Historically many New Zealanders have raised questions relating to economic growth. Is it good or bad? What causes it? How to achieve it? How to sustain it?
These are all issues that over the centuries all forward thinking communities have had to contend with. In recent times, however, we have become accustomed to stronger rates of economic growth while endeavouring to enhance quality of life factors. As communities we cannot ignore the need for economic growth.
It remains an inescapable fact that without a productive base to the local economy, the educational, sporting, cultural, environmental and personal amenities sought by society today will either not be attainable, or our ability to maintain these in the future will be diminished. Growth of these benefits can be achieved only through growth in the productive sectors of the economy.
How does this economic growth occur? Sometimes it is difficult to see the relationship between an individual's action and those of the broader economy. As a consequence, economic development is a term often fraught with different meanings and used in a context where it can have varying implications for community, district/city, regional or national development.
There are a number of definitions that have been used, but most are essentially about a process that begins when a community acts to make itself ready to accommodate the retention, start-up or expansion of businesses. It therefore occurs when a local economy benefits through the creation of one or more jobs, an increase in community wealth, or the injection of capital that arrives from outside sources.
The American Association of Economic Development defines economic development “as a process of creating wealth through the mobilisation of human, financial, capital, physical and natural resources to generate marketable goods and services”.
Further information from the association shows that: "increasing the flow of capital through the community and reducing its leakage is a definition of economic development"
Making economic development work for you
So what do you need to make economic development work? Firstly, you need a community that subscribes to improving the economic prosperity of its residents. This can be embodied in a number of ways, but a key fact is the active involvement of local and central government, business interests and businesses and community networks. Secondly, you need an economic development agency that has a mandate to pursue an active economic development agenda. Thirdly, you need the tools to assist the economic development agency. These include financial and staff resources and information on economic and business activity at a district/city, regional and national level. Information requirements are often overlooked despite providing an evidence-based approach to trends – opportunities that are independent of anecdotal information that is often relayed in local communities.
What sort of information and support should be provided by North Shore City to benefit economic development locally? Any economic development packages should contain information on:
-
Infrastructure, including transport networks, utilities (e.g. water, sewerage, electricity, gas and other services).
-
Local plans, including district and regional plans and economic development plans.
-
Economic information, including updates of local trends, economic profiles of the district/city, comparative analysis, benchmarking, economic performance and related information.
-
Profiles of the local community, city/district and region including quality of life indicators.
-
Information on education, workforce skills and training, to support business establishment and development.
-
Information on business support, advice on business development, investment, start-ups and expansion.
For economic development to work, these activities are underpinned by economic development practitioners who provide information, co-ordination, assistance and/or services for the development of businesses, including information on how to convert opportunities into realities for the location(s) he or she represents. Some people mistakenly believe that economic development is a simple hands-on occupation. Under this view, economic developers promote available industrial properties, visit existing industries, recruit new businesses to the community and so forth. In reality, today's economic development agency may perform the tasks noted above, but the profession has grown well beyond these activities. They now undertake a broader range of activities and involvement which is reflective of the fact that economic development practitioners are increasingly aware of the importance of developing their communities as a whole, not simply focusing on improving the local economy through business expansions and business start-ups.
Networks must include local and central government
For economic development to be effective locally there should be strong networks of business, community and government. It is essential that government includes central and local government. An often-quoted analogy is the concept of flying in formation. That is, each party recognises each other’s role independently but also as a part of the whole economy to make the outcome much stronger than if individual agendas are pursued. These activities are all about supporting business retention, business expansion and business attraction, in that order. Simply, once you have a business and an employer in your area, you want to keep it. In itself, support for local businesses will create a positive environment for new business investment.
So we know that economic development is necessary to encourage greater productivity and higher incomes; that it can help to create jobs and makes possible the earnings needed to support investments in education, infrastructure, and other services. So what can individuals in North Shore City do to promote economic development? They could simply work to encourage and promote more co-operative business activity, create a stronger community spirit, support programs to encourage local people and industry to patronise local businesses, support more programmes to lift business employment growth and support active involvement in economic development by business groups, local and central government and their community.
In the long term a community that continues to adopt and implement a best-practices approach to economic development that combines the interests of the community, businesses and employers, with genuine local and central government support, will ensure that business retention, business expansion, and business attraction are a key part of any community agenda.
Deryck Shaw
Deryck Shaw is a director of APR Consultants, a company specialising in economic development and research. For more information, contact: apr@apr.co.nz.
