Julian Wood

By Julian Wood - 05/02/2018

Julian Wood

By Julian Wood -

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How are we placed?

A LOCAL GROWTH AND DECLINE STOCKTAKE

“About ten years ago Charlie Duncan realised the Hunterville community had a problem – a lack of young people…”[1]

Long-term risk analysis is essential to overcoming political denial

Without first acknowledging the reality a region is facing, it is impossible to take positive steps towards new growth pathways. Political denial of regional long-term trends is widespread in both New Zealand and overseas, with politicians and advisors often choosing to focus on good news stories.[2] A first step in overcoming this political inertia is for local communities to undertake long-term risk analysis, or, in other words, a local growth and decline stocktake. To this end, we have pulled together two tools that will be useful:

  • a checklist of indicators of regional growth or decline; and
  • a dashboard of economic and demographic performance.

We have designed these tools to empower regional planners to use their local knowledge to assess their current and future situation and respond in a way that maximises positive outcomes for their communities.

Analysing growth and decline indicators

Communities seeking to make positive changes need to know their growth and decline profile. Table 1 below outlines our first tool: a range of indicators to be used to self-assess the growth and decline profile of a region.[3] The indicators are based on the “economic performance between European regions, …outlin[ing]… attributes that correlate positively with superior performance,”[4] and recent research and data on population change within New Zealand.[5] We recommend communities work through these indicators to help paint a more detailed picture of their current situation. To help regional planners make sense of the indicators, we also offer several examples of how the checklist could be used below.

Source: Summation of indicators from Mario Polèse and Richard Shearmur, ‘Why Some Regions Will Decline: A Canadian Case Study with Thoughts on Local Development Strategies’, Papers in Regional Science 85, no. 1 (2006): 23–46 and Natalie Jackson and Lars Brabyn, ‘The Mechanisms of Subnational Population Growth and Decline in New Zealand 1976-2013’, Policy Quarterly, Supplementary Issue: The ebbing of the human tide. What will it mean?, 13 (June 2017): 22–36.

How to use the Checklist—some examples.

This tool is designed for communities themselves to work out their growth and decline profile, rather than external people or organisations making an assessment on their behalf. To help guide communities on how they could be used and to highlight the complex interactions between the indicators,[7] we offer two examples: Southland and Thames Coromandel. It is important to note these analyses are sketches, limited by the author’s knowledge of the areas and are for illustrative purposes only.[8]

Example 1: Southland (illustrative purposes only)

On the positive indicator side, Southland would meet both indicators G5 and G6 insofar as it does have an institutional infrastructure for supporting local development strategies (both a Mayoral Forum and Venture Southland) and a positive image and social climate. It is notable that Southland is the first region in New Zealand with an explicit population goal. Following the 2014 Mayoral Forum the “Southland Regional Development Strategy announced an ambitious goal…to increase Southland’s population by 10,000 by 2020 [now 2025]” ).[9]

Turning to the indicators of decline for the Southland, it is reasonable to argue that certainly parts of the region are “geographically isolated and sparsely populated” and would most likely meet indicators D1, D2, and D3 of decline. This is especially so for smaller areas like Night Caps and Ohai. This combines with Southland potentially meeting indicator D6 in regard to year-round tourism and indicator D7 insofar as it is heavily reliant on primary industries. However, it does not yet meet indicator D5 of decline, as limits of profitable exploitation of its resource base haven’t yet been met. In addition to its abundant agricultural, aquaculture, and water assets, coal is still (at times) profitably extracted. Augmenting this with dynamic demographic information in indicators D8 and D9 however, informs this risk scenario further. Southland, it would seem, understands these dynamics and has been pro-active in setting a population growth target and has a whole strategy in place to achieve this goal.

Example 2: Thames Coromandel (illustrative purposes only)

Taking another region, Thames Coromandel, illustrates that a combination of growth and decline factors can cancel out one another’s positive and negative effects in the short-term. Unfortunately, the example also shows that the long-term negative risk factors have the potential to escalate or combine in ways that may inhibit long term growth.

For example, the Thames Coromandel region has good proximity to Auckland and thus meets indicator G1 on the growth side. It also appears to have good population inflows and a healthy tourism sector. But when the dynamic demographic information is taken into account, it is also seen that the current population is forecast to rapidly age. Many of the population inflows are older retirees from Auckland or surrounding areas, thus meeting indicator D8 of decline. This increases the risks that the overall population will soon be in decline, thus triggering indicator D9 of decline. Given the raw number of people forecast to retire from Auckland, and the work opportunities that will arise for younger people in service provision to support these inflows, however, Thames could argue that they might well have a balance between the success and decline indicators. It is key, then, to also understand how the area fits with indicators D4, D5, D6 to assess the overall risk of decline.

In this regard, throughout its history, Thames Coromandel area has been heavily reliant on resource extraction and mining, thus potentially meeting indicator D7. Smaller firms in the mining industry tend to find it hard to compete, thus potentially meeting indicator D4. Even if indicator D5 hasn’t yet been triggered (although history suggests that gold mining has a history of significant boom bust cycles) there exists an overall higher risk profile in the long term. Unfortunately, the existence of indicators D4, D5, D6, or D7 on the decline side mean it is more likely that the location will struggle to diversify as the local economic conditions are acting “as a barrier to diversification.”[10] Thus while in the short term the situation is not at all dire, the outlook is not all good.

