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Abstract
This paper outlines how regional development policy in New Zealand has attempted to reshape the organizational and institutional foundations of regional growth and innovation since the government initiated the implementation of growth and innovation-focused policies in 2000. Dealing with the governance and the economic dimension, the paper elaborates on the challenges encountered in different regional environments that range from metropolitan areas to remote rural regions. The paper outlines New Zealand's institutional and economic framework and the set of programmes used to foster regional development and innovation. Principal lessons from New Zealand's experience are the importance of the institutional set-up in regions, the need to tailor initiatives to different regional contexts, and insights into the complex relationship between regional development and regional innovation policy.
Notes
1. The paper represents the personal views of the authors and does not reflect the official position of the Ministry of Economic Development or the New Zealand government.
2. Untraded interdependencies include institutional norms and values such as trust, reciprocity and cooperation, as well as regional conventions inherent in labour markets and public institutions (Storper, Citation1995, Citation1997). These interdependencies are vital to economic and organizational learning and coordination. They are also based on tacit knowledge, that is, knowledge that is collective rather than individual and that cannot be removed from its human, cultural and social context. In other words, it is knowledge that “is more territorially-specific than is generally thought” (Morgan, Citation1997, p. 495).
3. It is important to note that there is a high level of innovation in farm technology, reflecting New Zealand's competitive position in that sector. This innovation activity is largely based in rural areas.
4. The RPP has been in operation for 4 years. The cluster programme started in 2002 following a pilot and the RPDF commenced in April 2002.
5. Maori are New Zealand's indigenous people, comprising 14.7% of the population. Pacific people account for 6.5%.
6. It is important to note that some of the institutional problems mentioned are linked to New Zealand's political set-up. The existence of 74 Territorial Local Authorities does not facilitate smooth institutional cooperation.
7. This point still holds even if it is under consideration to allow the Auckland region to proceed with up to four MRIs (at a combined total of $ 8 million). Given that the region accounts for 30% of New Zealand's population, it could be argued that only funding of $ 25–30 million would create incentives symmetric to those for some of the small-to-midsized regions.
8. Two types of reciprocity have been identified (Coleman, Citation1990; Putnam, Citation1993). Diffuse reciprocity refers to a continuing relationship marked by exchanges that at any given time may be unrequited, but over time will be repaid and balanced. In contrast, specific reciprocity refers to simultaneous exchanges of items of roughly equal value. The latter concept indicates a lack of trust and points to a relationship not conducive to long-term cooperation.
9. An alternative explanation would be that conditions in these regions have allowed cooperation to proceed on the basis of specific reciprocity while in big regions the number of players and divergent interests have made such an outcome less likely or more time-consuming.
10. The concept of ‘levelling up’, which originates from UK regional policy, envisages regional development policy that helps lift the performance of lagging regions to the level of the current national average while at the same time helping high-growth regions to perform even better.
11. NZTE was created in 2003 through a merger of Industry New Zealand and Trade New Zealand.