continue to build more channels to further capital.

2. Make access to capital a National Strategic Pillar.

It's time for the Government to stop treating SME and start-up capital as a side hustle and start backing it as a core driver of national productivity. We need a coordinated policy directive that makes access to business capital — not just property finance — a strategic economic goal.

That means scaling investment vehicles like the NZGCP, expanding co-investment models alongside private capital (as Denmark has done), and creating clear incentives for institutional investors to fund high-growth sectors. This isn’t just about handing out cash — it’s about creating a smarter financial ecosystem where ambition is rewarded, not throttled. Without this shift, we’ll keep watching our best ideas stall out for lack of fuel while the property market hoards the tank.

3. Go big on Agritech.

We shouldn’t just be users of smart farming tools — we should be global exporters of them. From sensors to genetics, irrigation tech to automation, New Zealand can lead the world in high-efficiency, low-emission systems. Let’s commercialise our on-farm ingenuity and build an export engine off the back of it.

This is already happening with companies like Halter (now with a >$1bn valuation) who are exporting smart collar technology that allows farmers to move cows remotely and track animal health in real time. Another example is the quiet export hero - Waikato Milking Systems with their rotary and robotic milking platforms which are used in over 30 countries. Designed in New Zealand, they’ve innovated everything from automatic cup removers to real-time milk monitoring.

We have many other examples of homegrown Agritech being used on New Zealand farms and now going global. We need to help these companies scale faster with both capital and market scaffolding.

4. Train for the future

Let’s stop funneling all our top talent into law, medicine and real estate. We need a new generation of farm entrepreneurs, Ag scientists, AI navigators, food technologists, and sustainability experts. The education sector needs to get real about this — and so do we, in how we speak to our kids.

University tech incubators like Lincoln Agritech (and their Postgraduate School),  and Canterbury University's "Thinclab" as well as external programmes like Icehouse and Spout Agritech are directly targeting this gap, connecting education with industry placements and hands-on skills. These are good starts — but need to be 10x bigger.

5. Cut the red tape and invest in infrastructure.

You want young people in the regions? Give them fast internet, transport links, and housing. You want farmers to innovate? Give them stable policy settings and faster consent processes. We don’t need perfection — just better ways to remove friction and build confidence to go on the journey.

It’s been very encouraging to see the rollout of the new national farm plan regime. This allows farmers to use approved farm plans—such as those from dairy co-ops—instead of redundant local council consents. This change, recently welcomed by Federated Farmers, eliminates duplicate paperwork and accelerates new investments like effluent systems or sheds.

6. Celebrate Excellence

We need to stop apologising for success. In Denmark or the Netherlands, a farmer making $5M profit is admired. Here, we downplay it for fear of criticism or complaints about the price of butter or ribeye. That culture is costing us ambition.

Awards like The Ballance Farm Environment Awards and NZ Food Awards do shine a light on top performers — celebrating innovation, sustainability and financial excellence. But this needs to go mainstream. These stories should be on the six o’clock news, not buried in niche publications.

And yes — Denmark has higher taxes than New Zealand.

But fixating on that misses the point. It’s not just about what’s taken from people — it’s about what’s left behind. When your GDP per capita is $40,000 higher, you can fund public services, support business, and still enjoy a high standard of living. Their political debate isn’t endlessly stuck on how to slice the pie — it’s about how to bake a bigger one. In New Zealand, we waste too much oxygen arguing over how to divide a stagnant tax base, instead of growing the economy that feeds it. That’s why wealth taxes and property taxes always hit a brick wall — because under-performance makes redistribution a political minefield. In an economy firing on all cylinders, these debates fade. People have more, expect more, and the system delivers more. That’s the real lesson from Denmark: focus on building the base, and the rest takes care of itself.

If we’re serious about scaling a smarter, more productive economy, agriculture should be where its scaled from.

Agri already houses many of New Zealand’s most innovative thinkers, problem-solvers, and self-employed business owners. No other sector in the country has more hands-on entrepreneurs per square kilometre. Farmers are engineers, logistics managers, climate strategists, people managers and financiers. And here’s the rub: unlike most Kiwi start-ups, agri-businesses begin with one massive unfair advantage: global demand and an internationally trusted brand. Our food and farming story already opens doors so its only natural we build on this. Agri should be the incubator where bold ideas are tested, scaled, and exported — not just commodities, but technologies, services, and IP that lift the entire economy.

The choice ahead.

New Zealand doesn’t need to become Denmark — but we’d be foolish not to learn from it. They took their rural roots and built a high-value, future-proofed economy by aligning capital, education, and government behind strategic sectors. We have the raw materials — world-class farmers, trusted food exports, and a deep base of on-farm innovation. But we’re missing the scaffolding to scale it. If we want to close that $200BN productivity gap and create real prosperity, we need to stop tinkering and start backing farming not just as a goods export industry, but as the launchpad for our next economic step change.