Inside Auckland’s innovation corridor

Inside Auckland’s innovation corridor

Space Race

A multicultural city of 1.65 million people, Auckland is developing a vibrant innovation corridor that is creating high-value jobs and attracting talented workers. The corridor has created a strong innovation ecosystem – and sets the theme for Auckland becoming a major innovation hub of the Asia-Pacific region.

From Albany in the north to Manukau in the south – a healthy spine through the middle of the Auckland region – there’s clusters of shared workplaces (such as GridAKL and Smales Farm); incubators and accelerators (such as ICEHOUSE); Massey, Auckland and AUT universities and Crown Research Institutes (for research and development); networking events, professional services and early stage investors.

Along the spine (innovation corridor), a plethora of technology companies – start-ups, small and medium-sized businesses and established multi-nationals – are developing an incredibly wide range of smart new products and planning to sell them into international markets.

The mantra is: Scale as quickly as possible, go global and increase Auckland and New Zealand’s exports, bringing increased prosperity to the local economy.

Endless opportunities

The innovation corridor with its linkages and connections provides endless opportunities, says Patrick McVeigh, general manager Business, Innovation and Skills at Auckland Tourism, Events and Economic Development (ATEED).

“A majority of our advanced companies are located along this spine – as are our main tertiary institutions – and the corridor provides a concentration of intellectual capital and knowledge, and connectivity with talent and skills, and research and development,” he says.

“People, both locally and globally, are now aware that the advanced industries are sitting in the innovation corridor – and this is part of Auckland’s growth story.

“For the second year running New Zealand was ranked No. 1 on the World Bank Ease of Doing Business index, amongst 190 countries, and Auckland is well placed to attract new businesses, investors and talent – who can all tap into the assets of the innovation corridor.

“ATEED’s role is to facilitate and connect the nodes and assets - to ensure that the different industry sectors have the right supply of land, premises and workforce available to support ongoing growth.”

Mr McVeigh says since the innovation corridor stretches from north to south, it spreads the benefits of growth across the Auckland region and creates multiple opportunities for companies of all sizes looking to expand or establish operations here.

“There is, for instance, the choice of offices near the downtown waterfront or Smales Farm, industrial and distribution space at the airport and across South Auckland, or new commercial spaces emerging in proximity to new housing developments at Albany and Manukau. The diversity of opportunities is what businesses and their staff are looking for.”

Economic pulse

ATEED has also created an extensive Auckland Growth Monitor that will attract the attention of investors and new businesses. The monitor is a snapshot of Auckland’s economy and its place on the world stage, and it will be updated annually.

The monitor highlights Auckland’s sectors of competitiveness and provides insight into key regional economic trends since 2000, including an in-depth analysis over the past 12 months.

Alongside the monitor is the Auckland Index – an interactive online tool that is updated quarterly and provides access to the most up-to-date Auckland data which can be personalised and shared.

Over the past year Auckland’s economy continued to grow nearly 4 percent, and unemployment dropped to 4.7 percent, from a high of 8.1 percent in 2010. During 2016 some 30,000 new jobs were created. In that year Auckland featured in the top 20 City Momentum Index (CMI), which covers 120 major established and emerging business hubs across the globe.

The CMI identifies cities which have the most dynamic urban economies and are adapting most rapidly to the imperatives of technological and infrastructural transformation. Referring to Auckland, the CMI report said it is “one of the world’s most sustainable and liveable cities” and “among the most dynamic city economies globally [which] have been able to achieve global reach without significant economies of scale”.

No doubt, Auckland has a growing global recognition of being a destination for business and an important gateway to the fast-growing Asian-Pacific region.

The Auckland region’s economy is worth $85 billion and produces 38 percent of New Zealand’s gross domestic product. There were 2.6 million visitor arrivals in 2017, and construction is booming – 72 long-term cranes are being used for 88 development projects in the city.

Population boom

Auckland is projected to gain 45,000 new residents in 2017 and the population is predicted to reach two million by 2033. The International Organisation for Migration ranked Auckland the fourth most diverse city in the world in its 2015 world migration report, behind Dubai, Brussels and Toronto.

