Some feedback on Dunedin's Economic Development Strategy

15 June 2012 (but submitted today)

The Project Co-ordinator
Dunedin City Council
PO Box 5045
Dunedin

Submission on the Draft Dunedin Economic Development Strategy of the 8th of May 2012.

Submitters’ Names: Blueskin Resilient Communities Trust (attention: Scott Willis)
Address: 31 Hill Street, RD2 Waitati, 9085 Dunedin District
Phone (day): 03 4822048
Phone (evening): 03 4822249
Email: waitatienergy@gmail.com
Table of contents
1
1 Overview 2
2 Specific Recommendations 3
2.1 Economic 'Development' or Economic 'Resilience'? 3
2.2 Stakeholders 3
2.3 Economic Risk 4
2.4 Energy and Economic Activity 4
2.5 Comparator small knowledge cities 4
2.6 Building Economic Resilience - South Island Examples 5
2.7 Building Economic Resilience - Dunedin's Future .6
2.8 Distributed Development..............................................................................................................................7
2.9 Charitable Sector Contribution...................................................................................................................8
3 Other Submissions and Initiatives we endorse 9

We, Blueskin Resilient Communities Trust, wish to speak to our submission

1 Overview

Thank you for this opportunity to submit to the Draft Dunedin Economic Development Strategy.

The Blueskin Resilient Communities Trust (BRCT) is a registered charitable trust formed in 2008 out of the need to support local sustainability and transition initiatives in a planned and structured way. In 2009 BRCT was selected to be one of five national Climate Change Hubs supported by the Hikurangi Foundation. Our core activity is supporting the development of a resilient energy system in Blueskin Bay and we act as an umbrella organization for a number of community groups working to build local food production and sustainable transport. Jeanette Fitzsimons is our patron.

We appreciate the important work on building strategy and the planning undertaken by the Dunedin City Council in a particularly challenging financial environment.

We believe however that the DCC with its other partners in this strategy to date can make substantial improvements by re-casting the DEDS as a preliminary document and engage in comprehensive engagement in a fresh start with all stakeholders with the goal of developing a fully fledged ‘Economic Resilience Strategy. This document appears to have had heavy investment from the invited stakeholders, and does not give the impression that those now being ‘consulted’ will be able to change in any signficant way the direction of the strategy. We believe that the DCC and the partners involved in this strategy should have as a top priority regaining the trust of the community, in light of divisive economically costly projects in recent times. We are particulary concerned with the lack of attention given to energy and the ‘business as usual’ assumptions within the strategy. Building economic resilience reuqires careful attention to what we have already, and the current and future risks. We strongly advocate greater engagement, greater collaboration and focus on reinforcing productive infrastructure. We also suggest greater alignment with existing strategies/plans (i.e. the Spatial Plan) and consideration of existing DCC reports (i.e. Climate Change Report and Peak Oil report).

We, Blueskin Resilient Communities Trust, wish to contribute in a forum.

2 Specific Recommendations
2.1 Economic ‘Development’ or Economic ‘Resilience’?

‘Economic Development’ is a loaded term in use since 1949 , and linked explicitly to the concept of ‘Economic Growth’, which has been severely battered not only by criticism (such as the Club of Rome 1972 publication “The Limits to Growth” and its 2004 update “Limits to Growth - The 30 Year Update”) but also by the increasingly hard limits of limited energy resources (Peak Oil) and an increasingly unstable climate (a feature of climate change). ‘Economic Resilience’, on the other hand, boils down to transactions between people to enable systems and settlements withstand shock from the outside, while ensuring flexibility (‘modularity’) in all the basic things that support and nourish us. The idea inherent in ‘Economic Resilience’ is that we should ensure that economic activity must support us, and not the other way around. ‘Economic Development’ may be an appropriate activity in strict space and time limited situations, but best contemplated within a larger, more robust framework of ‘Economic Resilience’.
• We suggest renaming this document “Economic Resilience”.
• We suggest a refocus on elements that can help build ‘resilience’ in light of the economic challenges we now face, through a re-working of the document before it becomes official strategy (see below).

