Investment Attraction Strategy

Transcription

1 NORTH Link September 2018 Investment Attraction Strategy Final Report 1

2 Acknowledgements I would like to recognise a number of key people and organisations crucial to the compilation of this Strategy and Prospectus. In particular, I would like to thank Ben Mason from Arup and his colleagues David Dawson, Matthew Dunn and Justin Madden, who were able to professionally undertake the consultations, research and analysis that has led to the development of the Melbourne s North Investment Attraction Strategy. Thank you also to the project funding sponsors: Northern Melbourne RDA Committee; MAB Corporation; McMullin Property; Moreland City Council; Banyule City Council and Nillumbik Shire Council. I would also like to acknowledge the support and contribution of all members of the Project Steering Committee: Tony Coppola, NORTH Link; Terry Larkins, Northern Melbourne RDA Committee; Susan Davies, La Trobe University; Michael Martin, MAB Corporation; John Purdey, McMullin Property; Sohrab Motiwalla, Mark Lobo and Natasha Twigg, Department of Economic Development, Jobs, Transport and Resources; Ian Kearney, RMIT University; Greg Madigan, Melbourne Polytechnic; Peter McWilliam, Northern Health; Matthew Elliott, Melbourne Market Authority; Linc Horton, Melbourne Airport; Mary Agostino, Mitchell Shire Council; and Kylie Lethbridge, Nillumbik Shire Council. Significant increases in investment are required as Melbourne s North continues to experience the effects of rapid population growth; the demise of the automotive sector; and the transition to a knowledge economy. The effective implementation of the Melbourne s North Investment Attraction Strategy will be critical in assisting Melbourne s North to generate new jobs and investment growth to overcome current and future economic challenges. Chris James Executive Director NORTH Link September

3 Table of contents 7 Defining characteristics 14 Competitive advantages 18 Key investment opportunities 20 Building on existing strengths 24 Filling the gaps 28 Future economy Councils in Melbourne s North 3

4 Region overview 1 City of Moreland 5 City of Whittlesea 7 2 City of Darebin 3 City of Banyule 6 Shire of Nillumbik 7 Shire of Mitchell 4 City of Hume 5 $42.85bn gross regional product 4 6 1,004,364 residents ,696 local businesses CBD 360,282 local jobs Port Phillip Bay 502,676 employed residents 4

5 Vision Melbourne s North is growing and changing. As representatives of the seven municipalities in the region, we aspire to attract investment to provide the best possible foundation for our communities to thrive. In ten years time, following the implementation of this Investment Attraction Strategy, we vision the future of Melbourne s North as described below: Investment - cumulative investment in Melbourne s North will be equal to or greater than the other regions of Melbourne, at least on a per capita basis. Trade - the region trades confidently internationally, with established overseas relationships. Population - the region s population grows as expected with a diverse demographic able to access jobs, healthcare, education, energy, digital infrastructure and transport infrastructure. Infrastructure - key infrastructure gaps such as the Airport Rail Link, North East Link, Outer Metropolitan Ring Road, Inland Rail and Intermodal Freight Hubs and links such as Upfield to Craigieburn are built or are on schedule to be built. Sector development - the sectors identified have grown, are globally connected in terms of trade and investment, and are driving jobs and further investment. This includes a thriving advanced, technologicallybased manufacturing sector. Land use planning - the precincts identified have been established and are successful hubs (e.g. Broadmeadows, Epping, Preston, Coburg, Eltham, Brunswick, Merrifield, Greensborough, La Trobe NEIC etc.) with a complementary mix of industrial, commercial and residential uses. Skills - education providers and industry are working closely together to enable a smooth education to industry transition and upskilling to meet the requirements of new industries. Collaboration and self-reliance - the region is able to band together to organise competitively-priced and reliable services such as energy and telecommunications that underpin future growth. 5

6 Approach The purpose of this report is to provide an evidence based rationale for investment in Melbourne s North. The following outlines the approach: Defining characteristics Competitive advantages Key investment opportunities The region s defining characteristics provide a platform to understanding the current demographics and drivers of the local economy. Key characteristics included demographics, industry, committed infrastructure, precincts & activity centres and worker movements. This was undertaken by analysing the region using Australian Bureau of Statistics datasets and GIS mapping software. Analysis of Melbourne s North has identified a number of competitive advantages in the region. The region s geographical position, being close to the CBD and key infrastructure while also having land availability in the North, provides a unique competitive advantage. Additionally, existing industries and economic clusters can be leveraged for growth in the region. Building on existing strengths Seeking investment to build on the strengths of Melbourne s North. This includes leveraging the existing clusters and competitive advantages in the region. Filling the gaps Seeking investment to address the key gaps in Melbourne s North to unlock economic growth in the region. Future economy Seeking investment to capitalise on emerging industries, enabling Melbourne s North s future economic growth. 6

7 Defining characteristics 7

8 Defining characteristics Demographics Population growth is an important driver for Melbourne s North with the region s population forecast to increase by almost 40% between 2016 and ,004,364 residents Growing by 2.9% per annum Age profile (by percentage of total population) Mitchell is forecast to have the largest relative increase at 105%, or ~41,000 additional residents over the same 15 year period. 0 to 14 19% Hume and Whittlesea are also forecast to grow significantly with almost 200,000 additional residents between the two municipalities from 2016 to In terms of land use planning, the North Corridor Growth Plan will accommodate much of this population growth. 15 to to to 59 19% 21% 23% This population growth provides social and economic opportunities for the region. An increase in population must be matched with an increase in services provided, and this provides opportunities for new and existing businesses in the region. Melbourne s North s age profile is similar to that of Greater Melbourne. The key opportunity is that growing population will increase the number of residents which are of working age and thus provide opportunity for economic growth. Increases in population also provide challenges, particularly in the area of healthcare, as the share of Australia s population that s over 65 years of age continues to increase. 60 to and above 6% 68, ,932 12% Census of Population and Housing, 2016, TableBuilder Education attainment (number of persons) Bachelor or higher degree Advanced Diploma or Diploma Vocational certificate 101,408 35% of residents speak a second language Census of Population and Housing, 2016, TableBuilder 8

