CITIES are thriving while regions are dying, says New Zealand Institute of Economic Research principal economist Shamubeel Eaqub.
Mr Eaqub was keynote speaker at the launch of Hastings District Council's Great Things Grow Here marketing material on Tuesday.
The council developed the material for its own marketing but designed it so it could be used by all in the region.
He said government policies were not delivering opportunities evenly, especially to Hawke's Bay.
"My proposition is that it is not good enough to say that we grow our economy as a whole if every part of New Zealand does not benefit," he said.
Success and failure co-existed but the national measure of success was weighted to how Auckland and Wellington fared.
"We must find solutions that are local and focused to fix the problems in each region."
Divergence between regions and cities was inevitable. Success and failure co-existed but the national measure of success was weighted to how Auckland and Wellington fared.
Outside of Auckland and Wellington household incomes were very low, with North Island unemployment "quite frightening".
From 2006 in 2013 the strongest growth in employment was in Auckland, 3 per cent, and the SuperCity's growth continued.
"This has been a trend that has been going on for the last century. Over the last century our rural population has grown by exactly zero - our population growth in the past century has been in urban centres."
Auckland enjoyed growth because it had the right industries, with a strong presence in growing industries like insurance and financial services.
In those industries Auckland fared better than the rest of the country, with 17 per cent growth versus the national average of 7 per cent.
"The recovery from the last recession saw 70 per cent of employment growth in Auckland, 20 per cent in Canterbury and 10 per cent spread thinly across the rest of New Zealand. If that doesn't scare you I don't know what will."
The removal of farming subsidies in the 1980s had a long-lasting impact and was needed to fix New Zealand's economy, he said.
"We needed to get aggregate growth averages better and yet 30 years on we are now talking about what it has delivered, which is some growth and some prosperity but it is incredibly unevenly shared."
Hawke's Bay's key industries were not delivering to people.
"For a lot of provincial New Zealand our history is what defines us and quite often it is based on the land. That is what has given us our prosperity over time and yet we know that even though there is huge activity and growth in the agricultural sector, employment is not growing.
"In the latest census we have as many people employed in the primary sectors as we did in the 1916 census.
"How can we expect to create economic opportunities for people using only our primary sector? We must think wider.
"It is not because you have done anything wrong. There are big forces at work."
Technology, urbanisation, globalisation, and ageing populations were "unstoppable".
The impact of technological change was quickening.
"I used to ask people four or five years ago how many had a smart phone. I now have to ask how many people don't have a smart phone."
He said phone company Blackberry's market capital was more than $80 billion in 2008, today it was less than $4 billion.
"You can grow from hero to zero very quickly because the life cycle of technology/competitive advantage is very short. This is happening in every sector and every economy.
"The time we have to adjust to changes is getting shorter and more disruptive. For that we need to have economies and people that are more nimble and agile than we have ever needed before."
Populations outside the big centres were not as well educated.
"That makes it very difficult because we don't necessarily have the ability to retrain people."
People moved to where there was economic opportunity, not just to Auckland
"I always joked that the fastest growing population of New Zealand was in fact in Queensland.
"If you are small it is really hard to compete with other places. They start to suck away your population and you get the voting-with-the-feet effect."
Places with fewer young people would find it difficult to have population growth.
"This end of growth really matters but it doesn't have to be the end of prosperity. You can still have economic opportunities if you play your cards right."
The pressing issue was time.
"An ageing population is not something that is going to happen in the future, it is happening right now.
"This is the story of New Zealand but in the provinces the issue is much more pressing because more often than not net migration is negative.
"The people that are left here are getting older and we have an economy and population that is degrading and ageing.
"It begs very serious questions of the succession of our farms and our businesses and who is going to be our future entrepreneurs. How will we create vibrancy in the economy - people doing stuff?
"Yes we are going to have entrepreneurs who are getting older, but is that going to be enough?"
Immigration was "an intense" topic in New Zealand even though immigration was "the very fabric of what we are".
Not enough was been done to leverage immigrant skills "in part because our immigration policy is quite aloof".
"We spent a lot of effort thinking about how we can get people through the border but we don't think a lot about how we can get them into our communities and jobs.
"It's a real opportunity."
He said discussions on immigration were sometimes "tinged with racism and envy".
"We can't do that, especially in the context of filling skills and labour needs. We have to be very careful that we understand why we have people coming into New Zealand and how we assimilate them into our society and our economy. It is a very big and a very courageous conversation that our politicians need to take a lead on."
Internet technology would not defeat the tyranny of distance, despite people claiming it would be "the end of cities".
"For most people you still need to have the face-to-face contact - you still need to be in the thick of things. You need to be immersed in the community and make it work.
"When I look at my job it is physically impossible to do it outside of Auckland and Wellington. Places like Auckland, Wellington, create opportunities and depth of labour markets that allow them to be something completely different."
Some people would have the best of both worlds "but I don't think it is going to be the defining characteristic of how we saved the provinces".
"Technology allows you to reduce some of the distance but ultimately face-to-face, for most of the industries we are talking about, still remains the primary form of communication and a real need, rather than an option."
Ageing populations were affecting economies throughout the world, giving Asian countries with younger people a vibrancy lacking in the old world.
Asia had competed successfully because of its low-wage economy at enormous cost to New Zealand but with a growing middle class it was now presenting an enormous opportunity, he said.
"Twenty years ago our exports to China were less than $500 million. Today it is more than $11 billion. Exponential rise in trading is going to be repeated in countries like Indonesia, Malaysia, India.
"These opportunities are at our doorstep and they are going to become very important. We need connections with these economies and understand how our regional economies can provide the right things for the right places.
"This is an opportunity requiring strong leadership and buy-in from all of the community, because results will not always be immediate.
"It has to be a story that is shared, that we believe in and we can all push forward to."
A vision of what it meant to be successful in Hawke's Bay needed agreement and solutions regarded as a legacy.
"Too often we see ideas that are tested and not progressed - they don't last the distance. What is the point of doing stuff if you're not going to see it through to its conclusion?
"The narrative is simple. The global economy is changing, is having a big impact on New Zealand, a bigger impact on the provinces and more often than not it is coming at a cost of jobs and economic opportunities."
Hawke's Bay had to forge its own path to success.
"It is not good enough to say that if we grow our economy as a whole that every part of New Zealand will benefit. We must find solutions that are local and focused to fix the problems in each region."
The Napier City Council response to the Great Things Grow Here marketing initiative highlights Hawke's Bay's current lack of cohesion.
The material was developed because of Hastings' own need. It commissioned videos designed to be tailored by any group in Hawke's Bay that wished to used them and slogan was also available.
Napier mayor Bill Dalton saw the gift to the region as a surreptitious scheme by Hastings, keen to amalgamate all councils.
"The presentation made it very clear that HDC are intent on pressing their own case. So much for the claim that we will be stronger if we amalgamate," he said.
Because it was developed by Hastings alone it was "stealth and deception".
Mr Yule said it was unfortunate the launch was "tarnished".
"We are about creating jobs and employment. Very little else matters," he said.