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Opening Address to the 2005 Regional Development Conference

Hon Jim Anderton MP

Minister for Economic, Industry & Regional Development

• Closing address

Speech notes

Acknowledgements:

• Chairman of Ngati Kahungunu, Ngahiwi Tomoana;
• Mayor of Napier, Barbara Arnott and Hastings Mayor Lawrence Yule;
• My Ministerial colleague Rick Barker, the MP for Tukituki;
• Chair of EDANZ, Murray Cleverley;
• members of the Small Business Advisory Group;
• delegates from overseas including Apia, Australia and Great Britain and the United States;
• and Delegates.

This is our third regional development conference since we went to Rotorua in 2001 for what was the first regional development conference in New Zealand since 1969.

That conference was a springboard of confidence for everyone involved in the social and economic development of New Zealand's regions.

It showed us all there are exciting things happening in our regions. It also told us we can learn a lot from each other's experiences.

We took stock two years ago in Timaru with another successful conference.

This year as we gather in the beautiful city of Napier we need to move on.

We need to be challenged to achieve more and to lock in our gains.

Over the last five years twenty-six partnerships have been formed between business, iwi, local government, economic development agencies and central government.

All twenty-six regions have produced economic development strategies. I want to emphasise the importance of those strategies.

It was obvious when we started out with a commitment to partnerships in regional development that we needed to build on our strengths towards agreed top priorities.

Establishing those priorities has been a matter of considerable time and thoughtfulness.

But the process has produced immense benefits.

It has brought together those with a stake in development, when they might not otherwise have been working together.

It has reinforced the commitment of regions to securing a future for themselves and their young.

It has ensured a focus for development work.

The strategy-making process only has to be completed once.

It certainly needs to be refreshed and updated in the future.

But if we keep going, we will never again need to start with a blank page.

So I celebrate the success of twenty-six regions working with New Zealand Trade and Enterprise to respond to economic development opportunities.

In my view it is no coincidence we are also celebrating 23 consecutive quarters of year on year growth.

Growth June 2003 - December 2004

It's difficult to put a figure on the confidence that has been produced by simply ensuring regions have a public commitment from central government to their future.

But if you were making an investment decision, it is only going to help if you see a region pulling together and committing itself to the future.

However we credit the causes of our development, the important challenge ahead of us is to build on the growth we have enjoyed.

It needs to be long-term, and the fruits of development need to be realised in every community.

New development opportunities will result from creativity and passion.

Entrepreneurs like David McLellan of the Kaweka Food company have identified market niches and are pursuing them.

That company has a factory here in Hastings.

Companies like Stainless Design in Hamilton use technology and innovation to deliver products to markets around the world.

Our regions are dependent on these stories. They are examples of building on each region's unique strengths.

The flagship of partnerships to build on the strengths of regions are the Major Regional Initiatives.

A number are now in place and some regions even have two. Let's take a look at some of these initiatives.

A second AV segment of 9 minutes will now screen, showcasing the first 14 New Zealand MRIs.

You can see a full version of the DVD these examples came from later in the exhibition area.

This was put together by NZTE, and celebrates the initiatives shown by our regions to date.

The success of the MRIs we have just seen are very good news for New Zealand. The most important feature of each is that they have come from a partnership within regions.

The government has insisted throughout that the process of identifying top priorities and barriers to development has been inclusive.

This helps to ensure development issues are not an exercise in jockeying for position or in blaming.

Instead it has been a consensus-building approach. This conference is part of the process.

It helps us to better understand the challenges, and how we can respond to them. There are some very successful examples of regions working together well. The MRIs we have just seen prove it.

But we can't stop here. I want to impress on this conference the urgent need to build on our beginnings. MED and the Treasury last month published Economic Development Indicators for 2005.

If you haven't seen those already, there are copies at this conference to take away.

It shows New Zealand is improving against other OECD countries on a number of fronts.

That's good, because we needed to do so. Labour utilisation is high, and improving.

We see this in the shortages of skilled people now being experienced. Skills shortages are the single biggest constraint on growth in many regions.

Our level of enterprise is high.

This is not surprising, the cost and time associated with starting a new business in New Zealand is much lower than in most OECD countries. GDP per capita is low, but improving.

So where do we need to do better?

We need to lift our rates of labour productivity and innovation. These are the most urgent priorities for increasing New Zealanders' standard of living and quality of life.

