Economic outcomes from City Region Deals – what should we expect?
New Zealand has experienced rapid urbanisation, along with most of the rest of the world.
While each city and region experiences change in its growth and productivity, supporting those cities and regions experiencing slower growth – or indeed growing pains - can support the widespread economic resilience of our people and our economy. Further, growth in one place need not be at the expense of growth elsewhere – and will be to the wider benefit of our entire economy if it enhances its productivity. This is why we think that a City Region Deal can’t just be a list of infrastructure that a city or region wants central government to fund – infrastructure alone isn’t enough.[1] History is paved with good intentions, and if we are not intentional about what we want city region deals to achieve, then they could end up being just another variant on the well-intentioned regional economic development grant funding, rather than a unique opportunity to resolve long-seated, wicked problems.
If City Region Deals are to be successful, and then become firmly integrated into the fabric of both central and local government in the way they have done in England as part of the Levelling-up Agenda, then we need to understand what sort of outcomes we are looking for – and then hold both sides accountable for measuring success.
While City Region Deals typically involve material new investment in a city or region, which of course has economic benefit, the transformative nature of successful City Regional Deals only comes when they are designed with a specific focus on delivering superior economic outcomes. For example, by linking the research and tertiary education sectors with the commercial sector to encourage innovation and entrepreneurship, and ultimately enhance productivity and create jobs. Ultimately the longevity of the deal – time, money and devolution of control and associated accountability – will only prove lasting if the economic benefits flow to existing and future citizens alike.
Governance and accountability are the foundation of a successful City Region Deal. They go hand in hand with transparency: this ensures that everyone is able to understand the effectiveness of the interventions, and provides the public with the confidence that they will be able to hold decision makers to account.
In other jurisdictions, City Region Deals have bought about a range of economic benefits by fostering co-investment, innovation, job creation, and sustainable development, thereby contributing to long-term prosperity and competitiveness.
The team at Kalimena has done considerable thinking about the sort of economic benefits we might look to generate in a New Zealand context and the associated accountability framework that would be necessary to ensure any Deal does what it is intended to do. In particular, considering benefits at a more micro level such as job creation and employment, productivity and competitiveness, innovation, inclusive growth and effectiveness.
Get in touch if you’d like to hear more.
[1] Good infrastructure is a fundamental precursor to enhanced economic growth and greater productivity, but it doesn’t deliver that in and of itself. See https://kalimena.nz/insights/tct8i0uo5bowss9no01b2enn9dzift
