Who’s who in the economic development zoo? 

[As published in March/April BayBuzz magazine.]

2023 promises to be a big year for Hawke’s Bay’s economic development capability. Major initiatives are about to come on-stream that should make a real difference to regional prosperity over the long term and our ability to attract people, businesses and investment.

Here’s a snapshot of the major economic development players and what they’ll be working on in 2023. But first, a definition. 

MBIE says that economic development is about improving the well-being of New Zealanders by supporting our economy to become more productive, resilient, and sustainable. The OECD says economic growth is the most powerful instrument for reducing poverty and improving quality of life. 

Havelock North-based economic development expert Gus Charteris says that economic development is like a jigsaw puzzle. 

“At its heart, it’s about bringing pieces of the puzzle together and real value is added when it helps business and communities do things that they can’t do alone. This is often because it requires decisions and/or investments in other areas that they do not have control over.”

There are many organisations contributing to our regional economic development landscape. In 2020 an independent review – commissioned by councils and authored by Charteris – identified gaps and overlaps, a lack of co-ordination and optimisation, and under funding. It recommended the establishment of a new agency with a strategic focus that could operate as a champion for Hawke’s Bay and take the lead on economic development.

REDA

Hawke’s Bay’s newly created regional economic development agency or REDA, is possibly the region’s last best hope of creating an agency that can speak with one voice for the needs of Hawke’s Bay. Funded to the tune of around $1.7 million annually by local councils and with an independent (and paid) board led by former Port chairman Alasdair MacLeod, surely this will be the time that the region gets it right?

We’ve been here many times before (setting up a regional economic development agency) and nothing has stuck. Possibly due to a lack of mana, mandate, and money. Hopes are high for this version. 

The REDA will be primarily responsible to deliver Pou 4 (economic growth) and Pou 5 (promoting our place) of Matariki, Hawke’s Bay’s Regional Development Strategy. Recapping on Matariki’s vision, it’s where “every whānau and every household is actively engaged and benefitting from a thriving Hawke’s Bay economy”.

Lofty goals indeed. It seems like a big challenge when considering that at (almost) full employment, Hawke’s Bay has more people on jobseekers now than before the pandemic. There will always be a group of hard core long term unemployed, but it seems that right now, everyone who wants to work, is doing so. 

REDA Chair Alasdair MacLeod is acutely aware of the task ahead. Fresh from the first REDA board meeting recently, he commented to BayBuzz: “I took the job because it is incredibly important for Hawke’s Bay, and it’s going to get a lot of focus (from me). Day to day business stuff is not what we’re in; the REDA will be an enabler and amplifier for the region.”

He wants youth from disadvantaged backgrounds to dream bigger because “there’s potential for really good employment in Hawke’s Bay”.

When asked if the REDA would be delivering social outcomes, MacLeod was clear that it wasn’t the REDA’s responsibility, but “it will be high on the list of filters we apply”.

The REDA will work with stakeholders to develop Hawke’s Bay’s economy, collaborating to ensure the various players are better connected and have a better understanding of roles and activities. It will identify gaps and barriers for making progress, and amplify the efforts of others.

MacLeod says the REDA will not attempt to deliver on all the expectations of a diverse set of stakeholders. Instead, it will work with stakeholders to identify priorities, applying its limited resources on focused delivery on agreed targets.

Also on the REDA board is Shayne Walker, Erin Simpson, Rawinia Kamau, and Caren Rangi. The REDA board allows for seven directors including the chair, and MacLeod is on the hunt for one more person to join the team. He’s looking for a “fairly heavy hitting business person”, with the search “in progress as we speak”.

It would be unfair to expect too much of the REDA this year. A letter of expectation for delivery is in the works, but it will focus on foundational activity like onboarding a chief executive, operationalising the organisation, and spinning up initial streams of work.

The Chamber

Helping businesses today is the job of Hawke’s Bay Chamber of Commerce. BayBuzz caught up with CEO Karla Lee and President David Trim in late January, a day before the Chamber and other tenants of the Hawke’s Bay Business Hub upped sticks and moved to new Business Hub premises in Queen Street Hastings. 

The Hawke’s Bay Chamber is a membership organisation focussed on the needs of business today, says Lee. “We’re a regional entity supporting all businesses between Wairoa and Central Hawke’s Bay.”

As Trim and Lee see it, there’s no overlap between the role of the Chamber and the new REDA. “We’re about developing businesses right now,” Lee explains. “Looking at the future needs of business, that’s not our space.” Trim adds: “We look after business, and business growth.”

The Chamber, whose members includes small, medium, and large businesses, has seen membership increase around 10% since the pandemic. It serves members in a number of ways – addressing pain points and needs through training, education and capability building; holding events; advocacy at a national level via the NZ Chamber network as well as locally with councils on issues like infrastructure and transport; RSE and immigration; and celebrating success through the Hawke’s Bay Business Awards.

Lee has recently been appointed to the NZ Chamber’s board, which should help bring to national attention the needs of our business community. 

When asked about the role of the Chamber, she says it has a micro, individual business focus, compared to the macro focus of the REDA. As to her expectation of the REDA, Lee hopes the Chamber and REDA will “walk beside each other, understand our lanes very clearly, and respect each other”.

