Expansion of primary production leads to many opportunities

Press, 8 May 1982, Page 20

Expansion of primary production leads to many opportunities

Firms going out of business in the main centres of New Zealand were only one side to a shift in national economic strategy, Mr Brian Easton, director of the Institute of Economic Research told the Canterbury Chamber of Commerce seminar on regional growth. "Less obvious, but equally as important, firms are being set up and expanding in other areas, particularly primary production, primary processing, and the . servicing of these sectors,” he said. The primary base of the economy was expanding, creating opportunities for primary processing and servicing. Traditionally the primary base was in pastoral farming. “Today, horticulture, agriculture, fishing, forestry, tourism, and energy have an increasing role.” The broadening of primary irocessing in traditional 'ields such as dairy factories produced wide ranges of cheeses, skins were used as the base for leathergoods, and more than half the national wool clip was scoured: these developments would be paralleled by the processing opportunities for the new primary industries. “Nor should we forget we have become exporters of wool-scouring machinery and dairying machinery, and in principle we could aspire to export carpet-making

machinery and irrigation equipment.” New Zealand’s economic strategy had been clearly switched from the processing of imported materials to processing of material produced by the primary industries. “There is a switch from metropolitan centres near ports, particularly Auckland, to regions with strong primary bases.” In the last five years all four of the country’s metropolitan centres had performed poorly. “This is hardly news to the citizens of Christchurch, but it may be news that even the city of Auckland experienced net outward migration,” said Mr Easton.

“The urban growth centres of the next decade will be those whose hinterland have good primary development and whose industrialists seize the opportunities the hinterland offers. "Seizing new opportunities includes identifying new products, new technologies, and new markets. To do this it will help to have a service industry with a strong educational and research orientation and a high-quality labour force.” It would also help to be the centre of a good cheap transport and communications network, said Mr Easton. The changes would rely heavily on high-quality, innovative management “They may well expect revolutionary changes in their firms over the next decade, and they will have to explode the imagination and leadership to introduce changes which are both

economically and socially efficient. “It may well reduce the dominance of Auckland in the New Zealand economy... the other metropolitan centres have about as much access to the entire Australian markets as Auckland does." C.E.R. was also likely to affect markedly ' industries which' did not directly export, or compete against imports. "These include transport, retailing and the service sector. The impact is uncertain, except that the more efficient and innovative firms have a better chance of surviving." Closer economic relations with Australia were likely to favour the country’s new industrial strategy, Mr Easton told the seminar. C.E.R. would discourage importprocessing manufacturing and encourage manufacturing based on primary-goods processing.