LEADER COLUMN OCTOBER 2012

The Council are working to create a vibrant, walkable inner city with good amenity. This accompanied by our climate, fantastic natural environment and our close proximity to New Zealand’s largest city should make us an attractive destination. So it is sad to walk through the CBD and regularly see empty commercial premises or closing down sales. While this problem is not unique to Whangarei and we are just following trends being exhibited in many of New Zealand’s larger cities, it does not make the situation any more palatable. The situation is in part due to some retail businesses no longer being able to operate in what are very difficult and increasingly competitive times. The situation has not been helped by online shopping and that many office workers relocating their businesses to locations that were once traditionally residential areas on the commercial districts outskirt. A reduction in the overall number of business units in Northland has also reduced demand for commercial property. In the current economic environment there is simply too much space available. This creates a challenge for the Council in their desire to create a vibrant CBD as there is an oversupply of commercial stock and an undersupply of businesses to occupy it. There should be no surprise that there will be a contraction in the area retail businesses occupy within the CBD and possibly a consolidation of businesses around the areas identified by Council for future development. The central city carpark, widening of pavements, more and better located pedestrian crossings, traffic calming and a continuation of the Cameron Street theme will all have a positive benefit on the amenity of the CBD. An increased sense of place and an emphasis on the place of the pedestrian within the city should result in increased foot traffic, something that all retailers want. There is evidence to support this happening elsewhere in New Zealand. For example following similar upgrades to Auckland’s Queen Street, pedestrian traffic increased by significantly. This will be good for some businesses and there may well be other businesses on which these developments will have a negative impact. There is always the risk that an over-emphasis one part of the CBD will result in an opposite reaction in other parts. Where possible this needs to be acknowledged and catered for. This is particularly true where there may be a perception that the focus of development could be advantageous to the Council’s own commercial stock.

LEADER COLUMN SEPTEMBER 2012

Two recent news events highlighted both the contribution that a single industry can make to a region’s economy and the risk that those economies can be exposed to when external market pressures impact on the performance of those businesses. Spring Creek Coal Mine and Tiwai Point are both major contributors to the communities in which they are located. The fact that they have provided a source of employment and income for many years means in many cases results in a strong level of dependance. If these were to no longer operate or operate in a reduced capacity then the impact on their local economies would be dramatic. Many of New Zealand’s regions will have one or two businesses or industries that a significant economic drivers whose absence would be sorely felt. While Northland has one of the more diverse economies in New Zealand we are still strongly reliant on dairy, tourism and the refinery. We would all hope that they will continue to be major contributors to Northland’s growth, but this cannot be taken for granted. We cannot control or influence outside market pressures but we need to ensure that the internal environment in which they operate makes it as easy as possible for them to remain operating here. When these businesses are successful we all benefit. Taking these three sectors as an example I imagine they have more different requirements than they would have in common when it comes to what constitutes a business friendly environment for them. Fortunately those things they do have in common are within our control to influence and enable. We can influence the regulatory framework in which they operate to bring about fair and consistent rules and plans. The local government reforms are intended to help do this through continuing to build a more productive and competitive economy and delivering better public services to New Zealanders. All these sectors require a capable workforce. While it is no secret that Northland has high unemployment when compared to many other regions, recent survey results revealed that many Northland businesses struggle to find people with the necessary skills to employ. It is important that we ensure that private sector and education providers engage early to ensure that the skills and knowledge being taught, match with those required by the region’s employees. Failing to do so fails both our businesses and our communities.

