Cities Beyond Perth. Best bets for growth in a new economic environment. Executive Summary. January Level 2, 53 Blackall Street Barton ACT 2600
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1 Cities Beyond Perth Best bets for growth in a new economic environment Executive Summary January 2015 Level 2, 53 Blackall Street Barton ACT
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3 The Regional Australia Institute Independent and informed by both research and ongoing dialogue with the community, the Regional Australia Institute (RAI) develops policy and advocates for change to build a stronger economy and better quality of life in regional Australia for the benefit of all Australians. Disclaimer and Copyright This research report translates and analyses findings of research to enable an informed public discussion of regional issues in Australia. It is intended to assist people to think about their perspectives, assumptions and understanding of regional issues. No responsibility is accepted by the RAI, its Board or its funders for the accuracy of the advice provided or for the quality of advice or decisions made by others based on the information presented in this publication. Unless otherwise specified, the contents of this report remain the property of the Regional Australia Institute. Reproduction for non-commercial purposes with attribution of authorship is permitted. RAI Research and Policy Project researcher: Annemarie Ashton-Wyatt, Senior Researcher Project supervisor: Jack Archer, Deputy CEO Contributing to research content and review: Su McCluskey, Chief Executive Officer Jennie Dwyer, Policy Advisor Morgan Rennie, Researcher Tai Nguyen, Researcher All RAI research is informed by the expertise of the RAI Research Advisory Committee. Members in 2014/15 are: Professor Sandra Harding, James Cook University (Chair) Professor Andrew Beer, University of Adelaide Professor Graeme Hugo, University of Adelaide Professor John Tomaney, University College of London Tim Shackleton, Director, Virtual Health Cities Beyond Perth (Executive Summary), January 2015 P a g e i
4 Research Partnership This research has been funded through a partnership between the Regional Australia Institute and the Department of Regional Development, Western Australia. Executive Reference Group: Tim Shackleton, Regional Development Council of Western Australia Mike Rowe, Department of Regional Development Su McCluskey, Regional Australia Institute Project Steering Committee: Ken King, Pilbara Regional Development Commission (Chair) Richard Hancock, Pilbara Development Commission Bruce Manning, Great Southern Development Commission Janine Hatch, Wheatbelt Development Commission Grant Arthur, Wheatbelt Development Commission John Acres, Department of Regional Development Denis O Donovan, Department of Regional Development Jack Archer, Regional Australia Institute Acknowledgements The RAI acknowledges the following people and organisations who have contributed feedback and ideas during the development of this report: Aboriginal Workforce Development Centre, Department of Training and Workforce Development City of Albany City of Kalgoorlie-Boulder Department of Corrective Services Goldfields Esperance Development Commission Kimberley Development Commission Fiona McKenzie, Department of Planning and Community Development, Victoria Goldfields-Esperance Development Commission Peel Development Commission Regional Development Council, Western Australia RDA Great Southern RDA Mid West Gascoyne Rio Tinto Shaddicks Lawyers South West Development Commission Wheatbelt Development Commission The Busselton Chamber of Commerce and Industry City of Busselton City of Mandurah Department of Training and Workforce Development Great Southern Development Commission FarmWorx Gascoyne Development Commission Mid West Development Commission Pilbara Development Commission RDA Goldfields Esperance RDA Kimberley RDA Peel RSM Bird Cameron Shire of Carnarvon The West Australian Regional Newspapers Workforce Education Cities Beyond Perth (Executive Summary), January 2015 Page ii
5 Executive Summary Regions in Western Australia are in a period of transition as the highs of the resources boom start to diminish. To be successful in this transitional period, regional Western Australia will need to look to its fundamental competitive advantages and how they relate to a changing economic environment. As a result of recent growth, Western Australia has acquired a new source of potential competitive advantage in the network of larger regional towns and cities across each region. More than half of the regional population now lives in the 12 largest regional towns and cities located across each of the nine regions in Western Australia. These towns and cities offer relatively diverse employment opportunities and many have grown significantly in recent years. Some are reaching 15,000 residents, which is an important threshold for long term sustainable development. Others are moving towards becoming regional cities with high economic capacity, due to a population size of 50,000 or more. Many of Western Australia s largest regional centres have only recently reached these growth milestones and are considering how best to leverage the new opportunities this scale provides. Significant investment through Royalties for Regions and related initiatives has also changed the quality of infrastructure available in many of these regional locations. This report has considered how best to leverage this new source of