The four-quadrants dashboard of economic and demographic performance

To complement the growth and decline indicator assessment, we also recommended that communities use their local knowledge to self-assess and position themselves within a dashboard of economic and demographic performance, outlined in Figure 3 below. For regions, this can be a headliner tool to assess their overall probability of growth and decline, feeding into consideration of which regional development policy initiatives will be most appropriate.

Source: Author adapted from the idea of Eric van Marissing and Thorsten Wiechmann, developed in a Budapest workshop on 15-16 November 2010 (WS, 2010) cited in OECD (2012), 286[11] and Thorsten Wiechmann and Karina M. Pallagst, ‘Urban Shrinkage in Germany and the USA: A Comparison of Transformation Patterns and Local Strategies: Urban Shrinkage in Germany and the USA’, International Journal of Urban and Regional Research 36, no. 2 (March 2012): 277, https://doi.org/10.1111/j.1468-2427.2011.01095.x.[12]

The quadrants explained: Growth, Gravitation, Transition, and Decline

Communities self-assessed as Quadrant 1, for example, would seem to face a relatively bright future of both economic and demographic development. These areas can be characterised as a “Growth Pole” and are most likely to be urban in nature. Communities within quadrants 2 and 3 are generally holding their own, but both face significant challenges. Those in Quadrant 2, for example, called “Gravitation Areas,” are still experiencing population growth despite economic difficulties. Those in Quadrant 3, “Transition Areas,” are experiencing decreasing population in spite of economic growth. Communities in Quadrant 4 are “Downgrading” or “Declining Areas,” and are already or likely to soon be feeling the effects of both negative economic and population developments.

Local economic planners may also use this dashboard to classify a number of smaller places within in a wider region to provide an overall spatial analysis of the economic and demographic health of a region. For example, when looking at the Bay of Plenty, one can imagine that the city of Tauranga and Edgecumbe might well exist in different quadrants, just as the city of Gisborne on the East Coast will most likely be in a different quadrant to Ruatoria or Tolaga Bay. The overall balance of spatial growth and decline is important for regional and local government to consider when deciding on long-term initiatives and where to focus their efforts.

We hope that those who use this dashboard are given a sense of empowerment for change. A community with a genuine desire for change alongside sound knowledge of their growth and decline profile is in a good place, but they also need the right portfolio of policies to transform potential pathways into real positive changes.


This is an extract from Julian’s research paper “Taking the Right Risks | Working Together to Revitalise our Regions” Policy Paper. (Released 2018) 

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ENDNOTES

[1] Jamie Morton, ‘Heartland: Cheese Capital Eltham Needs a Boost’, New Zealand Herald, 22 August 2017, http://www.nzherald.co.nz/nz/news/article.cfm?c_ id=1&objectid=11894759.
[2] Adriana Weber, ‘Regions Must Face Challenge of Population Decline – Report’, Radio New Zealand, 28 February 2017, sec. New Zealand, https://www.radionz. co.nz/news/national/325489/regions-must-face-challenge-of-population-decline-report.
[3] Mario Polèse and Richard Shearmur, ‘Why Some Regions Will Decline: A Canadian Case Study with Thoughts on Local Development Strategies’, Papers in Regional Science 85, no. 1 (2006): 23–46. Polèse and Shearmur, 30.Natalie Jackson and Lars Brabyn, ‘The Mechanisms of Subnational Population Growth and Decline in New Zealand 1976-2013’, Policy Quarterly, Supplementary Issue: The ebbing of the human tide. What will it mean?, 13 (June 2017): 22–36. It would be informative for future research to examine the extent to which these European based measures of growth and decline can be improved to fit within a New Zealand context.
[4] Polèse and Shearmur, ‘Why Some Regions Will Decline’. Here Polèse and Shearmur state that “Decline means that the region will undergo relative, and eventually absolute, population and employment decline.” Their framework for regional decline is located within a “geographically large nation, with inhabited spaces (The Periphery) located beyond a one-hour drive from a major urban centre (threshold defined according to context); and a nation in the last stages of the demographic transition: natural increase is either close to zero or negative. [As they state] Most industrialised nations today meet this condition.
[5] Natalie Jackson and Lars Brabyn, ‘The Mechanisms of Subnational Population Growth and Decline in New Zealand 1976-2013’.
[6] This is an industry that by its presence “crowds out” new entrants or opportunities for local diversification. New entrants cannot compete with this dominant local industry for finance or human resources. They are either out lobbied, out marketed or out priced on wages. All these factors combine to meant that the region or area is less likely to diversify.
[7] Polèse and Shearmur, ‘Why Some Regions Will Decline’.
[8] As such we will not be attempting to place the examples within the dash board tool as this is best undertaken by people within a region who understand local dynamics best.
[9] Amber-Leigh Woolf, ‘International Skills Could Boost Southland Population by 2020’, Stuff News, 7 July 2016, http://www.stuff.co.nz/business/81872599/ international-skills-could-boost-southland-population-by-2020.
[10] Polèse and Shearmur, ‘Why Some Regions Will Decline’, 42–43.
[11] Cristina Martinez-Fernandez et al., Demographic Change and Local Development: Shrinkage, Regeneration and Social Dynamics (OECD, 2012), 286, http://www. carltd.com/sites/carwebsite/files/Demographic%20Change%20and%20Local%20Development.pdf.
[12] Thorsten Wiechmann and Karina M. Pallagst, ‘Urban Shrinkage in Germany and the USA: A Comparison of Transformation Patterns and Local Strategies: Urban Shrinkage in Germany and the USA’, International Journal of Urban and Regional Research 36, no. 2 (March 2012): 277, https://doi.org/10.1111/j.1468- 2427.2011.01095.x.

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