ADVOCATE COLUMN 2nd WEEK OCTOBER 2012

ADVOCATE COLUMN 2nd WEEK OCTOBER 2012 Otorohanga Mayor Dale Williams spoke recently at Mayor’s Taskforce for Jobs evening of the challenges facing New Zealand as an aging population will result in an increasing burden on a diminishing workforce. No region will escape the consequences but regions such as Northland do have an advantage of a relatively high proportion of young people within our population. These youth are and will always be a valuable resource. In the future the demand for workers will grow and the competition for their services from outside our region will also increase. It is also true that at present we do not always provide these young people the best support that we can. On average New Zealand youth are more disadvantaged across a number of performance indicators than many other OECD countries and this disadvantage is strongly concentrated in Maori and Pacific Islanders. With 45% on New Zealand’s total unemployed being youth, this has significant impact on our future well-being. While our youth perform (comparatively) well in education, this does not follow through on average after leaving school. Otorohanga has almost zero youth unemployment. Mr Williams’ council has been successfully managing the transition from school to work amongst the youth in Otorohanga for a number of years now. They believe all young people under the age of 25 should be engaged in appropriate education, training, work or other options, which will lead to long term economic independence and well being. As equally as important as the community assisting youth in the transition from school to work is examining what we can do to ensure that what takes place within schools also assists all our young people to gain employment. One example of this would be the ability to increase student engagement through e-learning. There is strong evidence to suggest that e-learning, combined with a school improvement programme, strengthens student engagement. At Manaia View School which is low decile and has a high percentage of Maori on its roll, an e-learning programme has resulted in a significant improvement in their student’s education performance. This is not teaching technology but using technology to teach and engage students. I am sure there are many challenges to be overcome for this to happen across all our schools and that it will rely on passionate leadership from within the education sector. There are real economic and social benefits if we get this right. In particular this ensures that our young people know they are a valued part of their community.

ADVOCATE COLUMN 4th WEEK SEPTEMBER 2012

ADVOCATE COLUMN 4th WEEK SEPTEMBER 2012 It has been a difficult time for New Zealand export and manufacturing businesses recently with challenges around demand and unfavourable exchange rates resulting in low economic growth. This is unlikely to change dramatically in the near future but the news is not all bad. Some New Zealand businesses are performing in a manner that defies this trend particularly those that operate in ICT, high tech manufacturing and the bio-tech sectors. Sectors in which reliable and ultrafast broadband connectivity along with a capable workforce often are essential elements to them are operating successfully. New Zealand has an innovation sector worth $7 billion a year. It contributes $5 billion per annum of exports and yet is largely based around only a handful of companies. These companies are among our biggest export earners and show that New Zealand can compete globally as a manufacturer and exporter. These companies often occupy a niche international market and operate largely unnoticed by the wider community. This is evidence of what many commentators and politicians have being saying for some time now. That is that to grow our economy and increase our productivity requires innovation and the identification of those international niche markets where our comparative lack of size can actually be a competitive advantage. Further evidence of this was the latest NZ Chambers of Commerce Northland and NorthTec’s lunchtime address by Paul Davies Director of Intellectual Property at EverEdge IP on the commercialisation of technology and Intellectual Property. It demonstrated both the interesting and innovative world leading technology taking place in New Zealand and some of the support that is currently available to assist new enterprises to compete globally. He also provided valuable insight on how to go about the process of developing a good idea into a commercial enterprise. To grow our wealth and raise our GDP will require a shift to a high wage economy. Successful manufacturing and export businesses have shown that isolation and scale are not in themselves barriers to a successful manufacturing enterprise. These companies are involved in manufacturing things of high value by weight and that have a high profit margin. We have an attractive physical environment and lifestyle in Northland. What is needed is to ensure that we create a social and commercial environment that encourages innovation and values excellence in research and development. If we can develop this environment along with a capable work force this can remove the perceived barriers of isolation and lack of scale and allows a focus on high waged economy that is required for transformational change that will benefit all our communities.

ADVOCATE COLUMN 2nd WEEK SEPTEMBER 2012

ADVOCATE COLUMN 2nd WEEK SEPTEMBER 2012 The first week of this month marked Money Week. This was an initiative led by the Commission for Financial Literacy and Retirement Income. It was week-long series of financial education events and activities undertaken by many different organisations around the country to raise awareness of how people can better manage their money and where they can get help to do so. The objective being to inform people -whether they were employees or employers- about what areas of their financial life they need to make informed decisions about and who can assist them make positive money choices For Northland, financial literacy -like all forms of literacy- is essential to improving the capability of our work force and to empower people to take control of their finances. Over the last two and a half years many business people have had to increase their financial literacy as it relates to their businesses and how their businesses really operate. In many cases this has resulted in improved business practices and a higher level of management capability. With household credit card debt exceeding $3.5 billion, we need to take the lessons businesses have taken on board regarding living within their means and transfer these skills and knowledge into our homes. It is not a criticism of individual choices nor does it ignore the fact that we have a low waged economy, but rather a suggestion that the better informed we are, the better choices we can make. Unfortunately changing behaviour developed over a lifetime among our adult population will not be an easy task. Increasing the financial literacy and reinforcing good habits in those about to enter the work force or undertake tertiary education however is likely to have a higher chance of bringing about a positive financial result. For many young people tertiary study offers them their first taste of financial independence. They face decisions about student loans, leaving home and getting part time jobs. They need the skills that will lead to good financial decisions and that will set them up for their adult life Young people having a better understanding of financial matters would be of great benefit to Northland communities. It would allow them to make better decisions about debt and lifestyle and ensure that they can maximise their potential for a secure future. These same skills raise the capability of our workforce which in turn should raise productivity and wage levels.

