Local Economic Development in Porirua

Local Economic Development in Porirua City, New Zealand

Profile of Porirua City.

Social characteristics. The results of the 2006 Census show that the total population of Porirua City is around 48,500 people (slightly more females than males), representing a modest increase (2.5%) from the 2001 Census. This population rate ranks Porirua City as 21st in size compared to 73 other districts in New Zealand and represents 1.2% of the country's total population.

The city is also home to slightly more than 9,600 Maori residents, representing about 19.8% of Porirua City's population.

Porirua City has a modern municipal infrastructure, including the Te Rauparaha Arena, an Aquatic Centre, and the Pataka, one of the country's most important museums of contemporary Maori, Pacific and New Zealand art.

Porirua City has also been designated as a finalist in the three categories entered in the 2010 International Awards for Liveable Communities: (a) Whole of City; (b) Environmentally Sustainable Projects; and (c) Bursary Award.

Economic characteristics. Porirua City is well situated to take advantage of its unique economic characteristics to promote further local economic development initiatives. Following its official incorporation as a city in October 1965, a number of major companies located facilities in the Porirua City area, including the installation of a factory early on by General Electric Company in 1965, followed by Kodak, Chubb, Ashley Wallpaper, and W.R. Grace.

Throughout its recent history, though, the main employer in Porirua City has been the assembly plant of Todd Motors, subsequently renamed Mitsubishi Motors.

Although the city experienced a period of developmental stagnation in its central city during the period from the 1960s to 1990, the launching of the K-Mart Plaza in 1991 (currently known as North City Shopping Centre) began a period of revitalization continuing with the construction of covered walkways over older business areas in 1995 followed by the establishment of the Mega-Centre complex in late 1999.

Today, the Porirua City Council emphasize that, "There are opportunities for business and investors including plenty of commercial land ripe for development as well as a diverse, stable workforce, easy access to the rest of the country by road (on State Highway 1) and rail and the benefit of being just 20 minutes from the Capital City."

At the local level, the number of businesses in Porirua City increased by 25% during the period from 1997 to 2002; all told, for the year ended December 2002, retail sales in Porirua City were estimated at $561 million, representing an increase of 6.7% over the same period in 2001. The Porirua region is currently comprised of 17 suburbs and one island (see colored dots adjacent Porirua City in Figure 1 below) as defined by the Porirua City Council. In addition, Porirua City also has two international sister cities, Blacktown, Australia and Nishio, Japan.

At the regional level, Porirua City is part of a larger regional area consisting of New Zealand's capital, Wellington, together with Hutt City and Upper Hutt as shown in Figure 1 below.

According to Toland and Yoong (2005), in New Zealand, "The term region generally defines a broad geographical area distinguished by similar features. A region generally refers to sub-units within a country, broadly equivalent to the state level in Australia and the United States, or a county in England."

Figure 1. Map showing Porirua City, New Zealand

Sources: http://www.poriruacity.com/go.mv-suburb_information and https://www.cia.gov / library/publications/the-world-factbook/graphics/maps/large/nz-map.gif

Environmental characteristics. As noted above, Porirua City is located just 25 kilometers (about 16 miles) north of Wellington City

and overlooks what the city's leaders describe as "a stunning harbour and includes 54 km of coastline. Equally as impressive are our rolling hills offering a rural lifestyle."

Recent local economic development initiatives. Some of the recent and ongoing economic development initiatives for Porirua City include the following:

1. Village Planning Programme. This is a partnership between Porirua City Council and its communities that is designed to "put communities in charge of developing a vision for their neighbourhoods and then partnering with Council to make it happen. This vision is brought together through community consultation and developed into Village Plans, which lay out the community's goals and aspirations for the future of their neighbourhood."

2. Titahi Bay Beach Reserves Plans and Projects. Work is underway with landscape concept plans having been completed and work scheduled to commence in October 2010.

3. Digital Porirua. Launched in early 2009, this initiative was developed based on guidance from representatives drawn from all sectors of Porirua City. The initiative's focus is "on growing and adding new capability to the network of Community Access Points, the Netpods in low decile schools, the community website www.ourporirua.com portal and the technical and learning support the Trust currently offers."

In addition, the New Zealand government has been actively engaged in implementing initiatives intended to promote economic development at the local level in recent years.

According to Gouldson and Roberts, "For 50 years, New Zealand developed under a mixed economy that was designed to promote not only economic development, but also social welfare. The mid-1980s saw the beginning of a program of wide-ranging reforms to central and local (regional, county and municipal) government that sought to promote decision-making at local levels."

The net effect of these initiatives has been to place an increasing amount of responsibility for economic development programs at the local level. The controlling legislation for local councils is contained in the Local Government Act in 1989 and the Resource Management Act in 1991 that set forth the statutory basis for local councils to address economic developmental initiatives.

2)

Set of Priorities for Local Economic Development Initiatives

Given New Zealand's geographically isolated proximity to markets in North and South America, Europe and many parts of Asia, it is not surprising that many development initiatives have been focused on increasing commerce with the closest available trading partners. For instance, Toland and Yoong emphasize that in the case of New Zealand in particular, "Regions are different from nations in that they are more 'open.' A larger proportion of the region's economy depends on flows of imports from and exports to other regions."

Currently, New Zealand's major export partners are Australia, the United States, China, Japan and the United Kingdom as shown in Figure 2 below.

Table 1

New Zealand Major Export Partners

Figure 2. Percentage of Exports for New Zealand Major Export Partners

Source: World Factbook (2010) and Peters (2006)

The main exports to these countries were, in descending order of importance, dairy products, meat, wood and wood products, fish, and machinery.

