A quick update
Since the last newsletter two key directional meetings have taken place. First, on 3 February, the Wellington Regional Strategy Forum held a workshop at the Overseas Terminal, Wellington. The workshop updated the region’s leaders on strategy progress and more importantly canvassed their views on the region’s potential. In other words, what natural advantages should the region focus on. The same ‘agenda’ was used at the 21 February Strategic Partners (representing business interests) Forum.
Two things emerged from these workshops. First, the Strategy as it stands is broadly in line with the views of the region’s leaders. Second, there is consistency among business and political leadership on the core things Greater Wellington should focus on – in other words those things we’re good at, that also have international potential.
The Wellington Regional Strategy Forum has a further workshop on March 30 where the team will work through specific strategy concepts.
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In the next four issues of Strategy Update we’ll highlight one of the four focus areas being developed by the Strategy team. In this issue we deal with:
Unlocking the region’s potential
The work completed so far points to nine areas that are key to unlocking the region’s potential.
These are:
1. Plugging the gaps – regional broadband
Broadband allows businesses and individuals to electronically send and receive complex data over the internet. Fast, affordable broadband is taken as a given for international communications. The Wellington City CBD led New Zealand in broadband coverage when it was introduced here in the 1990s. However this early starter advantage for the region has gone, with broadband access in Auckland and Christchurch now at least equal to that in the Wellington region. Overall, New Zealand lags in international standings, both in terms of current usage and uptake. An integrated, region-wide approach is being developed by the Strategy team – the goal being fast, affordable broadband coverage throughout the region.
2. Generating wealth from ideas
Ideas generate wealth for their creators and for the community when they can be turned into commercially valuable goods and services. Successful commercialisation of ideas depends in turn on robust linkages between educational institutions, researchers, entrepreneurs and businesses. Through examples of science and technology commercialisation here and overseas, the Strategy team is identifying where and how these linkages best operate. The goal is to support commercialisation activities through strengthening the linkages between education and research institutions and innovative companies working in the Wellington region.
3. Labour market strategy
Wellington, like the rest of New Zealand, enjoys high employment levels. While this level of participation is good for the economy, the region’s skills shortage is not. We need more people with skills in health, education, the trades (plumbing, electrical, etc), IT, accounting, finance, engineering and policy analysis (both business and Government). These skill gaps are a handbrake on the economy and the situation will only get worse if no action is taken. This is because our population is ageing. Also, the skills gap is a world wide problem and increasingly our youngest and brightest are being enticed overseas.
The Regional Strategy team is working alongside other key players and recently attended a Department of Labour / Ministry of Social Development hosted workshop that was attended by 80 representatives from community groups, government agencies, councils, industry groups, educators and employers.
What we know now is that immigration is part of the solution. We also know that attracting and retaining skilled people will only happen if Wellington is a great place to live (lifestyle) and if it offers rewarding careers.
4. Determining what we’re good at – ‘value chain’ analysis
A ‘value chain’ incorporates all the things that occur between a product or service idea, and after-sales follow up. In other words, research and development, design, manufacturing, marketing, distribution, warehousing, retailing and so on. Internationally, fundamental shifts are occurring in value chains. The most noticeable has been a concentration of manufacturing in low cost countries such as China.
The Wellington region needs to decide which value chains it can ‘own’. ‘Ownership’ occurs in a vertical cluster, within a market sector where education, research, business and government agencies are linked, effectively providing a centre of excellence for that sector.
The region also needs to identify its specific expertise in sectors where most of the activity takes place overseas or in other parts of New Zealand. In other words where it forms a part of the value chain.
In both cases the region needs a good understanding of what it’s good at, and what are the growth areas internationally.
5. Regional investment and business attraction
The work in this area includes two stages. First we need to identify the sectors and business clusters that are key growth areas. Second we need to attract investment and businesses in those identified areas. Part of the solution may be to attract a few key individuals with expertise in the fields in which Wellington aims to be world class. Peter Jackson’s work in the film industry is an excellent example of what an individual can achieve.
6. Business requirements for international markets
The main barrier to business in developing international markets is cost. Our work in this area seeks to identify ways of reducing costs and other barriers. For example we need a better understanding of the infrastructure and education requirements needed to increase exports and we need to ensure there are strong links between providers (e.g. universities) and business.
7. Maximising government assistance
Government assistance works best when it is targeted at businesses that have the potential to be world class. The initiatives also need to be tightly aligned to the things business needs in order to be internationally competitive. Between now and June 2006 the work group responsible for this area will be researching businesses to determine what assistance they need to be more internationally competitive. In addition to highlighting what businesses need, this process will highlight the gaps in current programmes
8. International relationships
We live in a globalising world, where individuals and businesses in different countries are increasingly aware of, and connected to, each other. In the Wellington region, these connections can range from migrant communities in touch with their communities of origin, through business and education alumni programs, to formal sister city relationships and exchanges between local government officials. The Strategy team is developing a region wide approach to existing and emerging sister city relationships, using local government connections to build ‘global business gateways’ for businesses across the Wellington region.
9. Incubator development
Incubator programmes have a proven ability to improve the probability of success of high growth businesses. High growth businesses are defined as those which have the potential to achieve annual revenue of $5 million after five years. The Wellington region has successfully used incubation as a tool for economic development, albeit with a relatively small investment. The incubator team’s vision is to create a world class programme. To achieve this it needs to expand its existing collaboration networks to include all potential providers in the incubation sector, especially the universities, research institutes and the entrepreneurs themselves – the aim being to identify and nurture innovation in the region. |
