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Home / Business / Economy

<i>Project Auckland:</i> Auckland's unique population is what makes it great

Liam Dann
By Liam Dann
Business Editor at Large·NZ Herald·
21 Sep, 2010 12:00 AM5 mins to read

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Part four of the Project Auckland series looks at 'Prosperity and Profile'

In the end what will make Auckland a great city is not its infrastructure. It is not the Sky Tower or any other tall buildings. It is not even the volcanic cones, beaches and waterways. As the original Aucklanders liked to say: it is people.

The city has a unique population mix - young, hip and educated; European, Polynesian and increasingly Asian. We are a people switched on to world and highly literate in the nuances of British, American and Chinese culture. We are a city of untapped potential.

It is the talent pool that holds the key to taking New Zealand's economy in long promised directions - up and away from a reliance on agriculture and tourism.

It has, for at least a decade, been the aim of government and business to improve productivity and shift the profile of the nations export earnings. This in itself is a daunting challenge. Achieving it without the help of the nation's largest city will be impossible.

Auckland is typically viewed as an economic laggard by the rest of New Zealand. In a country where agriculture and tourism dominate exports it is easy to see why.

It is a little unfair because many of the services Auckland provides are vital to the performance of the big earners around the country.

But the city's economy is dominated by the service industry. And sectors like property, finance, insurance, IT, design, retail and media are often viewed as non-productive because they trade largely within the domestic economy.

That has historically been the case to some extent. But there is no reason why it should be that way.

The challenge for the region and indeed for the whole nation is to turn more of the companies in these sectors from inward facing domestic businesses into export earners.

There are certainly already good examples of Auckland businesses doing just that. Take a look at Orion Health, a Mt Eden-based company which sells and runs software for healthcare administration all over th the world. Orion said last month that it was on track to hit revenue of $100m and it is now gunning for $1bn.

The company provides a model for a whole range of local industries which could utilise smart technology to sell creative ideas internationally.

Technology has removed the tyranny of distance that once confronted New Zealand exporters.

So of all the infrastructure challenges facing Auckland broadband is the one that has the potential to drive new growth.

While the national broadband upgrade currently being tendered out is a central government spend, the logistics of getting the network built will mean that local government plays a crucial role in ensuring the speed and quality of the build.

In Auckland it will be the new Super City council that works with the builders - likely to be Telecom or Vector.

It is vital then that we have a mayor who understands the value of technology and gets behind it.

Meanwhile the Technology Investment Network published its top 100 technology company list which provided a reminder that most of New Zealand's tech sector is still underpinned by "bricks and mortar" businesses - the biggest still being Manukau-based Fisher & Paykel Appliances.

As Auckland strives to develop a 21st century economy it needs also to take a look at its manufacturing sector, which has been struggling to keep up with the growth in other sectors.

According the Auckland City Business and Economy Report published last year manufacturing dropped as a percentage of Auckland's total economic output from 14 per cent to 10 per cent in the years from 1999 to 2009.

Some of that effect will have been caused by the property bubble and the disproportionate growth of property-related industries.

But times have been tough for the sector - if just because it has had to battle the high Kiwi dollar which has nearly doubled in strength since 2000 and wiped out the competitive cost advantage that many had come to rely on.

If the sector is to move back in to expansion mode it needs freedom to focus on research and development, marketing and sales.

A Super City that works with business will make a big difference.

There are limits to assistance that local government can provide. But there are almost no limits to its ability to hamper business.

Providing a positive environment for growth ought to be the minimum requirement for the new council.

But what the city really needs is a circuit breaker - a council with the drive and energy to get Auckland business working together and create some momentum for a major step change.

If Auckland is going to thrive then it needs to create exciting and rewarding jobs for its young, and dynamic population.

Perhaps the birth of the Super City could be that circuit breaker.

Liam Dann is editor of the Business Herald

Discover more

Economy

<i>Project Auckland:</i> Super City gains will boost business

21 Sep 12:00 AM
Economy

<i>Project Auckland:</i> Prosperity and profile

21 Sep 12:00 AM
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