How New Zealand Cities can attract Innovators and Creators

Lessons from Magnet Cities – How New Zealand Cities can attract Innovators and Creators

New Zealand needs our largest hubs to become “Magnet Cities”, the globally competitive cities that attract Young Wealth Creators. Currently New Zealand is not attracting the world’s best talent, which means that we are also losing its best talent overseas, adversely affecting our country’s economy and future prosperity. A recent study on the phenomenon of Magnet Cities makes for fascinating reading and a new way for city planners to approach the plan for change.

Caroline Haynes, KPMG UK Advisory Practice Director and co-author of “Magnet Cities – Decline, Fightback, Victory”, an intensive study of nine Magnet Cities around the world, identifies cities previously in decline, that switched their magnetic pull and now attract Young Wealth Creators. The findings show how these cities, that once repelled people and were stuck in a seemingly problematic cycle of decline, turned their economy around and what thinking it took to get there.

Ms Haynes is visiting Auckland, Christchurch and Wellington this week to conduct Design Thinking Workshops with New Zealand city officials and stakeholders to begin the process for change. This will be Ms Haynes’ second visit to the country in three months, having only just visited in June this year when the Magnet Cities report was first published. Such was the enthusiasm met from stakeholders, that this second visit has been arranged to build on the momentum of interest and start the process for real change.

Several cities from the Magnet Cities study that share the closest traits with New Zealand will form the basis for debate and discussion with workshop participants. Up until recently, leaders have looked to London or New York as the epitome of city success and tried to emulate their efforts locally, but Ms Haynes says a comparison like this with New Zealand’s cities is all wrong.

“Auckland will never be a New York or London and it’s just not practical to compare any of New Zealand’s cities with these mega-cities. Not only do they not share similar significant traits, their magnetic pulls are different. If New Zealand is to prosper in this new age, its cities need to examine their own unique magnetism and then work on attracting the right people to bring that identity to life. That’s where the Magnet City’s approach is so relevant. In the workshops we’ll be looking at the learnings from the study with cities such as Pittsburgh USA, Malmo Sweden, Bilbao Spain and Changwon South Korea. We believe these cities are the ones for Auckland, Wellington and Christchurch to emulate as they are of similar size, facing similar challenges,” says Caroline Haynes.

The Design Thinking Workshops are a unique opportunity for a different, combined viewpoint to be formed and heard, to help address the challenges those cities will face in the future as globally competitive cities. Representatives from Committee for Auckland and Auckland Tourism, Events and Economic Development (ATEED), KPMG, as well as key decision makers and interested partners in each city will meet and brainstorm together at the workshops.

The goals of the workshops are to identify what cohort of talent the city needs to attract to ensure a more dynamic future, and is the first step to success following the Magnet Cities model. The outcome from the workshops will help provide a clear project plan of how New Zealand cities are going to address their current deficits and attract the desired Young Wealth Creators.

Simon Hunter, KPMG NZ Lead Partner on Magnet Cities and Principal, Advisory Performance says, “New Zealand lacks the magnet cities that will drive our future prosperity. Our cities don’t have a strong identity, there is no unique feature that attracts young people nor the infrastructure to support a high tech dynamic group. We do not foster innovation nor have a brand that is attractive to forward thinking business. We need to identify and target specific groups of Young Wealth Creators and refashion and leverage all the city’s assets to make them move here. We can’t afford to lose our bright young people overseas. New Zealand is a country in decline - its cities’ population growth rates far outweigh the growth in GDP. This is a real cause for concern. KPMG cares about New Zealand’s prosperity and our hope is that our Magnet Cities study provides a basis on which to sharpen the debate in New Zealand and help contribute to solutions.”

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Magnet Cities Principles

KPMG have identified seven key principles of a Magnet City with a strong magnetic pull drawing in new residents, visitors and business investment.

1. Attract Young Wealth Creators – the innovators

2. Physical renewal – housing and downtown

3. City Identity – a clear brand

4. Connected – clear routes with other cities

5. New Ideas – links with academic institutions

6. Fundraisers – attract investment, grants and funding

7. Strong Leaders – collaborative and driven

The key to a Magnet City’s success is the abundance of Young Wealth Creators as its residents, whose contributions increase the economy and increase the city’s magnetic pull because of their success.

According to Ms Haynes, Auckland currently attracts “Traders” looking to sell goods and residents looking to settle down and raise families or retire, putting their savings into low-risk investment or property. What’s different about the Magnet Cities approach is that the city would attract more Young Wealth Creators who are innovators and risk-takers and on the cutting-edge of ideas in design, thinking, and creating the jobs for tomorrow. It’s their contributions that will directly lift the city’s prosperity and the country’s economy.

Value for Auckland

The financial gain for Auckland adopting a Magnet City model can be significant. Case study cities have seen substantial improvement in their economy with an average 2-5% increase in GDP over a sustained period relative to peers.

• Auckland currently contributes 35.3% to New Zealand’s GDP.

• Total Auckland rates revenue is $1.41 billion of which 32.8% or $462 million comes from businesses.

• Aucklanders in employment number: 780,000 (69%).

• Commercial businesses located in Auckland: 170,600.

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• Potentially a Magnet City approach in Auckland can increase GDP by an average 2%, which has significant implications: projections are that by the year 2035:
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- GDP is $57b higher (cumulative gain $500b)

- Business rates income could be $200m higher ($2.8b over 20 years)

- Employment could be as much as 200,000 higher then current trends

Visit the KPMG website for an overview of findings and short video presentation at kpmg.com/uk/magnetcities

ENDS

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