Angela Hunter: Mid-market firms vital to regions

A group of Massey University researchers led by Professor Paul Spoonley wants the Government to develop a "strategic population policy" or strategy to avoid looming problems such as regional decline and housing shortages. Photo / Thinkstock

Companies in provinces play same role as corporates in cities

If you were listening to National Radio on Sunday, after the All Blacks beat Wales 34-16, you may have caught another issue of national significance.

A group of Massey University researchers led by Professor Paul Spoonley wants the Government to develop a "strategic population policy" or strategy to avoid looming problems such as regional decline and housing shortages.

If the regions are going to survive, Spoonley argues, Government policy at all levels will need to take into account the aging population, falling birth rates and rapidly increasing immigration.

However, if his call is taken up, implementation will not be a simple exercise as the economic activities our regions depend upon to survive vary greatly.

For example, in the Tasman and Nelson regional districts around 52 per cent of GDP comes from agriculture, forestry, fishing and manufacturing. In other towns and cities, the closure of a plant or factory would send local families in a hundred different directions seeking work.

At GE Capital, our focus on mid-market businesses - those with an annual turnover between $2 million and $50 million - means we pay attention to New Zealand's regional centres. And we're well aware of the importance of those companies in their regions.

This can be seen in the likes of Manuka Honey, the second largest employer in Te Awamutu, after Fonterra. It will soon open a state-of-the-art, $10 million honey processing, packaging and logistics plant there.

Or take Tainui's planned inland port at Ruakura, just south of Hamilton. It will be a significant employer in the region - both in the construction phase and long-term once it's up and running.

Within the regions, mid-market firms play a similar role to large corporates in the cities, partly due to their ability to work with local, regional and even central Government to increase opportunities already available.

If they can demonstrate their plans will provide good, long-term jobs for local Kiwis, they will get a fair hearing.

Most local and regional councils are keen to do whatever they can to facilitate growth and employment opportunities in their jurisdictions but, it goes almost without saying, they also have strict obligations to ensure development is environmentally sustainable.

Focusing as we do on New Zealand's vibrant mid-market sector, GE Capital knows these businesses don't get anything like the "share of voice" that big corporates get.

Yet the influence of these companies in their regions and their importance to the local community - particularly in terms of creating jobs - is enormous.

So with all of this in mind, Spoonley should add another directive to his call to action: if we are to boost our regional performance, then we must also boost support for our regional mid-market firms.

Angela Hunter is managing director of GE Capital New Zealand.