The announced closures last week of Fisher and Paykel Appliances and Tamahine Knitwear brought back into play the theme of economic development for Dunedin. Business Editor Dene Mackenzie investigates.
For at least the last 20 years, there has been a theme running through Dunedin's economic development that one large manufacturing employer setting up in the city would save the day.
Whether that was a wood or meat processing plant, or any other manufacturer, various elected officers and paid officials lived the dream of a greenfield development employing 300 to 500 people.
Those dreams have come and gone, often as Dunedin manufacturers were closing their doors and head offices were moving north.
Criticism has been levelled at the Dunedin City Council for not doing enough to retain and grow the small businesses in the city.
Economic development is a hard area to measure. Proving how much of the economic growth is attributed to the work of an economic development unit and how much is due to organic growth is near impossible, according to people spoken to by the Otago Daily Times.
Economic forecaster Berl has been monitoring the city for a long time and even senior economist Ganesh Nana had difficulty deciding how economic development best worked.
"It's all part of setting the mood and climate for doing business and a lot of it revolves around infrastructure.''
Asked to explain, Dr Nana said economic development of the region revolved around the "horrible'' world infrastructure and functions like communications, drainage, transport, sewerage, flood protection, power distribution and roading.
A council needed to ensure those things were in place. It was essential, he said.
In some cases, economic development might involve rates relief but Dr Nana was not a fan of picking winners, although he could see that in some cases, it would make a difference.
"Purists will say it is meddling with the market but everyone else is doing it. We don't make the rules. Picking winners is not a function of local government but if a business is showing some interest, and a little bit of rates relief could make the difference, then local government
has to weigh up the costs and benefits.
"Ten years later, if the company goes away, there is not much anyone can do about it. It doesn't mean the information 10 years ago was not right at the time,'' he said.
Dunedin jeweller John Bezett is a long-time member of the Dunedin City Council and the current chairman of the council's economic development committee.
The council was supporting in various ways dozens of small companies in the city. Admittedly, most of them were associated with the University of Otago, he said.
But there were other private companies receiving the benefit of council help through market support, research support, and, in some cases, rates relief.
Cr Bezett acknowledged that the policy could be seen as picking winners but the economic development unit's role was to help grow the economy of the city.
The relocation of companies like Wickliffe Press and F&P was a body blow to the city and terrible for the people losing their jobs.
However, the city's economy had changed in the last 10 to 15 years and last year, job growth in Dunedin had been more than the 400 or so jobs that would be lost in the next 18 months from F&P, he said.
"We expect to do the same over the next few years.''
Cr Bezett was this week clearing out some space in his jewellery workshop because he was employing another watchmaker. While that was only one job, it was a sign that small businesses were still expanding in Dunedin.
It was also essential to keep the larger businesses in the city to help retain the jobs. The council's close association with Cadbury Confectionery had helped secure the future of the company in the city, he said.
The EDU was working with the Maori business network headed by Dunedin accountant Phil Broughton. The network brought in $30 million annually to the Dunedin economy and the council wanted to see how it could help the network grow further.
Cr Bezett agreed with Dr Nana that infrastructure was key to economic development although he differed in what qualified as infrastructure.
The proposed Dunedin Town Hall atrium and the stadium were seen by Cr Bezett as an integral part of economic development as they both would contribute to the economy through the attraction of conferences and other major sporting events.
"Some are saying that this is not the right time to spend that sort of money but there is never a right time to spend $188 million. The money is not lost money. It is going into the economy.''
It was the same for the redevelopment of the harbour basin as it would give entrepreneurs a chance to say they could provide services for Dunedin.
The Hilton and Mercure hotel owners would not be coming to Dunedin and expanding if they did not think they could get a return on their investment, he said.
