Summing up regional development

Colin James, regional development conference, Rotorua, 29 November 2001

Lesson No 1 out of this conference is that, as Peter Kenyon said this morning, we all must embrace change. We’ve even got to get to like it. It’s good for our souls — if we still have souls in this godless age.

In fact, you can’t go to a conference or guru’s peptalk without being told to embrace change. Change is wonderful — or at least inevitable — and we’ve all got to get to like it. Change is the new permanence.

Actually, it’s old hat. If, at meetings like this, this mantra is going to be recited to people who have heard it a thousand times before, it is no wonder there are no under-30s here — because to them it is very 1980s.

So I want first to remind you that it is also important to be aware of what does not need to change. Change for the sake of change is just disruption and it is seriously damaging to social capital.

My second comment is that the point of your gathering here, as I see it, is to draw policy lessons out of the presentations and the coffee-break chat — policy for the central government, policy for local government, policy for other agencies and organisations that centre their activity around regional development.

I say this because, with great respect to Peter Kenyon, his baker doesn’t seem to me to be regional development, but serendipity. It is a marvellous tale and he has obviously been a huge developmental benefit to his locality. But this remarkable individual might just as well have popped up in Temuka or Tirau or 20 years ago or 20 years hence and had exactly the same effect.

He didn’t need a government or an agency to do it. What he needed was for no one to stop him doing it.

So what is the baker’s lesson for governments and agencies? It is to be alert to what will entice and encourage regional economic development or at least not impede it.

Which means, if I have read the runes here, that governments focus on what they can do that adds value.

It also means, I think, that government activity must be investment, not income maintenance — that is, there must be a measurable return on investment.

When I first learnt about regional development — in the 1960s — and it was supposed to regenerate depressed regions by putting regular job-making industries in there with government money. It was Kevin Meates and the ill-fated Matai Industries. It was a bit like aid to the third world, concentrated at first on the poorest regions. Then some more were added until only Wellington and Auckland were left out and you couldn’t leave them out could you?

On the 1960s aid approach of government handouts for poorly performing regions, Auckland would have been pulling down a fair amount of the money over the past few years. Southland and the West Coast, riding high on the cows’ backs, wouldn’t have had a look in. And, as an aside, I might ask whether the Parnell biotech cluster would nowadays be seen as regional development.

The lesson from those earlier days of regional development is sustainability. If you take away the aid, will it stay in business? I don’t get a sense of much enthusiasm at this conference for unsustainable activity.

Straight aid, without eventual sustainability, is not adding value. It is churning money around. There is opportunity cost in doing that. If you are not adding value, you are destroying value.

So what is the environment you are doing this in?

One element is the information revolution. You know about this and you know how exciting and scarifying it is. And you know that so far we have only been in the easy bit, the silicon bit. Those who are expert in it tell me that the really bumpy bit, the biological bit, is just getting under way.

Clearly, regional economic development would be boosted by getting in the forefront, or even the second rank, of the new businesses that spring out of this revolution.

That means focusing on new knowledge. I don’t intend to spend much time on that ex-cept to say that I think it comes in three sorts: cutting-edge research and development (including highly innovative design); imaginative and creative application of new ideas to traditional work or the knowledge to do the work of the new businesses founded on new science; and getting “old” knowledge into people without any or much knowledge — let alone “new” knowledge — so they can get on the ladder, even if only at the bottom rung but with the lure of the higher rungs then before them.

That leads me to my next point. I have heard here firm suggestions that if regional development is to be complete the other two legs of the triple-bottom-line must be attended to, that is, social and environmental development. That has been embedded in some of the presentations.

So, amid the buffetings of the information revolution, there is — if I have read the messages from this conference right — a need for continuity, for institutions that will hold us together. Community recovery, community building is an element of regional development.

You know from your history books what the industrial revolution did. It ripped up the social fabric — and then after a time made everyone richer. It was an exciting time and a scarifying time. We’re in the middle of such a time. Social cohesion will be stretched and torn and regional developers may well spend quite a bit of their time just holding their places together.

Yesterday I distilled a number of themes which I will not repeat again today [see below ##]. Roger Wigglesworth has drawn out four theme lessons from the multitude of items the workshops have mused on and it would be pointless to rehearse those again. And Jim Anderton has indicated some lessons the government is taking away — again, there is no point in my going over those.

So I shall offer just a few other thoughts.

The first picks up on the greens’ pnemomic, to “think global, act local”. I think I have heard here an inversion of that, partly out of interest in how to attract foreign invest-ment: that is to “think local, act global”.

