Growing Auckland

Can this new Forum get Auckland’s Economy Going?

Forgive me if I say “No”

 

Yesterday Morning Report (Radio NZ) released an audio clip of the announcement of the creation of (yet another) forum to try to grow Auckland’s influence. This new group is meant to be: “A high-powered group of business and public sector leaders is to lead efforts to double the rate at which Auckland’s economy is growing.”

You can see the audio clip here

Source: http://www.radionz.co.nz/national/programmes/morningreport/audio/2584115/auckland-aims-to-grow-its-influence
At this point in time I am displaying little confidence in this new forum (that said they have a chance to prove me wrong and if they are serious about Auckland I hope they do).

 

First though I am going to copy over a Shape Auckland blog post on this new forum.

From Shape Auckland (The Council social medial portal on the Unitary Plan):

SEE CITIES EXPERT GREG CLARK’S TALK ON AUCKLAND’S ECONOMIC GROWTH

International cities expert Greg Clark spoke at the Auckland Conversations series this week, outlining some of the challenges for Auckland in meeting its liveability and economic aims. See what he had to say: Liveable Cities and Business Friendly Cities: What is the global competition up to? How should Auckland respond? For further background, you can read Auckland’s Economic Development Strategy, and see how the Proposed Auckland Unitary Plan aims to help support Auckland’s economic growth with this paper Shaping a business friendly city.

Also see this press release following this week’s economic forum in Auckland:

Business and council to promote economic growth action plan

Auckland business and the council are looking to combine the city’s reputation for high liveability with openness to business and investment through a clear agenda for economic growth, following a three-day economic forum. Mentored by international cities expert Greg Clark, who advises many of the world’s most successful cities, the forum identified nine priorities to accelerate delivery of Auckland’s Economic Development Strategy and the Auckland Plan. The forum was attended by representatives from business, the council and government departments.

Mayor Len Brown said: “Auckland’s amalgamation has delivered huge opportunities of scale. But we need to translate those opportunities into clear action. Auckland requires one leadership team to drive the jobs and growth we need. “This is a very strong start. It identifies some clear priorities and actions for Auckland. And, importantly, it shows a real consensus for action from business and council. The next step will be to take this to government to seek their full backing for Auckland’s growth priorities.”

Auckland Chamber of Commerce chief executive and chair of Auckland’s business leadership group, Michael Barnett, acknowledged the shared commitment to deliver economic growth. “A new year, a new council term. An opportunity for action-based results. That’s what Auckland is expecting,” he said.

Councillor Arthur Anae, Chair of the Economic Development Committee said: “We have the right strategy for Auckland’s growth. But we need to move from planning to action and begin to shift up a gear. This set of priorities will send a clear message that Auckland is serious about achieving its economic potential.”

Greg Clark guided the forum on international best practice of successful cities, calling for Auckland to be more visible on the world stage by establishing a distinctive identity and business proposition based on its leading assets. “Auckland has made great strides in being ranked among the world’s most liveable cities. The challenge set by the Mayor is to underpin that by great economic performance and dynamism gained from international recognition as an attractive place for investment and talent,” he said.

The nine priorities agreed at the forum are:

  1. A new Auckland Leadership Team
  2. Raise youth employability
  3. Build, retain and attract talent
  4. Build the Auckland business proposition for a business-friendly city
  5. Boost the investment rate into Auckland’s economy and infrastructure
  6. Motivate greater investment in products, services and markets
  7. Increase Auckland’s visibility
  8. Optimise Auckland’s platforms for growth
  9. Support improved performance of Maori businesses.

Further engagement with central government and the private sector will maintain the momentum of the forum, and confirm the agenda.

The draft plan will be referred to the council’s Economic Development Committee in February.

—ends—

You will have to forgive me if:

  1. I have heard this all before (as Todd Nial said on the Morning Audio clip there has been reincarnations of this kind of forum since 2001) and yet we are at the pre-starting blocks rather than even at the starting blocks
  2. There is an entire disconnect still happening between the Council and everyone else in Auckland (I’ll point out this below as I got through and critique the nine points)

Critiquing the Nine Points that illustrate the disconnect and why I have no confidence in this forum

 

