New Zealand’s low productivity receives regular mention in the media and government statements. For some reason we work as hard, or even harder, than citizens of like countries but earn significantly less for our efforts. The challenge of raising national productivity must involve Auckland since it represents one third of our economy. The thrust toward super-city governance is part of this attempt, especially in its aim to streamline the provision of infrastructure into the greater city. But funds for this are limited, and there needs to be wide debate on just what sort of infrastructure will lead us along the road to better growth and productivity.

Growth in the 21st century comes principally from the so-called ‘knowledge economy’, leaving historically commodity-based economies such as ours at a distinct disadvantage as prices for our exports gradually reduce. Big cities are the natural home of the knowledge economy, and our only big city is Auckland. Does Auckland’s environment encourage us to believe it can play its part in our economic transformation? I believe the answer is no, and there is a simple reason for this.

The observable fact of big cities fostering a knowledge economy is thought to grow out of what are called agglomeration effects. What are agglomeration effects? They are the mechanisms by which people, companies and institutions in close proximity interact creatively to achieve more than they would if widely dispersed. Higher levels of productivity, and higher returns to businesses and workers, arise from increasing the concentration of people and economic activity in larger, intensely urban areas. Perhaps ironically, the growth of digital communication has coincided with an accelerating trend toward ever-larger cities around the globe. People want to cluster together.

But agglomeration effects refer not only to direct productivity benefits. They embrace the wide range of factors that make cities desirable places to live. This includes the wide range of choices, concentrated cultural activity, social tolerance and the excitement of an intensely urban experience. It is the combination of these diverse factors that attracts talented people which in turn drives economic activity.

Auckland is on the cusp of becoming a city of size, where agglomeration benefits can become increasingly significant. But will they? How do we achieve the required urban intensity that will drive these benefits, creating a more liveable and attractive built environment that will match the stunning natural setting of the city? What sort of city will help us retain our home-grown talented children and attract the new people that we need to lead an economic transformation?

Our cities are shaped largely by the transport systems that serve them. For the past fifty years, Auckland has doggedly pursued a transport policy based on the private car by providing motorways, roads and parking in extremely generous portions. This has resulted in the low-density sprawling city we have today. While many of the suburbs thus created have positive qualities, the policy has stifled the development of truly urban neighbourhoods. Urban intensity such as exists here is concentrated in those areas developed before the car-based transport policy was adopted in the late 1950’s. The urban intensity achievable since then has been limited by the urban space consumed through car movements and parking, and the planning rules written to support the overall philosophy.

To start to develop an urban intensity that will yield tangible agglomeration benefits demands a quality public transport system, and a progressive removal of the inbuilt subsidies underpinning the car-based status-quo. Clearly such a change in policy needs to be supported by congruent land-use policies, but transport must lead the way. Recent attempts by planners to promote urban intensification at transport nodes and along transport corridors have failed because developers and consumers are rightly sceptical that the necessary transport improvements will ever eventuate.

So if the key to a more intense and vibrant city is a full commitment to quality public transport, is it so hard to expand that idea to say that agglomeration effects flowing from such a change will, over time, increase our productivity? Can we say a key role in creating New Zealand’s economic future lies in Auckland’s public transport system?

The Office for Urban Research is committed to pursuing this idea. Read the research to date here.