- Auckland’s economic growth has outpaced the rest of New Zealand in six of the last seven years.
- There is an increased interest in what is happening in Auckland, and the signs are positive that foreign investment will continue.
- The opportunities to accelerate entrepreneurship in the city has been helped by the influence of incubators. Although they are early-stage, Auckland’s incubators have a reasonable track record.
“In places like Silicon Valley, in the places interested in innovation and entrepreneurship, there is increasing interest in what is happening in Auckland.” – Andrew Patterson
The Auckland economy has been powering New Zealand’s growth in the face of dairy-driven constraints for some time now. According to Dean Butchers of ATEED, in six of the last seven years, Auckland’s economic growth has outpaced the whole of the rest of New Zealand. The number of cranes on the skyline – “a proxy for construction and growth” – will soon exceed 40.
And it was widely recognised at the Investable Auckland panel discussion at the Tripartite Economic Summit that foreign direct investment (FDI) has contributed significantly to that growth. Some 25% of Auckland’s workforce now work for companies at least 50% owned by foreign firms. Last year saw inward investment growth of 60%, the largest jump since recording started in 2003.
The signs are positive that such investment will continue into the future, particularly in the high-tech sector. “In places like Silicon Valley, in the places interested in innovation and entrepreneurship, there is increasingly interest in what is happening in Auckland,” said Andrew Patterson of NBR Radio.
This trend appears to be no accident. The Summit saw strong emphasis on the efforts made by local and central government, and their respective agencies, to encourage FDI.
At the highest level, Steven Joyce, Minister for Economic Development spoke of the government’s Business Growth Agenda. “It focuses on the development of the appropriate infrastructure, attracting the right investment, attracting market access, innovation, access to resources, and access to skills,” said Joyce.
Providing this platform was emphasised in the context of a need to attract investment that keeps the core of our best companies in New Zealand. Retaining a New Zealand base is crucial to success in the opinion of Joyce: “Our unique, competitive advantage in high-tech industries.”
Joyce told the story of a meeting he had with Silicon Valley Bank, who told him, “Whatever you do, make sure that you keep the back office, design, ICT development, the high-tech development in New Zealand.”
“Central government has really decided to kick Auckland into a higher gear,” said Patterson. “The policy settings are all about right at the moment.”
“Part of it is New Zealand waking up to the possibilities… This is a city which is still gearing up to what its potential is.” -Andrew Patterson
In Auckland specifically, it is hoped that initiatives such as the launch of the Global Impact Visa encourage economic growth that keeps the fruits of that growth in the country. Butchers highlighted this new class of visa, “intended to target young, well-connected, talented entrepreneurs who perhaps haven’t got the financial threshold that enables a person to come into New Zealand under the Investor or Investor Plus.” However, these people may well have the skill-set required to launch new ventures which may then grow into the international market from an Auckland base.
The opportunities to accelerate entrepreneurship in the city have also been helped by the influence of incubators, and Andrew Patterson suggested we could still do with some more of these. “The ones that are happening here have a reasonable track record, but are early-stage at the moment,” said Patterson.
Wynyard Quarter’s Innovation Precinct was identified as a high watermark of activity when an audience member asked about what is being done to facilitate the investment required to spur growth. Initiatives such as GridAKL, the Biz Dojo, and The FoodBowl (New Zealand’s food innovation network) are all based in the Precinct, and delegates were encouraged to hop over the street from the Summit venue to check it out firsthand.
With the policy settings and infrastructure just about in place, attitude and action seem key to this work being translated into growth. As Patterson said, “Part of it is New Zealand waking up to the possibilities… This is a city which is still gearing up to what its potential is.”