Planning for future of Dunedin Inc

Dunedin's economic development draft strategy will be released on Monday. For the first time, the document will be signed off by stakeholders representing diverse areas of the city. There are several things business editor Dene Mackenzie hopes will be included in the new 10-year plan.

For about 25 years, Dunedin's economic strategy has doddered along.

Past plans have included Dunedin City Council officers travelling to visit large-scale manufacturing enterprises in a bid to persuade them to establish themselves within the city boundaries, through to catchy slogans and billboards at airports.

During that time, the city has seen its large-scale manufacturing base shrink with the loss of thousands of jobs.

Meat company collapses in the late 1980s started the trend - and with the collapse of the former Waitaki International meat company, more than 1000 workers lost their jobs in a week.

Fisher & Paykel, once the beacon for innovation and enterprise on the Taieri, packed up its factory and moved offshore, leaving a design and technology centre hidden in George St.

The fate of the Hillside Workshops appears to rest in the hands of a private enterprise buyer coming to its rescue after Government-owned KiwiRail put it up for sale.

However, around the doom and gloom, some success stories remain.

In manufacturing, companies like Farra Engineering continue to take on global competitors.

Our technology companies are among the best in the world. In fact, some of the technology developed here is used in global sporting competitions.

Port Otago continues to labour under local government ownership, providing millions of dollars in dividends to the Otago Regional Council, when private ownership could be a better option.

Apart from the ongoing clusters, there has never seemed to be any straightforward strategy to push economic growth in the city or the region.

The release on Monday of the latest 10-year economic development strategy has much riding on it.

It needs to be a "living document" so changes in economic circumstances can be handled.

Reviews of city council funding strategies need to be undertaken and the strategy must be inclusive of the needs of the business community.

It seems that, often, funding decisions are applied on an ad hoc basis, when better value could be extracted from ratepayer funds.

Reviews of targets achieved must be regularly undertaken and stakeholders need to ensure they participate in developing the strategy.

This document cannot be left to gather dust in an office.

New city council chief executive Paul Orders has made it plain the strategy needs to be coherent and relevant to other parts of the country.

By being relevant, it allows the city to plan for the future and start a dialogue with people interested in what Dunedin can offer.

Dunedin and its hinterland are co-dependent and a successful strategy in Dunedin will add value to the region as a whole.

A report in the Otago Daily Times this week about the consent problems experienced by the new Mad Butcher shop in Dunedin highlighted what has become a source of irritation among the business community.

The perception, rightly or wrongly, is this is a council that puts up barriers to business.

One of the hopes for this strategy is that the council replaces unnecessary red tape with a red carpet.

Having businesses finding it difficult to establish themselves in the city, particularly given the lack of progress in the rebuilding of Christchurch, is not helpful.

While the strategy should contain some bold visions and goals for Dunedin's economy, it must also identify the challenges the city faces to achieve the overall vision.

Incoming Minister of Business, Innovation and Employment Steven Joyce made it clear in a meeting with business leaders in Dunedin last week that there was no point going to the Government for extra funding in straitened times.

The ODT understands the steering committee agrees there is no shortage of money to fund economic development in the city, but questions have been asked about whether the money is being spent appropriately.

Mr Joyce urged the city to leverage off what is already available, such as through the University of Otago, the Otago Polytechnic, the council and the established successful businesses.

He is pushing for state-funded organisations, such as Crown Research Institutes, to be more responsive to local needs, rather than continually referring decision-making to Wellington.

A push has been made to engage with the private sector to establish public-private partnerships (PPPs) - using a mix of civic funding and private money to achieve economic growth.

Dunedin has an identity crisis.

Auckland is the biggest city, Wellington the capital city and Christchurch quake-damaged and the main focus of the Government at present.

Dunedin is, frankly, being ignored. Even Hamilton - "the tron" - is being written up by North Island media as a dynamic centre of technology, engineering, research, retail and manufacturing.

Perception is everything and the strategy should aim to change the perception of Dunedin. We want to live in one of the world's great small cities.

In 2011, Dunedin generated about $4.8 billion of gross domestic product (GDP) and employed about 52,000 full-time-equivalent employees.

Ten years earlier, our GDP contribution was nearly $4 billion and jobs numbered about 47,000.

That means a 20% increase in GDP and an about 11% increase in jobs in 10 years.

But research shows that, despite positive results, employment and GDP growth in Dunedin has generally been below average.

That can be partly explained by Dunedin's slow population growth, which was about half the national average between 2000 and 2010, and well below other cities in New Zealand.

While the rate of population growth in Dunedin is expected to increase, the rate of economic growth is expected to lag well behind the national average.

Dunedin also performs relatively poorly on most measures of income. GDP per capita is well below the national average.

Many of the differences can be explained by the size of the city's student population. But statistics suggest average labour productivity is also lower in Dunedin.

Overall, Dunedin's economic performance has improved in the past two years, but not at a rate so spectacular it would make people want to move to the city.

Turning this around will require population growth and labour utilisation and productivity improvements across the economy.

One of the challenges is ensuring Dunedin is noticed by international investors, businesses and migrants.

Too often, we are regarded as a place to visit rather than stay and do business.

More than 90% of Dunedin businesses are said to have no intention of exporting in the future and the city captured only 2.5% of the country's recent migrants. That must change for the city to grow and prosper.

So, there are challenges aplenty for the city. Just how the authors of the economic development draft strategy would have us respond to those challenges remains to be seen.

Ratepayers will have a chance to submit on the draft strategy.

Hopefully, many will take that opportunity. After all, the success or otherwise of Dunedin Inc affects us all.

- dene.mackenzie@odt.co.nz

The strategy
In a first, the Dunedin City Council has joined the Otago Chamber of Commerce, the Otago Southland Employers Association, the Otago Polytechnic and the University of Otago to draw up an economic development strategy for Dunedin. The strategy will be released at 9.30am on Monday.

 

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