Julian Wood

By Julian Wood - 06/04/2018

Julian Wood

By Julian Wood -

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What can be done? | Smart Growth Three


“Ahipara needs a boost. It needs to grow.” Then he [Malley] smiles. “But I’m glad it hasn’t as well. It keeps the surf uncrowded.”[1]

Fortunately, there is a rich regional development literature from both New Zealand and abroad that outlines an abundance of policy options for places to consider. In this section we will explore these options, discern how they might work together, and assess their overall likelihood of success. To help make sense of the potential pathways, we have created a framework for analysing these options, focussing on the two primary approaches: Smart Growth and Smart Decline policies (see Figure 4 below).[2]

We have grouped smart growth policies into three components: local resilience and productivity; the local labour market; and the local capital market. Smart decline policy options have been broken down into two components: policy aimed at “de-growth” and policy aimed at relocation or exit. This section is structured following this five-part framework. We will begin by discussing smart growth policies and then transition to smart decline options.

Smart Growth 3: Increasing labour supply

Just as a location can aim to incentivise the inflow of investment to improve its growth prospects, it can also aim to improve its local labour supply in quantity and or its underlying skills and social capital.

We have arranged these labour supply policies into three broad categories, those that seek to:

  • improve the skills and social capital of the underlying population;
  • increase net inward migration;[3] or
  • increase the fertility of the underlying population.

These policy tools interact in a multitude of ways: some mutually-reinforcing; others working at cross purposes.[4]

Smart Growth 3.1 Improve the skills and social capital of the underlying population

Retraining older workers has shown some success

One way of improving the local labour market is to upskill local people. With the global trend toward an ageing workforce and increasing automation, a number of places have seen success by focusing on retraining older, recently unemployed people. Two case studies, one from Germany and another from Canada, outline some of the lessons learnt for supporting older unemployed workers in shrinking towns.

The Germany study examined the national-level “Perspective 50 plus” programme, an active labour market policy investing in the silver workforce, particularly women and female migrants.[5] “Between 2005 and 2011,” the report outlines that “more than 580,000 older long term unemployed across Germany were [included in the programme] and more than 160,000 of these found a job in the regular labour market.”[6] This is a positive outcome. Key elements of the programme included: gender mainstreaming;[7] focusing on small and medium-sized employers; including health care strategies alongside employment strategies (health issues were a barrier for many older unemployed people); and vastly reducing the number of cases per staff worker to enable more focused assistance.

The Canadian study looked at a much smaller-scale initiative, that focused on improving outcomes of older people that had become unemployed due to the closure or downsizing of a firm in a place with a high reliance on a single employer or industry.[8] Over an average duration of three months, the initiative offered a range of targeted assistance ranging from CV preparation to upskilling, often in group settings. They almost always involved “a job-shadowing or work experience component with a local employer or community organisation.”[9] The strengths of this programme appear to be its “joined-up approach,” whereby training initiatives were embedded in wider regional development strategies and across various levels of government, training providers, and employers. While small in scale, its highly-targeted approach appears to have had good outcomes for participants, especially older women—75% of participants “found employment during or after their participation” in the programme; 44% of those were still employed 8 months later.[10]

Youth initiatives show some promise

Youth initiatives aim to improve the retention of young people within a particular location by linking local youth to local jobs. Studies into small town renewal in Australia point toward the success of youth programs that focus on improving “employment diversity, education options, transport, accommodation, lifestyle, image, and participation.”[11] On the participation front, an initiative in Sweden has encouraged youth participation in local councils and in school decision making.[12] There are also examples in the Netherlands of initiatives that join employers with education providers to highlight the possibilities for local employment for local youth.[13] The overall outcomes of these newer programs have not yet been evaluated.

In our own backyard Rachel McMillan reported on the success of youth interventions in Otorohanga, New Zealand, following the opening of a trade training centre aimed at transitioning local young people into local jobs. These initiatives included “pastoral care of apprentices… scholarships and guaranteed job paths.”[14] A Ministry of Social Development review of the initiatives found that “since the initiatives began in 2005, youth crime has plummeted and there is zero registered unemployment for people under age 25 since November 2006.”[15]

More recently, a youth transition programme piloted by Aoraki Development in Timaru (in partnership with the Ministry of Social Development and the Ministry of Education and within the wider Canterbury Regional Economic Development Strategy) has seen some initial success and is likely to be expanded.[16] This programme aims to connect young people in schools to businesses and helps employers to become “youth friendly.” There is an evaluation of this pilot being planned.

