Deloitte identifies eight sectors, private sector investment and population growth as keys to South Australia’s future has been saved
Deloitte identifies eight sectors, private sector investment and population growth as keys to South Australia’s future
19 May 2017: A concerted focus on retaining and attracting younger people, growing the state’s population, and nurturing a services economy across key industries are the focus of a new Deloitte initiative that aims to turbocharge South Australia.
The world’s largest professional services firm has released a new report – Make it big Adelaide – supported by the thinking of Deloitte Access Economics, and backed by the Committee for Adelaide, Business SA, Adelaide City Council and the Property Council.
Deloitte South Australia Managing Partner Andrew Culley said: “It’s no secret that South Australia’s economy has been growing more slowly than the rest of mainland Australia over the last three decades at least, with annual growth of 2.3% between 1990 and 2016 compared to 3.1% nationally.
“And the same goes for population growth, which is half that of Australia as a whole as young South Australians choose opportunities in other states and not enough other young people choose to move to South Australia to replace them.”
Remarkably, there are fewer 15-34 year-olds living in South Australia today than there were in the mid-1980s. And as a result, South Australia’s share of Australia’s GDP has declined, from 7.5% in 1990 to 6.1% today – a worrying trend that is forecast to continue unless we take action.
“We believe investment in the right industries, and the resulting job opportunities, will be key to keeping more of our young people here, and to attracting more of the best and brightest to make South Australia home,” Culley said
Deloitte has identified eight competitive advantage industries that, fuelled by new private sector investment, can drive growth for South Australia over the coming years:
1. International education
5. Defence industries
2. Energy and gas
6. Creative industries
7. Health and medical industries
8. Professional and IT services
South Australia already does well in the first four of these sectors, which have high growth potential based on global demand. We are also well ahead in terms of our defence and creative industries. But all present significant opportunities for domestic growth, and none of them stand alone. In fact, it’s the synergies between each sector where many of the most exciting opportunities lie.
“Fuelled by new private sector investment, we believe these industries can pick up the slack created by declining manufacturing, and become the true stars of our economy,” Culley said.
Deloitte is also proposing a focus on growing the number of people who choose to live in South Australia – setting the aspiration to meet the national growth rate of 1.4% per year, increasing the population from its current 1.71 million to 2 million by 2027.
Deloitte Access Economics director Aaron Hill said: “The time is right to link a plan for population growth to investing in the acceleration of these eight industries.
“We know there are many positive things about living in a smaller population state like South Australia and city like Adelaide, for example, the lifestyle offered.
“But without people and their skills and ideas, economies just don’t thrive, as public and private investment and the creation of jobs follow where people choose to live.
“For many years, too many young South Australians have left seeking better futures elsewhere, and have taken their skills, ideas and passion with them. Yes, they leave a lot behind, but this hasn’t been enough to stop them.
“This simply has to change. We want our young people to be able to stay, and we want them to raise their children here with the confidence that they too can make it in Adelaide.”
Culley said: “For Adelaide to compete nationally and globally, we also need to attract more than our fair share of the world’s best and brightest via appropriately targeted migration.
“Ultimately, the return of strong population growth will be the most robust indicator of a return to growing and sustainable economic health.”
“And South Australia needs to make the right investment decisions over the medium term to facilitate growth, push through its often risk averse culture, and rebuild its corporate sector.
“South Australia hasn’t transitioned towards the growth prospects of a service economy as well as other parts of Australia,” he said. “Our service sectors haven’t grown fast enough to make up for decreasing manufacturing, yet we have become inclined to just accept the changes we have seen in recent years.
“But complacency is such a confidence killer when it comes to turning decline into a global outlook and sustainable growth.”
Culley said he and his local Deloitte team were passionate about, and committed to, South Australia’s potential and its future.
“With Make it big Adelaide, we want to build on everything that we know is great about our city and South Australia, really challenge the private sector, and work with business as well as the state government and communities, to shift gears once and for all, and get the state on a growth trajectory,” he said.
“Now is the time to lay out a plan for what a big Adelaide will look like and what we all need to do to make it there.”
The Make it big Adelaide report is the first step in a consultative process to be informed by detailed research and modelling, with findings, solutions and actions across a range of areas to be released over the next 12 months.
“We’re under no illusion that driving the change needed is going to be easy,’ Culley said. “But we also believe we are uniquely placed, given our capabilities and connections across both business and government, to bring people together, connect the dots and help develop and drive action,” Culley said.
“Business ultimately makes investment decisions that can support job creation, and they have to be a catalyst and facilitator for practical, but transformational, action.”
“In the end, doing nothing can’t be an option for South Australia.”