Forsyth Barr Central Otago

Laws of Attraction

Boulder, Colorado, shares plenty of similarities to Queenstown, Wānaka and other parts of Central Otago. It’s beautiful, there are a wealth of activities on offer, it has a great climate, and it’s extremely popular as a place to visit and live. 

But there’s one big difference: Boulder has become a technology and entrepreneurial hotspot in recent years with industry clusters developing around aerospace, bioscience, cleantech, IT, natural products and outdoor recreation.

CNBC reported that more than 24,000 tech businesses now call Colorado home and the industry supported nearly 140,000 jobs at the end of 2023, a 37% increase within the past decade. As of 2021, more than two dozen New Zealand firms had set up offices in Boulder and that number is thought to have grown since then. 

It is, as Sir Paul Callaghan said in a famous speech back in 2011 that laid out a plan to improve New Zealand’s productivity, a place where talent wants to live. So could we replicate this economic story in our region?

One major difference between the two places is that Boulder has a very good university and a number of publicly funded research institutes close by. This connection to academia is often crucial for economic growth and innovation, as research (and talent) tends to flow out into the private sector. That is often how ecosystems are built and it happened in Silicon Valley and, to a lesser degree, Boston, London and New York over many years. In New Zealand, Lincoln University is a good example in the agricultural space.

The Universities of Canterbury and Otago are both looking at establishing a presence in the region due to the expected growth here (economist Benje Patterson says that “the golden triangle of Queenstown, Wānaka, and Cromwell could exceed Dunedin’s population in just 15 years”) and work is being done by council and a number of committed locals to grow the tech sector and attract new businesses.

Callaghan said in his speech that New Zealand is “poor because we choose to be poor”. Back then, New Zealanders worked some of the longest hours in the world but earned less per hour than most other developed countries. That’s still the case today. There are many reasons for that, but more low-paying tourism, construction or agriculture jobs will not greatly improve the region’s prosperity.

And more prosperity is important because it means we are able to pay for expensive things like new drugs, healthcare, education, infrastructure and talented people to provide the services we need.

This is not just about the money, however. More diversity of business creates more culture and more interesting communities, and many successful business owners are able to help fund recreation, sports and the arts. 

Forsyth Barr has been in this region for 86 years and we’re in the business of growing our clients’ prosperity. Like investing, diversifying a regional economy is a long game, but we need to think about what we want this place to be in a few decades and make a plan to get there. 

Serendipity also has to be part of that plan. We need to have faith that by attracting smart people, successful businesses in strange niches will emerge. One or two big companies can change the fortunes of a region, whether it’s founded there or moves there. Microsoft relocated to Richmond, near Seattle, in 1986, because both founders had grown up in the area, and Amazon also moved to Seattle because of the access to talent, tax advantages and lifestyle benefits for employees. 

In New Zealand, companies like Xero, Halter and Rocketlab have been powerful demonstration projects. And local businesses like Scannable, Mons Royale, MedRecruit Honeysticks and Stoked Stainless have proven it’s possible to run big, internationally-focused businesses from here. 

Humans are herding creatures and success breeds success. If this region is to become the Boulder of the south, we need a lot more stories like these.

To talk investment - either for yourself or the region – get in touch with us at Forsyth Barr Investment Advice Central Otago on 03 443 2980.