Growing Apart g p A burning platform Shamubeel Eaqub, CFA - - PowerPoint PPT Presentation

Growing Apart g p

A burning platform

Shamubeel Eaqub, CFA Wellington 11 March 2015

A ll f l li i A call for place-aware policies

• Burning platform for change
• What matters
• People
• Opportunity
• Different solutions

2

BURNI NG PLATFORM

Prosperity is unevenly shared

BURNI NG PLATFORM

Prosperity is unevenly shared

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Di i f t Diverging fortunes

4

U ll h d Unequally shared

$140,000

Regional household income dispersion

20th percentile 50th percentile 70th percentile $100,000 $120,000 $40 000 $60,000 $80,000 $0 $20,000 $40,000 $0 Auckland Wellington est Coast NZ Taranaki Gisborne Northland Waikato Otago Wanganui

• f Plenty

wke's Bay anterbury Nelson

• uthland

lborough Tasman A W We N M.-W Bay Haw Ca S Mar Source: Statistics NZ, NZIER

5

Diff t f Different performance

2% 4% 013

Employment growth by region

(2006-2013)

• 2%

0% 2% h, 2006-20

• 6%
• 4%

2% % growth National effect Regional industry mix

• 10%
• 8%

Regional industry performance Total Wanganui wke's Bay Gisborne Northland rlborough y of Plenty West Coast Southland Otago NZ Tasman Wellington Waikato Taranaki Nelson anterbury Auckland M.-W Haw N Ma Bay W S W Ca Source: Statistics NZ, NZIER

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Diff t i Different economies

Wellington

500 000)

Economic complexity & human capital

Auckland Wellington

450 (2006, $0

Canterbury Hawke's Bay Otago Southland Taranaki Waikato

350 400 per capita

Bay of Plenty Gisborne Hawke s Bay Manawatu-Wanganui Marlborough No thl nd Nelson-Tasman West Coast

300 n capital p

Northland

250 1 2 3 4 Huma Economic complexity index (rising compexity ---> )

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Economic complexity index (rising compexity ---> ) Source: Statistics NZ, NZIER

U i Unique

Specialisation of industries vs. growth in jobs

Region # 1 specialty Strongest growth (2003-2013)

Northland Petroleum Refining Hospitals Auckland Music publishing Corporate Head Office Management Waikato Iron Ore Mining Corporate Head Office Management Waikato Iron Ore Mining Corporate Head Office Management Bay of Plenty Kiwifruit Other Agriculture & Fishing Support Gisborne Citrus Fruit Sheep-Beef Cattle Farming Hawke's Bay Apple & Pear Labour Supply Taranaki Petroleum Exploration Labour Supply Taranaki Petroleum Exploration Labour Supply Manawatu-Wang. Pumps & Compressor Mfg Sheep-Beef Cattle Farming Wellington Central Banking Central Government Administration Tasman Building Society Operation Road Freight Transport Nelson Fish Trawling, Seining & Netting Labour Supply Marlborough Non-Metallic Mineral Mining & Quarrying Other Agriculture & Fishing Support West Coast Metal Ore Mining Coal Mining Canterbury Communication Equipment Mfg House Construction Ca te bu y Co u cat o qu p e t g

• use Co st uct o

Otago Stone Fruit Growing Stone Fruit Growing Southland Aluminium Smelting Dairy Cattle Farming

Note(s):

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Legend: Service; non-service ("making") Source: Statistics NZ, NZIER (Based on filled job comparative advantages for 2013)

N t Not new

Employment by industry sector

Primary Goods producing Services 60% 70% 80% 40% 50% 60% e of total 10% 20% 30% Share 0% 10% 1891 1896 1901 1906 1911 1916 1921 1926 1931 1936 1941 1945 1951 1956 1961 1966 1971 1976 1981 1986 1991 1996 2001 2006 2013

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1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 2 2 2 Census year Source: Statistics NZ, NZIER

N t f ll Not for all

A kl d

Share of population with tertiary education

0% 40% Hamilton Auckland Palmerston North Porirua Kapiti Coast Wellington Christchurch Lower Hutt Queenstown-Lakes Dunedin

