Andrew Whiteford says that commuters and remote workers can contribute to economic revival of towns, including places like Wanganui

Andrew Whiteford says that commuters and remote workers can contribute to economic revival of towns, including places like Wanganui

By Andrew Whiteford*

Each morning the train station in the small Wairarapa town of Carterton is packed with commuters who do the long trek into Wellington.

Like me, these people have each balanced up the pros of living far out of town against the costs.

The journey takes an hour and a half so the costs are clearly significant.

But we each weigh these costs against the benefits of the more pleasant climate, affordable housing and the opportunities of living on a lifestyle block.

Watching these people do the long trek, I often consider the economic effects of this daily movement of workers. Wellington City provides economic opportunities not available in the Wairarapa.

Commuting enables Wairarapa residents to tap into Wellington’s well-paying and high value-adding knowledge industries, such as financial services, the information technology sector, and other professional services.

If my spending patterns are reflective of the average Wairarapa commuter then there is a significant flow of income from the big city to the country.

While my household earns all its income in Wellington, it spends all but a small portion of it in the Wairarapa. My spending in Wellington is restricted to a couple of lunches each week, the occasional item of clothing, and gifts at birthdays and Christmas.

Among the 4,000 or so Cartertonians that were employed in 2013, nearly 500 of them worked in Wellington City or Hutt Valley. The 2013 census shows that on average those that work in Wellington and the Hutt Valley earn 60% more than those that work in Carterton. These commuters clearly make a significant contribution to the Wairarapa economy. Collectively they account for nearly 20% of all income earned among Carterton residents.

While the train between Carterton and Wellington provides an important economic link between these two centres, over time telecommunication connections will increasingly be the conduit.

Technology such as video conferencing and screen sharing dramatically break down geographical barriers, allowing staff to work remotely. Using this technology I am able to work from home a couple of days a week and many other fellow Carterton residents do the same.

Working from home is a growing trend among professionals in New Zealand.

According to the 2013 Regus Global Economic Indicator, 40% of New Zealand professionals work away from the office for half the week. We have a little way to go to catch up to the UK (42%) and the US (47%).

Flexible working conditions, such as working from home, is an increasingly important strategy for companies to retain and attract talented staff.

Remote working opens up the opportunity for towns that are beyond commuting distance to the large centres to attract professionals employed in high paying occupations based in the major centres.

Many small towns in New Zealand are struggling for survival and bemoan the difficulty in attracting industries with high paying jobs. Most of the high paying professional service industries prefer to locate in the big centres to benefit from the agglomeration effects of being co-located.

The smaller centre’s best chance to tap into these industries is to attract remote workers or those that are close enough to big centres to attract commuters. After a spell in the large centres, young professionals are often tempted to return to the region they grew up in and seek the support of family networks to help raise a family.

Local councils have only limited control over factors which influence their economies, but they can make them attractive places for professionals who are able to work remotely or commute to larger centres.

A vibrant arts and culture scene, pleasant public spaces, top class amenities including well stocked libraries and sports facilities, a good choice of restaurants, schools, and family friendly facilities can all help attract professional workers.  Decent broadband and cell phone coverage goes without saying.

There are a host of towns around the country which will be competing to attract remote workers.

The obvious examples are Queenstown, Nelson and Cambridge.

A less obvious example, but in my mind a town that has turned itself around and is positioning itself to take advantage of the growth in remote workers is Wanganui. It is a pretty town with its heritage architecture, riverside location, and pleasant climate.

The council has put enormous effort into making it an attractive town to live with the redevelopment of the Sarjeant Gallery and Opera Theatre, the Arts Centre and the riverside walk, amongst other projects.  It is a town that is currently enjoying an economic upturn which will reinforce its attractiveness.

Local councils have recently been rushing to finish their long term plans. Their economic development strategies often focus on picking ‘winning’ economic sectors and pushing those sectors. In future plans they could consider the impact of remote workers and how best to attract them.

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Andrew Whiteword the managing director and a senior economist at Infometrics, and is is responsible for Infometrics Regional Service.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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I thin Wanganui faces some unique challenges, and hosting the beast of Blenhiem can't be helping.