Maintaining health and education services in rural areas impacts positively on wellbeing

A number of places have attempted to diminish the impact of demographic change by investing in regional health or education services to help people stay in remote areas. As already discussed above, Japan has made a significant investment into the widespread use of ICT solutions for aged care. Another example is Distance Health Care in Sydjylland, Denmark, a telemedicine project where “patients can be diagnosed, monitored, and treated in their own homes.”[17] After evaluation, this programme was extended to become an important part of service provision in the region.[18] There is no overall evaluation of these initiatives regarding their demographic success, but as mentioned earlier, these initiatives have been shown to improve health and reduce social isolation outcomes.[19]

Smart Growth 3.2: Increase net inward migration

Migration is unlikely to work everywhere

“So, we have jobs, and affordable housing, but we need skilled workers and we would like to see more incentives in getting people to settle into our region…”[20]

Migration solutions are, perhaps, the most commonly cited solution to small town demographic decline. As outlined in our previous paper, however, the big picture of their effectiveness is not encouraging: “Immigration is also unlikely to solve regional demographic trends, as migrants typically self-select where to settle…[t]o date, migrants have been most likely to settle in New Zealand’s major urban areas rather than rural ones.[21] Skilled immigration is unlikely to balance out the long-term structural ageing problem in the New Zealand economy. As Natalie Jackson confirms, “[e]ven a trebling of the current immigration rates would have little effect on the structural ageing of the population.”[22]

Migration can make a big difference to a local area with the right set of policies and support

While not necessarily effective at an overall or national level, local communities should not ignore the potential of migration solutions. These could include a focus on domestic migration by improving commuting or ICT linkages with larger cities, or offering tertiary study scholarships for local school leavers with the aim of having these students later return and work in the community, to name a few possibilities.[23]

The international literature highlights that international migration for a particular location can be highly influential in revitalising a local town or city. This can be through a location focusing on getting their own diaspora to return, or through the use of skilled—or even unskilled— migration solutions.[24] Many New Zealand towns are already proactive in this regard, with promising results. As Kurt Bayer reported of Ashburton:

…while sheep [farming] has been transplanted by dairy, it still is an agricultural powerhouse. It’s just that it’s gone beyond the local population to help keep it running. Migrant workers have flooded to the area over the last decade. The Ashburton district – total population of around 32,000 – now has a 3000- strong Filipino community, another 1000 or more Pasifika people…consensus seems to be that the place is all the richer for the increased diversity and multiculturalism.[25]

Success requires settlement and welcoming policy

The most common theme throughout the international literature on the ability of local communities to use migration successfully is not just their ability to attract the “right” or “highly skilled” people or to “incentivise” or “bond” people to settle in smaller communities, it is their ability to welcome and settle well.

A positive example of good welcoming and settlement policy comes from the southern Italian towns of Sutera and Riace. Researcher Deborah Needleman’s points out that for these small communities, “refugee migration if welcomed and settled well can breathe new life into shrinking places,” and goes on to say that accepting refugees as “an act of humanity…has become an act of self-preservation.”[26] The Närpes region of Finland established “Welcome Offices” to provide information to immigrants and help co-ordinate the integration work in the region[27] with varying degrees of success. Economist Philippe Legrain supports this positive view of refugee migration from an economic perspective, predicting that “investing one Euro in welcoming refugees can yield nearly two Euros in economic benefits within five years.”[28]

Domestically, Immigration New Zealand has recently commenced a “Welcoming Communities” pilot programme in five locations across New Zealand.[29] This pilot encourages local government, tangata whenua, and community leaders to develop a wide range of welcoming initiatives that aim for the following results:[30]

  • there is an increase in community capability to welcome newcomers;
  • newcomers feel included;
  • those who are eligible choose to stay and make the community their home;
  • communities recognise the benefits of diversity;
  • negative perceptions towards newcomers are reduced; and
  • community growth is planned for and carefully managed.[31]

This pilot programme will be evaluated in 2018.

Another recent example of welcoming policy in New Zealand is the “Community Connectors” based in Cheviot and Culverden/Amuri,[32] that work to engage newcomers to the district and connect isolated people in with community activities. The need for these part-time, Ministry of Social Development-funded positions came to light following the findings of a local business survey. Interestingly, a similar position in Amberly, introduced following the success of the Cheviot and Culverden trials was seen to be less successful in Amberley due to the fact it wasn’t based on local need.[33] This is an important lesson for these kind of initiatives.