10 About Tableau maps: www.tableausoftware.com/mapdata

Source: Statistics NZ, NZIER

UNSTOPPABLE FORCES

Sped up change

UNSTOPPABLE FORCES

Sped up change

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S l f i Secular forces = growing gap

• Technology
• Technology
• Globalisation
• Urbanisation

Widening gap between regions

• Urbanisation
• Ageing

g & industries

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T h l Technology

S h

Technology adoption pace

Smartphone I t t Internet Home computer Home computer Telephone 10 20 30 40 50 60 Telephone Years to reach 50% of US households Source: Asymco

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U b i ti Urbanisation

4

Population distribution

Rural Urban 3 2 umber, m 1 Nu 1881 1896 1911 1926 1941 1956 1971 1986 2001 Source: Statistics NZ, NZIER

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Gl b li ti Globalisation

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CATALYSTS

Reality bites

CATALYSTS

Reality bites

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F t it l d i i Future capital decisions

3,000

Local government investment trends

Roading Other R di f i l d O h f i l d 2 000 2,500 Roading - from partial data Other - from partial data 1,500 2,000 013$, m 500 1,000 20 500 1905 1915 1925 1935 1945 1955 1965 1975 1985 1995 2005

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1905 1915 1925 1935 1945 1955 1965 1975 1985 1995 2005 Source: Statistics NZ, NZIER

A i Ageing

5%

Population growth by age

Under 40 40-64 65+

3% 4% nge 2% 3% al % chan 0% 1% Annua

• 1%

0%

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1993 1996 1999 2002 2005 2008 2011 2014 Source: Statistics NZ, NZIER

V ti ith th i f t Voting with their feet

Mar-06 Mar-13

Population growth between Census, % pa

19 About Tableau maps: www.tableausoftware.com/mapdata About Tableau maps: www.tableausoftware.com/mapdata

Source: Statistics NZ, NZIER

E d f th? End of growth?

2006 Population

Southland population growth 2006-2013

2006 - Population Natural Regional migration International migration 2013 - Population

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90 91 92 93 94 95 People, 000s Source: Statistics NZ, NZIER

PLACE BASED POLI CI ES

Transitioning to a new state

PLACE BASED POLI CI ES

Transitioning to a new state

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“…build on existing capabilities by l i l l t th d p ti leveraging local strengths and expertise. …[interventions] should only be to resolve market failures and [if] a [ ] community has a credible chance to building a self sustaining cluster ” building a self sustaining cluster. Enrico Moretti Enrico Moretti The New Geography of Jobs

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Wh t i ? What is success?

Indicator GDP per capita (2010) Growth in GDP per capita (2000-2010) Volatility in GDP growth (2000-2010) 1 12

Rank

23 About Tableau maps: www.tableausoftware.com/mapdaAbout Tableau maps: www.tableausoftware.com/mapdaAbout Tableau maps: www.tableausoftware.com/mapda

Diff t t t Different states

• Unshackle
• Catalyse
• Unwind

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C t l i t Control vs impact

impact Vital few Vital few Cost ineffective Cost ineffective Level of Cost ineffective Cost ineffective Trivial many Trivial many ineffective ineffective many many Level of control

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Wh tt Why you matter

Ideas Government Economy C l y Good ideas Catalyst: to promote good ideas Innovation leading to ideas Filt t leading to better economic & i l Bad ideas Filter: to say no to bad ideas social

• utcomes

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N t l Not alone

Central government Local government Iwi B i Business Community

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H d t di t Hard to co-ordinate

Yes

• “Big picture”

No

• “Lowest common denominator”
• Big picture
• Realise synergies
• Economies of scale
• Lowest common denominator
• Reduced accountability
• Longer decision making
• Reduced effectiveness
• Cost of management

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Th h d The way ahead

Goal: Better NZ Data: Benchmark Develop & implement strategies Coordinate DIRECT local control INDIRECT local control Competition Coopetition Coordinate across CG, RG, LG, Iwi, Business & Households Review &

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Review & refine

A ll f l li i A call for place-aware policies

• Burning platform for change
• What matters
• People
• Opportunity
• Different solutions

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“Invincibility lies in the defence v c b y s d c the possibility of victory in the attack.”

• Sun Tzu
• Sun Tzu

THANK YOU