Waikato regional economic profile - Waikato Regional Council

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Capital productivity is value added divided by the consumption of fixed capital (e.g.buildings and equipment). Average Waikato capital productivity was $6.42 of valueadded per $1 of fixed capital consumed. This was about the national average of $6.45.Capital productivity can be increased by using labour and capital more efficiently, or bysubstituting natural capital for man-made capital or labour. However, this woulddecrease the productivity of natural capital. Natural capital is more difficult to measureand growth which depletes natural resources is unsustainable in the long term.Labour and capital productivity by sector are shown in figure 116. The electricity, waterand gas sector has the highest labour productivity by far, $570,000 per employee. Thisis because utilities sectors are very capital intensive, and capital and labour aresubstitutes in production. The capital productivity in electricity, gas and water isrelatively low. The construction and real estate sector has the next highest labourproductivity ($109,000) and high capital productivity as well ($20 value-added per $1 ofcapital). However, this result was fuelled by strong growth in property prices in 2007(the latest year for which productivity data is available) and was not a sustainablesource of growth.Sectors with high capital productivity are generally good areas in which to invest morecapital. Similarly, sectors with high labour productivity are good areas in which to“invest” more human capital (training, for example). The sectors that stand out arebusiness and finance services and dairy product manufacturing because they haveboth high labour productivity and high capital productivity.Manufacturing sectors tend to be characterised by high levels of capital per employeeand high labour productivity. Meat, food, and other (e.g. textile, chemical, basic metal)manufacturing all have high labour productivity and relatively low capital productivity.High value (equipment and machinery) manufacturing has lower labour productivity.Figure 116: Waikato labour and capital productivity by sector (2007)Page 122 Doc # 2069885
10 Capital10.1 SummaryA financial system that provides firms with adequate access to finance on acceptableterms is crucial to enabling the country to achieve its full economic developmentpotential. 377 Robust data on capital are almost nonexistent at the regional level. Itappears that there a number of sources of finance available for firms at various growthstages and relatively few young company finance deals have been recorded in theregion. The vast majority went to Hamilton firms, mostly to firms in the software sector,followed by pharmaceuticals, biotechnology and life sciences. There are no Waikatofirms listed on the stock exchange.10.2 Sources of financeTable 16 shows the sources of finance available for firms at various growth stages,some of which are discussed in this section.Table 16: Sources of financing by business growth stage 378Concept Inception Survival Growth Expansion MaturityOwnersFriendsRelativesOwnersFriendsRelativesBanksGovernmentgrantsInstitutionalNew partnersProfitsCapitalmarketsProfitsCash flowInternationalfinancingSuppliersCustomersVentureGovt grantsSuppliersCustomersVentureGovt grantsLicensingLeasingJoint Divestiture ofventures segmentsThe Reserve Bank of New Zealand publishes Money and Credit Aggregates that arebroken down by sectors but not regionally. Information about debt funding 379 at theregional level is not available from the banks also.Equity 380 markets provide an important source of financing for some companies andindustries. Certain sectors, such as research and development-intensive industries,tend to be more dependent than others on issuing equity to finance investment. Theseindustries are expected to grow more rapidly in countries with better developed equitiesmarkets. 381Business angels 382 and venture capital funds 383 are a distinct part of the larger marketfor financing small firms in that they focus on higher-risk ventures. Angel investors aregenerally involved in the early development of an enterprise, with venture capitalfinancing coming at a later stage. The firms that are financed by both groups often377Ministry of Economic Development (2011a) Access to finance.378PwC (undated, p. 1).379A debt is an obligation owed by one party (the debtor) to a second party, the creditor; usually this refers to assetsgranted by the creditor to the debtor. Debt increases the debtor’s liability and must be paid back over a fixed periodof time. Debt funding can be short or long term and come from many sources with many different financing options.Sources include banks, finance companies, trade credit, factoring companies and credit card facilities.380Equity finance refers to the provision of funds in exchange for a share of ownership of the firm. It is an alternativeform of financing to debt.381Capital Market Development Taskforce Secretariat (2009, p. 6).382An angel investor is a wealthy individual or professionally organised firm or group who invest in entrepreneurial firms.Although angels perform many of the same functions as venture capitalists, they usually invest their own capitalrather than that of institutional or other individual investors.383Venture capital refers to independently managed, dedicated pools of capital that focus on equity or equity-linkedinvestments in privately held, high-growth companies. Many venture capital funds, however, occasionally makeother types of private equity investments. Outside the United Sates, this phrase is often used as a synonym forprivate equity.Doc # 2069885 Page 123
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Waikato Regional Council Technical