Corrections has that chappie well sewn up. there are much worse than him in any town in the country, and more than a few in the major centres.
The issue with regional centres is one of perception not reality. It is percieved that to be successful you need to be close to the action, and this is percieved to be the cities. Whereas the "action" could be where you are. If enough business's opt to locate away from the major centres, eventually the busienss gravity will follow them. In the mean time the significantly reduced costs of existing in the regions can more than make up for the distance. 

Does high speed train have a market in NZ?

Take the Wairarapa example, 500 people riding the train into Wellington each day.  I don't know exact details of how much it costs to build and maintain a high speed train link but I suspect they'll need more than 500 customers a day. 

In regard to technology companies: Retaining talented staff is the big win from an employers perspective. The companies that are open to this are not only retaining their key staff, but gaining very talented extras they would not normally be able to poach.  Soon most companies hand will be forced and will need to allow this.  An intesting question is will people continue to keep choosing to live in the big cities when their jobs no longer require them to?

The big problem that has always faced NZ business aspirations is the country's provincial high school-level attitude and completely amateurish approach to absolutely everything.
 
People are hired and fired on the basis of "coolness" rather than merit, or a lack thereof. Staff aren't hired for being good workers, they're hired for being good friends. It's why there are so many dangerously and criminally incompetent people thoroughly entrenched in every business and genuinely good people being pushed out simply for not being one of the boys (or girls).
 
Perhaps it's that NZ is simply too small to be truly professional in-and-at anything. It's still a case of everything being about "mates," and about "near enough is good enough" instead of about actual quality.
 
Then again, how do we explain away the stellar performances and attitudes of other small nations that still manage to be economic powerhouses, such as Switzerland or Singapore?
 
Let's face it: NZ is a land of hicks.

"Land of hicks"...  except you, of course. 

Yep.

I remember about 20 or so years ago how they were talking about people working from home. And how this was going to cause a colapse in office prices in the city. Maybe it has taken all this time to start to make this change. If so get your money out of office buildings.
 
Perhaps the smaller towns could turn themselves into large retirement villages with lots of great amenities for the elderly.
Just think of all that super money pouring into town.
 

The main issue with smaller towns is a lack of good health care. I know of  alof of elderly who move from provincial centers, like say Whangamata to Hamilton, Whitianga because of a great ability to access health care. So unless the small town can offer that, the elderly wont be coming.

I think there will be a lot of changes to this particular aspect of smal towns in the next 20 to 30 years, as the BBs are retiring and requiring more healthcare.
They have the money and the numbers, they will require the change - it will happen.
.
They vote.

The one thing this article fails to mention is that most big offices just don't trust their staff to work from home.  They want them in the office where they can keep an eye on them. 

Your fairly much right. Right now it's usually the upper crust employees that get to work from home.  The sort if people a business wants to retain and wouldn't need supervising. In the future there will be tools to mitigate the remote supervision issue. But it's not here yet. 

Japan has entire law firms (over 100 attornys) working remotely with one small office for admin etc.

Not too convinced wanganui has turned the corner just yet.. PN hospital still deals with a lot of wanganui patients, and population growth in wanganui is flat to falling. Educational facilities also lacking in wanganui, with PN too close and growing, and still cheap/easy to live in such that investment will always go to PN first leaving wanganui behind. It will be a long time before PN gets so expensive and congested that people choice to live in wanganui and commute or remote in from there

..and hour and a half...presume thats one way, plus the time from home to platform, platform to work..so are we talking 4 hours a day commute?  Thats insane ... must be just an awesome winter experience.... hours of free time during a full moon to play in the garden. 
As for Wanganui, the gummit hasn't helped.  Once had a very strong Doc office...now it's shut and the pointy heads gone to Wellington. Patch protection by Wellington beurecrats always comes at the expense of the regions

Even ignoring the time in the middle, 3 hours a day is down right scary.
Just doing some basic math; thats around 29 days a year of sitting in a train. 

And with all forms of public transport you can add 5-10 mins to each end of the journey; you get there 5 min early for a train thats running 5 mins late, theres 10mins standing in the rain, even if only 15 min travel time (eg outer suburb) still 25min each way when this factored in, best part of hour a day, depending on your pay rate that can be very expensive