9 Industry Industry Melbourne s North is transitioning from an economy centred on traditional manufacturing to a more diversified economy. Continued business growth in the region is being driven by a growing population, together with land availability affordability. Health care & social assistance 74,272 businesses Top 5 industries by employment Growing by 5% per annum 40,893 The top industries by employment in Melbourne s North education, advanced and food and beverage manufacturing, retail, construction and health. These industries align closely with the region s key sectors - education, health, freight and logistics, together with a new generation of manufacturing including food and beverage and the caravan industry. There is a nascent equine cluster in the Shire of Mitchell and also a significant equine presence in the municipalities of Hume, Whittlesea and Nillumbik. The number of businesses in Melbourne s North continues to increase every year, being driven by a higher than average population growth, together with land availability and affordability. Retail trade Manufacturing Education & training Transport, postal & warehousing Census of Population and Housing, 2016, TableBuilder New industrial floorspace in ,061 31,279 29,819 24,539 Cost of non-residential land ($/sqm) Compared to the West and South-East, Melbourne's North with supply 60% of new industrial floorspace in 2018 and currently offers the lowest cost of non-residential land. These factors have made the region a prime location for new businesses to set-up or for existing businesses to relocate, and should be expected to support continued growth into the future. South-East West North 60% 23% 1,316 1,275 1,203 17% Colliers International, Industrial: First half 2018 South West North Arup analysis of Valuer-General 2016 data

10 Defining characteristics Committed infrastructure Melbourne s North is set to benefit from a number of committed infrastructure projects in the region. North East Link will complete the missing link in Melbourne s ring road, between an upgraded Eastern Freeway from Springvale Road to the M80 Ring Road, and aims to remove up to 15,000 trucks everyday from local roads. The M80 Ring Road upgrade will improve connectivity between Melbourne s North and West, and will link to other Victorian urban and rural freeways. The project is expected to be complete by late With the growth in Melbourne s North, the recently opened Mernda rail extension project will meet some of the demand for more local transport services, with the rail alignment being extended from South Morang Station to the future Mernda Town Centre. Additional key infrastructure projects for Melbourne s North include the planned Outer Metropolitan Ring Road, Inland Rail, Intermodal Freight Hubs and Airport Rail Link. These projects will have a transformative effect on the economy of the North rail links and intermodal hubs (especially combination of Beveridge Intermodal Hub, Inland Rail and Hume Freeway) will transform the Outer North. Level crossing removals in Melbourne s North also provide opportunities for improved access and commuter ease. Melbourne s North includes one of Victoria s urban growth corridors designated by the State government to guide the planning and development of future housing, employment and transport infrastructure across Melbourne. 10

11 Defining characteristics Precincts and activity centres There are a number of key existing precincts and activity centres within Melbourne s North which are key drivers of economic activity within the region. Generally, industries derive productivity benefits from being close to one another and from being located in large labour markets. Greater productivity in agglomeration arises from the fact that industry have access to larger product, input and labour markets, as well as face-toface contact, information exchange and networking only available to industries working close to each other. These effects underline the importance of leveraging precincts and activity centres to their full potential. A key economic asset for Melbourne s North is the La Trobe National Employment and Innovation Cluster. Victoria has just six National Employment and Innovation Clusters which underpins the level of importance of the La Trobe. This cluster encompasses La Trobe University s Bundoora Campus, Heidelberg West Industrial Precinct, Northland Employment Precinct and a number of health facilities in Heidelberg including Austin Health. Other key economic activity areas include Melbourne Airport, Epping (including a food and beverage cluster around Melbourne Wholesale Market), Coburg, Preston, Brunswick, Broadmeadows and Greensborough, with ambitions for Eltham and Diamond Creek. Emerging activity areas include Merrifield, Cloverton, Lockerbie, Wallan and Beveridge, with ambitious plans for Kilmore and Seymour. 11

12 Defining characteristics Workers commute The tendency for residents of Melbourne s North to commute out of the region for work is an important factor in assessing the characteristics of the region. While it is not surprising that large numbers of workers travel to Melbourne s CBD for work, there is clearly a large economic potential in seeking higher retention of local residents to be entrepreneurs and/or workers within Melbourne s North. 190,000 in the region Over 150,000 residents from Melbourne s North commute to the CBD every day. This is not unique to the region; Melbourne s CBD is the economic centre of Victoria, and many of the residents of Greater Metropolitan Melbourne commute to the CBD on a daily basis. There will always be a proportion of residents in Melbourne s suburbs commuting to the CBD, particularly those who work in professional services. However, generally there is a strong preference for workers to shorten their commute, allowing for more productive hours in the day that can be allocated to leisure or labour as per an individual s preference. Providing compelling employment options in Melbourne s North, or reducing the commute time through transport infrastructure, will likely increase the economic output as well as the quality of life for workers from Melbourne s North. 20,000 to the West 150,000 to the CBD 25,000 to the East Workers commute 12

13 Defining characteristics Underinvestment Underinvestment in Melbourne s North is evident from data and points towards the importance of a concerted effort to attract additional investment to the region. Cumulative investment over the last 10 years ($bn) Data from the National Institute of Economic and Industry Research shows that cumulative investment in Melbourne s North over the last ten years has clearly lagged behind investment in Central Melbourne, Melbourne s East and Melbourne's South (based on the old RDA boundaries). Over this period Melbourne s North received $80bn less total investment, from all sources, than Melbourne s South and over $40bn less than both Central Melbourne and Melbourne s East. Closing this investment gap would go a long way towards the region reaching its economic potential. Melbourne's West Melbourne's North Melbourne's East Unpacking the investment data shows that Melbourne s North had the least investment in infrastructure and commercial buildings of Melbourne s regions over the last ten years. Investment in these areas have stayed relatively flat over time in the North whilst investment in residential property construction investment has almost doubled in the last decade. Central Melbourne Melbourne's South

