Economic development.  We hear the term a lot.

We have a Minister of the Crown, Steven Joyce, charged with

“The thinking it took to get us into this mess is not the same thinking that is going to get us out of it.”
developing us economically.  Which does not mean that he does it cheaply.  The Ministry of Economic Development, now subsumed by the Ministry of Business, Innovation and Employment, has a stated purpose to “Grow New Zealand for All”.  They will do this by “helping businesses to become more productive”, by providing “more jobs” and increasing “the opportunity … to participate in more productive and higher paid work.”

NZ$5These are lofty goals that have a primary focus on business.  That primacy is reflected in the government’s Business Growth Agenda which they describe as “an ambitious programme of work that will support New Zealand businesses to grow …”

Similarly, Auckland Council’s new Economic Development Strategy has a primary focus on business growth, innovation and exports.

Not to be left behind, the Waikato Regional Council have published a draft Economic Development Strategy for discussion.  The title of that document, “Waikato Means Business: …” is more than a play on words.  It too is focused on businesses being the engines of growth.

I attended one of Waikato Region’s seminars last week and left feeling unsettled.  I was reminded of Schumacher’s subtitle to his 1973 book “Small is Beautiful: a study of economics as if people mattered.”

My parents’ generation were better off than their parents.  And we in turn, enjoy better health and wealth than my parents had. But my children may not see a similar gain.

I cannot ascribe those gains to be a consequence of purposeful economic development strategies.  More probably, they were a consequence of education and plain hard work in a growing economy.

Exhorting people to work hard was the likely objective of Benjamin Franklin when he published the proverb “Early to bed and early to rise, makes a man healthy, wealthy and wise” in his 1735 annual journal “Poor Richard’s Almanack.

Today, it seems that a better education and working hard is not enough.  Yes we do work hard, but we are compelled to do so within the guidance of a plethora of economic development plans and strategies.

Which begs the question: just what is “economic development”?

Many who talk about development, actually mean growth.  Like the three strategies mentioned above, economic growth has come to mean growing the market value of the goods and services produced in their respective economies over time.

This growth requires more infrastructure such as housing, roads and hospitals and more resources like energy and minerals.  As Auckland is experiencing, growth feeding upon growth causes environmental and social conflicts that are difficult to resolve.

There is another way to look at economic growth.  Rather than growing the number or girth of things, we could seek to grow the wellbeing, value and quality of life of our existing population.

The first view of economic growth is simply not sustainable.  It has resulted in an economy that is in a mess, is inequitable and so complex that it is difficult to see a way out of the mire.

As Albert Einstein said, “The thinking it took to get us into this mess is not the same thinking that is going to get us out of it.”

The second view of economic growth is personally appealing but is often seen as a consequence of existing economic strategies rather than a driver of them.

A strategy focused on what Councils do best, place-making and the creation of communities where talent wants to live, would seem to offer more potential than a strategy based on identifying businesses that will grow.