2.2 Stakeholders

Significant economic interests are represented in the small group involved in preparing this document and they provide good representation of some of the current economic activity in the city. However, as a future-looking document concerned with developing Economic Strategy for the whole of Dunedin, it is unfortunate that a wider engagement net was not cast in the preparation of this document. All Dunedin citizens are stakeholders in Dunedin’s economic future and by not valuing their participation in this draft document they have effectively been sidelined, potentially alienated and certainly disenfranchised. The Draft Dunedin Economic Development Strategy as it stands has a focus already shaped by the small group of stakeholders involved in its creation and as such wide participation in the development of the strategy is not possible, unless a significant re-framing occurs.
• We suggest valuing the current Draft Dunedin Economic Development Strategy document as a preliminary discussion document rather than as a strategy document as such – with a refocus of ‘strategic themes’ required.
• We suggest instigating a process whereby this document becomes a ‘living document’, allowing the participation of a wider group of stakeholders.

2.3 Economic Risk

Dunedin is a small city set in a global context and in a global economic situation in which it exerts minimal control. Currently, the three great economic realities within this context are: Economic disarray (The system within which global trade and economic development have been conducted since at least the end of WWII is in a state of disarray and possible collapse); Resource depletion (The main resources that have fuelled economic life over the past century or more are now either drastically depleted and increasingly expensive (oil), or problematic (coal)); Climate change (In any case, the continued use of these energy sources is highly undesirable because of the dire effects on the global climate being caused by gas emissions from the burning of oil and coal.). Furthermore, with its explicit expectation that China will save us, this document seems unaware of the risk of hoping for a powerful saviour rather than looking at our own strengths and attributes. What is surprising is that key DCC commissioned reports such as the ‘Peak Oil Vulnerability Assessment for Dunedin’ and appendices, and the ‘Climate Change Impacts on Dunedin’ report do not appear to have been considered in the document to date. We expect that some internal logic should apply in the development of strategy and attention must be given to existing analyses of economic risk.
• We suggest revisiting ‘challenges’ and incorporating existing report analysis and any new information to hand – such as the risk of dependence on one large and distant country and possible economic ties for salvation.
• We suggest significant attention be given to considering the importance of the risk and challenges to economic activity in Dunedin.

2.4 Energy and Economic Activity

Affordable energy has underwritten all economic activity since the industrial revolution. It is surprising therefore that energy is represented in this document as a mere sidebar, almost as an afterthought. Furthermore, where energy is mentioned, there is a contradiction between the economic benefit seen to flow from fossil fuel extraction (which, in and of itself increases the economic challenges, particularly those related to climate change) and the stated desireability to accelerate the decarbonisation of the local economy, and lowering carbon emissions. The era of cheap energy is over, and we cannot afford to ignore this fact. Furthermore, to secure not only economic benefit, but more importantly, a livable climate, we must reduce our reliance on fossil fuels rapidly and de-carbonise our city as much as possible.
• We suggest reformulation of this document with low-carbon energy as its core theme.
• We suggest incorporating analyses from the ‘Peak Oil Vulnerability Assessment for Dunedin’ and appendices, and the ‘Climate Change Impacts on Dunedin’ reports, but with attention to the latest updates.

2.5 Comparator small knowledge cities

There are a number of potential pitfalls in seeking to find comparisons. The small cities that feature in the Draft Dunedin Economic Development Strategy (Cambridge, Leuven, Salisbury, Kingston) demonstrate surface similarities however it is unlikely that the elements that make these small cities currently successful can be particularly useful in assisting Dunedin substantially, in our very different national and cultural context, with our significantly different economic heritage. The University and Polytechnic are clearly economically important in Dunedin, as in many other small cities such as those used here as comparisons, however it cannot be simply assumed that business as usual will maintain a flow of fresh students self-funding their studies and consuming within the city, or, given the current research funding priorities of our current government, that there will be ‘nanotech’ or other saviour technology/intellectual economic successes.
• We suggest caution in assuming such comparisons offer lessons for Dunedin given the current global economic situation.
• We suggest a refocus on more relevant and local/regional/NZ success stories, that, despite their modesty, often offer some protection from economic shocks.