14 Competitive advantages 14

15 Competitive advantages Growing population Freight and logistics networks Proximity to the CBD Land availability & affordability Victoria is projected to grow by 1.6 million residents from 2016 to 2031, representing ~30% growth over that period. The councils that are represented through NORTH Link are projected to grow by almost 40%, outstripping the growth rate of wider Victoria during the same period. This population growth both provides an increasing labour pool for firms and an increasing market to purchase products and services. Whittlesea is projected to have the largest growth in the region in absolute terms, with over 110,000 new residents representing a growth of 55% between 2016 and 2031 Mitchell is forecast to have the largest growth in relative terms, with a 105% growth in resident population from Melbourne s North is ideally positioned for freight and logistics investment, with connectivity to Hume, Calder and Geelong freeways as well as access to the M80 Ring Road. Major freight connectivity to regional Victoria, as well as major transport corridors to South Australia and New South Wales running through Melbourne s North. Additional major infrastructure is on planned and committed including North East Link, Outer Metropolitan Ring Road, Inland Rail and Intermodal Freight Terminals at Somerton and Beveridge. Benefits of proximity to Melbourne Airport and Port of Melbourne. Melbourne Airport is the largest freight airport in Australia handling $16bn of international freight per annum. The City of Melbourne hosts nearly 500,000 jobs and produces a quarter of the state s GDP. Melbourne s North benefits from close proximity and ease of transport to this economic hotspot. 150,000 people commute from the region to Melbourne s CBD on a daily basis according to the most recently published census data there is huge potential to tap into this skilled workforce for jobs in Melbourne s North. Over 16,000 establishments in the City of Melbourne alone. This provides particular opportunity for professional services firms in the inner North such as Brunswick, Coburg and Preston. In 2016, there was approximately $500m in commercial property sales and $7bn in housing sales transacted across the NORTH Link councils. Land is more available and affordable than in Melbourne s inner suburbs. Melbourne s North will supply 60% of Melbourne new industrial floorspace in Office rental values of $300 per sqm for Melbourne s North compare favourably to St Kilda Road and Southbank which stand at $400/sqm and $495/sqm respectively. Some activity centres are well suited to office commercial development. Cost of non-residential land of $1,205/sqm in Melbourne s North is cheaper than the West ($1,275) and South ($1,315). 15

16 Competitive advantages La Trobe National Employment Cluster and other clusters Growing food & beverage industry Melbourne Airport Working as a region Bundoora and Heidelberg play host to a burgeoning innovation district, particularly in education and health, with development outlined in the La Trobe National Employment and Innovation Cluster Framework Plan by the Victorian Planning Authority. The cluster provides for over 28,000 jobs. Other established and emerging clusters such as Melbourne Airport (including transport and logistics and manufacturing), Epping (food, fibre and beverage, health), Coburg and Preston (business and professional services), Broadmeadows (health and wellbeing, digital, government services), Greensborough (government services, business and professional services) and Merrifield (manufacturing) with Nillumbik centres such as Eltham showing major visitor economy potential. Emerging clusters include: Merrifield, Cloverton, Lockerbie, Wallan and Beveridge, with ambitious plans for Kilmore and Seymour. Melbourne s North Food Group, established in early 2018, has been launched with support of the State Government with a goal of growing the North s food sector to $5bn in output and by 7,000 jobs over the next decade. The industry is well facilitated by freight access to the international airport and Port of Melbourne. The relocation of Melbourne Wholesale Market to Epping has encouraged growth in the industry as well as secondary spending in the region The growing food and beverage industry has strong synergies with education and research assets. Melbourne s North Food Group industry, education and government working together to grow a cluster systematically. Proximity to agricultural producers north of Melbourne with opportunities to supply Melbourne s North manufacturers. Melbourne Airport is located adjacent to Tullamarine, and has facilitated 25 million domestic and 10 million international passenger journeys over the past year alone. It is also a major freight hub, handling more than 30% of Australia s international air freight. Melbourne Airport provides 15,000 jobs that are directly related to the operation of the airport, a figure projected to grow to 23,000 by The airport is forecast to support over 70,000 jobs indirectly by 2033, and is responsible for approximately 6% of the region s economic output. Melbourne Airport is curfew free which enables a greater range of international passenger and freight services to be attracted to Melbourne. NORTH Link has set the standard for collaboration between councils since it was established in 1995 to represent the interests of Melbourne s North. As example, NORTH Link s influence was key in the recent relocation of the Melbourne Wholesale Market to Epping. Through combining the advocacy of five cities and two shires, as well as health, education and industry, NORTH Link is better able to champion the interests of Melbourne s North to various funding bodies. NORTH Link s status as a leading organisation is evidenced by the Northern Horizons 50 Year Infrastructure Strategy which pre-dated a state-wide infrastructure strategy undertaken by Infrastructure Victoria. NORTH Link works closely with the Melbourne s Northern Councils group of CEOs and Mayors. 16

17 Competitive advantages Workforce skills and education Advanced manufacturing Melbourne s North is home to a diverse and skilled workforce, and is supported by a number of leading Universities and TAFEs in region. Melbourne s North has two universities (La Trobe and RMIT) and two TAFEs (Melbourne Polytechnic and Bendigo Kangan Institute) which produce skilled workers for the region. Over 180,000 residents in Melbourne s North have a bachelor degree or higher. A further 68,000 hold an advanced diploma and 101,000 have a certificate level education. At a more grassroots level, population growth means that 21 new primary school will be in needed in Whittlesea and Mitchell alone. Advanced manufacturing is a global megatrend which requires highly skilled workers and close relationships between providers of education and training and companies in the sector. With the cessation of passenger vehicle manufacturing in Australia, these manufacturers have diversified their client base into supplying product for the global auto supply chain, truck, caravan, boat and bus manufacturing and items for the health, mining, and food manufacturing sectors. R&D and Innovation facilities across Melbourne that can be leveraged include the RMIT Advanced Manufacturing Precinct, CSIRO Lab 22 (3D printing facility) in Clayton, the established incubator network in Melbourne s North, and centres of expertise at RMIT and La Trobe Universities such as RMIT School of Fashion and Textiles, a global leader in fashion and textiles and merchandising programs 17

