Large Dunedin employers say the city's future lies in hundreds of new small businesses.
A draft economic development plan launched on Monday aims to create 10,000 jobs and lift incomes by $10,000 over a decade.
The plan is a rare partnership between Dunedin City Council, the university, polytechnic and business groups and says job growth of 2% per year could come from the city's strongest sectors of education, health and information technology.
The plan says Dunedin could become one of the world's great little cities - but it is not exporting enough and relies heavily on central government spending and welfare.
The jobs and money would come from new small and medium-sized businesses, innovation, education and tourism.
The council says it is working on ways to give red carpet, not red tape, to business.
The Otago Southland Employers Association says Dunedin must put the large-scale manufacturing of the past behind it, because new jobs will be found mainly in smaller businesses.
Chief executive John Scandrett says the loss of skilled people to Australia must be reversed, and people coming in with new skills must be found opportunities that can build Dunedin's economy.
The University of Otago says it will not grow as fast as it has in the past, but its students will stay on and create new opportunities if they are linked into the city more deliberately.
Otago Chamber of Commerce chairman Peter McIntyre is confident the plan can succeed.