At June 2016 Auckland’s working age population reached 1.28 million with an active labour force of 884,000 – a participation rate of 69 percent. Nearly 50 percent of the labour force are highly skilled or medium/highly skilled.

Interestingly, 28 percent of the labour force was categorised as highly skilled and 44 percent low skilled in 2000, and six years later these proportions had switched to 36 percent and 37 percent.

A skilled and growing labour force operating in the innovation corridor has boosted Auckland’s economy – the labour force increased by 292,400 between 2000 and 2016.

At March 2016, Auckland was home to 184,000 registered businesses, and more than 100 multi-nationals had their Asia-Pacific headquarters here operating mainly in the technology, food and beverage, and commercial services sectors.

In the Ease of Doing Business index, New Zealand was ranked first for starting a business, getting credit and registering property, second for protecting minority shareholders and third for dealing with construction permits – proof that Auckland is a business-friendly and competitive city.

High-value

Auckland is firing on all cylinders in eight sectors of advantage: Technology, commercial services, food and beverage, advanced materials and manufacturing, screen and creative, tourism, international education and construction.

These sectors produce a wide range of high-tech products and services such as ICT, robotics, medical devices, agricultural machinery, financial technology, pharmaceuticals, high-value food, composite and polymer materials, film production, gaming, engineering and architectural consulting.

Mr McVeigh says these competitive sectors provide higher-value jobs and are growing quicker. “They are parts of the economy that add most value to the city – they increase productivity and generate wealth. These types of industries are critically important to Auckland’s long term economic growth,” he says.

“They have performed well since the global financial crisis. They are research and innovation based and focused on global exports, providing better opportunities for Aucklanders.

“We have the opportunity of looking at how to accelerate and facilitate the growth across the city through the innovation corridor.”

AUCKLAND’S GLOBALLY COMPETITIVE SECTORS

Technology

• Auckland is New Zealand’s tech capital - it contributes 48 percent of the country’s tech sector GDP and generating 47 percent of the country’s tech sector income.

• Auckland is home to 66 percent of New Zealand’s top 200 technology companies.

• The tech sector contributed $7.8 billion to Auckland’s GDP (11.6 percent) and $2.83 billion worth of exports in 2015.

• It employs 47,682 people across 8,912 firms in Auckland, including Fisher and Paykel Healthcare, Orion Health, Oracle, Tesla, Microsoft, Huawei, Vodafone, Rocketlab, Datacom and Xero.

Commercial Services

• All major financial institutions, professional services and leading consultancy firms are headquarted in the Auckland region.

• The sector employs 177,890 people and contributed $17.7 billion to Auckland’s GDP in 2016.

• Since 2012, the sector has grown on average 4.2 percent a year, adding 19,000 employees in that period.

• The University of Auckland’s Business School, the country’s largest business school, produces 2000 graduates annually.

• Key companies include Beca, ANZ, KPMG, Deloitte, PwC, IAG and Simpson Grierson.

Film, TV, Gaming and Advertising

• Auckland is home to majority of New Zealand’s screen, music and gaming industries.

• Auckland’s screen professionals are recognised globally for their creativity, innovation, flexibility and cost-effectiveness.

• Auckland generates $2.39 billion or 72 percent of New Zealand screen sector revenue and is home to 45 percent of screen employment (6831)

• The creative sector, employing 30,900, contributes $2.8 billion of Auckland’s GDP.

• The newly-established Kumeu Film Studios is a world-class production facility.

• The AR/VR Garage is a thriving augmented and virtual reality hub.

• Key companies include Warner Bros., Paramount, Huhu Studios, South Pacific Pictures, Grinding Gear Games, Ninja Kiwi, Booktrack, Universal Music Group, Saatchi & Saatchi, MediaWorks, DDB Group.

International education

• More than 83,000 international students enrol in Auckland annually, representing 63 percent of New Zealand’s total enrolment.

• The sector contributes $2.16 billion to Auckland’s GDP and employs 8,730 people.

• London-based Quacquarelli Symonds ranked Auckland 18th in the world in its Best Student Cities survey.

• Key institutions include The University of Auckland, AUT University, Massey University, ACG, Manukau Institute of Technology (MIT), Unitec, Media Design School, Crown Institute of Studies.


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