18 Key investment opportunities 18

19 Key investment opportunities overview Building on existing strengths Filling the gaps Future economy Food, fibre and beverage Career pathways Digital and professional services The food, fibre and beverage industry in Melbourne s North currently employs over 10,000 people and will experience significant growth over the next ten years, presenting numerous opportunities for investment as the region becomes a recognised food and beverage hub. The region is well placed to leverage existing educational institutions to work with industry and develop career pathways that align the skills of the region s residents with the current and future needs of the economy. Investing in world class digital infrastructure, coupled with highly skilled professionals living and working in Melbourne s North, creates an exciting opportunity to grow the digital and professional services sectors. Airport city Connecting the airport Agritech and food tech Melbourne Airport is Australia s second largest airport by passenger numbers, facilitating more than 35 million trips per year and supporting 85,000 jobs. Leveraging this major asset provides an opportunity for complementary development in the surrounding region. Health and wellbeing La Trobe s National Employment and Innovation Cluster is home to over 28,000 jobs mostly in the education, research and health industries. These strengths provide a clear opportunity for investors seeking to capitalise on the emerging health and wellbeing sector. Visitor economy The visitor economy is a multi-billion dollar industry for Victoria with Melbourne Airport being the key entry point for international visitors. There is enormous untapped potential in Melbourne s North to capitalise on this industry. State and Federal commitment for a rail link to Melbourne Airport provides an opportunity for investment in complementary public transport to ensure that the wider region is better connected to the airport. Affordable and reliable energy Investing in energy efficient technology and renewable generation will ensure industry in the Melbourne s North has a competitive edge through access to affordable, secure and sustainable energy. Freight infrastructure Melbourne s North is ideally positioned for a major intermodal freight terminal. Investment in existing infrastructure will provide rail access to the Port of Melbourne and connect the port to the region s established freight and logistics network. Melbourne s North is home to Australia s leading agriculture and food research facilities providing cutting edge research and development. The opportunity to commercialise innovative technology in collaboration with the region s agriculture and food industry will provide numerous investment opportunities. Start-ups and supporting ecosystem Melbourne s North already has established innovation and incubation centres that work locally with small business and start-ups. This provides an opportunity to create an incubator and accelerator network across the region that leverages specific industry strengths and increase knowledge sharing within the region. 19

20 Building on existing strengths Relevant Victorian Government priority sectors: Food & Fibre Food, fibre and beverage Melbourne s North currently boasts a vibrant food, fibre and beverage sector worth approximately $2.6bn per annum in gross domestic product, forecast to double its output and create 7,000 jobs in the sector over the next 10 years. Being home to hundreds of food manufacturers, including major Australian brands and multinational food and beverage manufacturers, has resulted in a specialised labour force. In late 2015, the Melbourne Wholesale Fruit, Vegetable and Flower Market relocated to a $460m purpose built facility in Melbourne s North. With an estimated $2bn of produce passing through it annually, the Market is the catalyst to further stimulate affiliated economic development for a state-ofthe-art food and beverage precinct of international significance. In total the designated food and beverage precinct could encompass 120 hectares. In addition to food processing and manufacturing, a complementary range of auxiliary support services are envisaged including business incubation, logistics and distribution, commercial, education, research and training. The food production sector is already developing into an industry cluster in Melbourne s North. Tertiary institutions include RMIT s Food Research and Innovation Centre, La Trobe University s Centre for AgriBiosciences, La Trobe Institute for Agribusiness and Food (LIAF), Research Hub for Medicinal Agriculture (key investment: Cann Group), plus Melbourne Polytechnic and Bendigo Kangan Institute. This, associated with the established freight and logistics network, an agricultural food bowl beginning at the North of the region, connectivity with export markets via Melbourne s air and sea ports is a compelling proposition. Further momentum is gathering following the recent launch of Melbourne s North Food Group, aiming to enhance business connections, expand access to export markets and upskill the local workforce. What does success look like? Food and Beverage Plan targets and jobs aspirations achieved. In doing so, being an internationally recognised food and beverage cluster with marked increase in trade relationships, exports and inbound investment. Attract businesses to complete the Melbourne Wholesale Market development plan and commence developing and divesting the adjacent land to create a high value food and beverage ecosystem of international significance for the entire region. Small businesses in food, fibre and beverage related industries are supported in their growth through a successful incubator program, making the region an attractive place to establish new food and beverage related businesses. Success elsewhere Northern Adelaide Food Park, AUS In an effort to leverage of South Australia s food and wine reputation, the South Australian Government has launched the Food Park, which aims to be Australia s premier food processing and food manufacturing precinct. The precinct will generate growth in the region by creating a space where food and beverage processors, manufactures, food packaging suppliers and logistics companies can expand, increase their export capacity, and collaborate and generate savings through economies of scale. See: renewalsa.sa.gov.au/projects/northern-adelaide-food-park/ Tomoana Food Hub, NZ The Tomoana food hub is a precinct for food production and development that creates an environment in which businesses can benefit from clustering. The park provides design, build and lease options for food-related business, ranging from packaging to product development, so that they can share knowledge and logistics in order to make gains in productivity and profitability. Tomoana is a prime example of the competitive advantage that could be achieved in Melbourne s North if a similar clustered food precinct existed. 20 See: tomoanafoodhub.co.nz/

21 Building on existing strengths Relevant Victorian Government priority sectors: Retail, transport, distribution & postal Visitor Economy Medical technologies & pharmaceuticals Airport city What does success look like? Melbourne Airport is Australia s second largest airport by passenger numbers, facilitating more than 35 million trips per year and handling more than 30% of Australia s international air freight market. Melbourne Airport is located adjacent to the suburb of Tullamarine, and has catered for 25 million domestic and 10 million international passenger journeys over the past year alone. 1 2 Available land within proximity to the airport has been successfully developed and is an attractive location for complementary industry such as freight and logistics, advanced manufacturing, retail and visitor economy and health services requiring access to the airport. Leveraging the airport to attract the necessary range of supporting business (hotels, car rental, tourism agencies, etc.) to meet the growing number of airport users. The airport is a major employer in the region, currently providing approximately 15,000 jobs that are directly related to airport operations. This number is expected to grow to 23,000 in 2033, in line with the expected increase in use of the airport. By 2033 the airport is expected to indirectly support over 70,000 jobs as a result of its operations. These include jobs related to freight and logistics, an industry in which Melbourne Airport is a major player in the Australian market. There is no doubt that the airport represents not only a major transport and freight hub, but is also a key economic generator of both Melbourne s North and Metropolitan Melbourne as a whole. In this respect, the airport should be seen as a major economic asset for Melbourne s North, particularly when the expected increase in population and utilisation of the airport is considered. There is space for development that has been flagged around the airport. NORTH Link could work with Melbourne Airport stakeholders to ensure that the precinct s economic potential is fully utilised through developing this land in a manner that would provide additional economic output for the region while not impeding on the airport s core operations. Success elsewhere Dallas/Fort Worth Airport, USA DFW is an International Airport that is owned by the cities of Dallas and Fort Worth in the United States. The airport has evolved into an Airport City since its opening, comprising of terminals and runways and a range of non-aeronautical activities. More than half of the airport s revenue can be attributed to warehouses, factories, hotels, office space and the world s largest Infiniti car dealership. See: dfwairport.com/landhere/news/aerotropolis Western Sydney Aerotropolis As part of the new airport plans for Badgerys Creek, the intention is to use this development as a catalyst for an airport city which creates thousands of jobs. Federal, state and local governments are looking to invest around $20bn in the project. Opportunities identified for the development include food and beverage, medical technologies and tourism. See: theurbandeveloper.com/articles/western-sydney-aerotropolis 21