2.6 Building Economic Resilience – South Island Examples

2.6.1 Auckland Island Pigs Project
From an investment of approximately $20, 000, the Southland economy has benefitted to the value of approximately $12, 000, 000 as a result of the Auckland Island Pigs Project according to Invercargill Mayor Tim Shadbolt.
Lesson: The Auckland Island Pigs Project is the result of thinking outside the square, working with available local resources and brokering contracts where necessary.

2.6.2 Southern Institute of Technology (SIT) Zero Fees Scheme
Faced with economic challenges at the SIT and Southland in general, the SIT success in boosting not only the institution of the SIT, but also the Southland economy (SIT had a one million dollar surplus after the first year of the scheme) is remarkable.
Lesson: Collaboration and co-ordinated approach, combined with strong future vision.

2.6.3 Central Lakes District and Pioneer Generation
When the Central Electric Power Board became Central Electric Ltd in 1993, the assets moved from an authority to a trust. In 1999 (electricity sector reform period) some assets were sold (retail and lines businesses) and put into a charitable trust (Central Lakes Trust), while others were retained (generation assets) and Central Electric was renamed Pioneer Generation, responsible for developing and operating generation assets and returning profits from that operation to the Central Lakes Trust. The Central Lakes Trust received $155 million in assets in 2000 and has distributed grants totalling more than $53 million in the ten years to 31 March 2011 throughout the Central Lakes District. Grants are directed at public benefit.
Lesson: The immense value of strategic infrastructure (particularly energy).

2.6.4 WindFlow Technology and Christchurch City Council PPA
In 2003, a local high-tech NZ company, Windflow Technology Ltd, installed their prototype 500 kilowatt wind turbine at Gebbies Pass, near Christchurch The Christchurch City Council agreed to purchase all the electricity generated by the turbine, which was almost sufficient to power the Council offices in Hereford Street (approximately one million kilowatt hours a year). Since then Windflow Technology Ltd has built and installed 97 turbines for the Te Rere Hau wind farm near Palmerston North, with excellent performance and returns, and has signed a significant agreement with US based General Dynamics Ltd, while also moving into the wind farm market in Scotland.
Lesson: Local Authorities as significant energy consumers with a long-term vision can facilitate innovation and economic success for their cities and their communities.

2.6.5 Community Visioning in Blueskin & Distributed Development
The Blueskin Resilient Communities Trust (BRCT) was formed in 2008 from a 2006 community visioning exercise. While maintaining a full-time employee since 2008 and a leased community office, Trust activities have brought over $1 million dollars into the Dunedin economy to date through job creation (2009 WEP Retrofit Project, the current BEP project), events, research and contracts, while attracting national and international interest. BRCT works closely with the Centre for Sustainability, Agriculture, Food, Energy and Environment and the Otago Energy Research Centre and is now engaged in developing New Zealand’s first community owned and managed wind cluster.
Lesson: Sometimes the answers are in our own backyard and can be fortified and strengthened with assistance in terms of brokerage and increased collaboration. Securing resources for the ‘Distributed Development’ approach will enable repeat success stories.

2.6.6 Powerhouse Wind Dunedin High Tech
Powerhouse Wind Ltd (PHW) was established in 2007 to develop an appliance-like wind turbine as a complement to other distributed generation technologies for the future of smart grids and renewable generation. Dunedin has proved an excellent base for this development with essential inputs on the engineering side from Dunedin’s well established engineering cluster, on the testing and evaluation front from the association with the BRCT and the University of Otago (Otago Energy Research Centre), and on the design and visual design side with the University of Otago and Otago Polytechnic.
The Economic Development Unit at the DCC has been instrumental in helping PHW investigate partnerships, access potential Tech NZ (MSI) development grants, and take part in useful promotional opportunities. The one factor that has held PHW back and cost a lot of time has been access to angel investment.
PHW are currently working with the Otago Polytechnic on a solution to getting the Thinair product from a field test prototype to pilot production, and are hopeful that this initiative, and the extension of the existing development relationships will result in a commercial product, a significant number of high quality jobs in the Dunedin economy, and an expanding company.
Lesson: We can have all the other input factors and goodwill in the city to make technology startups work, but without modest access to angel/venture/development grant funding, they will fail.