BUSINESS ADVOCATE COLUMN SEPTEMBER 2012

BUSINESS ADVOCATE COLUMN SEPTEMBER 2012 NZ Chambers of Commerce have for a long time being advocating Northland businesses investigate the uptake of ultrafast broadband. If companies want to stay ahead of their competition they need to keep up with the latest developments that will result in robust, reliable and affordable data usage. Data usage in recent times in New Zealand has doubled and with the proliferation of smart devices this will only continue to grow as the consumers preferred choice to access information. It is amazing how often small business owners respond that they are not involved in technology and innovation so they do not see how their business would benefit from uptake of UFB. While it is true that UFB and the rural broadband initiative will provide the impetus for developing technology and innovation related businesses, this is not to say that the average or traditional business would not also benefit. Given that Northland is both isolated and that our business profile is predominately small enterprises, UFB can enable companies to use technology to increase their competitiveness through improved processes and to reduce their isolation through connectivity to a much larger market. A news article on television brought this home to me when it reported a post office in a rural mining town in Australia had experienced a large growth in its parcel delivery service directly related to online purchasing. It highlighted that a large majority of consumers are now shopping online and the opportunity that connectivity to a wider market can present any retailer anywhere in the world. As well as the expanded market, technology enables processes around sales and distribution to be streamlined in a manner that reduces the length of time between when an order is placed and the customer receives the product. This obviously reduces the time between when they receive and pay for the goods from their supplier and the time they in turn get paid by their own customers. Service will always be a critical factor and technology can allow any business to exceed the customer expectations. If you are in business in Northland and if you have previously thought that your business would not benefit from increased improvements to technology, then perhaps it would be worth your while to consult an IT expert regarding the subject or to look at what your competitors are doing that may be giving them a competitive edge.

ADVOCATE COLUMN 4th WEEK AUGUST 2012 With the entries for this year’s Westpac Northland Business Excellence Awards now closed I thought it would be worth revisiting another business award event that took place recently. That was the Te Tai Tokerau Maori Business of the year 2012 which was held in July in conjunction with the Te Hiringa Maori Business Expo. This was a thoroughly enjoyable and encouraging series of events that highlighted the achievements of Maori businesses, the whanau directing and supporting the enterprises and the unique Maori perspective that characterises their success. The overall winner this year was Kaikohe Scrap Dealers owned and operated by Gavin and Tahu Robertson. The convenor of judges, Steve Bennett highlighted “their winning formula based on manaakitanga, whanaungatanga and aroha ki te tangata. They embrace values of integrity, respect and honour in the way they do business which has won the admiration of its peers and confidence of Tai Tokerau hapori.” I would suggest that these values would stand any business in good stead when endeavouring to create a sustainable economic future. This event was very important to Northland for so many reasons. The success of our regional economy is strongly related to the success of Northland’s Maori economy. Lifting the performance of Maori business benefits all our communities. The success of this year’s entrants shows the value of raising the aspirations and capabilities of whanau to achieve this. Improved capability will grow capital and investment through higher income, greater savings and increased financial literacy. The Maori population is young and expected to grow significantly over the next decade. Their proportion of Northland’s workforce will continue to grow in the future and this workforce in a position to influence and contribute to our economic future. As a point of interest as to why under performance of this sector of our economy should not be underestimated is the unrealised potential benefit to our region. BERL recently estimated that the Maori asset base totals at least $36.9 billion nationally. Based on their modelling if the level of productivity in the Maori economy is lifted to equal the national level by 2061, the GDP contribution from the Maori economy could be $12.1 billion higher than it otherwise would be and there could be 148,000 more job opportunities. This transformation will require strengthening capability of Maori business and increased collaboration. Events such as Te Hiringa Maori Business Expo have a valuable role to play in this process.