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 A call for place-aware policies ll f l li i • Burning platform for change • What matters - People - Opportunity • Different solutions 2

3 BURNI NG PLATFORM BURNI NG PLATFORM Prosperity is unevenly shared Prosperity is unevenly shared

4 Diverging fortunes t f i Di

U Unequally shared ll h d Regional household income dispersion 20th percentile 50th percentile 70th percentile $140,000 $120,000 $100,000 $80,000 $60,000 $40 000 $40,000 $20,000 $0 $0 NZ Gisborne Auckland Wellington Taranaki Northland Waikato Otago Wanganui of Plenty wke's Bay anterbury Nelson outhland lborough Tasman est Coast A M.-W We N Haw W Ca S Bay Mar Source: Statistics NZ, NZIER 5

Source: Statistics NZ, NZIER % growth h, 2006-20 013 Diff Different performance -10% -8% -6% -4% -2% 2% 0% 2% 2% 4% Auckland Total Regional industry performance Regional industry mix National effect Ca anterbury t Nelson Employment growth by region Taranaki f Waikato Wellington W (2006-2013) Tasman NZ Otago S Southland West Coast W Bay y of Plenty Ma rlborough Northland N Gisborne Haw wke's Bay M.-W Wanganui 6

Diff Different economies t i Economic complexity & human capital 000) 500 Wellington Wellington (2006, $0 450 Auckland per capita 400 Waikato Canterbury Otago Southland Taranaki 350 n capital p Hawke's Bay Hawke s Bay Manawatu-Wanganui Bay of Plenty Marlborough West Coast 300 Nelson-Tasman Gisborne Northland No thl nd Huma 250 0 1 2 3 4 Economic complexity index (rising compexity ---> ) Economic complexity index (rising compexity ---> ) Source: Statistics NZ, NZIER 7

Unique U i 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 Waikato Iron Ore Mining Iron Ore Mining Corporate Head Office Management 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 Taranaki Petroleum Exploration Petroleum Exploration Labour Supply 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 Ca te bu y Canterbury Communication Equipment Mfg Co u cat o qu p e t g House Construction ouse Co st uct o Otago Stone Fruit Growing Stone Fruit Growing Southland Aluminium Smelting Dairy Cattle Farming Note(s): Legend: Service; non-service ("making") Source: Statistics NZ, NZIER (Based on filled job comparative advantages for 2013) 8

N t Not new Employment by industry sector Primary Goods producing Services 80% 70% 60% 60% e of total 50% 40% Share 30% 20% 10% 10% 0% 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 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 9

N t f Not for all ll Share of population with tertiary education 0% 40% A Auckland kl d Hamilton Kapiti Coast Porirua Palmerston North Lower Hutt Wellington Christchurch Queenstown-Lakes Dunedin Source: Statistics NZ, NZIER About Tableau maps: www.tableausoftware.com/mapdata 10

11 UNSTOPPABLE FORCES UNSTOPPABLE FORCES Sped up change Sped up change

S Secular forces = growing gap l f i • Technology • Technology Widening gap • Globalisation between regions g • Urbanisation • Urbanisation & industries • Ageing 12

T Technology h l Technology adoption pace S Smartphone h I t Internet t Home computer Home computer Telephone Telephone 0 10 20 30 40 50 60 Years to reach 50% of US households Source: Asymco 13

U b Urbanisation i ti Population distribution Rural Urban 4 3 umber, m 2 Nu 1 0 1881 1896 1911 1926 1941 1956 1971 1986 2001 Source: Statistics NZ, NZIER 14

15 Globalisation ti Gl b li

16 CATALYSTS CATALYSTS Reality bites Reality bites

F t Future capital decisions it l d i i Local government investment trends 3,000 Roading Other Roading - from partial data R di f i l d O h Other - from partial data f i l d 2,500 2 000 2,000 013$, m 1,500 20 1,000 500 500 0 1905 1905 1915 1915 1925 1925 1935 1935 1945 1945 1955 1955 1965 1965 1975 1975 1985 1985 1995 1995 2005 2005 Source: Statistics NZ, NZIER 17

A Ageing i Population growth by age 5% Under 40 40-64 65+ 4% nge 3% 3% al % chan 2% Annua 1% 0% 0% -1% 1993 1996 1999 2002 2005 2008 2011 2014 Source: Statistics NZ, NZIER 18

V ti Voting with their feet ith th i f t Population growth between Census, % pa Mar-06 Mar-13 Source: Statistics NZ, NZIER About Tableau maps: www.tableausoftware.com/mapdata About Tableau maps: www.tableausoftware.com/mapdata 19

E d End of growth? f th? Southland population growth 2006-2013 2006 2006 - Population Population Natural Regional migration International migration 2013 - Population 90 91 92 93 94 95 Source: Statistics NZ, NZIER People, 000s 20

PLACE BASED POLI CI ES PLACE BASED POLI CI ES Transitioning to a new state Transitioning to a new state 21

“…build on existing capabilities by l leveraging local strengths and expertise. i l l t th d p ti …[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 22

Wh t i What is success? ? Indicator GDP per capita (2010) Growth in GDP per capita (2000-2010) Volatility in GDP growth (2000-2010) Rank 1 12 About Tableau maps: www.tableausoftware.com/mapdaAbout Tableau maps: www.tableausoftware.com/mapdaAbout Tableau maps: www.tableausoftware.com/mapda 23

24 Different states t t • Unshackle • Catalyse t • Unwind Diff

C Control vs impact t l i t impact Level of Cost Cost Vital few Vital few ineffective ineffective Trivial Trivial Cost Cost ineffective ineffective ineffective ineffective many many many many Level of control 25

Wh Why you matter tt Ideas Government Economy y C Catalyst: to l Good ideas promote good Innovation ideas ideas leading to leading to better economic & social i l Filt Filter: to say t outcomes Bad ideas no to bad ideas 26

27 Central government Local government Community Business Iwi i B Not alone l N t

H Hard to co-ordinate d t di t Yes No • • “Big picture” Big picture • “Lowest common denominator” • Lowest common denominator • Realise synergies • Reduced accountability • Economies of scale • Longer decision making • Reduced effectiveness • Cost of management 28

Th The way ahead h d Develop & Goal: Data: implement Better NZ Benchmark strategies Coordinate Coordinate DIRECT across CG, INDIRECT Competition local RG, LG, Iwi, local Coopetition control Business & control Households Review & Review & refine 29

A A call for place-aware policies ll f l li i • Burning platform for change • What matters - People - Opportunity • Different solutions 30

“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