  • A new Auckland Leadership Team

Where would you like me to go with this one seriously? Because to me this forum is at serious risk at being stacked with leaders from the 20th Century with 20th Century ideas and thinking – thus auto fail. Your new leadership team needs to draw from leaders of the 21st Century with 21st Century and ideas. Why? Because we are in the 21st Century and Auckland is trying to drag itself from the 1950’s way of doing things into the 21st Century way of doing things. You want Auckland to be attractive to the world and grow its influence? Then you will not do so appointing leaders of last Century as the World has moved beyond it into this Century. As I said 21st Century means 21st Century ideas – something New Zealand as a whole does somewhat lack of right now. An example of this particular situation is the constant complaints from retailers about the increasing sales from online retailers. We the consumer will constantly say to retailers the reason why we shop more online is because:

  • cheaper
  • poor service from staff
  • Malls can be a pain
  • wider range of choice of goods
  • poor digital presence

So what should the retailers do? Lower their over-inflated prices, give better training and support to staff (that includes wages), get malls to be more people friendly and charge lower ground rent, offer a wider range of goods, and better digital portals for shopping online including better social media presence.

But what do our retailers actually do? Complain to the Government and New Zealand Herald and want GST charged on all overseas purchases rather than the above pointers made.

Another example was an article from the Herald that came up the same time as I posted this post yesterday:

Just saw this: http://www.nzherald.co.nz/opinion/news/article.cfm?c_id=466&objectid=11195066 (Brian Gaynor: Business leaders failing long-term growth test ). Rather fitting after the post I just wrote…

And you wonder why I made those points about a new Auckland leadership team…

 

  • Raise youth employability

The correct term is “Raising employment prospects for our youth” (those under 25) for starters. I thought the much-lauded Southern Initiative as a partnership between public, private and the social sectors was meant to be developing ways into this problem of poor youth employment prospects. Obviously not otherwise it would have not been mentioned in the above Shape Auckland blog post nor in Todd Nial’s piece around the 4 minute mark. So what another forum plans to do about this problem I am keen to know. The issue as I see it is straight forward one and it is a disconnect between the education sector and the private sector. Our state education is hopeless in getting our students prepared with the skills for the real world. We do not teach Civics and we have this over “reliance” of shoving people through universities. It would be more beneficial for the youths of Southern Auckland to not only teach them reading, writing and math, but also Civics and foundational technical skills that can carry through to MIT and onto our actual money earning industrial sector in Wiri and Takanini. The youths that want to go University will do so under their own steam. However, we are pretty slack in helping those who are good with their hands and getting them trained up for work in our industrial sectors. The A Perspective on the CBD and Waterfront (see bottom of post for the article) post I wrote up last year points out the importance of our often forgotten industry here in Auckland. So message to this forum – get the education sector reorganised!

 

  • Build, retain and attract talent

Similar to above with our education-private sector disjoint. With Australia tanking at the moment it is not providing a big a pull as before with our talent. That said I recommend reading again my Perspective on the CBD and Waterfront post on where the actual money for both workers and the economy as a whole is made. Here is a small clue: it isn’t in the CBD on relative terms with our industrial sectors. I had the privilege of touring a factory in Onehunga recently (to which I was very thankful for) and what I saw was actually fascinating. Without going into too much detail this factory does export to the world as well as produce for New Zealand various high-end products. The workers are across the demographic spectrum and are highly skilled. The final conclusion I drew was that these employers in our industrial sector are our true backbone and engine house for Auckland and we need to do more fostering them and the talent they draw on. It is our industry that earn our foreign receipts (hard income), and developing a skilled work force. Sleepyhead’s expansion at Manukau is another case of industry expanding providing employment while also providing export revenue.

 

  • Build the Auckland business proposition for a business-friendly city

Read this again: A Perspective on the CBD and Waterfront (see bottom of post for the article) and enough said. I am currently framing the Super Metropolitan Centre concept into my submission of the Unitary Plan that will help answer the question of “Shaping Auckland to become a business friendly city.”

 

  • Boost the investment rate into Auckland’s economy and infrastructure
  • Motivate greater investment in products, services and markets

Same as above and is being covered in my submission to the Unitary Plan. I will run a full commentary on this in March once my submission is in to Auckland Council

 

  • Increase Auckland’s visibility
  • Optimise Auckland’s platforms for growth

I have written before how Auckland is a Beta Class World City as well as how to get ourselves back up the ranks and into the Alpha City areas (meaning we are in the same broad category as London). The best way to Auckland to increase its visibility is for starters to liberalise our planning laws so again industry (and in part commercial) do not get tangled in the bureaucracy in establishing themselves here in Auckland (thus contributing to further growth). Another thing is to stop this disconnect that is happening in Auckland where we still have silo thinking. I will draw on that disconnect with Manukau shortly.

