Innovation

Economics ( DRAFT Thesis Statement - May 2012) Alex Haryowiseno (1016143) The Innovation Economics doctrine is a theory that puts the importance of technological development and transfer of knowledge at the centre of a nation's economic growth. Knowledge and its subsequent products are seen as important factors alongside traditional primary commodities, and have shifted from being seen as independent forces unaffected by policies, to being a driving force that promotes productivity and better use of resources. The two key questions to be asked when considering this are: Why should New Zealand consider adopting this thinking into its economic development strategy? And what is this theory's significance in terms of creating a strategy for Christchurch's recovery? New Zealand's orientation towards the primary industries is widely known, with its agriculture products as the country's top export income generators. The country has achieved this by also associating these products with its clean and green image. However, this reliance on the exploit of natural resources has resulted in the countrys inability to reverse the decline in its prosperity since the 1970s, as seen in its current position within the Organization for Economic Co-operation and Development (OECD). Sitting at 22nd out of the 33 registered countries, New Zealand falls short in terms of Gross Domestic Product (GDP) per capita compared to the average OECD mark, as well as countries such as Australia. New Zealand currently generates $29,800 GDP per capita, 35% behind Australia and 20% below the OECD average standard. One of the key reasons for New Zealand's decline in GDP is the persistence of intense labour and low-impact jobs. It is recorded that NZ workers put in as much as 15% more working hours and generate 20% less returns when compared to the OECD average. In order to just maintain this current position, New Zealand needs to generate a minimum of $120,000 per employment, given its current FTE number of 1,300,000 (1 FTE = 1 Full Time Employment). Industry sectors such as tourism and winery, although popular, manage to generate $100,000 and $80,000 per job respectively. This is again caused by their nature to employ labourers for largely unskilled and low-impact jobs. It is clear that we need to look beyond the current orientation and invest in a sector that has potential to prosper in the long term. The key to generate value beyond the current minimum would be to invest in sectors which create high value commodities. The science, technology, as well as the high value manufacturing and services industry are sectors that present us with this opportunity. For example, in the scale of New Zealand, Fisher & Paykell is currently the leader in innovation as well as R&D. The company currently employs 1,250 people and generates $290 million in revenue per year. This accounts for $232,000 generated per FTE, making it one of NZ's top earning companies. In the scale of Christchurch, emerging companies in the Information and Communications Technology (ICT) sector present an opportunity to progress in this direction. ICT currently employs 4500 people in Christchurch and generates over $ 850 million Gross Regional Product (GRP) per year. This accounts for an average of $190,000 generated per FTE, 60% more value than the minimum required for New Zealand to maintain its current economic position. Christchurchs existing secondary industry is a large component within the citys employment landscape. This has greatly influenced the development of its urban fabric. The industrial line located in the southern part of the city forms a transport network that connects the industrial zones of Christchurch city to the port in Lyttelton, where commodities are shipped to overseas destinations. However,

Innovation Economics ( DRAFT Thesis Statement - May 2012) Alex Haryowiseno (1016143) between the period of 2005 and 2009, the manufacturing industry experienced a significant decline of 8% in terms of its recorded business units, which led to a loss of 5,000 employments and a $200 million decline in the citys GRP. It is these facts that highlight an opportunity, one where Christchurch could transition from a manufacturing based economy to a knowledge based economy. The recent Canterbury earthquakes have also prompted investments to be made towards the city's future, and it is within this timeframe that an opportunity to invest in innovation emerges. This could have the added value of changing the city's employment landscape. In order to establish a knowledge based economy, a critical mass in the form of an educated workforce is needed. Christchurch holds potential in fostering this new aspect of economic growth, given that it produces a substantial number of graduates from its universities (around 25% of NZ's graduates) and is recorded to have over 10,000 people that are currently being employed in the field of science and research. These are aspects which will be beneficial in creating the initial talent pool needed to establish it as a city for science, technology & innovation. However, the declining number of students coming from the technology and sciences field, a fact that was highlighted in multiple OECD reports, remains an aspect that needs to be addressed, given their role in creating the critical mass needed in order to start and sustain the shift towards innovation economics. By fostering this educated workforce, the city will be able to create a 'self-reinforcing cycle' (Komninos, 2008) which creates a synergy with its existing manufacturing sector. The emerging industries in science and technologies serve as potentials for development and could increase the amount of technological export products from New Zealand, while the existing manufacturing industries also stand to benefit from improved efficiency as a result. This thesis proposes to look at architecture's role in encouraging the regeneration of Christchurch's economy through supporting innovation and technological development. Within the premise of this post-industrial scenario, strategies that aim to direct Christchurch towards an economy based on knowledge as a primary commodity will be proposed. As an urban strategy, potential areas for regeneration will be located, particularly within the city's existing industrial zones. By utilizing existing facilities and the associated transportation system within these zones, the proposed centres aim to create synergy between the emerging high value sectors with the existing manufacturing sectors and bridge the gap between the northern and southern suburbs of the city. The importance of maintaining an innovation ecosystem, in order to enable the organic process of knowledge and information exchange between different sectors (businesses, institutions, etc.), has been widely discussed (Komninos, 2008) It is within the premise of this ecosystem that innovation can occur. The integration of competences from various social areas, such as education, science, politics and the public, is an integral part of encouraging growth through innovative means (Simmie, 2001). As such, the research and design process will take stance from an ecological perspective. Within this methodology, architecture assumes the role of contributing to the continuous provision and adaptation of the built environment as a framing system of social communication and organized spatial relations (Schumacer, 2010). As an ecological system, Architecture becomes the connective strand that creates the possibility for innovation and exchange of knowledge to occur. The built environment operates as a catalyst for these developments to happen but they are dependent on the progression of other economies within the city. Aspects such as quality of life, progress of education and advancement in sustainable practice will be necessary in order to maintain the standard of living to allow these environments to operate. The interdependency of these different aspects will also be looked at as part of the design's ecological framework.