Successful trade requires not only international treaty frameworks, support from Government and regional agencies, and membership of country to country business and friendly societies, but also ready capital and upskilling of our local companies.
NZ has numerous Free Trade Agreements with Asian countries, and it is important that NZ companies keep access to and actually enter these markets now as the advantage will close as other countries secure similar Agreements. Companies can utilise the networks created by Asian business people resident in New Zealand, or by establishing connections with the increasing number of Asian students who have studied in New Zealand and are familiar with the business opportunities and our way of doing business. .
What are the key trade-offs required when attracting outside investment into regional New Zealand?
The trade-offs usually centre around two key areas. Firstly, matching the scale of the investments available in the regions with a pool of investors. Often, the investment required is too small to be of interest to many overseas investors, given the additional actual and perceived effort involved in monitoring a remote investment. This differs if the investment is active or passive.
Active investment often brings not only capital, but knowledge of the target market, distribution channels, marketing expertise and networks into related supply and value chains. The second trade off is the appetite for local company owners to relinquish some degree of control over their business. Owners have to decide that the benefits of overseas investment outweigh their natural desire to control their own destiny.
Can you see similarities between the way major metropolitan centres achieve sustainable growth and the way more rural centres can achieve the same?
Generally, larger cities benefit from an economic term called agglomeration. The spatial grouping together of people, capital and companies in urban areas, which leads to, among other things, a bigger pool of workers, lower transport costs, a sizeable local market and the easier sharing or 'spill over' of new ideas between companies.
Larger cities also have a greater population base over which to share the costs of growth (such as infrastructure), the benefits of scale (such as air travel connections) and to justify the presence institutions such as banks and universities.
With a lot of rural land in NZ, small towns are necessary to growing, producing, and distributing food. Even while agriculture increases automation, more interest grows in more natural and labour-intensive foods.
Small towns are located where our natural resources are located. Small towns provide the bases for the people who take care of many of our tourism, conservation and recreation assets. Small towns and rural people matter to our society, now and in the future.
That doesn't mean every small town will survive.
That depends on what actions we take. There are different ways for smaller areas to stimulate growth. Cooperation along a value chain, between producers, processors, logistics, and professional services firms improves productivity and competitiveness.
There's a school of thought coming out of the rural Untied States that smaller open-minded towns can engage its people into starting business through innovative rural business models. Just a few examples are ideas such as – tiny (start small utilising part spaces), temporary (pop–ups in empty buildings to test the model), together (sharing costs and marketing), and trucks and trailers (to access number of smaller towns).
What reactions do you get when talking to people from outside Hawke's Bay on the potential business opportunities here?
Hawke's Bay has a very strong brand in primary food production and wine, and the Great Things Grow Here (GTGH) brand is widely recognised as referring to more than just primary sector production. Investors don't realise that there are other opportunities to invest in further up the value chain of the primary sector and in related industries such as transport and logistics.
We have work to do as a region to ensure that outside investors or business considering relocating operations to Hawke's Bay don't just see the lifestyle destination, wonderful place to live, great climate, natural advantages, good schools etcetera, but are introduced to a connected, thriving business ecosystem. We have to do better at targeted and focused connections with influencers outside our region, and we are working on this to build on the GTGH brand recognition.
The Hawke's Bay councils and Business Hawkes Bay are working with major enablers such as the Port of Napier and Hawke's Bay Airport to finalise a regional investment attraction strategy. This will identify where the gaps are – is capital required for early stage companies, established companies requiring capital to maintain their competitiveness by keeping up to date with new technologies, or are there public / private investment opportunities to leverage better return from existing public assets?
Once this information is known, local and regional investment opportunities will be profiled and a targeted campaign to attract investors (domestic and possibly international) will be undertaken.
Are you convinced that economic development can be achieved without a dedicated Economic Development Agency?
Hawke's Bay has chosen to adopt a distributed model where various agencies fund and project manage the delivery of the action items contained in Matariki Hawke's Bay Regional Economic Development Strategy.
There has been good success to date with the delivery of some of Matariki's priority action items. For example, Project 1000, which links local people receiving benefits to new jobs, has placed 377 people into employment in the last year, with another 74 placements in the pipeline. The discovery project for a Food Innovation Hub, targeting job creation, workforce development and investment in Maori business growth, has four options entering feasibility study phase.
In lieu of a dedicated economic development agency with its own project initiation expertise and funding for pre-feasibility studies, a programme manager role which facilitates and coordinates the various action items has been established.
People and processes are the key to successful implementation, so ideas such as the co-location of key economic development practitioners, and pooling of operational budgets, will be considered.
The steering group is open to gauging the effectiveness of the current and proposed delivery options, and would consider further development in the future if that was required for an effective model.
