[As published in January/February BayBuzz magazine.]
‘’Skills have become the global currency of the 21st-century economies, yet they are unevenly distributed and often undervalued.”
Andreas Schleicher, OECD Education Vice President
No one gets excited about plans, especially Kiwis who see themselves as pragmatic, number eight wire types who just get stuff done.
Raupunga-born Sir Ian Taylor of Animation Research was in the region recently and told a business breakfast his company slogan was ‘’Bugger the boxing, just pour the concrete.’’ But the story he told that morning, for example about developing the world’s first live to air GPS ball positioning for golf, kept coming back to having the best and brightest staff and giving them the freedom to create. It sounded suspiciously like he had a plan after all.
Research that HBREDA commissioned last year identified a regional skills shortage as one of the factors holding back our region’s potential. While other regions also face skills shortages, there are several demographic peculiarities in Hawke’s Bay that make our skills shortage of particular concern:
• The population is both older and younger than the national average, which makes the working age population proportionately smaller;
• The proportion of the population with no qualifications or low qualifications is higher than the national average.
There’s a well-recognised link between the qualifications and skills of workers and both individual and organisational productivity. Our productivity per worker in HB is, predictably, lower than the national average. Why does this matter? Because low productivity leads to lower average earnings, which leads to lower household incomes, which leads to lower-than-average wellbeing indicators. This can be seen and felt especially in Wairoa and other areas within the region that rank poorly on the deprivation index. The result is that average earnings per job in Hawke’s Bay are approximately 10% lower than in the rest of New Zealand.
Improving skills and qualifications will not alone lift productivity. Companies also need to foster innovation, adopt new technology, and attract new capital.
More broadly, Hawke’s Bay needs to be a good place to do business with resilient infrastructure, good connectivity, an attractive lifestyle, and a vibrant business community that shares knowledge and contacts. If it is not, we will see more companies voting with their feet and heading out of town or offshore. This is happening already with many companies telling us that they have moved their operations, not just because of high input costs (such as energy), but because of workforce challenges. One manufacturer told me that they could pay a labourer $8 a day offshore where ‘’people line up on the street to get jobs’’.
We have, in large part, responded to our skills deficit by bringing migrant labour into the region.
Much has been written and said about New Zealand’s reliance on migrant labour. The New Zealand Productivity Commission described it as an “easy solution” for workforce shortages. The COVID migration restrictions and resulting high employment here brought home how vital the RSE scheme is in ensuring our horticulture sector continues to be viable. Migrants also fill important roles in many of our other industries. They bring fresh perspectives, strong work ethics, and often higher qualifications.
I married and brought a Finnish engineer back to Hawke’s Bay (you’re welcome) and am well aware of the role that international talent has in helping to lift our productivity. Of course it is a ‘’both/and’’ – we need to both boost the local skill base and attract the best talent from around New Zealand and abroad.
There has been a raft of programmes and initiatives aimed at getting people into jobs and filling the skills deficit in Hawke’s Bay in recent years. The good news is that it has lowered our unemployment rate and our NEET (not in employment, education, or training) rate compared to the national average. Which is to be applauded, though the wider economic environment post-COVID greatly helped. Getting people into jobs, however, is not enough to lift productivity.
Each industry, and each business, addresses their skills shortfalls through training and targeted recruitment, higher wages, and incentive programmes. Government agencies, like the Ministry for Social Development, use programmes and products to get the unemployed into work. Business support agencies help upskill workers. The Tertiary Education Commission and educational and training institutions, like EIT and the workforce development councils, work closely with industry to try to provide the right types of qualifications and support to meet industry needs.
But it’s still not enough. We need a regional skills plan to look at everything required to improve the skills and qualification profile of our workforce, from the entry level worker through to the director at the board table. It needs to be ambitious, evidence-based, realistic, and heavy on targets and evaluation. It needs to be properly resourced with the backing of government and business, alongside schools and training institutions, local government, iwi/hapū, and other players.
My sense is that Hawke’s Bay is ready to take on our skills and qualifications gap. But we need a plan.
The plan needs to be driven by stakeholders who are so committed to the region’s prosperity that they will stay true despite political changes, and who are willing to ride the inevitable waves of policy and funding reforms. Our plan needs to be developed by us, for us, because we deserve it. We need to build the boxing and then hurry up and pour the concrete because a skilled workforce is the foundation of a productive economy.
The Hawke’s Bay Regional Economic Development Agency is hosting a regular column to stimulate conversation about our economy. We will share pieces of work and research that we are involved in and at times will open up this column space for guest writers.