Successful migration in rural locations requires a different set of migration policy tools compared to larger cities

A recent study of rural area migration solutions in Nordic Countries (Iceland, Norway, Sweden, Finland, Denmark, and Greenland) concluded that while “integration outcomes are not always that good,”[34] success appears to hinge on policies that aim to overcome particular problems with rural locations like:

  • family-wide immigration solutions (not just interventions focused on employment that attract highly-skilled individuals or in schools that attract international students);
  • local education providers having access to and providing e-learning services (to overcome local second-language learning capacity constraints);
  • workers being able to source housing close to jobs (as rural areas are not well-served by public transport);
  • local settlement co-ordinators; and
  • welcoming communities.[35]

A key lesson on migration solutions is that they are often contingent on community agreement and backing, or else welcoming policy will fail.[36] Indeed, even with broad-based support for migration solutions from within community, the politically motivated anti-migration knife attack of the Mayor of the small German town of Altena serves as a warning that migration as a policy tool can stir emotions of those with a strong adversity to change.[37]

Local communities can successfully take a leadership role in migration solutions if given the chance

The capacity of local communities shouldn’t be underestimated. Case study research from Morden, a 9,000-strong population town in Canada’s Manitoba province, highlights the leading role that small communities can play in migration solutions if they are given permission to act by broader local community and national-level immigration policy.[38] Whereas other smaller areas hope to attract migrants after they have arrived in Canada, Morden actively seeks out potential newcomers before they have even applied to live in Canada. The town focuses on skilled migrants who have no existing family linkages to other parts of Canada and requires them to visit the town for two weeks before assisting them to apply for relevant visas. Following this visit, successful applicants are then streamlined through the broader provincial migration programme by local Morden officials. While Morden has been effective in recruiting highly skilled migrants and initial retention rates seem high, there is not yet any long-term evidence that this will be sustainable.

Another option is to focus on people who already have a connection to a community

Other places have focused their migration efforts on getting people that have migrated elsewhere to return; people with an existing connection to a community. Israel and China, for example, have concentrated on harnessing their wider diaspora with return-focused migration strategies. Research suggests that knowledge- based returnees contribute substantially to the strength of domestic research and innovation systems.[39] As the authors articulated, “returnees directly link their country of origin to the outside world…[and] boost domestic productivity and international competitiveness through the direct transfer of knowledge and the indirect benefits brought by overseas professional and trade networks.”[40]

Unfortunately, the experience of both countries highlights one of the major challenges faced by returnees: “somewhat restricted” labour market opportunities, “with one returnee describing it as ‘professional suicide.’”[41] This does not mean that small places should discount the idea of return-focused migration, just that once again, it is not a simple solution with guaranteed results. The role of welcoming policy is also apposite here, as we see people experience social and cultural dislocation even in a place they have a connection with.[42]

Smart Growth 3.3: Encourage fertility

Governments have used a wide range of measures that have been used by to increase fertility, including: “baby bonuses, family allowances, maternal, paternal and parental leave, subsidized childcare, tax incentives, subsidized housing, flexible work schedules, and campaigns to promote the sharing of parenting and household work between spouses.”[43] Few have been successful. “The United Nations noted in its 2013 World Fertility report that “the success of policies to influence fertility in low fertility countries has not been impressive,”[44] and continued to conclude that “the evidence for the effect of financial incentives on increasing fertility is mixed and often temporary and transient.”[45]

This is a grim assessment. In the same report the United Nations outlined that there is some evidence to support the use of family-friendly policies like increasing the availability of childcare, for the use of flexible parental leave and efforts at addressing work-life balance issues, as these initiatives can influence fertility insofar as they promote the ability to combine work and parenthood. On balance, however, the evidence suggests that there is limited ability for either central government or local communities to influence local fertility rates, let alone capture these gains.

Smart Growth 3 – Conclusion

Improving the underlying supply of labour is not easy, but there are a number of options available for communities. Youth initiatives and the retraining of older workers both showed promise and should be investigated further. At a local level there was good evidence to support migration solutions, but these are not a one-size-fits-all solution. Migration solutions also appear to rely on a community being open to change and able to welcome newcomers or returnees well. Unfortunately, there doesn’t appear to be any effective policy levers to increase fertility rates in a robust way.

To read the other smart growth policies, and smart decline policies, click below. 