22 Building on existing strengths Relevant Victorian Government priority sectors: Medical technologies & pharmaceuticals International education Health and wellbeing The La Trobe National Employment and Innovation Cluster is home to over 28,000 jobs mostly in the education, research and health industries. These strengths provide a clear opportunity develop a specialism focused on the emerging health and wellbeing sector. The La Trobe National Employment and Innovation Cluster (NEIC) is a State Government designation that the region should be looking to leverage to attract investment and ultimately provide jobs and growth. Education, research and health are key existing strengths for La Trobe NEIC with the La Trobe University campus and the Austin Health precinct directly employing 8,500 staff across facilities located in the NEIC: Austin Hospital and Heidelberg Repatriation Hospital. The NEIC should be seeking growth which complements the existing strengths of the cluster. The health and wellbeing sector would appear to be a good fit with La Trobe University s development of a Health and Wellbeing Hub which will support aged care, mental health, allied health, existing and future research, and training for the future workforce in these sectors. There are also opportunities for assistive technology (related to NDIS) and emerging medical products (leveraging the La Trobe s Research Hub for Medicinal Agriculture which includes the Cann Group medicinal cannabis R&D facilities). Initial growth in the health and wellbeing sector could focus on the development of La Trobe s R&I (research & innovation) precinct, its Health and Wellbeing Hub, and its regional Sports Park, which will also include a research centre focusing on rehabilitation and sports medicine. Northern Health s Northern Centre for Health and Education Research, the clustering of private hospitals it is attracting, and other private hospitals - North Park, John Fawkner and Brunswick Private should also be a focus. At a regional level, population growth, particularly in the outer North, needs to be met by new private and public hospital provision. What does success look like? Leverage the National Employment and Innovation Cluster designation, Northern Health and satellites at Epping, to catalyse growth and become a recognised centre of health and wellbeing research and practice. The region has excellent health and wellbeing services to support population growth and changing demographics by ensuring investment in services, such as aged care, that meet the needs of an aging population. Melbourne s North contains a recognised cluster that leverages the onset of the NDIS and growth in aged care to drive opportunities in education, health and advanced manufacturing of disability/mobility devices. Success elsewhere Westmead Health Precinct, NSW The health precinct in Westmead is one of Australia's largest education, health and medical research hubs, generating $2 billion of economic output. Government, universities and private sector investors have committed more than $3 billion to expand the 75 hectare precinct. The project will stimulate the Western Sydney economy, creating more than 1,000 jobs per annum during construction phase, and is expected to employ more than 30,000 staff by See: Wyndham Health Precinct, VIC The Wyndham Health Precinct in East Werribee is planned to feature a range of research, medical and educational institutions. The 775 hectare site will be redeveloped into a specialised technology cluster made up of an international university precinct and research hub that will deliver over 58,000 jobs to residents. NB the current status of this development is somewhat unclear. See: 22

23 Building on existing strengths Relevant Victorian Government priority sectors: Visitor Economy International education Visitor economy What does success look like? The visitor economy in Melbourne s North has enormous untapped potential. The visitor economy is a Victorian Government Priority Sector. Tourism is a significant economic driver for Victoria worth $23.3 billion (directly and indirectly) in worth 6.2 per cent of the State's Gross State Product. 1 2 Melbourne Airport is leveraged to capture the potential of this key tourism gateway with tourists and business travellers staying close the airport and visiting the North s tourism attractions. Food and beverage tourism industry is well developed and offers a differentiated experience from the Mornington Peninsula and the Yarra Valley. Arts and Culture is interwoven into this food and beverage offering, as well as being an attraction in its own right. An enhanced stock of visitor accommodation is crucial. Key tourism assets include the presence of Australia s second largest airport, Melbourne Airport, universities and TAFEs with many overseas students, significant open green space, a thriving creative arts scene in inner Melbourne and a heritage arts scene based in the North East, which includes the Heidelberg, Heide and Montsalvat schools of artists along the Yarra River. A regional art gallery and hotel could anchor some of the visitors to Melbourne s North East, encouraging higher yield overnight stays and spending on restaurant, entertainment, transport and tourist items. It could also take overflow collections from Councils, universities and the NGV. There is also a need for an Arts and Culture Audit for Melbourne s North to assess improvements that can be made to arts and cultural facilities, bearing in mind work already done by Moreland and Darebin. As well as visual arts, this could also encompass the creative industries and the performing arts. The Nillumbik, Hume, Whittlesea and Mitchell municipalities also afford opportunities for high yielding nature-based tourism. Their artisan food and beverage producers, especially farm gate producers, wineries and breweries, combined with farm stay and B&B nature-based experiences for overseas visitors, can also provide a more genuine tourism experience where visitors can meet the producers. This is a different experience to the corporate feel of the Mornington Peninsula and Yarra Valley. 3 Melbourne s North s higher education institutes are integrated into the visitor economy, capitalising on a boom in international students to host their friends and families in the region. A dedicated tourism destination group is formed. Success elsewhere Martinborough Vineyards, New Zealand The Martinborough wine region is located around an hour s drive from Wellington city centre. The area has 20 boutique vineyards with an emphasis placed on being able to walk or cycle between venues. The region takes a coordinated approach to promoting the region with a mural trail between a number of wineries and an annual Jazz festival. See: Powerhouse Museum, NSW The New South Wales Government have taken the significant step of announcing that the collection at the Powerhouse Museum, a part of the Museum of Applied Arts and Science, will be moved to Western Sydney. An international design competition has been initiated to ensure that the museum, which will open in 2023, is in an iconic building which will catalyse a step change in tourism for Western Sydney. The facility will include 18,000 sqm of exhibition and public spaces including a world class planetarium See: 23