I take that to be to measure a region against the best in the world. The strongest value-added, in other words, will come only if there is some international connection or benchmark.

The second is that I think we need also to be clear that development is not just “more” but also, and more important, “better”. In that respect, self-congratulation about how many entrepreneurs this country has relative to the rest of the world, as shown in the GEM report, is overdone: I think many are just self-employed and not particularly entrepreneurial.

The best regional development is not just keeping someone employed, albeit self-employed. It is about encouraging and levering off true entrepreneuralism.

Which butts on to another strong theme that I picked up: that of self-starting and self-reliance. Don’t wait for “them” to do it. As Ngati Porou said of their initiative: “If we don’t pick ourselves up, who will?” To which you might add: who should?

And that brings me to another frequent observation around this place over these two days: that top-down is dead; bottom-up is the key. Look inside the box as well as think outside it: building on what is already there is not a bad place to start.

And policymakers must ask people — especially kids, we heard this morning — and come off the back of what people want and can usefully use, not off the back of a bureaucratic brainstorm.

And it helps to benchmark, we have heard — to spread ideas around from region to region, to borrow from neighbours. “Collaborative” was one of Roger Wigglesworth’s four key lessons.

So what about the next conference Jim Anderton is promising in two years time? This one had a getting-to-know-you feel about it. The next, I presume, will be more focused on detail and action.

It also needs to be more broad-based. There was a preponderance of Peter Kenyon’s ageing males at this one. There were plenty of women, but mainly in subordinate roles. Regional development — any development — needs to draw more on women.

And the workforce was not here. There was only one union person out of 600-odd — and he was here because he was presenting.

So what does this conference leave behind it as it packs up — apart from the remarkably good mood there has been here. Do we have a half-full or a half-empty glass?

Actually, that hackneyed question is an irritating irrelevance. The issue — which I think has been grasped here — is filling up the empty half. I have days when I feel optimistic and days when I feel pessimistic — but if I was fully occupied filling up the empty half I wouldn’t be either optimistic or pessimistic and it wouldn’t matter.

I will finish on this. I have been hearing a lot about aspirations and dreams — so much that I began to feel tired today just thinking how much I have to lift my game, that any dream I might have would be a nightmare of ceaseless activity.

Just thinking about Pete Hodgson’s list of portfolios sometimes makes me feel tired too. How does he get through all that? And in relation to this conference, he is just the un-derstudy. How Jim Anderton does what he does in his week is beyond me.

So a conference like this can be enervating. It’s all just too challenging, being supposed to emulate the impossible people who’ve been describing the impossible things they have done.

So perhaps I should just stop here.

Except that impossible people can also be energising.

And somewhere in that is one of the secrets of local development: making it OK for energisers to energise. That seems to me the central point in Vicki Buck’s address this morning.

Vicki worries about what to do with the 100 loaves that come back when she casts bread upon the waters. I am worried about what she is going to do with 100 mouse cord managers and turtles which you are supposed to digitise, rugby league-style. For, after lis-tening to her vigorous presentation this morning, I have no doubt the multiplier effect is operating right now.

So I will leave you with this thought: Vicki Buck is surely the strongest argument I have seen yet for cloning.

—– ## The themes I distilled on the first day were:

1. The importance of social capital. It is a slippery concept and often people seem to treat it as a flow, not a stock, so it needs more work to fit fully into regional development

2. Innovation.

3. Linked to that is entrepreneurship, the ripple effect a single energetic individual can have — the snowball effect, someone called it.

4. There was a crossover of examples from the social entrepreneurship conference last week, drawing in the notion of social development alongside economic development.

5. Small size and flexibility. This is an advantage for this country and is an aspect of…

6. …clusters, with which is associated…

7. …collaboration, working together, etc, which is allied to …

8. …partnership. Listen to the locals, don’t tell them. I found myself during Helen Clark’s comments wondering why you need central government if regional development was happening anyway during the hands-off years, as she said. She said that activity needed more coordination and she listed the government’s appropriate roles but I could benefit from some more argument tomorrow on how the central government adds value.

9. Self-reliance

10. Cultural integrity and the value of Maori uniqueness, underlined well in Mike Tamaki’s presentation.

11. I also liked Mike Tamaki’s notion of “imagination” being the next wave — and I would put beside that Helen Clark’s rating of creativity alongside cutting-edge research and development.

12. Trust, mentioned by Pete Hodgson as a vital ingredient in clustering. It actually is critical to all economic development. In that respect I commend to you Francis Fukuyama’s 1998 book of that name.