Trim says that the Chamber’s and REDA’s purposes are aligned. “We want a great Hawke’s Bay, booming business, and for it to be an attractive place to set up business.”

Lee hopes that the REDA will take the time to really understand the lay of the land, develop a clear strategy, understand its “lane” very clearly, and link up.

In 2023 the Chamber will have a bigger focus on member needs and networking. It will leverage its Young Enterprise work to create more opportunities for youth, including taking students into businesses (helping ready them for work), as well as getting businesses ready to interact with today’s youth, their future workforce, and act as an essential connector for business.

foodeast

foodeast is another new addition to Hawke’s Bay’s economic development scene. Envisioned as a food innovation hub, the $20 million project has been plagued by pandemic-affected delays, as well as skyrocketing costs, and has had to significantly scale back on its original building plans.

Craig Foss, former regional councillor and current chair of foodeast remains upbeat. 

“From its inception, the foodeast vision has been to develop a facility focused on assisting our food producers and manufacturers to expand and develop their offerings to bring new products to market. 

“Within the development landscape, it will be a pivotal link between businesses (from start-ups to medium players) and the science and technology expertise they need to innovate and grow, as well as (things like) linking them with production facilities across the region that have manufacturing capacity. It is all about innovation, collaboration, and excellence.”

foodeast has been modelled on and is intended to link to the New Zealand Food Innovation Network. It will act as a connector, enabling businesses to take the next step in bringing new products to market or to further develop existing products.

The project reached an important milestone at the end of January, with construction of Building B underway. Lodging of the consent application for Building A is imminent, with completion of both expected by the end of the year.

Foss says foodeast and the new REDA will work closely together. 

“With the REDA assisting all businesses with their ‘business gaps’ – things like business cases, management structure, and support – and foodeast assisting food and beverage businesses to get to the deliverables stage, this will be the perfect marriage.

“Working with all economic agencies is critical to the region’s success.”

Top priorities for foodeast in 2023 are to complete construction, sign key tenants, develop the team, and the board refocusing to the operational model, says Foss.

Foss wouldn’t be drawn on potential tenants, sharing only that there is significant interest from a varied and exciting range of innovative food and beverage businesses, interested in both long term leasing and the services the facility can offer.

“As detailed design and fit out are finalised, construction gets underway and availability dates are confirmed, we will be able to progress these discussions,” he says.

The councils

Business needs assistance with consenting, infrastructure, and capability, and that’s where councils come in. Not only do they have a big role to play in supporting economic development, they are also major funding stakeholders of the REDA.

BayBuzz understands that both Hastings District Council and Napier City Council have given their ED staff assurances that their jobs won’t be affected by the establishment of the REDA.

Napier City Council Acting CEO Richard Munneke says that Napier City provides funding and support for sector development at a lot of levels.

“Our support includes business and talent attraction, business support, employment initiatives, business and innovation start-ups training and support through Rebel Business School and Young Enterprise Scheme, business events such as the recent Greg Foran lunch, development and management of sister city relationships, close relationships with the Chamber of Commerce, local business associations, and other councils. 

“In everything we do, it’s a team effort, with us working with partners and stakeholders,” says Munneke.

Hastings District Council (HDC) CEO Nigel Bickle says his council provides support for business relocation, account management services, and establishes industrial parks, as well as the things it does with the Hastings business community working with the Chamber on things like the quarterly ‘focused on business breakfast series’.

Of HDC’s activities and those of the REDA, he says: “They need to be aligned, but they’re completely different things.”

Bickle says that we can expect more regional collaboration than previously. “Two of the biggest priorities (for all councils via the triennial agreement) are regional spatial planning and greater levels of collaboration across the region. 

“We need to be more than the sum of our parts, and that’s got to be through things that are truly strategic and regional, having a really coherent strategy around the big pillars.”

Other players

Hawke’s Bay Regional Investment Company (HBRIC). The investment arm of the Regional Council. At June ’22 it had assets, such as the majority share of Napier Port, valued at approximately $440 million, including nearly $50 million of managed funds remaining from the port IPO. HBRIC is also an investor in foodeast. Its goals are to optimise financial and strategic returns to assist Council achieve its vision of “a healthy environment, and a resilient and prosperous community”.

Post treaty settlement groups (PTSG). A range of PTSGs are currently investing on behalf of Iwi across the region, with more to come. Two examples: Tātau Tātau o Te Wairoa has invested in orchards for its people, with plans to plant 160 hectares of Envy apples providing jobs that will change role models in communities. Ngāti Pāhauwera Development Trust has the Pākuratahi orchard near Tangoio. Last year the iwi bought land in Raupunga, with the plan of turning it into orchards for its people, leading to sustainable jobs, housing in Mohaka-Raupunga, and eventual home ownership. 

Central Government agencies. MBIE, MSD, and MPI in particular play a vital role in regional economic development. 

If the promised collaboration proves to be more than obligatory rhetoric, Hawke’s Bay could be in its best position ever to capitalise on our regional competitive advantage and deliver economic development that achieves the Matariki goals of “every whānau and every household”. All the pieces of the jigsaw puzzle are in place, at least as far as the bureaucrats are concerned. 

But what do actual business leaders think of all this ‘support’? Stay tuned for further BayBuzz coverage.