competitive advantage for regional Western Australia. Why Focus on Developing the Largest Regional Centres in Western Australia? Western Australia s largest regional centres are worth developing because they: Provide a greater diversity and quality of services for residents and visitors than smaller locations. Factors such as market size, workforce diversity, and access to innovation supports are attractors for entrepreneurship and investment. This enables sophisticated economies to develop and supports an independent growth pathway; Are a focus point for key infrastructure such as ports, airports, and major roads that enable connections to markets for regional Western Australia; and Are hubs for services to meet the needs of the region s population and industries. Many provide a central base for the delivery of health, education and other government services. As a result of their size and position in each region s economy these places play a unique role in enabling the development of regional Western Australia. Their development should be a priority within the wider regional development strategy for Western Australia. Cities Beyond Perth (Executive Summary), January 2015 P a g e 1
6 Four Development Pathways The Regional Australia Institute s (RAI) analysis suggests that four different pathways exist that require a different development approach: 1. Old towns with city-sized opportunities (Albany, Bunbury, Busselton and Geraldton) Each of these places has an existing population size, diversity of industry and available infrastructure to provide a foundation for future growth pathways. Capacity for local innovation, technological readiness and human capital needs to be further developed to secure these opportunities. 2. Places growing through connected lifestyles (Mandurah and the proposed Avon City) Proximity to the Perth metropolitan area offers on-going avenues for future population and economic growth, as residents can have easy access to the city and enjoy regional living, but this also creates pressures. Development of the local workforce and business capacity alongside infrastructure and population development will be critical for building economic growth in the future. The challenge will be to build deeper connections to the metropolitan area and still maintain a regional identity. 3. Areas well-positioned to access the new global markets (Broome, Carnarvon, Kununurra) Prospects for new economic growth exist in these places by aligning their unique natural resources with new domestic and international market opportunities in agribusiness and tourism. Securing resource access and investment in the development of these resources will be essential to realise these opportunities. The support and leadership of local people and local businesses will also help to enable growth. 4. Boom towns in transition (Kalgoorlie-Boulder, Karratha City, Port Hedland) Rapid growth during the resources boom has created opportunities in these towns and cities. Future stability and growth will depend on forming effective local responses to the structural changes in the resources sector. It will be essential to manage adjustment to demand for local services and workers from the resources sector. In addition, growth will need to identify opportunities in non-resources sectors to diversify the economy and reduce the potential impacts of structural change. Each of these locations has experienced both opportunities and challenges from the resources boom, but this driver of the Western Australian economy is changing. Key commodity prices often have cycles of decline after periods of growth, and the demand for labour reduces as large projects transition from construction to production phases. Accordingly, demand for workers and services in the resources sector (and related regional areas) is likely to soften. Cities Beyond Perth (Executive Summary), January 2015 Page 2
7 A Western Australian Regional City Strategy: Growing Cities Beyond Perth Given the growth in these regional centres, there is now a strong case for implementing a specific regional development strategy for these places (Figure 1). The outcome of this approach should be an established, resilient and growing network of regional cities across Western Australia. Common Priorities for Regional Centres The heart of a regional cities strategy should be region-led initiatives that are focused on: Services to the region. Large regional centres have a service provider role with the wider region. This long-standing source of competitive advantage is being disrupted by technology, better travel options and globalised supply chains. Western Australia s largest regional centres must understand and respond to the changing demand for its services from the wider region through innovative development strategies; Lifestyle. Western Australia s largest regional centres offer a unique lifestyle and this is a core source of competitive advantage. These centres must continue to build local lifestyle advantages that will attract and retain residents for the long term; Expanding markets to capture customers from beyond the region. Western Australia s largest regional centres have competitive specialisations reflecting the regional economy. Each centre should encourage local businesses to seek market opportunities beyond the region to increase resilience to economic changes; and Targeting emerging growth opportunities. Western Australia s largest regional centres need to actively pursue new opportunities in areas like