Wellington Top Region for High Growth Companies
VANTAGE CONSULTING GROUP
Strategic Planning, Technology Park
Patrick Smellie recently made some strong points in the “DomPost” about the poor performance of the Wellington regional economy. However he and other commentators have missed one important statistic in the “Regional Economic Activity Report” (2013) recently released by the government.
Wellington region has the highest proportion of high growth enterprises per thousand enterprises of any region in New Zealand, followed by Hawke’s Bay, Bay of Plenty, Auckland and Nelson.
It is surely worthy of analysis (e.g. by MBIE, NZTE and Grow Wellington) to evaluate this further. Why is the high proportion of high growth enterprises not translating into broader economic gains? Are the high growth enterprises all small start-ups with minimal economic multiplier effects or low added value per employee? Are they high growth enterprises failing, moving to Auckland or being transferred offshore? Or are they businesses that will in time create a much higher level of economic dynamism in the Wellington Region? The answers to these questions should shape the way in which resources to assist and promote economic development are allocated in our region.
My suspicion is that many of them are ICT businesses or other types of firms with a strong base in technology.
For the last three years, a small group of people have been promoting the Hutt Valley in particular, but increasingly incorporating the wider Wellington region, as “Technology Valley” (see the Technology Valley website). A key element of the initiative is that to the maximum extent possible, Wellington businesses should build their core competencies upon deep linkages with research and development organisations which are numerous in the region. These include Callaghan Innovation, Victoria and Massey Universities, GNS Science, NIWA, ESR, BRANZ, CRL Energy and WelTec – especially WelTec’s Centre for Smart Product.
Regions internationally that build such an economic base are more resistant to economic downturns, redundancies and loss of businesses to other regions and countries. On the contrary, they are often magnets to high technology firms, are able to offer more highly paying positions and to underpin vibrant and attractive lifestyles and communities.
This is the direction Wellington Region and its constituent City Councils need to head.
, Technology Park