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





[1] David Fisher, ‘Heartbeat: Ahipara, Where Not Much Has Changed since the GFC Stopped the Boom-Town Talk’, New Zealand Herald, 23 August 2017, http://www. nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11900276.
[2] In practice, many of the policy options discussed below are not as neat as this framework may suggest. It is inherently difficult to delineate and separate one from another, as they are often inter-related. The groupings, then, are the author’s best attempt at ordering a vast and complicated literature.
[3] Providing an overview of the effects of immigration policy is far beyond the scope of this paper. Immigration solutions will be discussed within the context of their impact on local community’s regional development context only.
[4] An example of the latter would be improving net inward migration, but finding that many of the people arriving are 44 years and older. This is likely over time to reinforce ageing population trends and lower the overall fertility rates.
[5] Reiner Aster and Daniel F. Heuermann, ‘Perspective 50 Plus: Regional Employment Pacts For Older Long-Term Unemployed Persons (Germany)’, in Demographic Change and Local Development: Shrinkage, Regeneration and Social Dynamics (OECD Local Economic and Employment Development, 2012), 257–62.
[6] Reiner Aster and Daniel F. Heuermann, 260.
[7] “Mainstreaming a gender perspective is the process of assessing the implications for women and men of any planned action, including legislation, policies or programmes, in all areas and at all levels. It is a strategy for making women’s as well as men’s concerns and experiences an integral dimension of the design, implementation, monitoring and evaluation of policies and programmes in all political, economic and societal spheres so that women and men benefit equally and inequality is not perpetuated. The ultimate goal is to achieve gender equality.” United Nations. “Report of the Economic and Social Council for 1997”. A/52/3.18 September 1997.
[8] Human Resources and Skills Development Canada, ‘Supporting Older Workers in Canada’s Vulnerable Communities: The Case of the Targeted Initiative for Older Workers’, in Demographic Change and Local Development: Shrinkage, Regeneration and Social Dynamics (OECD Local Economic and Employment Development, 2012), 231–40.
[9] Human Resources and Skills Development Canada, 236.
[10] Human Resources and Skills Development Canada, 238.
[11] Rachael Christina McMillan, ‘Anticipating Subnational Depopulation: Policy Responses and Strategic Interventions to Regional Decline’, 82. See also Kenyon, Black, and Rural Industries Research and Development Corporation (Australia), A Kit for Small Town Renewal.
[12] Ingrid HG Johnsen and Liisa Perjo, Local and Regional Approaches to Demographic Change, 2014, 21, http://www.diva-portal.org/smash/record. jsf?pid=diva2:843811.
[13] Johnsen and Perjo, Local and Regional Approaches to Demographic Change.
[14] Rachael Christina McMillan, ‘Anticipating Subnational Depopulation: Policy Responses and Strategic Interventions to Regional Decline’, 82.
[15] Rachael Christina McMillan, 82.
[16] The Canterbury Mayoral Forum, ‘Canterbury Regional Economic Development Strategy 2017-1029’, May 2017, 14 see also Education and Training Accelerator projects supplement page.
[17] Johnsen and Perjo, Local and Regional Approaches to Demographic Change, 27.
[18] Johnsen and Perjo, 44.
[19] Martinez-Fernandez et al., ‘Shrinking Cities in Australia, Japan, Europe and the USA’.
[20] Jamie Morton, ‘Heartland: Cheese Capital Eltham Needs a Boost’.
[21] Julian Wood, ‘Growing beyond Growth: Rethinking the Goals of Regional Development in New Zealand’, 12.
[22] Paul Spoonley, ed., Rebooting the Regions: Why Low or Zero Growth Needn’t Mean the End of Prosperity (Auckland, New Zealand: Massey University Press, 2016), 33.
[23] Unfortunately, while potentially good policy responses no literature was found evaluated the overall effects of these type of linkage policy.
[24] McLeod, Fabling, and Maré, ‘Hiring New Ideas’; ‘Global Argonauts Returnees and Diaspora as Sources of Innovation in China and Israel.Pdf’, n.d.; Deborah Needleman, ‘Who Will Save These Dying Italian Towns? Near-Empty Villages Try to Hold on to an Endangered Way of Life — and Some of the Country’s Most Important Artisanal Traditions.’