24 Filling the gaps Relevant Victorian Government priority sectors: International education Professional services z Creative industries Career pathways The region is well placed to leverage existing educational institutions to work with industry and develop career pathways that align the skills of the region s residents with the current and future needs of the economy. Industry leaders in Melbourne s North have noted the lack of applicants in both skilled and unskilled positions in industries that have been identified as key to the economic output of Melbourne s North. The population of the region is also growing faster than Metropolitan Melbourne as a whole, however, the region s level of unemployment still remains above the state s average and the decline in traditional manufacturing and rise in automation means that traditional labour intensive jobs are being replaced by fewer equivalent jobs. The region is well placed to leverage existing educational institutions such as RMIT, La Trobe, Melbourne Polytechnic and Bendigo Kangan to work with industry and develop career pathways that align with the needs of growth sectors. The recent partnership between the Caravan Industry of Australia and Melbourne Polytechnic to deliver caravan specific courses was formed to meet the demand for skilled labour in the region s caravan manufacturing industry. As the region continues to grow, it is crucial to align growth sectors with relevant skills. An important first step is to identify what skills the current and future economy in Melbourne s North will demand and investing in appropriate training and developing the local workforce. For example, the current infrastructure boom in the region provides a short to medium term opportunity to help meet the demand for construction and engineering skills. Skills development and training has traditionally been student driven, however, to ensure that businesses can continue to meet expected growth, there is now a need for industry to understand future reemployment requirements and promote career pathways through TAFEs and universities. What does success look like? 1 Industries in the region are able to satisfy their employment needs through a local workforce equipped with the appropriate level of skills, training and education via local jobs infrastructure e.g. Melbourne s North Joblink site, NORTH Link Jobs Victoria program. 2 The region has a diverse and productive workforce that can support and facilitate growth in existing industry and helps attract new business and investment into the region. Established vocational mentoring program to assist job aspirants to 3 access networks and information on career pathways that will lead to employment. Also, an expanded student placement program that places thousands of students with industry, particularly into growth sectors. Success elsewhere South East Water, VIC Plumbers in Melbourne s south-east are supported with a specialist training program that has been developed in partnership by the Victorian plumbing industry, South East Water and the Chisholm Institute. The aim of the program is to build local skills in plumbing and create closer relationships between the plumbing and building industries. Collaboration between industry and educators in Melbourne s south-east has developed the workforce, providing residents with the necessary skills find employment locally. See: Northern Industry Student Placement Program (NISPP), VIC NISPP, a partnership between NORTH Link and higher education institutions, has led to over 250 student placements in businesses over the past three years. This program increases linkages between local organisations, higher education providers and students from Melbourne s North. There is also the NORTH Link Innovation Series which connects businesses to university and TAFE R&D and Innovation facilities. See: 24

25 Filling the gaps Relevant Victorian Government priority sectors: Retail, transport, distribution & postal Transport technologies Visitor Economy Connecting the airport A rail link to Melbourne Airport appears to be gaining traction with the State and Federal budgets including various funding commitments for the rail link. Regardless of the alignment, the current plans for an airport rail link centre on a shuttle from the airport to Melbourne s city centre. It is important to be clear that the transport issues facing the airport are much wider ranging given the lack of resilience with current access arrangements. Completion of the CityLink Tulla Widening project will help but this is expected to be a temporary respite rather than a future-proofed solution. 1 2 A phased public transport solution (including the airport rail link) is commenced that benefits Melbourne s North by providing complementary public transport to the airport in addition to the airport rail link. Ensure the airport rail link and associated infrastructure is not just passenger-centric but provides a mass transit solution to a key job hub, including access for workers From the point of view of Melbourne s North as a region, an airport rail link is likely to offer some benefit such as reducing congestion in the North. However, most residents of Melbourne s North are not going to travel to the city centre in order to board an airport rail link. Therefore there is a need for a broader programme of public transport works which provides opportunities, and choice, for all users of the airport. For Melbourne s North this includes access for workers, airport passengers and also ensuring sufficient capacity for freight access. The proposed Suburban Rail Loop has merit in this respect a Broadmeadows line link to Albion via Jacana is also recommended. There is an economic aspect here too: Melbourne Airport is a key economic asset for Melbourne s North and, should accessibility issues constrain the growth of the airport, this in turn has a negative impact on economy of the region. Given that an operational airport rail link is, at best, a number of years away, there is a need for a more immediate, flexible, phased accessibility solution which focuses on buses and, potentially, trams. Success elsewhere Sydney Airport Link, NSW Sydney Airport Link connects Sydney Airport to the CBD through a 10km rail line made up of five added train stations that are primarily underground. The line opened in May 2000, creating a total of 3,000 jobs. Patronage reached a total of 8.2 million passengers in 2016, experiencing an unprecedented level of demand that has meant that 200 extra services each week were added in See: Heathrow Express, UK The Heathrow Express is an airport link between Central London and Heathrow Airport. This is the fastest rail link to Heathrow, running a total of 150 services and carrying approximately 170,000 passengers per day. The energy savings deriving from the Heathrow Express have been notable, saving a total of 204 million kg of carbon emissions. See: 25