 

  • Support improved performance of Maori businesses

This one caused me to raise an eyebrow. Our Maori Business especially those as part of Iwi units are doing well and in some cases better than others in New Zealand. Time and time again at Auckland Council I have heard the Independent Maori Statutory Board ask people and Council how they plan to link in with Maori enterprise. The answer is often a blank look on people’s faces. Here we have growing Maori enterprise cashed up and actively willing and wanting to invest but can’t simply because we have not adapted ourselves for this investment. I think we might want to be a bit more proactive here folks if we having enterprise willing and actively wanting to invest. The obvious and immediate benefit of this investment is not only further growth but also the best available “weapon” in tacking our youth problems in the south. Investment means more opportunities, more opportunities means growth, growth means training and work, training and work mean income, income means more investment. You will also find if you go back to earlier New Zealand history that when the settlers, missionaries and whalers came to New Zealand (so effectively prior to Land Wars) that the Maori people were very quick and adapting in establish commerce and becoming quite fine merchants. Yes we had a sordid moment in our history from the Land Wars to around 1984 with the treatment of the Maori (and it often makes me ashamed being a Pakeha knowing what “we did” in that period) but Maori never have lost the skills for commerce and being merchants. Often in statistics Maori Enterprise outshines the rest in New Zealand which does bring a smile to my face. To bring this part to a close it shows Maori enterprise does well and has presented a unique opportunity through them willingly and actively wanting to invest. The catch is the rest of us are very slow  in coming realisation in giving our support (that is allowing Maori enterprise to invest) to help improve Maori enterprise even more.

 

The Disconnect Using Manukau as an Example

I am going to repaste my CBD/Waterfront post below for your ease of reading. What is pointed out in that post illustrates the disconnect that is facing Auckland, Auckland Council and this new forum. The Super Metropolitan Centre concept as I see it as our best shot in establishing two sub-regional (well at this rate they will become regional with Manukau as the portal for the Waikato and Bay of Plenty, and Albany as the portal for Northland) hubs that will provide major boosts for our export and/or industrial sector thus giving the currency of greater influence for Auckland on the international stage that this forum is wanting to seek. Further commentary on Auckland and the Super Metropolitan Centres can be seen in the Entering the City Building Phase – Well the Actual City Phase post

A Perspective on the CBD and Waterfront

Opportunity or Already Missing the Target

While I was finishing up the ‘First Concept Manukau Drawings‘ yesterday I saw this on Facebook from (Councillor) Cathy Casey:

In the Sunday Star-Times yesterday, Rod Oram argues that Auckland Council won’t deliver on the city’s economic goals, particularly on the Waterfront because we are not addressing sustainable urban design:

“While an ambitious strategy for Auckland looks good on the surface, it fails miserably in one globally cutting-edge area: sustainable urban design.” (Will post when it goes online)

The Online link being here: ‘Auckland’s waterfront plan will not deliver

Rod Oram’s opinion piece in the Sunday Star Times when I read it through had some unfortunate irony attached to it. Irony in the fact the things Oram mentions I had either mentioned myself or implied in my ‘Looking at Developing a 21st Century Auckland” series (currently being written),  ’The Auckland Project?‘ post and the ‘Outlining a 21st Century Auckland‘ post.

First of all lets look at some key aspects of Rod Oram’s opinion piece:

Auckland’s waterfront plan will not deliver 

ROD ORAM

OPINION: Auckland, given its people and place, has the potential to be one of the world’s great cities. To help achieve that, its council has set a bold economic strategy.

However, some studies for the council show that the initiatives under way won’t deliver on the city’s goals. That’s particularly true on the waterfront, the jewel in the crown.

The council’s economic vision could not be clearer:

  • An average annual increase of regional exports greater than 6 per cent
  • An average annual real gross domestic product increase greater than 5 per cent
  • An average annual productivity growth greater than 2 per cent

If the city achieved these targets, it would rise 20 places in 20 years in the OECD’s ranking of cities by GDP per capita, the council says. This will require “a fundamental change in Auckland’s economy”, the council’s economic strategy document says.

Roughly speaking, the regional economy would have to double its rate of growth, not just in volume terms but also in value creation through high productivity, high-paying jobs; and sustain such progress over decades.

Waterfront Auckland, the council-controlled organisation tasked with redeveloping the city’s best land fromWesthaven marina to the Ports of Auckland, is no less ambitious. It will “help drive the sustainable development of the waterfront, to deliver the waterfront as New Zealand’s leading location of sustainable urban transformation and renewal”, it says in its recently published Sustainable Development Framework.