[25] Kurt Bayer, ‘Heartbeat: Ashburton Sheds Its Old Skin’, New Zealand Herald, 16 August 2017, http://www.nzherald.co.nz/nz/news/article.cfm?c_ id=1&objectid=11902315.
[26] Deborah Needleman, ‘Who Will Save These Dying Italian Towns? Near-Empty Villages Try to Hold on to an Endangered Way of Life — and Some of the Country’s Most Important Artisanal Traditions.’ Unfortunately these initiatives are recent and the long-term outcomes have not been evaluated.
[27] Johnsen and Perjo, Local and Regional Approaches to Demographic Change.
[28] Philippe Legrain, ‘Refugees Work: A Humanitarian Investment That Yields Economic Dividends’ (Tent, May 2016), http://www.opennetwork.net/wp-content/uploads/2016/05/Tent-Open-Refugees-Work_V13.pdf.
[29] This is a pilot undertaken by “Immigration New Zealand (INZ) working in partnership with the Office of Ethnic Communities, the Department of Internal Affairs and the Human Rights Commission.” These five locations are Tauranga/Western Bay of Plenty (Tauranga City Council and Western Bay of Plenty District Council), Southland (Gore District Council, Invercargill City Council and Southland District Council – coordinated through Venture Southland), Whanganui (Whanganui District Council), Palmerston North (Palmerston North City Council), Canterbury (represented by the Ashburton and Selwyn District Councils).
[30] New Zealand Immigration, ‘Putting out the Welcome Mat: A Resource for Developing Your Welcoming Plan Te Whāriki – He Raumi e Whanake’, January 2018, https://www.immigration.govt.nz/documents/about-us/putting-out-the-welcome-mat.pdf.
[31] Immigration New Zealand, ‘Welcoming Communities New Zealand Pilot Programme / Te Waharoa Ki Ngā Hapori’ (Martin Jenkins, 6 December 2017), https://www. immigration.govt.nz/documents/about-us/welcoming-communities-intervention-logic.pdf.
[32] Heather Warwick, ‘Re: Newcomer and Migrant Settlement’, 29 September 2017.
[33] Based on email from Heather Warwick. and discussions held in Christchurch on Thursday 28 September 2017.
[34] Lisbeth Greve Harbo, Timothy Heleniak, and Åsa Ström Hildestrand, eds., ‘From Migrants to Workers: Regional and Local Practices on Integration of Labour Migrants and Refugees in Rural Areas in the Nordic Countries’ (Nordregio: Nordic Centre for Spatial Development, May 2017), 8, http://www.nordregio.se/en/ Publications/Publications-2017/From-migrants-to-workers-Regional-and-local-practices-on-integration-of-labour-migrants-and-refugees-in-rural-areas-in-the- Nordic-countries/.
[35] Lisbeth Greve Harbo, Timothy Heleniak, and Åsa Ström Hildestrand, ‘From Migrants to Workers: Regional and Local Practices on Integration of Labour Migrants and Refugees in Rural Areas in the Nordic Countries’.
[36] In the New Zealand context, given their position as the indigenous people, seeking agreement with local Iwi before proceeding with any migration initiatives will be important.
[37] Even welcoming places can suffer from individuals who disagree on migration solutions, as seen in the what looks to be a politically driven knife attack on the Mayor of Altena in Germany. “Under his leadership, the town of Altena, with 17,000 residents and 450 refugees, has taken in more migrants than it was allocated.” Madeline Chambers, ‘Pro-Refugee German Mayor Stabbed in Suspected Political Attack’, Reuters, 28 November 2017, sec. World News, https://www.reuters.com/ article/us-germany-attack-mayor/pro-refugee-german-mayor-stabbed-in-suspected-political-attack-idUSKBN1DS0O7.
[38] CIC News, ‘Immigration To Morden, Manitoba’, 17 September 2014, https://www.cicnews.com/2014/09/immigration-morden-manitoba-093839.html.
[39] Welch and Hao, ‘Global Argonauts’.
[40] Welch and Hao, 289.
[41] Cohen, N., and D. Krantz. 2014. “State Assisted Highly Skilled Return Programmes, National Identity and the Risks of Homecoming: Israel and Germany Compared.” Journal of Ethnic and Migration Studies 41 (5). doi:10.1080/1369183X.2014. 948392. cited in Welch and Hao, 290.
[42] Welch and Hao, 290.
[43] United Nations, Department of Economic and Social Affairs, and Population Division, World Population Policies 2013, 2013, 60, http://search.ebscohost.com/ login.aspx?direct=true&scope=site&db=nlebk&db=nlabk&AN=857630.
[44] United Nations, ‘World Fertility Report 2013: Fertility at the Extremes’ (United Nations, Department of Economic and Social Affairs, Population Division, 2014), 24.
[45] United Nations, 24.

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