He said Napier's response to attract people had been much more proactive than the district council in Levin.
"You have built all these cycleways and upgraded Marine Parade. These things you have done will attract young people to come and live in the area because they don't want to come just because the money's good - they want to come to this area for the lifestyle and to raise families. So, it's important that you keep that balance up of lifestyle and that will attract more young people and more businesses."
That would be a more effective way of attracting businesses than offering rate reductions to business, because people wanted to take businesses to areas that attracted people.
"That's a pool of talent you can draw on."
He encouraged regional manufacturers to maintain a manufacturing base in New Zealand, rather than taking a cheaper option offshore.
"It was a yearly challenge, then it was a monthly challenge, now it's every single day. Every day you have to be on your game. It's like climbing a mountain, it's hard work but the view from the top is incredible."
Mr Hughes told the audience at the Napier Conference Centre it was important for businesses to have an eye on the long-term.
"When we build our brands we have to realise there are two things that will give your brand long-term life.
"That's authenticity - what you do is real - and integrity - everything you do is done with passion and honesty. Those will build a long-term brand.
"You can throw a lot of money at a brand, and do fantastic sales, but if you don't have integrity and you don't have authenticity, that brand will have a very short lifecycle."
Mr Hughes, who was speaking at the re-launch of the council's Business Breakfast speaker series, said that also meant companies had an environmental responsibility to ensure products would last.
New Zealand's geographic location meant businesses here needed to punch above their weight to compete internationally.
"It means we have to go up to the next level. It means the perception of everything we do has authenticity and integrity.
"We need the rest of the world to know that when we make a product or when we grow an apple, we've done it with passion - and this is the absolute best it can ever be."