2.7 Building Economic Resilience – Dunedin’s Future

2.7.1 Local Food
There are already a growing number of community networks that function to strengthen the informal economy, particularly in those areas related to local food production, distribution and consumption. The informal economy boosts the formal economy as people chose to live and invest in strong, well functioning communities.
Lesson: Seek regulations that facilitate all local economic activity with a resilience focus to build stronger community and strengthen the local economy.

2.7.2 Low Carbon Transport
Dunedin’s growing cycleways are attractive not only to commuters but to a growing number of low-carbon tourists.
Lessons: Careful future planning with known risks in mind can help build economic resilience both through such things as low carbon tourist dollars but also enhancement of essential transport infrastructure. Direct support of low cost transport business (such as electric bike retailers) can also help build economic resilience.

2.7.3 Local Renewable Energy
The Blueskin wind cluster project being developed by BRCT is only one community energy idea within Dunedin and it has become a powerful symbol for grass-roots social enterprise both within and well beyond Dunedin.
Lesson: Concrete examples of success will foster emulation and build economic resilience and local energy infrastructure. Supporting such initiatives will provide multiple dividends to the whole city.

2.7.4 Eco-Friendly Co-Working Hub Dunedin
A Hub is a co-working space which appeals to co-workers who want a meeting point to work from, and develop ideas drawing on the inspiration of other people also committed to similar ideals of collaboration, social justice and ethics. There is currently no place for ‘hot-desking’ in Dunedin. Innovative co-working is more than coffee and shared networking, it is enhanced productivity. Progressive employers increasingly allow employees to work anywhere, to ensure greater productivity, and given a chance, more and more people will give up home offices and coffee shops to join co-working schemes.
Lessons: Create a team to develop the idea in partnership with forward-thinking social/green groups, plus University, Business School, Polytechnic, DCC and major companies (they could become corporate/strategic members). Consider possibly creating mini-hubs: a hublet in Waitati, connected to Dunedin, yet serving the Blueskin Bay community, as well as others interested to work in the Waitati locale.

2.8 Distributed Development

As in our submissions on the Draft Spatial Plan and the LTP/AP, we applaud and support the DCC’s ‘Distributed Development Approach’. The excellent DCC work in developing the Spatial Plan now needs to be reinforced to allow generation of the 2nd Generation District Plan, and to allow the promise inherent in the ‘Distributed Development Approach’ of increased economic resilience, greater community participation, cost effective action, and strong community support to be realised. A ‘Distributed Development Approach’ promises economic resilience for the council by enlisting the enormous capacity of communities through effective collaboration. We cannot hope for any success by simply relying on existing roles, processes and practices. We are concerned that there does not appear to be any mention of the ‘Distributed Development Approach’ in the Draft Dunedin Economic Development Strategy.
• We suggest enhancing ‘Dunedin’s stand-out advantages’ of a dynamic and engaged citizenry by putting resources into the ‘Distributed Development Approach’ and brokering support for this approach.
• We suggest strengthening support for organisation such as ourselves who are already working hard in our communities under the ‘Distributed Development’ approach.

2.9 Charitable Sector Contribution
The Draft Dunedin Economic Development Strategy seems to have overlooked the enormous economic contribution of the charitable sector. The charitable sector in NZ contributes $14.2 billion to the economy or is 8.5% of GDP . In our own area, our trust (BRCT) is only one charitable organisation working for our community and contributing to the local economy, and to do so we have partnered with the Hikurangi Foundation, who, in turn help broker philanthropic and pro-bono support. There are many smaller, local charitable groups whose work is not valued in the Draft Dunedin Economic Development Strategy as it stands but whose work could equally benefit from recognition of the economic value that the charitable sector brings to the local economy, not only in attracting the philanthropic dollar and additional pro-bono expertise but also in strengthening community and promoting actions aimed at acheiving greater resilience.
• We suggest focussing on building linkages within our borders, and explicitly recognising the charitable sector’s economic importance through engaging Dunedin’s charitable sector as a major stakeholder group in the re-working of the Draft Dunedin Economic Development Strategy into the Dunedin Economic Resilience Strategy.

3 Other Submissions and Initiatives we endorse

We will confer with other community groups and interested parties prior to any forum that the group considering this submission organises.

We thank you for your attention to this group submission

Yours sincerely,

Scott Willis
For Blueskin Resilient Communities Trust