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Western Focus
Economic development core function of local government
Thursday, 13 August 2009
By John Wadsworth, Chief Executive, Waitakere Enterpr
Last month, I argued that while efficiency in an economy is essential, so too is a focus on growth. Growth initiatives must be driven at all levels of an economy – locally, regionally and nationally. After all, small businesses are future big businesses and the stronger the pool of small, local employers, the bigger and brighter the future of New Zealand.
This month I want to reinforce that economic development is not merely essential to the health of local communities, it is in fact, a core function of local government. Why? Local governments, by their very existence, profoundly affect the economic performance of a locality. They regulate. They plan. They monitor. They have a responsibility to undertake all of this activity in a manner that is economically as well as socially, culturally and environmentally sustainable.
Growth and efficiency drivers must be embedded long term in the legislative, governance, leadership and organisational culture of the new Auckland Council. In short, make economic development a key focus. Infrastructure is rightly central to the current reorganisation of Auckland governance. However, there is more to economic development than infrastructure!
Consider this; regulation is currently either a significant impediment or enabler of economic growth. Use an economic development perspective to drive regulation and priority will be given to the clarity, certainty and speed of these processes. With economic development as a responsibility, an efficient regulatory and planning context is more likely to succeed.
Another example is property. Local government can usefully address market failure where that failure may negatively impact on economic growth and urban development. In five years, Henderson Valley Studios has contributed more than $1billion to New Zealand’s GDP. The market had proposed bulk retail use for the site. Likewise, the market demanded high value housing on the Hobsonville Peninsula. Under the Council’s directive, the area is being developed with mixed value housing and a super yacht precinct that will generate 2,000 local jobs.
Focusing on economic development will also simplify the process of project choice and programme delivery for local government. Where there is clear evidence of market failure and evidence that outcomes will be better achieved through public intervention, these activities should be taken on. Examples of this include; connection of private sector equity to non-listed growth companies, SME business growth programmes, business networks, investment attraction and facilitation.
These examples are designed to illustrate my point. If economic development rightly sits as a core function of local government, local, regional and national benefits will follow. Given the key role that the Auckland Council will play in influencing central government expenditure priorities in Auckland, this focus is even more essential.
We have an opportunity in Auckland, to get it right. Let’s do that.
