ISSUES FOR NEW ZEALAND CITIES
David Maré
Adjunct Professor,
Department of Economics,
Waikato University
Senior Fellow,
Motu Economic and Public Policy Research Trust
NIDEA Launch Symposium
November 24th 2010
Cities & the tides of economic and demographic change
• Concentration
– of population; of production
• Connections
– Within cities; Between cities
• Composition
– Demographic Change; Industrial structure
Concentration
• Geographic Concentration is growing
– Internationally, growth in city-regions
– In NZ, Auckland Urban Area’s population share is
c. 30% (and growing)
• Concentration improves outcomes
– . . . and inequality
Concentration – New Zealand
• Density and firm performance are positively related
– 10% higher density => 0.7% higher productivity (mfp)
• 6% - 9% Auckland Region premium relative to Cant, Wgtn, Waikato
– Innovative firms are located disproportionately in cities
• Auckland wages and productivity
– Auckland firms have 25% higher (labour) productivity
• Higher premium for industries that are over-represented in
Auckland and concentrated within Auckland
– Auckland wages are 7% higher
• Much larger premium at the top of the distribution
Connections
• Connections within cities
– Beneficial interactions at small spatial scale
– The paradox of ‘placeless’ technology
• Its use complements face-to-face contact
• Cities (and regions) depend on each other
– Connectedness more costly in a long thin country
• Global connectedness
– Flows of goods, ideas, people, money
International Connectedness – Dairy products
Source: Blayney & Gehlar (2005)
International Connectedness – Passenger links
London
New York
Sydney
Source: Derudder & Witlox (2005)
Composition
• Changing economic composition
– Large cities gain from specialisation and diversity
• Cities favour firms that benefit most from these
– Smaller cities specialise in industries
• Changing demographic composition
– Geographic dimensions of population ageing
• Cities are younger and more skilled
– City growth through entrants (Immigrants)
Challenges
•
•
•
•
Congestion
Coordination
Cultural change
Climate pressures
– Sprawl v intensification
• Competitive advantage
Research Directions
Concentration
• Concentration and firm
productivity
– For which firms?
– Price effects
• Concentration and skills
• Optimal Size & Urban Form
Connections
• The Interdependence of NZ
system of cities/ regions
– Transport & Services links
– Value chains
• NZ cities within Australasia
• Global flows
Composition
•
•
Functional specialisation and competitive advantage
Regional cascade of demographic change
−
−
Ageing;
Migration
Thank you
dave.mare@motu.org.nz
www.waikato.ac.nz/nidea