5 March 2009
A unique collaboration between a University of Auckland entrepreneurship expert and an isolated North Island region worried about its post-financial crisis future has seen the creation of a multi-million-dollar investment initiative for local businesses.
Hawke’s Bay economic development agency Hawke’s Bay Inc and Auckland Business School’s Dr Ian Hunter will together make plans over the next 100 days to ensure the region pulls through the looming economic recession better than expected.
The plans include establishing a $20 million fighting fund to invest into existing companies and those new ones created by redundant workers with rich experience, along with encouraging job creation, entrepreneurship and innovation.
And Dr Hunter says the region’s “brave and realistic” attitude towards one of the worst economic recessions on record will distinguish it from other New Zealand provinces when this country feels the downturn’s full brunt over the second half of this year.
“Those involved in the development of the Hawke’s Bay are as concerned as me at the incorrect advice being given to New Zealand at the moment,” Dr Hunter says.
“Many regions are still at the ‘ignore or deny’ stage; they have not accepted that it is crucial they start making plans for a significant downturn that will bring substantial unemployment and loss of both income and population.
“I believe, from research into other world recessions, that New Zealand will not avoid the full effects of this current downturn – in fact, we are around a year behind the United States and by the middle of this year will start to see the ramifications that our American counterparts are currently experiencing.
“What regions do now – in this very narrow window of opportunity – can avoid a train wreck in 12 months’ time. But that depends on how long they wait to take ‘grassroots’ action.”
Together with Hawke’s Bay Inc and the Hawke’s Bay Regional Council, Dr Hunter is thoroughly assessing the region’s economy, matching capability and deepening skills bases. The region is geographically isolated, has an aging and reducing population, with a longterm history in agriculture and horticulture and a shortage of skilled workers.
Established and well-regarded businesses in the region are operating well, and will be capitalised on during challenging times, Dr Hunter says. Firms will be offered financial help to create new products and services, and to add new jobs.
“In two days alone, we have identified firms that are worth the addition of capital in the Hawke’s Bay, which is very encouraging. But New Zealand needs to play in niche markets, and that’s one area that will be focussed on.”
Closely mirroring North Carolina in the United States, Hawke’s Bay has a regular unemployment rate 1.5% above national rates.
“This means the Hawke’s Bay is looking down the barrel of 10% unemployment or more in a year’s time,” Dr Hunter says.
“With these initiatives kicking in, however, the region will likely start to see people that are skill-rich staying in the Hawke’s Bay, and those with valuable experience starting their own businesses and providing new jobs.
“We will see new and existing firms operating well, with young people staying in the region for work. We will see people’s skills and capabilities deepen, and aspirations rise.”
Dr Hunter, who has worked for the United Kingdom Department of Trade and Industry, and the Ministry for Economic Development in Management Capability Research, says the time lapses between coming up with initiatives to beat the crisis and actually doing something are worrying.
“Advice out there being fed to businesses flies directly in the face of history,” he says. “I predict that this downturn will be unprecedented and its full impact will take our Government by surprise.”
The Hawke’s Bay initiative is expected to be rolled out within the next two months. |