agribusiness, tourism and education that can offset reduced demand from the resources sector or provide new sources of growth. To leverage competitive advantages across the network there is also a need for the State Government to work with the network of regional centres to: Improve human capital performance. This is an area where regional centres must be competitive. It remains an area of significant challenge for many of Western Australia s largest regional centres at present; Ensure resource access and use arrangements are responsive to new sources of demand. New demand for resource access and use is shifting from the resources sector to agriculture and tourism. The State Government will need to work with regions to ensure new demand to be met sustainably; and Broker competing demands within the network. Places have similar priorities which could lead to unhelpful competition for resources and undermine collaborative development. The State Government will need to work to broker between these demands to provide the best outcomes for the State as a whole. Cities Beyond Perth (Executive Summary), January 2015 P a g e 3
8 Collaborative Opportunities Given the common challenges and opportunities within the group of Western Australia s largest regional centres, building inter-city collaboration is also essential. Areas where collaboration should be prioritised include in developing: The regional knowledge sector across Albany, Bunbury, Busselton and Geraldton; Services and amenities for different lifestyle groups in Mandurah and the proposed Avon City; Complementary events and activity based tourism in Albany, Bunbury, Busselton and Geraldton; Cooperative pursuit of new agribusiness and tourism market opportunities in Broome, Carnarvon and Kununurra; Incubation of non-resource businesses in Karratha, Kalgoorlie-Boulder and Port Hedland; and Development of specialist networks to leverage mining services business beyond regional Western Australia in Karratha, Kalgoorlie-Boulder and Port Hedland. Together these initiatives will provide the foundation for leveraging the comparative advantages of Western Australia s largest regional towns and cities. Old towns with city-sized opportunities Places growing through connected lifestyles Areas well-positioned for growth in new global markets Boom towns in transition Cities Beyond Perth (Executive Summary), January 2015 Page 4
9 Cities Beyond Perth: Building an established, resilient and growing network of regional cities in Western Australia Population and economic changes are shifting opportunities for regions in Western Australia Regions can Respond to changing demand for services to the region Realise lifestyle advantages through population mobility Link to new growth drivers through emerging market opportunities Encourage specialist business groups to grow markets outside of region State government can Help grow human capital performance in regions Facilitate resource access and use arrangements Broker inter-regional competition for resources But, large regional centres do not all have the same pathways for growth. Four groups with different imperatives exist across Western Australia: Old Towns with City-Sized Opportunities Albany Bunbury Busselton Geraldton Places Growing Through Connected Lifestyles Mandurah and the proposed Avon City Areas Primed to Access New Global Markets Broome Carnarvon Kununurra Boom Towns in Transition Kalgoorlie Karratha City Port Hedland Develop a highly skilled and flexible labour force Meet regional export industry needs Expand the local knowledge-based industry Grow connectivity to Perth Pursue areas of competitiveness in retail and services sectors Manage developmental pressure to secure regional identity Secure access to land and water resources Support Indigenous economic engagement Facilitate new opportunities for agri-business Develop tourism markets Engage markets for resource services beyond the region Expand non-resources industries Support Indigenous economic engagement Common opportunities are best pursued in collaboration. Business innovation networks offer practical pathways for cities with common issues to work together Regional knowledge sector Services and amenities for different lifestyle New agribusiness Tourism market opportunities Diversification in resources communities Cities Beyond Perth (Executive Events Summary), and activity January based 2015 tourism P a g e v Indigenous business development Figure 1:Regional city development framework
10 Contacts and Further Information The full report of Cities Beyond Perth: Best bets for growth in a new economic environment is published in two parts: Analysis of the competitive and collaborative advantages of Western Australia s largest regional centres Profiles of the largest regional centres in Western Australia To discuss this research report please contact: Jack Archer Deputy CEO Regional Australia Institute (RAI) jack.archer@regionalaustralia.org.au (02) Level 2, 53 Blackall Street Barton ACT 2600 Further information on the work of the RAI can be found at Cities Beyond Perth (Executive Summary), January 2015 Page 6
Cities Beyond Perth. Best bets for growth in a new economic environment. Profiles of the largest regional centres in Western Australia.
Cities Beyond Perth Best bets for growth in a new economic environment Profiles of the largest regional centres in Western Australia January 2015 Level 2, 53 Blackall Street Barton ACT 2600 02 6260 3733
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