Diversification

Editorial

Diversification

May 13 2019 by David Wallace, Chair, Startup Queenstown Lakes Tru

Is our economy no longer serving the community’s interests? More than half of all employees in the Queenstown Lakes economy are employed in tourism. This industry is the backbone of our economy but having most of our eggs in the tourism basket is neither wise, nor practical. Recent pushback on development at Ladies Mile, debate around the airports’ focus on corporate growth over community impact, and the ongoing conversation around affordable housing and working wages are indicators that residents want something to change.

We have reached a critical junction point. Are we destined to be a tourism-only town, or can we diversify our economy with more industries added to the mix before it’s too late? Do we need to double down on a single industry? Will more tourism increase wages, create meaningful career opportunities, or reduce the strain on our housing market? Will more tourism make Queenstown Lakes a better place to live, work, and play? Will more tourism attract the best and brightest to settle here as full-time residents and contribute to the fabric of our community?

Let’s be clear - this isn’t anti-tourism thinking. We have achieved an incredible level of success building a destination with global appeal. As a community we need to discuss whether we want all our eggs in the tourism basket, or do we now prioritise diversification of our economy and spread more of those proverbial eggs around before something cracks?

Let’s put the incredible investment that created our destination to work by attracting and stimulating the next industries in our community. We don’t need to replace tourism, just add to and leverage it. Diversification increases our intellectual, cultural, and economic options to make this place a place that our children can thrive in as they grow up.
Three promising areas have Council support: film, education, and the knowledge and innovation sector.

Ratepayers are investing nearly a billion dollars over ten years on physical infrastructure to deal with where we are today, in anticipation of more of the same. By comparison, we are investing less than 1% of that to diversifying our economy over the same period.

Diversification of our economy is easy to suggest, but hard to achieve. We have a small population, are a long way from key markets, and lack a traditional economic base such as manufacturing or large-scale farming.
So, what do we have? Talent! Our district has a wealth of incredibly talented people – who want to be in this place, our prime asset; this is the gold we haven’t mined yet.

Attracting and harnessing this talent, in this place, is the key to diversifying our economy. Behind the scenes, the work underway is getting traction.

Film Otago Southland is helping boost our film sector. We saw $35 million in production expenditure covering 150 shoots in a single year. The industry employs nearly 200 people, with wages well above average.
In turn, a thriving film industry creates tourism demand. Whether it be Lord of the Rings or the recent production of Wrinkle of Time and Mission Impossible, this work raises the profile of our destination.

On the education front, the numbers are even more impressive. Work by Study Queenstown shows $88m was contributed to the local economy in 2018, employing more than 1,000 people. The sector is growing 4 times faster than tourism in Queenstown (48% vs. 12%) and more importantly, these students attract friends and family spending ($480M to NZ in 2018). These students are also part of our workforce, many working 20+ hours per week.

The recent launch of Startup Queenstown Lakes is the next promising effort to foster high-growth companies with an innovation, technology, or IP edge. These are the types of companies that are able to export innovation both nationally and internationally. We already have numerous innovative firms working here, many that leverage our tourism expertise, as a landing pad to sell services globally including InTouch, SnoPro, Wherewolf, Chomp, First Table and many others.

Creating economic infrastructure that supports entrepreneurs with innovative ideas means that as other industries grow, including film and education, we have a well-paid talent pool activated to create new products and services that can be exported around the globe.

Many of our best diversification opportunities will leverage tourism or support it in the future. Our investment in economic infrastructure boosts our destination status, continuing to attract visitors and talent alike to discover all we have to offer - in a more manageable way.

Sparking diversification is a long game. If we find more ways to tap into the incredible talent of those who call our district home, while supporting those who join the dots, we can grow an economy that better meets the needs of current and future generations.

David Wallace, Chair, Startup Queenstown Lakes Trust
Michael Hesp, Chair, Film Otago Southland Trust

- David Wallace, Chair, Startup Queenstown Lakes Tru
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