Spatial planning and economic development - from strategy to delivery

Patrick McVeigh, Technical Director – Economic Development Advisory with Beca, makes the case for greater integration of spatial planning, economic development, and infrastructure delivery.

Article originally published in InfraRead, the Infrastructure New Zealand publication.

As Councils prepare Long-Term Plans, they are making hard decisions on prioritising and funding infrastructure. This is part of the reason why there has been such interest in city and regional deals, and the promise of new funding tools.

However, it seems clear that deals will be more focused on reshaping how local and central government work together, rather than providing any new money. Consequently, we can’t afford to assume that these deals will solve established infrastructure challenges. While there are some good examples of how places are seeking to address the implementation challenge, more needs to be done to move from strategy to delivery.

The challenge of slow growth

The funding challenge is compounded by a lack of business confidence, stalled growth, and high inflation, as highlighted in the OECD’s recent New Zealand Economic Snapshot. At the same time, our infrastructure deficit continues to constrain growth, and the planned $1.2 billion Regional Infrastructure Fund is unlikely to make a difference to an estimated $200 billion gap.

Our productivity continues to lag peers and over the last 10 years has declined further. Without productivity growth, we will not be earning enough to pay for the infrastructure we need, let alone respond to significant global challenges such as climate change.

The need for a new approach

We need to think differently about sustainable economic and productivity growth, not simply to do more with less, but seriously rethinking our approach to economic development and aligning this with spatial planning and infrastructure delivery.

There is a need for a ‘systems-led’ approach that integrates efforts to enhance the four well-beings, and spatial planning should be the tool we use to set direction and plan future growth, with a far greater focus on implementation.

Considering how spatial planning can be a tool for enabling economic development and how infrastructure investment can redefine economic geography and unlock new opportunities across our regions, is critical. Enabling towns and regions to move away from population-led economic growth to a focus on creating diversified and resilient local economies, with more businesses and jobs in industries that are competitive, trade-oriented, and innovation-focused.

Industry-led growth

Economic development is an active process, and on its own, zoning land is not enough to attract new businesses, support existing businesses to grow or encourage startups. There is a need to align economic development, spatial planning, and infrastructure investment to support the growth, productivity, and competitiveness of key industries. We also need to consider the policy and regulatory settings that support local economic growth, prioritising those industries where there are ‘place’ advantages.

This is starting to happen. For example the Wellington Regional Leadership Committee are undertaking an industrial land study, going beyond a standard HBA to better understand not just land requirements but how to best support job creation and a healthy regional economy, aligning objectives of the Regional Economic Development Plan and the Future Development Strategy. Similarly, Tātaki Auckland Unlimited’s Southern Auckland Economic Masterplan process, considered both the spatial and industry development opportunities arising from the development of the Drury-Opāheke future urban zone.

Spatial plans should also reflect on wider global trends, such as those related to the ongoing impact of industry 4.0 and consider how these might impact existing industries or create opportunities for new sectors to develop. A good illustration of this can be seen in ChristchurchNZ’s focus on the strategic opportunity to develop the city and surrounding region as a hub for aerospace and future-focused transport innovation.

Prioritising quality jobs

Economic development should also be focused on delivering good jobs. For this reason, many places have focused on growing their technology sector and encouraging innovation-based entrepreneurship, but opportunity sectors are broader than this. There are other ‘advanced industries’ including those in health, manufacturing and transport and logistics that provide good jobs for a wide range of workers in most regions.

Spatial planning can be a tool for further developing these sectors, ensuring that land and infrastructure requirements are supported by economic development plans that enable more and better jobs. For example, in Queenstown Lakes as part of the district’s spatial planning approach the Council has developed an Economic Diversification Plan promoting economic opportunities that are less reliant on tourism.

Planning for the future

The starting point for integrating spatial and economic planning must be to build on what is already known about local economies, supplemented with further assessment of emerging areas of specialisation, levels of economic diversification, and niche sectors.

There are also opportunities to leverage ‘frontier firms’ and ‘anchor institutions’, including universities, hospitals, major employers, iwi, hapū and local businesses that have significant place impacts. These impacts could relate to their role as large employers, or as purchasers of good and services, or they may own and occupy significant areas of land or key economic assets.

We need an integrated approach, with interventions such as targeted business attraction, focused on leveraging areas of specialisation and promoting cluster development, coupled with employment and skills development programmes. Where these can be tied to the delivery of economic enabling infrastructure, such Te Utanganui, the multi-modal distribution hub in the Manawatū, there are opportunities to accelerate economic growth outcomes, enabled through spatial planning.

While there will still be the need for resources to support implementation, in many cases the closer connection to the market will create opportunities for private sector investment. This includes the use of Public Private Partnerships, and taking advantage of new tools such as user pays approaches and land value capture. In addition, there will also be opportunities to redirect other local and national spending to align outcomes.

Fundamentally, for New Zealand to move from strategy to delivery, a new approach is needed, one that is systems-led, builds on what has come before, and aligns efforts to enhance social, economic, environmental, and cultural wellbeing. 

Find the original article here.