The capacity of producer services to generate regional growth: some evidence from a peripheral metropolitan economy

The recent rapid increase in producer service activity has been presented as an alternative source of economic growth to that created by manufacturing. Evidence from a survey of firms in Auckland, New Zealand throws doubt on the ability of producer services to generate regional growth. The dynamics of individual firms are different to the momentum of producer services as viewed through aggregate economic data. The sample of producer services firms in the Auckland region are characterised by a narrow income base, a lack of innovative activity, a propensity to expand via branch offices rather than through local investment, and close links with inward investment. A cautious approach to public policy initiatives aimed at producer services is therefore advised.