Paul Spoonley: The demographic challenges facing the Bay

Distinguished Professor Paul Spoonley.

Many of New Zealand's regions are facing interesting - and sometimes daunting - options. The challenges are both economic and demographic.

What The Economist calls the Fourth Industrial Revolution is impacting on the nature of economies around the world. The twin impacts of globalisation and the disruption that is associated with digitisation will alter what we produce and how we work.

But there are also significant demographic changes under way as the baby boomers retire, fertility rates continue to decline and the prime working age population reduces in size.

Matariki - or to give it its full name, the Hawke's Bay Regional Economic and Development Strategy and Action Plan - is a welcome and ambitious plan to address some of these issues. But there is little acknowledgement of some of the other challenges facing the economy and communities of Hawke's Bay.

The strategy and plan are clear that it is business-led and relies upon relationships between the major players. There is a focus on improved infrastructure, business development and innovation, and additional jobs.

My concern would be that there is insufficient attention to demographic dynamics and trends. There is some acknowledgement of these challenges: reference to upskilling those not currently in the workforce, including Maori; the fact that the young leave the province; and the need to attract skilled migrants.

Hawke's Bay, like many regions, will experience a decline in those in the prime working age in the future, and this will be very obvious by the mid and late 2020s.

This will be a result of the increasing numbers in the 65+ age group (a 10-15 per cent increase by 2030) and a decline in the 15-24 age group as a result of declining fertility and out-migration.

More and more jobs in New Zealand, at least those that earn decent salaries, require post-secondary qualifications. Hawke's Bay has struggled to offer these jobs.

Between 1981 and 2013, Hawke's Bay slipped from 6th to 13th (out of 16 regions) in terms of average personal income. Whether Matariki will address this slide will be interesting. Let's hope so.

But there are also interesting dynamics in the seasonal, temporary sector with 30 per cent of all workers now being from outside the region.

The RSE has been a success story but even so there are two issues. Does it displace local workers? And given, for example, the demand for seasonal workers in areas like pipfruit, is the supply adequate to meet demand?

Or is there a cost to producers because there are simply not enough workers?

And there is little to indicate how the Bay will attract and retain skilled immigrants or immigrant businesses.

As I have noted previously in this paper, statistics show that immigrants do not stay - 1300 fewer immigrants were recorded as living in Hawke's Bay in the 2013 census compared to 2006.

How will Matariki address this, especially given that both temporary and permanent immigrant numbers are now at an historic high for New Zealand?

When we worked with Taiwhenua o Heretaunga on "Mahi Awatea" in the 1990s, the challenge was as much about people as it was about economic considerations.

My plea would be for those responsible for Matariki to factor in what will happen over the next decade in terms of the shape of local communities.

What will be done to retain and attract those who will provide the local talent pool?

Distinguished Professor Paul Spoonley is Pro Vice-Chancellor of the College of Humanities and Social Sciences at Massey University and is the editor of a recently published book, Rebooting the Regions (2016).