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Toward a 21st Century Economy

In the archives of the Hawke’s Bay Chamber of Commerce are scores of reports on economic development, development strategies, economic plans, and endless minutes of meetings going back over 15 years.

These volumes are the products of the many iterations of regional economic development agencies (EDAs) that have been created – Vision 20/20, the Hawke’s Bay Economic Development Agency, Hawke’s Bay Inc and more recently, the short-lived Venture Hawke’s Bay.

Murray Douglas, Hawke's Bay Chamber of Commerce

Apart from the weight of these seemingly rubbish bins of paper, what strikes you is the virtual absence of follow through or sustainable success of 15 years of efforts and talk about economic development for the region.

I certainly don’t question the motivation of the partners involved in these endeavours nor indeed the staff. The litany of effort, and failure to fulfil, has come about more because the various EDAs were short lived, had huge key staff turnover (eight CEOs in 12 years), and were often stillborn in terms of the gap between thinking and action.

Meanwhile, Hawke’s Bay gradually slipped down the regional rankings in economic heft … in the last very hard three years bouncing between last and third-to-last in most regional key indicators. This prospect is not assisted by a slowing population increase, which is a key economic activity generator in its own right.

It need not be this way

Hawke’s Bay is the fifth-largest urban population in New Zealand. Our region generates a relatively high export GDP contribution and has a number of very productive and innovative businesses and plenty of good ideas.

Yet we have some long-term structural issues that have been well known. We continue to be low in average household wealth, an outcome of lower wages; hugely vulnerable to commodity demand and price cycles, whether drought or global pricing; and slow and, in some areas, negative population growth. Being relatively low in tertiary qualifications per capita compounds this, along with the hollowing out of government jobs from the region. As a result, employment in the region in the last five years has been virtually static.

We can gild the lily in many ways to explain what has happened, but the simple situation is that Hawke’s Bay punches below its weight. Yet as an outsider coming into the Bay, I am astonished that our region is not amongst the top three or four for economic growth and business vitality. In other words, the answer lies in our own hands.

Yet, as noted before, the various EDA organizations have persistently been unable to make headway and provide sustainable growth, with a deeper and enriched economic base.

Business Hawke’s Bay

Business Hawke’s Bay has been born out of frustration with this situation. It was triggered by the quiet demise of Venture Hawke’s Bay (VHB) at the end of 2010. In reality, VHB had spent a great deal of its limited ratepayer-funded resources working on tourism development and to a lesser extent on economic development. But when the Chamber of Commerce found out that this effort was all to be ‘lost’ when VHB disintegrated, it set out to create a new body. But a different body and a different approach.

The key differences are twofold: First, it is private sector led. Previous EDA iterations have been either combinations of the private sector with council control or fully council-controlled. Business Hawke’s Bay is funded predominantly by the private sector and has a fully private sector Board. This Board consists of ten individuals who have demonstrated considerable achievement in business. Equally importantly, they either have a global reach in their business or they have spent time outside the Bay and come back aware of the wider
economic space.

Second is the key understanding that parochialism, petty politics and gamesmanship have no place in this very serious business, a lesson arising out of the pyre of Venture Hawke’s Bay. Collaboration, cooperation and stakeholder openness are the hallmarks of this new organisation. An advisory group of the economic managers of all the councils, the Chamber, Hawke’s Bay Tourism and some other key practitioners meets weekly and advises the Board, but cannot vote.

This is the fundamental paradigm change between Business Hawke’s Bay and its predecessors. The entity is collaborative, partnership is the method, and we actually begin to see Hawke’s Bay as one economic entity.

Pleasingly I can say that, with a couple of hiccups, the advisory group are working very well together. We are seeing co-branded efforts which provide a great vehicle for the future of Hawke’s Bay.

Hardly rocket science

Work-wise, a great deal of initial effort is being undertaken by the advisory group and the Board to get the foundations right and ensure Business Hawke’s Bay can deliver on its promise of assisting real sustained economic growth. Business Hawke’s Bay is not trying to be overly clever. Some basic economic development is required. Sadly these economic development fundamentals are not currently available, so we need to do some very basic things, such as find out what actually does go on in the Bay business-wise. This initial inventory is where the joint efforts of all parties is proving successful.

A key process will be what is termed ‘economic gardening’. Our home-grown entrepreneurial enterprises still constitute the key engine for our future. Good gardening will mean businesses get early and more coherent access to advisory services and support. Hardly rocket science, but certainly historically not well-marketed, coherent or sustainably approached.

Relocation and business attraction and export growth will receive attention in due course.

Infrastructure will not be neglected, with a heavy emphasis on e-commerce around Ultra Fast Broadband. The providers will cooperate in showcasing the benefits and applications, to ensure these transformational technologies become routine to combat our region’s distance to market.

Economic development is not a game to be played between election cycles or for a rush of blood headline. It is hard work with a strategic emphasis for planned medium to long-term outcomes. The key performance objectives of Business Hawke’s Bay are a steadily growing population and growing average household wealth. Moving these indicators takes courage and persistent commitment beyond day-to-day matters. And the reason for growth – jobs, jobs, jobs.

Next February, Business Hawke’s Bay will present a strategy describing in more detail how we will work to meet these long-term goals and the pathway to build on what we are good at, while adding new marketable products and services for a 21st century economy.

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