Moreover, it says it will deliver “globally significant” projects. Its current focus is Wynyard Central, area south of North Wharf. In coming months it hopes to complete negotiations with property developers for commercial and residential buildings and a hotel there.

All very good and goes pretty much what I outlined (the positive stuff) from what Design Champion Ludo Campbell-Reidwas quoted in saying in the ‘Outlining a 21st Century Auckland‘ post recently.

However, Oram then goes on and says this just two sentences later:

But the rhetoric of Auckland Council and Waterfront Auckland won’t deliver the goods. This is the blunt analysis of a study by PwC for Waterfront Auckland published in March (Waterfront Auckland’s website).

And it all falls apart from there.

I have read both reports that were linked on Oram’s piece and have placed them at the bottom of the post. Needless to say I can see where Rod Oram is coming from on both the economic side and urban design sustainability side.

Continuing on with Oram’s piece – on the economic side

Yes, employment on the waterfront will grow, PwC forecasts for the area between Wynyard Quarter in the west to the Marsden and Cook wharves in the east. This excludes the bulk of the Ports of Auckland employment in the container terminals further east.

Direct and indirect fulltime equivalent jobs will grow 2.7 times from around 14,500 this year to 39,400 by 2040. But the economic activity they generate will grow only 2.8 times to $4.12 billion (in constant dollar terms). So, the non-port waterfront’s contribution to regional GDP will barely shift from around 5.5 per cent currently.

It is obvious why Auckland Council is failing to start the fundamental change in Auckland’s economy. Some 12,600 waterfront jobs in 2040, about one-third of the total, will be in low-value, part-time and seasonal work in the cruise, tourism and hospitality sectors, PwC forecasts. Another 12,500 jobs will be “high productivity”, which PwC doesn’t specify nor give any indication of where they will come from; and a further 14,300 in “other” work.

So, how might Auckland fulfil its ambitions? The goals are right. The region needs to be far more deeply linked with the global economy. Currently only 9 per cent of Auckland’s economy has anything to do with the rest of the world. The vast bulk of activity is generated from serving the needs of its population, and the wider country.

To develop such engagement, Auckland needs to become very good at attracting interest and investment from overseas businesses, while many more Auckland businesses must learn how to earn a living internationally, not just in this tiny domestic market. But Auckland will develop these two powerful economic drivers only if it locks on to the seismic economic and social shifts in the world. The most potent of all is the economic and environmental sustainability of urban areas.

….

We see some economic number crunching in the above section from Oram based on PwC’s analysis earlier this year. Yes we are seeing growth in the CBD and the immediate fringe areas as outlined in the ‘Strong Growth in Auckland‘ post. While that is good what Oram and PwC were pointing out that we should have reasons for concern:

  • Direct and indirect fulltime equivalent jobs will grow 2.7 times from around 14,500 this year to 39,400 by 2040
  • But the economic activity they generate will grow only 2.8 times to $4.12 billion (in constant dollar terms). So, the non-port waterfront’s contribution to regional GDP will barely shift from around 5.5 per cent currently.
  • Some 12,600 waterfront jobs in 2040, about one-third of the total, will be in low-value, part-time and seasonal work in the cruise, tourism and hospitality sectors
  • Another 12,500 jobs will be “high productivity”, which PwC doesn’t specify nor give any indication of where they will come from;
  • and a further 14,300 in “other” work

Just quickly in regards to “other work” I wonder if they mean this: “On the Phenomenon of Bullshit Jobs.” While it is a fascinating read and gives some interesting insights it does raise concern if that if those 14,300 “other” jobs come from err BS Jobs then this in truth the Port will be providing the only real and relative boost to the CBD and wider Auckland Economy. Meaning we in real terms stagnate around that 5.5% mark (quoted in bold above) as we have not realises this:  ”many more Auckland businesses must learn how to earn a living internationally, not just in this tiny domestic market.”

So where will the real growth come from is the CBD looks to be stagnating at 5.5% contribution without port help. Our exporting sector that earns and attracts currency and investment overseas. That catch is though you will not find the bulk of the exporting sector (apart from Port of Auckland) in the CBD regardless of an innovation precinct being there (or not).

You will find our exporting sector and even our start-ups (unless subsidised beyond the hilt to be in the CBD/Wynyard Quarter) here: “ The export jobs won’t be found down here. Look south instead to Manukau and surrounds.” That came from a Waitemata Local Board member on Facebook.