26 Filling the gaps Relevant Victorian Government priority sectors: Construction technologies Affordable and reliable energy What does success look like? Reducing the cost of energy for businesses in the region will help lift productivity and make Melbourne s North more competitive. Australia now has some of the highest energy prices in the world, with prices expected to continue rising in the foreseeable future. Electricity and gas are a major cost to both consumers and businesses and rising prices are putting pressure on the cost of living for households and the productivity of businesses. 1 2 Energy intensive industries are attracted to the region and existing businesses become more competitive and sustainable due to its comparatively low cost of electricity and success in group buying. Renewable energy projects have been successfully developed in the region whether by utilising available land for wind and solar or through innovative methods such as virtual power plants and waste to energy. Melbourne s North has several energy intensive industries such as food, beverage and caravan manufactures. Businesses in the region are finding that the cost of electricity is impacting their bottom line and ultimately their ability to grow and create new jobs. Generally, there is a lack of understanding amongst business about how their energy is consumed and how they can save money on power bills. Reducing the cost of electricity in the region will not only increase the competitiveness of existing businesses, but will also make the region more attractive to businesses seeking to relocate or establish new services. There are several approaches to help businesses identify long-term solutions to reducing their consumption and find more cost-efficient alternatives. Locally, the Moreland Energy Foundation and Northern Alliance for Greenhouse Action provide expert energy advice to both consumers and businesses about how to reduce their electricity consumption and how to find cheaper electricity. This investment priority will also look at bigger energy plays for the region including solar/renewables solutions at key precincts and waste to energy facilities (this also links to the key issue around the disposal of waste). NORTH Link has formed a region-wide Energy and Waste Roundtable to explore region-wide options around aggregating demand to reduce price and self-sufficiency in generation (e.g. solar, co-generation). Success elsewhere Better Commercial Buildings, VIC Sustainability Victoria has created a program that commercial building owners, agents, tenants and facility managers can use to improve the energy efficiency of their assets. The program offers up to $300,000 per applicant to implement upgrades that lead to improvements in building performance. See: SACOME Joint Electricity Purchasing Group, SA The South Australian Chamber of Mines and Energy (SACOME) has negotiated an eight-year group buying agreement with a renewable energy retailer. This bulk buying approach provides a reduced price for the buyers group whilst providing revenue certainty for a role out of renewable energy generation. See: 26

27 Filling the gaps Relevant Victorian Government priority sectors: Retail, transport, distribution & postal Freight infrastructure Melbourne s North has an established freight and logistics network being ideally positioned within proximity to Melbourne Airport and Port of Melbourne and their associated freight transport infrastructure, and connected through the Hume, Calder and Geelong freeways as well as having access to the M80 Ring Road. The North also benefits from proximity to the Goulburn, Murray Valley and Riverina foodbowl. Leveraging these assets is important with huge growth in the national freight task forecast. Investment in a major intermodal freight terminal in Melbourne s North is supported by the requirement for rail access to the Port of Melbourne and the future alignment of Inland Rail s connection into Melbourne. The State Government has committed to delivering a new freight plan in 2018 whilst the importance of freight is already clear in the Freight State and Plan Melbourne policy documents. The new freight plan will encourage industry to shift freight from road to rail through intermodal transfer terminals. Investment in major intermodal freight terminals in Melbourne s North is supported by the requirement for rail access to the Port of Melbourne and the future alignment of Inland Rail s connection into Melbourne. The region currently has two options for future investment, being the existing intermodal hub at Somerton and the future interstate terminal at Beveridge (which will strategically positioned at the intersection of Inland Rail, the Outer Metropolitan Ring Road and Hume Freeway). It is important for Melbourne s North to leverage its existing and planned infrastructure such as North East Link, by working with the State Government and key stakeholders, to ensure that the region attracts future investment into developing future intermodal freight terminals and building upon its freight and logistics network. What does success look like? Somerton Intermodal Freight Terminal is connected to the Port of Melbourne through the Port Rail Shuttle Plan and is a major component of the solution for future freight movements in Victoria. Land surrounding Somerton Intermodal Freight Terminal has been developed and the broader area is an attractive location for the freight and logistics industry and complementary business requiring port access. In the short term, land for Beveridge Intermodal Freight Terminal (BIFT) is reserved and planning begins. In the medium term, BIFT is built as the Somerton facility reaches capacity. Success elsewhere Enfield Intermodal Logistics Centre, NSW The Enfield Intermodal Logistics Centre is the largest rail based intermodal logistics centre is NSW. The centre is 16km from Port Botany and accessible from key arterial freeways including the Hume Highway, the M5 and M4 motorways. Although the Enfield Centre has been approved to handle 300,000 TEU, it has the capacity to handle a much larger throughput. The rail based logistics terminal has been projected to save 6.5 million truck kilometres per year, reducing CO 2 emissions by 993 tonnes. See: Moorebank Intermodal Terminal, NSW The Australian Government has committed to developing an Intermodal Terminal in south-west Sydney to support the growth of freight in the city. The site was selected due to its proximity to major road corridors and the Southern Sydney Freight Line. It has been anticipated that the terminal will provide a total of $11 billion in economic benefits for the local and wider community and will create a total of 6,800 jobs. Benefits realised from the terminal include the a reduction in both traffic congestion and the number of trucks on the roads in Sydney. 27 See:

28 Future economy Relevant Victorian Government priority sectors: Digital technologies Professional services Digital and professional services The roll-out of next generation digital infrastructure to parts of Melbourne s North provides an unique opportunity for the region to develop a digital economy and grow its professional services. There are opportunities for further growth in employment in the digital and professional services sectors in Melbourne s North this includes business services, accounting and legal services, design services including architecture, engineering and various design fields, tourism, education services, financial services and ICT services. The number of firms in this sector are under-represented in this region and as more quality office space becomes available and the region s businesses demand more professional services, this will make it possible for sector firms to establish a greater presence in Melbourne s North. This requires professional services hubs with high quality office space with complementary facilities including event space. As Melbourne continues to grow, the CBD, being the key centre of Victoria s productivity and innovation, will continue to expand outwards, while at the same time attracting young professionals to live in proximity to the centre. This has created a burgeoning mix of highly skilled professionals living and working in the areas surrounding Melbourne s CBD. This is particularly evident in Melbourne s inner North given the close proximity to the centre with the gentrification of Preston, Coburg and Thornbury. NORTH Link is piloting a program to connect business precincts and industrial estates to fibre-to-the-premises fibre optic cabling, beginning with the West Heidelberg Industrial Estate. NORTH Link has also developed feasibility work around developing a North West Data Analytics Hub that would enable upskilling of businesses in the region with regards to the customer and industrial data they hold, and involve universities and their data analytics students in bringing about this upskilling. What does success look like? Key business precincts in Melbourne s North connected to fibre-optic telecommunications cable. North West Data Analytics Hub established, providing assistance to region to upskill data capability, with digital cluster emerging. Education institution cybersecurity capability leveraged. A business services and professional sector with a size comparable to the region s share of population. Success elsewhere Tech City London, UK Tech City is an area in the city fringe of London, known as the Silicon Roundabout, operating on the basis of relatively low rent, large warehouse and office spaces as well as the precedence of creative industries in the area. Tech City is responsible for generating 48,500 jobs and is home to some of the world s largest tech companies including Google, Cisco and Intel. See: GigCity, Adelaide In order to support the economic transition of Adelaide, the Government of South Australia is funding an initiative to introduce gigabit-speed internet to 28 innovation precincts and co-working spaces across Adelaide. This next generation of digital infrastructure offers internet speeds around 100 times faster than the national average, is providing a competitive advantage for existing firms and providing a key differentiator to seek to attract new and high value industry to the region. See: 28

