Grow the Bay – A Snapshot

Commenced in mid-2009, The Grow the Bay Project brings together Venture Hawke’s Bay’s existing Recession Recovery Plan with Dr Hunters suggested interventions in light of the present financial crisis. Following discussions with regional stakeholders and presentations in the region, a number of key objectives were established that are now being pursued:

• Establishment of a Regional Development Fund that will support existing businesses/new ventures and bolster job growth and sustainable enterprise in Hawke’s Bay.
• Innovation Assessment of Hawke’s Bay Region  identifying innovation strengths/weaknesses/barriers/opportunities among firms and enterprises in Hawke’s Bay. 
• Media Strategy design of a media strategy that will raise aspirational levels among Hawke’s Bay enterprises. Development of a Productivity Tool Kit: a productivity tool kit (tool-kit and workshop) to use with small and medium sized enterprises . 
• Exemplar Cases about Hawke’s Bay enterprises for use in media work, and promotion/training initiatives.
• Economic Modelling: to improve input/output economic modelling of Hawke’s Bay region, including more detailed reporting and measurement of enterprise activities and industry growth to better inform policy makers and industry sectors. 
• Improved Internal Capabilities within Venture Hawke’s Bay through Knowledge Transfer from University of Auckland Business School to ensure sustainable regional interventions are executed.

Regional Development Fund 
A key component of the Grow the Bay strategy is establishment of a Regional Development Fund. This fund differs substantially in its nature and purpose from Venture Funds, ICE ANGEL funds, or Equity Funds.

Recognizing the need in a recessionary climate for quick wins, and to halt the erosion of further job and skill losses, the Regional Development Fund is designed with existing businesses in mind, to quickly leverage their existing markets and capabilities to generate additional wealth and to create additional jobs. This does not decry the work of activities such as Business Incubators, rather it is a frank assessment that the demands of the present recession do not allow the time return that brand new ventures by inexperienced entrepreneurs or business incubators demand before payback. Quick results are needed to stem job losses and create wealth, therefore existing firms are targeted - also because of the inevitable credit shrinkage in a recessionary climate. This locally-based fund, will target local firms, with its aim to stimulate the immediate economy. The flow-on benefits of this spread wider.

The Regional Development Fund is a sustainable and local source of funding targeted initially at successful, established businesses as a mechanism to provide quick intervention. The aim of the fund is to assist established Hawke’s Bay firms to pursue growth opportunities that will create jobs and generate wealth in Hawke’s Bay.

Similar initiatives overseas have proven successful:

• The European Regional Development Fund has been operating for over 30 years, investing and promoting growth in the EU’s least prosperous regions.
• In North Dakota, in the early 1990s, funds from a 1 percent local sales tax were created to invest in local enterprise growth and creation, and generated or saved 4,500 jobs in 7 years.

A unique feature of the proposed Hawke’s Bay Regional Development Fund is its reliance on experienced local business people in its governance, and its use of mentors attached to firms that receive funding. In this way, local knowledge is brought to bear on funding decisions, and more than a monetary transaction takes place. In addition, through its existing government and industry relationships, Venture Hawke’s Bay is able to direct experience and resources to provide non-financial assistance to targeted firms and opportunities for support for research and development.

In brief, the characteristics of the fund are as follows:

       1. Funding provided by private investors, local and/or central government.
       2. Administered by local business people and investors, credit union 
       3. Provides a commercial return to investors 
       4. Profits reinvested into the fund 
       5. Additional support to companies via Venture Hawke’s Bay’s partnerships including NZTE and TechNZ 
       6. Local mentors (provided from local business network) will assist firms and monitor funded businesses