And it is true, you will find your exporters and most likely start-ups in actual established industrial areas near good commercial and transit links. Manukau and Wiri are two places that tick those boxes although they are not the only ones in Auckland. Of course this will lead to another post on why Innovation Precincts done or subsidised by Local and/or Central Government(s) are a waste of time and that exporters and start-up often search out established areas.

Ironically given time if enough exporters or start-ups flourish and mature through time, they both regeneration the urban area they are in. As an example we have the exporters and “innovator” start-ups cluster around Wiri and Manukau – two very established areas that over decades flourish and mature. .

In those decades of maturing the surrounding urban area and fabric change and urban renewal kicks off. While a Council might get involved with say civic and physical infrastructure, the free market and the established exporters and mature start-ups guide and dictate the regeneration for their needs. This in-turn causes critical mass and are able to self-attract more like-minded exporters or innovative start-ups. The economic and social benefits flow through and the surrounding population is lifted up – all without Council sinking $1 billion over ten years (into Wynyard Quarter) that looking at PwC and Rod Oram’s assessment could not deliver the outcomes nor return in investment for the amount of our ratepayer money sunk in…

Questions Council need to ask and to ask of ATEED and Waterfront Auckland

Sustainable Urban Design

From SST (still same opinion piece)

How people build and run cities is changing fast. Today, most building owners and occupiers think only of trying to save a bit of energy or water or recycling. But the real leaders are already designing and building radically different structures with vastly superior environmental performance. One example is the Living Building Challenge.

There is a big economic upside to this, as shown by the latest annual World Green Building Trends report by McGraw Hill.

Respondents to its global survey rated the benefit of such buildings as important or very important: lower operating costs, 91 per cent; higher occupancy rates, 86 per cent; higher rental rates, 85 per cent; increased tenant productivity, 83 per cent; higher building value, 81 per cent; future proofing of assets, 79 per cent; and building quality assurance, 76 per cent.

If Auckland wants to become a great city, it has to be truly a leader in urban design, construction and performance. Waterfront Auckland says it is at the forefront of this thinking, and is pushing the principles with Wynyard Central.

Ludo Campbell-Reid has outlined his vision for a 21st Century Auckland CBD and Waterfront, with Waterfront Auckland meant to be picking up the ball and running with the 21st Century concept – sustainable urban design.

But uh-oh again we run into problems:

From SST:

Yes, it hopes to achieve one Living Building in Wynyard Central, and all the office buildings will earn a five Green Star rating and all the residences a seven on the Green Homestar rating. It says it is pushing its prospective development partners to aspire to more.

Waterfront Auckland’s Sustainable Development Framework ticks many of the right boxes. But a chart on page 8 tells a different story. Over the next five years, its goals will deliver only modest improvements in building performance. It sees the truly transformative projects as more than 25 years away. Moreover, Auckland Council’s own organisations are failing to work effectively together. For example, Waterfront Auckland’s attempts to get an innovation precinct into Wynyard Central have progressed no further than a vague memorandum of understanding with ATEED, the council’s economic development agency.

Likewise, it is struggling to get any traction with Auckland Transport on planning for much more public transport in the area. The whole Wynyard Quarter is in danger of being swamped by cars, contrary to Waterfront Auckland’s ambitions for a world-class, 21st century urban environment.

25 years away is the magical fairy land with pixies running around the garden. Especially when best sustainable urban design practice is already here, current and economically viable. As for Waterfront Auckland, ATEED and Auckland Transport not working together, had to laugh as we know those three CCO still think in nuclear silos to the point they could even have contempt against the parent organisation – the main Council.

Finally

The fundamental problem with Waterfront Auckland and its parent council is that they are failing to live up to their own goals. For example, Waterfront Auckland gave sustainability only four mentions in its 78-page annual reportfor 2013; it does not even do any sustainability reporting of its own organisation; and sustainability was a one-slide afterthought in a major presentation that John Dalzell, its chief executive, gave this week.

—–

Lip service, nuclear silo thinking, airy-fairy goals way down the line, mass pouring in of money into an area that does not truly lift the GDP performance of the CBD (5.5% without Port of Auckland included) and an area the market that earns us hard currency (exporters and innovative start-ups that make it) could utterly reject for “better” areas like Manukau or even Henderson (given the right indicators).

Not the particular way Council would want to see things go especially with the amount of money to be sunk into the CBD over the decade – with the real possibility of nothing to show in return…

Rethink time

….

As I said at the beginning of the post I do not display confidence in this new forum being set up. I do hope I am proven wrong for Auckland’s sake and prosperity 

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