29 Future economy Relevant Victorian Government priority sectors: Food & Fibre Digital technologies Agritech and food tech Given the strength of food, fibre and beverage manufacturing in the North, strong supply chains, proximity to agricultural foodbowl, education, research and incubator facilities, nascent urban farming businesses and digitisation of agriculture, there is an opportunity for the region to take advantage of the growth in agritech and food tech. Agriculture is a significant contributor to the Australian economy, being one of the country s largest exports, contributing to over 14% of the country s total value of exported goods and services. With growing global demand for Australian agricultural goods, there is a need to increase the productivity of our existing agricultural land with farmers now looking towards technology to become more efficient. Melbourne s North is home to Australia s leading research facilities in this sector including the Centre for AgriBiosciences and the Institute of Agriculture and Food at La Trobe University and RMIT s Food Research and Innovation Centre. This provides an opportunity for Melbourne s North to build upon and invest in ensuring that the region is leading commercialising agriculture and food technology, and to be at the forefront of megatrends such as use of blockchain in the food supply chain and the multi-billion dollar opportunities related to the medicinal cannabis sector. Agritech and food technology in Melbourne s North can be leveraged by the region s food and beverage industry and existing agriculture businesses to partner and work closely with the agriculture technology sector in order to benefit from testing and early adoption of new technologies such as the digitisation of agriculture. What does success look like? The agriculture and food technology industry works closely with traditional agriculture and food manufacturing to research, develop, test and commercialise new innovative products. Food and beverage firms in the region take advantage of agriculture and food technology to grow with a particular emphasis on accessing export markets. Establish a conference in the North to drive co-operation in this space e.g. between food businesses, La Trobe and RMIT University researchers, TAFE specialists and incubators and their clients Success elsewhere Salinas Region, USA The agricultural industry in the Salinas region of California is worth $8 billion, making it the primary producer of fresh foods in the United States. In 2012, the City of Salinas partnered with leaders in education and industry to connect the region to Silicon Valley, creating high-tech jobs and developing solutions to global agricultural issues. The City has partnered with universities to establish a skilled industry workforce with defined career pathways in agriculture and technology. See: SproutX Innovation Hub, VIC SproutX is an Australian agriculture technology business accelerator and national collaboration network that is set to open up a co-working space in Mildura. The partnership will create a network to support agriculture start-ups in the region, transforming Mildura into a hub of agriculture tech excellence. The idea behind SproutX can be applied in Melbourne s North by connecting agriculture technology start-ups in the region to support the local industry and provide a competitive advantage. See: 29

30 Future economy Relevant Victorian Government priority sectors: Digital technologies z Creative industries Professional services Start-ups and supporting ecosystem Start-ups are a vital component of a healthy and growing industrial ecosystem. The investment climate needs to be right, however. The North has a great opportunity to drive a stronger start-up culture as it already has a strong ecosystem that includes university and TAFE R&D facilities, a new business accelerator at La Trobe University, new precinct developments (e.g. Broadmeadows, Coburg, Preston, Epping, Brunswick Creative Precinct), two longestablished incubator networks, nascent makerspaces (e.g. Space Tank Studio in Coburg North) and the desire for more investment on the part of Councils in the outer North such as Whittlesea, Hume (proposed incubator at Broadmeadows Town Hall redevelopment) and Mitchell. Also proposed is a food and beverage incubator at the Melbourne Market site. The established incubators have had a major impact on business success and jobs growth, with both Melbourne Innovation Centre and the Brunswick Business Incubator creating over 1,000 jobs in 20 years. The incubator environment has changed and Moreland City Council is aligning with the new opportunities. Vibrant diverse shared spaces supporting entrepreneurs and startups are growing rapidly and are linked to accelerators, universities, investors and co-working communities. The pivot in Moreland is in Brunswick. Likewise suburbs such as Greensborough and Eltham record high number of microbusinesses and high numbers of patent registrations. Further investment could facilitate the development of additional incubation and innovation centres. Networking the existing centres with each other, taking a coordinated approach towards promoting innovation in the region, with a particular emphasis on supporting start-ups, leveraging specific industry strengths and linking to other initiatives such as the North West Data Analytics Hub are recommended. What does success look like? The region s incubator and accelerator networks are interconnected and working together cohesively, offering new businesses support and pathways for existing businesses to grow within the region. Support and assistance programs offered through the region s incubator and accelerator network, together with NORTH Link as a provider, means that Melbourne s North is an attractive location to start a new business. Further investment in the accelerator, incubator and co-working network, including emphasis on outer Melbourne opportunities and capital investment to enhance established networks. Success elsewhere Melbourne Accelerator Program (MAP) The MAP is an accelerator program that provides funding, office space and mentoring for start-ups to grow their businesses. The program has been ranked as Australia s best business incubator, helping 44 start-up's to raise over $30 million in funding, create 250 jobs and generate more than $40 million in revenue. See: Chicago s Technology & Entrepreneurship Centre 1871 is a non-for-profit organisation that helps promote and grow entrepreneurs and tech start-ups in Chicago. The organisation is currently home to 500 early stage and high growth digital start-ups, hosting more than 2,000 people daily has supported Chicago in becoming a centre for technological innovation, supporting a large majority of tech businesses that relocate or expand to the city. See: 30

31 Arup Sky Park, One Melbourne Quarter 695 Collins Street Docklands VIC