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Table of contentsAcknowledgementLis
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11.2.5 Industry Training Organisati
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The Government aims to create an en
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TransportAlmost a quarter of total
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Regional competitivenessRelative pe
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WRC identified three flagship goals
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WRC adopted the concept of green gr
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Figure 4: Real value of goods and s
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4. Foster policy learning through b
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economic development strategy for t
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Figure 5: Economic value added by s
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Figure 8: Unemployment by region, 2
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Figure 12: Median household and per
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Figure 15: Deprivation in Hamilton
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In addition to dairy products contr
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In May 2009, DairyNZ launched the S
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New Zealand exported $716.9 million
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Wallace Meats: is a subsidiary of W
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Figure 29: Location quotient and em
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Figure 30: AgBio New Zealand produc
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Five of New Zealand’s six largest
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Most providers of high valueservice
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When measured for its value to the
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is not considered by this profile t
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4.2 Transport4.2.1 RoadThe current
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Local roads in the Waikato region a
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Waikato to, or from, the Bay of Ple
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Approximately 40 per cent of all ex
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Figure 58: International arrivals t
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The New Zealand Energy Strategy has
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Figure 62: Transpower transmission
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Coal has been mined in the Waikator
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4.3.4 OilWaikato does not produce o
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etween 75 and 100 years. 202 The de
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Taupō District CouncilWater supply
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4.4.3 Productive water infrastructu
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The surveys identified that there i
Page 88 and 89: RBI has been implemented by the Gov
Page 90 and 91: Figure 76: RBI broadband in the cen
Page 92 and 93: 5 People5.1 SummaryThis chapter des
Page 94 and 95: Figure 81: Urban population in the
Page 96 and 97: 5.2.3 AgeingFigure 83: Percentage i
Page 98 and 99: Figure 88: Proportion of population
Page 100 and 101: Figure 92: Highest qualification pr
Page 102 and 103: Figure 95: Labour market areas in t
Page 104 and 105: Figure 99: Commuting patterns (2006
Page 106 and 107: Three areas of the Waikato region h
Page 108 and 109: Figure 101: Land uses in the Waikat
Page 110 and 111: 120%100%80%60%40%Land with limitati
Page 112 and 113: 6.6 WaterFreshwater is important fo
Page 114 and 115: Table 10: Current water take author
Page 116 and 117: 7 Institutions7.1 SummaryCentral an
Page 118 and 119: The final report of the Government
Page 120 and 121: Local authority Strategy DeliveryRo
Page 122 and 123: Local authority Strategy Vision Goa
Page 124 and 125: Local authority Strategy Vision Goa
Page 126 and 127: Figure 106: Iwi of the Waikato regi
Page 128 and 129: SettlementprogressMāoriCommercialA
Page 130 and 131: SettlementprogressDeed ofSettlement
Page 132 and 133: Figure 108: Geographic units with 0
Page 134 and 135: Figure 111: Entry rate (percentage
Page 136 and 137: Gas supply 0.44Air transport, servi
Page 140 and 141: have low tangible assets and low or
Page 142 and 143: 11 Innovation system11.1 SummaryAs
Page 144 and 145: Zealand universities (34 per cent).
Page 146 and 147: cent), health (21 per cent) and hos
Page 148 and 149: Figure 124: Waikato ITO trainees (2
Page 150 and 151: The University of Waikato has five
Page 152 and 153: esearch.” 398 Research is essenti
Page 154 and 155: Landcare ResearchNational Institute
Page 156 and 157: 11.4 Business development and growt
Page 158 and 159: Waikato Innovation Park provides se
Page 160 and 161: 12 Key findings and next stepsThe W
Page 162 and 163: There are also a number of opportun
Page 164 and 165: BibliographyAFFCO New Zealand 2010.
Page 166 and 167: Hauraki District Council 2009. Haur
Page 168 and 169: Ministry of Economic Development 20
Page 170 and 171: New Zealand Transport Agency 2010.
Page 172 and 173: South Waikato District Council 2009
Page 174: Waikato Regional Council 2011f. Lan
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Waikato regional economic profile - Waikato Regional Council

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