Grow Wellington, the agency that focuses on accelerating economic development in the Wellington region, is finalising a strategy for developing the high tech manufacturing sector in the region.
If all goes to plan, the Wellington Regional Strategy document will be published on the organisations’ website in the next few weeks, according to Grant Lumsden, senior development manager for high value manufacturing sector at Grow Wellington.
“The strategy comprises of a three-pronged approach. The first is to try and up-skill manufacturers in the region in terms of improving their product development knowledge. Traditionally the manufacturers have been focused on supporting other industries, they have been B2B focused," says Lumsden.
“We believe it is important for people to start thinking about designing and engineering on their own, because if you are just making parts to order then you are really competing with the likes of China, Vietnam or any other low cost sites. Developing that upstream R&D, brand development and design engineering is going to give the businesses more longevity."
The second part of the strategy focuses on helping firms identify potential markets for their products. For this, Grow Wellington will tap into its existing ties with the NZTE, and direct firms to overseas markets that are found to be good fits.
“The third element is about taking advantage of the strong ICT sector in the region. We have a really strong technology sector in the city, and there are a lot of ways in which manufacturers can work with software providers to improve and add to products.
“We have just started a series of forums where we are getting the people who are stamping things out of metal, making parts, moulding things in plastic and getting them to talk to guys who are really in the software space and see if they can come up with ways of working together and collaborating.
"In such collaboration there are opportunities for products that are unique, with which the companies can succeed and there is a lot of IP in it,” says Lumsden.
Grow Wellington conducted its first digital forum last month, and Lumsden has plans to conduct one every two months through to the end of 2015.
The strategy is part of larger changes that have taken place in Grow Wellington over the last 18 months. It is also an attempt to address some of the larger challenges faced by the high tech manufacturing sector.
“One of the things we don’t have in the manufacturing sector in Wellington is a strong startup scene, which is quite unlike the ICT scene, where there is a strong start-up ecosystem for software companies.
"One of the other challenges is around getting new blood into the sector. Product development and commercialisation often demand specific, well-defined skill sets, and getting those skills and the right staff can be a challenge for manufacturing firms. Grow Wellington has a team that works on attraction and brining new people and businesses to the city.
“I guess another real issue is changing the prevalent business model in the manufacturing sector so that you are not competing head on with the lower cost countries around the world. If you have a product that has a high amount of labour content then its going to be a challenge to compete against the likes of Vietnam, Bangladesh or Phillipines. The sector has to develop a mindset of adding more value and doing more with automation,” says Lumsden.
Lumsden also says the sector needs to recognise new business models that are arising in manufacturing, especially with the growing trend towards 3D printing, and be ready to tap into it early on to gain a first-mover advantage and to establish NZ Inc’s lead in the space.
“We would like to see manufacturing contribute more to the GDP. We would like to see manufacturing employ more people, but we have to deal with the fact that overall in all developed countries employment in manufacturing is declining over time. So that’s not something we can change the direction of in NZ.
"What we can work towards is ensuring that even if the sector employs less people, it employs ones that are doing more interesting things. So by having higher earning jobs, we will be able to attract and keep people with higher educational qualifications and they can in turn contribute to the economy in terms of what they are spending,” states Lumsden.
Grow Wellington is charged with implementing the initiatives outlined in strategy document. The agency’s priority sectors include ICT, screen and digital and primary sectors besides high-tech manufacturing.