(New Zealand, 2010).

As can be seen from Figure 2 above, the Pacific Islands represent a small but important part of New Zealand's current exports, and there is growing support for increased trade with regional partners in this area of the world. According to Peters (2006), "New Zealand seeks partnership with its Pacific neighbors as we confront the many and varied challenges within our region. Only with the consent of, and in full partnership with, regional governments can we hope to make an effective, positive and lasting impact in the region."

In other words, customized responses are the key to addressing the primary local economic developmental priorities of Porirua City rather than implementing a "one-size-fits-all" approach.

This is an important point given the enormous diversity that exists within and between the islands that comprise this area. For example, Colbert describes the Pacific Islands thusly: "Ten thousand islands -- a few large, most very small, many uninhabited -- are scattered over a vast oceanic expanse, stretching from the southern reaches of the Pacific to the Tropic of Cancer and covering 20 million square miles."

The Pacific Islands also represent a potential market of about 6,000,000 consumers for Porirua City's goods and services.

To date, though, the Pacific Islands have largely been omitted from economic development initiatives in the past, but these islands represent an enormous potential for Wellington in general and Porirua City in particular. According to Peters, "One aspect of the trade relationship that is often overlooked is the economic importance of the Pacific Islands to New Zealand. In 2005, they accounted for more than NZ$1 billion, over 3 per cent of [the country's] total merchandise exports, as well as contributing to its invisibles earnings such as in tourism and contracting."

Therefore, increasing trade with the Pacific Islands appears to represent a viable strategy for local economic developmental initiatives that is especially well suited for Porirua City based in large part on its Digital Porirua and the central government's ongoing Digital Strategy initiative (discussed further below). To this end, new opportunities for using information and communication technology, particularly the e-publishing industry, third-party provision of human resources and other outsourced functions, consultation services for wildlife and cultural heritage tourism and other online services appear to represent the most promising long-term strategic partnerships with companies in Australia and the Pacific Islands, industries in which first movers stand to gain a competitive advantage.

3)

Approach to Meet These Priorities.

The first step in developing procedures for local economic development initiatives in Porirua City is to identify what resources are available from the private and public sectors for these purposes. The local and regional councils that administer the Porirua City metropolitan area have different, but interrelated responsibilities that must be taken into account in formulating effective economic developmental initiatives as described in Table 1 below.

Table 1

Respective Responsibilities and Areas of Interest for Regional and Local Councils in New Zealand

Council Type

Description of Responsibilities and Areas of Interest

Regional Councils

Responsible for the integrated management of natural and physical resources, management of natural resources such as water and soil.

Local Councils

Responsible for carrying out multiple functions that enable them, among other things, to promote development projects with the private sector; also responsible for land-use planning, subdivision, service delivery, etc.; however, local councils are not involved in educational, health and welfare matters and these remain in the domain of national government.

Source: Gouldson & Roberts, p. 54

Therefore, local councils would be best suited for establishing priorities for local economic development incentives and coordinating their implementation, but many such local councils in New Zealand are already faced with a number of constraints in their operation. For instance, according to Gouldson and Roberts, "Many local authorities in New Zealand are faced with a lack of coherent national policies, with multiple and in some instances competing objectives, with over-stretched resources and with under-developed capacities for implementation."

As a result, the second step in establishing priorities for economic development would be to identify how a partnership between private enterprise and local councils can best achieve the goals of the economic development initiative. In this regard, Dalziel and Saunders report regional councils can help coordinate the resources that are needed at the local level. According to Dalziel and Saunders, "New Zealand's regional partnership programme acknowledges a particular partnership structure, recognized by the central government as being the lead agency for local economic development planning."

As noted above, the Porirua region consists of 17 suburbs and one island. In order to develop private and public sector partnership that could address the priorities of increasing online trading opportunities with the Pacific Islands, all of the affected stakeholders would need to be involved in the planning and administration of such developmental initiatives. In this regard, Dalziel and Saunders note that, "It is common to create a structure that includes members drawn from local businesses and employers, trade unions, farmers, tertiary education institutions, local politicians, local authority officers, government department employees, community non-government organizations and local volunteer groups."

The close interrelatedness of the localized resources means that any economic development initiative must be tied to what resources are available, and for Porirua City, this means people who are willing to take the necessary risks and pursue the steps needed to achieve their organizational goals. For instance, according to Blair and Carroll, in New Zealand, "Regions are pursuing entrepreneurial and cluster-based economic development strategies. Both approaches emphasize innovation and innovation is enhanced by social capital. The economic application of new ideas often centers on individual entrepreneurship -- risk taking, unique vision, leadership, and so forth."

The importance of individual risk taking in promoting economic development at the local level is well documented, but coordinating these localized efforts in a cohesive fashion requires a guiding framework to achieve the desired outcomes.

To this end, the New Zealand government has implemented several initiatives in recent years in an effort to provide a framework that develops a knowledge society, encourages innovation, builds up regional economic development, and improves usage and access to information and communications technologies (ICT).

The desired outcome for these initiatives has been to elevate New Zealand's per capita income to the upper 50% of the OECD rankings and sustain that level of performance.

Some of the current initiatives in place to promote regional and local development in New Zealand include those described in Table 2 below.

Table 2

Current Local Developmental Initiatives by New Zealand Government

Initiative

Description

The Regional Partnerships Programme

This initiative is operated by New Zealand Trade and Enterprise, which provides guidance and funding to assist regions identify and develop sustainable economic growth strategies.

The Clusters Development Fund

The New Zealand Trade and Enterprise sponsors this initiative with the goal of facilitating the development of business clusters with significant growth potential.