Close

Idealog's Guide to Wellington: Up, up and away

After a few years of sluggish growth the nation’s second biggest regional economy has kicked into gear with business confidence hitting a three year high. Local government support is fuelling growth and the booming tech sector is attracting top talent to the city. All told, Wellington’s vital signs are looking good.

Legend holds that taniwha brothers Whātaitai and Ngake lived peacefully in a lake until Ngake got restless and wanted to reach the ocean.

Smashing his way through land and forming the Hutt River with a lash of his tail, he swam deep into Cook Strait creating Wellington Harbour and opening the trading door to the region.

Whataitai tried to follow but became stranded on high ground.

Over the years his body turned to earth and became known as Hataitai.

The Wellington region’s diverse landscape features ranges and valleys, coastlines and rivers, vineyards and high-rises spreading from the central city to the Wairarapa and Kapiti Coast.

Since 1865 it has been the country’s capital, and home to the Central Government and Supreme Court – and it’s anecdotally known as the cultural capital for its bevvy of galleries and annual arts festivals, be they hugely successful street fairs, comedy shows or concerts.

The Wellington regional economy had strong growth of 2.9 percent in the December quarter. Wellington City showed its resilience with growth of 2.8 percent despite having to cope with the impact of November’s Kaikoura earthquake.

A boom in the local technology sector is helping diversify the economy with a greater percentage of Wellingtonians working in knowledge intensive industries than anywhere else in New Zealand per capita, and more people working in tech than in the public sector.

Over the past year nearly 4,000 people moved to the region from overseas and in the year ending March 2016 the regional population rose 1.6 percent to almost 505,000. Wellington City’s population was up two percent in the same period.

Locals are more educated than in other regions with 84 percent of people holding a formal qualification compared with 79 percent across the country. And 28 percent have a bachelor’s degree or higher, compared with 20 percent nationally.

This, teamed with higher annual earnings (averaging $62,330 in the region and $70,000 in Wellington City, with the national average $56,030) and lower-than-average house prices, has made Wellington a vibrant place to set up shop.

Growing season

For the Wellington Regional Economic Development Agency (WREDA) the mission is clear: ensure the region is the most liveable, vibrant and prosperous in Australasia by 2025. CEO Chris Whelan says the city is already well on its way.

A year ago Wellington’s economy struggled to hit the national two percent growth average but in the past 12 months Wellington City experienced growth of more than three percent, Whelan says. And to top that off, more than 11,350 jobs were created in the region.

The latest NZIER quarterly survey shows business confidence is at its highest level since 2014. It shows how quickly Wellingtonians have bounced back after the Kaikoura earthquake, Whelan says.

WREDA is working to further boost confidence and growth through “regional vitals” including talent attraction, retention and growth, a global orientation, innovation and adding new value and distinctiveness.

“This is focusing on what we do best,” Whelan says.

Big-ticket items such as the Roads of National Significance, direct Singapore Airlines flights servicing Canberra, Wairarapa water, and the possible Wellington International Airport runway extension also boost growth and confidence in the region, Whelan says.

On the look out

One of the most pressing of the region’s vitals is talent attraction – and that means taking advantage of the blossoming tech scene.

With a higher percentage of people employed in the tech space per capita than anywhere else in the country, coupled with expertise and a creative edge, Wellington has a unique and exciting economic path, Whelan says.

More than 51 percent of those in the region work in high value-added, knowledge-based jobs, compared with 36 percent nationally. Those Wellington jobs make up 48.9 percent of its GDP, compared with 31.9 percent nationally.

Local government, WREDA and the wider community have responded to this boom with organisations such as the Mahuki Innovation centre in Te Papa, BizDojo and Creative HQ popping up across the city.

“The region is geared toward technology and innovation,” Whelan says.

One WREDA initiative is LookSee Wellington, which will bring 100 mid-to-senior level tech professionals from around the globe to Wellington where they will attend a series of prearranged job interviews and be shown around the city. The 100 successful candidates will travel to Wellington in May. The cost of their flights and accommodation will be covered.

“Look See is specifically targeted at attracting tech talent to the region,” Whelan says. “Over the last three and a half weeks we’ve had 80,000 expressions of interest and more than 12,000 confirmed registrations.”

Culture makes the yoghurt

As the old saying goes, culture eats strategy for breakfast – and Whelan agrees.

The DNA of Wellington – wild with unique topography – has created an important culture of coming together as a community, he says.

“What grows cities and regions over time is the ability to attract people because they want to share ideas, they want a sense of meaning and purpose. There’s no doubt in my mind that Wellington facilitates that.”

He says some regions are more transactional but Wellington is far more collaborative and collegial.

“[People] know that in Wellington they have the highest skill base per capita, the highest salary base per capita, and combined with the liveability it means staff can afford houses and their children can go to good schools,” he says.

The comeback

While Auckland is the country’s largest global city, Wellington shouldn’t try to compete with that, Deloitte CEO Thomas Pippos says.

Pippos says former PM John Key was being “a bit colourful” when he said Wellington was dying but admitted the region had lost its way.

At the time, the capital was suffering slow growth, a clear juxtaposition to what was happening in Auckland where large immigration and a government-focus sought to transform it into a global city.

However, Pippos says any corporate or government creep north is more perception than reality and Wellington’s economy is seeing real growth.

New Zealand as a whole has been affected by globalisation and multinational work has become a fraction of what it was. Pippos says the hollowing out of multinationals affected the capital but it has been backfilled.

“If there’s a void, the void gets filled. There are now businesses and large public companies that are headquartered in the city that weren’t historically … the likes of Meridian and Contact, Xero, TradeMe and Z Energy.”

New York, Paris… Wellington

The way forward for Wellington is to join the list of global cities, Pippos says.

“New Zealand needs to create three global cities. Partly to diversify the risk and also to spread the infrastructure burdens.”

As the second largest regional economy, it’s important Wellington keeps productively contributing to the national economy and continues to take advantage of the industries that are blossoming, he says.

Recent leadership shown by local government and businesses have made a big difference in returning the city to a thriving hub, Pippos says.

“Wellington has been really successful at creating an environment where a new generation of SME businesses, particularly in the tech sector, seem to have flourished.”

Regions will continue to grow in their own way, and while there will always be aspects of competition, they need to complement each other, he says.

Better bureaucracy

Being able to catch the country’s Minister of Defence eating a sandwich on The Terrace is a very distinctive characteristic of the Wellington region.

And housing the largest bureaucracy in the country comes with its share of opportunities, Pippos says.

“Central government is looking to innovate and be more successful in the way it delivers its services, and the tech sector has a massive client opportunity.”

Already Creative HQ is facilitating that relationship with its R9 Accelerator.

Creative HQ’s Brett Holland says the connection allows government to experience and learn from innovation in their sectors first-hand.

It’s not just business in the city with aspirations of growth and innovation either, with the region’s tertiary institutions such as Victoria and Massey universities setting their sights on increasing enrollments.

With the city’s interspersion of universities in the CBD, the region could be geared to becoming even more of a student town, leading to more knowledge, growth and – in all likelihood – more craft beer. We’ll drink to that.

Idealog has been covering the most interesting people, businesses and issues from the fields of innovation, design, technology and urban development for over 12 years. And we're asking for your support so we can keep telling those stories, inspire more entrepreneurs to start their own businesses and keep pushing New Zealand forward. Give over $5 a month and you will not only be supporting New Zealand innovation, but you’ll also receive a print subscription, an Idealog t-shirt and a copy of the new book by David Downs and Dr. Michelle Dickinson, No. 8 Recharged (while stocks last).