Everyone has a role - businesses, central government but regions, too, can have an impact.

As business becomes more specialised, and faces more demanding global pressures, they need to become more connected - both regionally and nationally as well as globally.

Once, a business would be stand-alone, undertaking most functions itself. A factory here in Hawke's Bay might attempt to undertake an entire production process from design to packaging and marketing, right here.

Now, it's increasingly likely that products will be designed, assembled and marketed in different countries.

A business located here in Hawke's Bay has to be plugged into these global value chains.

The focus has to be on the competitive advantages that this region can offer. This will be partly a matter of geographical location, but also the skills and resources, and the partnerships and networks developed here.

This is why the government is putting a heavy emphasis on improving the level of innovation in each region's area of competitive advantage.

MRIs like the Centre of Applied Engineering in Taranaki, the Nelson Seafood MRI and of course Food Hawke's Bay are all examples.

In Southland, the region identified lack of high speed internet as a barrier to growth in the region.

It has worked hard to get broadband established in the region. The government has consistently recognised the critical importance of Information and Communications Technologies (ICT) in developing a modern, innovative and globally competitive economy.

In the 21st century, affordable access to high-speed broadband communications is as necessary as access to reliable water and electricity supplies.

Almost $50 million has been spent on Project PROBE delivering broadband to schools to extend the learning opportunities available to our children.

For example videoconferencing with scientists in Antarctica, taking a virtual tour or Te Papa, and having access to an extended range of subjects is now possible.

PROBE has already had significant economic spin-offs in the regions.

Businesses have taken advantage of global communications to attract and retain expertise, keep down costs and collaborate with partners all over the globe.

Broadband has the potential to keep people in a region. There is no need to move away for education or employment when everything you need is the click of a mouse away.

But it will also bring the world and its consumers to you. It will improve the opportunity for partnerships that create innovation and growth.

If we look at the areas where we need to do better, our partnerships need to get stronger.

A recent review of the Regional Partnerships Programme found that some partnerships were not involving Maori to the extent that they could.

The Ruapehu-Wanganui-Rangitikei region is a shining example I commend to you to as one to study.

That region has managed to find an initiative that three different councils and twelve iwi groups could support.

If you ask me why it's important, I say you need to ensure every part of every community has a stake in economic development.

Just as you can't develop the national economy without developing the regions, you cannot develop regional economies without developing the economic performance of the whole population.

If anyone is getting sick of the figures showing the urgent need for Maori economic development, it is Maori themselves.

In my view, this country finds it easy to play the blame game. What we need to do better is to work together at building on strengths.

That means regions have to make a serious and ongoing commitment to involving Maori communities in their development.

This conference is an opportunity to share what has worked and what hasn't worked.

But more importantly I see it as an opportunity to generate innovative ideas on how to create lasting growth in all our regions.

You will benefit from the vast regional economic development experience of Martin Briggs, CEO of the East Midland's Regional Development Agency.

Martin will provide an international perspective on the challenges facing New Zealand.

He'll provide a unique perspective on the things we are doing well.

Martin spent last week travelling round New Zealand, meeting with many of you, to gain an impression of the challenges that New Zealand firms and economic development practitioners face.

Successful business people are going to provide you with a business perspective on regional economic development.

You will hear suggestions for successfully engaging with youth and Maori. I expect a lot of quality debate and discussion in the workshops, where the topics range from skills and talent, to boosting exports, to enhancing regional innovation to local government reforms.

Each of these is a weighty topic in its own right. But it is essential that we make the links between all these topics, if we are to really influence the future of our regions.

A few years ago, regional development wasn't even on New Zealand's economic agenda.

Now we have a conference where other government agencies and businesses are looking to align their work at a regional level.

This conference is a challenge for practitioners but also for policy makers. As such I would encourage you to question and challenge the received wisdom. At each workshop there will be an opportunity for constructive debate.

I encourage you to visit the 'Chatham House' where we have provided paper and pens for you to jot down your ideas.

MED policy analysts are available to listen to your ideas, and engage in debate - to find out what you think we are doing right, or wrong, or even what we are not doing.

The Ministry of Economic Development is currently thinking about regional development policy, and thinking about the next steps that we need to take to maximise the potential of each region.

So please get involved through the Chatham House.

There will be an opportunity to register your interest for future involvement in this process.

I encourage you to take this offer up. I have much pleasure in declaring this conference open.