APPENDIX TWO - THE CANTERBURY KNOWLEDGE ECONOMY.

The Knowledge Intensity of industries varies across the regions of New Zealand. Comparing results for Canterbury against the national average shows some interesting differences.

The industries with the highest levels of knowledge intensity (those with a K1 rating) are quite similar in Canterbury and New Zealand overall. The main differences are that Canterbury does not have a significant Government Administration industry, and the Canterbury Mining, Tobacco Product and Recorded Media industries having a higher than average skill level (although it must be noted that the these industries are quite small in Canterbury, combining to employee only 33 people).

The major differences in knowledge intensity between Canterbury and the national average occur in the composition of the K2 and K3 industries^[26]. Nationally, the majority of Finance and Insurance sub industries (ANZSIC96 Division K) are coded with a K2 rating, while in Canterbury, most of these sub industries have a K3 rating. Nationally, most of the Finance and Insurance sub industries had a graduate employment rate of between 30 - 35%, while the corresponding figure for Canterbury was a step lower at between 15 - 25%. A table showing 3 digit ANZSIC96 industries by their knowledge intensity for both New Zealand and Canterbury is included at the end of this section.

The difference in qualification levels may be due to the majority of regional employment in the finance and insurance industries being in branch offices, with the assumption being that the more highly skilled jobs in these industries being located in the Head Offices, generally based in Auckland and Wellington.

This assumption is supported by the comparison of results between Canterbury and Wellington regions. Canterbury has one of the eight Finance and Insurance sub industries within the K1 and K2 categories (K751 Services to Finance and Investment is rated K2), while Wellington has seven of the eight Finance and Insurance sub industries within the K1 and K2 categories. This shows that Wellington employment in these industries is generally more highly qualified. Results at the two digit level show the same basic pattern.

While the knowledge intensity of these sub industries for Canterbury trail the national average, inter temporal analysis show recent improvement. Results from the Annual In Depth Regional report (AIDR) for Canterbury^[27] show that employment and Hours worked in ANZSIC Division K (Finance and Insurance) grew faster than the New Zealand average between 2001 and 2006. Also, the share of university graduates in the Canterbury workforce has increased markedly in this industry between 2001 and 2006. On average, the share of graduates in the eight Finance and Insurance sub industries has grown by around 5% each, with 5 of the sub industries having a K4 rating in 2001, declining to only one K4 rating in 2006.

Canterbury, and in particular Christchurch City, has a well known Electronics cluster. It is interesting to note that the results for Canterbury and Christchurch City for both 'C283 Photographic and Scientific Equipment Manufacturing' and 'C284 Electronic Equipment Manufacturing' industries are marginally less skilled than the New Zealand average levels. This result was not expected and is certainly worthy of further discussion with stakeholders. One reason for lower than average qualification levels in the Canterbury electronics industries might be that there is a higher share of production line workers than product developers in Canterbury. Alternatively, the employment of the highly skilled staff in the Canterbury Electronics cluster may have been coded to industries other than the ones identified above.