When the Coalition Government took office last October, it inherited a country on a precipice. With persistent inflation, decades of insipid productivity growth and crises in healthcare, education, housing and law and order, it is no exaggeration to suggest New Zealand's first-world status was at stake.

Resolving these daunting policy problems is difficult enough. But there is a deeper, more fundamental challenge confronting the nation. It is one of ambition and identity.

A creeping cultural malaise has dampened New Zealand's aspiration to aim high and fulfil its potential as a truly prosperous, dynamic society.

Instead, an insidious complacency has taken hold – the unspoken assumption that New Zealand is too small and too isolated to compete robustly on the world stage beyond a few commodities and tourism niches. That relative decline is inevitable and acceptable, so long as a veneer of comfort remains.

But it is not just complacency sapping our ambition. Increasingly, we are becoming an inward-looking, divided people, expending excessive energy on zero-sum battles over slicing up our existing national pie. The political zeitgeist of grievance and identity trumps any unifying goal of expanding opportunity and prosperity for all.

Even when we do try to lift our gaze, our goals betray our horizons. An example is the previous National-led Coalition Government’s 2025 Taskforce. Its remit was to provide strategies to close the income gaps with Australia. Worthy enough. But why not aim to be the world’s most prosperous small, advanced nation?

Researcher Tony Smale has argued that a cultural psyche – an inclination to "satisfice" with modest living standards – directly impedes New Zealand from realising the economic benefits of its innovative potential.

Even among entrepreneurs, the iconic Kiwi dream is a ‘boat, bach and BMW’. But it pales against the ambitions propelling entrepreneurial talents in other small economies like Singapore, Denmark or Ireland to build innovative global enterprises. Sure, there are exceptions – like Rocket Lab’s Peter Beck and Zuru’s Nick Mowbray. But their exceptionalism only underscores the rarity of such world-beating business ambition.

In his 2008 report, The Influence of National Culture on New Zealand’s Innovation Outcomes, Smale provides an empirical case study of how ingrained cultural traits and narratives shape a nation's economic trajectory. He links New Zealand's specific cultural barriers – the 'tall poppy syndrome', short-termism, anti-materialism – directly to our struggle to convert creativity into sustained growth.

Such constrained thinking belies the ethos of those who built the outward-looking, world-leading society we inherited. It defies the daring that once had us overcoming the tyranny of distance through outsized feats of exploration, enterprise and public policy reform.

The costs of this poverty of ambition stretch far beyond lost incomes. It starves us of revenue to afford first-world social services, infrastructure, and educational institutions. It deters global talent from bringing their human capital here. Ultimately, it resigns us to a peripheral future as the world's most isolated also-ran.

Cultural drags of complacency, lack of global vision and internal division also combine to sap the collective political will to make hard policy choices. Without a galvanizing narrative of national purpose, reforms to boost productivity and competitiveness stall. Stagnation becomes a self-fulfilling prophecy.

The new Government has an opportunity to rekindle faith in our ability to achieve audacious goals through daring and perseverance. And not just in the sporting arena. But in technology, science, the arts and, most of all, business. After all, it is business on which we all rely to grow the national pie.

Restoring an ambitious enterprising spirit is a generational undertaking. We must foster a culture of lofty individual and national ambition, with supportive economic policies to match. We must define ourselves by our eagerness to make a positive, prosperous impact on the world, not our readiness to settle for a fading share of it. We must recast our unique geography as a platform for defiant achievement, not an excuse for timid fatalism.

The task is not the Government’s alone. We need brave leadership from all quarters to replace the psychology of managed decline.

There will be pushback from the merchants of miserabilism grown used to mediocrity. 

Naysayers will also decry the pursuit of excellence as elitist and divisive, betraying ‘egalitarian’ Kiwi values. They will define national character by division and past wrongs, not shared hopes. In their telling, striving to achieve merely widens the gaps between us.

But such divisive rhetoric risks unravelling the social fabric and sense of common purpose vital for inclusive progress. Its very emphasis on difference threatens to make inequality a self-fulfilling prophecy.

Rationalisations of New Zealand’s decline also slight New Zealand’s past success. And the outsized achievement of those Kiwis who have excelled on the global stage from the bottom of the world.  

Effecting this cultural renaissance is a daunting mission. Yet our prospects for a first-world future rest upon it. Because underlying the pressing challenges in housing, health, education, and prosperity is this even deeper crisis of imagination, ambition and national solidarity.

As economist and Nobel laureate Douglass North argued, long-term prosperity requires more than smart policies. It demands reshaping the cultural narratives and norms underpinning how a society sees itself and its place in the world.

New Zealand stands at a crossroads. One path leads to a diminished destiny on the margins of progress. The other to reclaiming our historic standing as an indomitable small nation boldly shaping a prosperous, globally engaged future.

The choice is ours. But it requires the courage to confront hard truths and the resolve to make hard choices. Above all, it requires the ambition to imagine our small country’s full potential – so that every Kiwi has the opportunity to apply their unique gifts and live out their dreams.

To read the article on the NZ Herald website, click here.