The next wave of reform means Northern Territory communities – not just tax and competition
The purpose of place: Reconsidered
Building the Lucky Country #5
- In addition to much-needed tax and competition policy reform, getting Australia’s cities and regions right is yet another way to meet the productivity challenge
- Prosperous places will deliver productivity benefits, particularly in a knowledge economy
- Business needs to help unlock the potential of place by driving collaboration with government, communities, individuals.
13 October 2015: As Australia transitions to a knowledge-based service economy, and looks to deliver a prosperous future for its people, unlocking the potential of the nation’s places needs to be reconsidered.
In its latest Building the Lucky Country series report, The purpose of place: Reconsidered, Deloitte calls on businesses, governments, communities and individuals to collaborate to create and nurture flourishing places that deliver economic prosperity for Australians.
The report makes three simple points:
- Australia is among the most urbanised nations on earth
- Our future living standards will depend almost entirely on productivity gains
- Our cities and regions (our ‘places’) are latent sources of productivity growth…if we get them right.
According to report author and Deloitte Access Economics partner, Professor Ian Harper: “Governments and businesses shouldn’t just think about levers such as tax or competition reform, as important as they are, to meet Australia’s productivity challenge.
“In the knowledge age, place matters for productivity, and prosperity, more than it has ever done, and getting our cities and regions right is therefore more important than ever.
“As Australia responds to economic shifts and challenges, understanding the huge potential of productive and liveable places – from inner cities to rural and remote communities – will be critical in delivering the future living standards that Australians have come to expect.
“Our national story has been shaped by place, from the first Australians to the highly urbanised country of today, and productive places present so much potential when it comes to prosperity. Our transition to a knowledge economy redefines the purpose of place.
“Place transcends landscape, climate, and buildings. It’s about people and what they produce, the quality of life beyond work, the effectiveness of government, and the momentum of business.
“Flourishing places act as magnets for people, investment and industry, while languishing places give many people a reason to go elsewhere. We need to reconsider how Australian places can be made to flourish rather than languish.”
Deloitte Northern Territory Managing Partner, Hendri Mentz, said that, while business, governments, communities and individuals could all contribute, investing in place should be imperative for business.
“Reconsidering the purpose of place in terms of amenity, jobs and productivity is arguably more important, and more of a challenge, for the Territory than anywhere else in Australia,” he said.
“We are endowed with some great natural assets and proximity to key Asian markets, but stagnant population growth and well-documented social issues make creating the right conditions to allow our places to really flourish very difficult.
“Government has a real role to play here so that our places have more pros than cons. But the value that can be derived from thriving places means changing purpose of place should make business, in particular, think again about place’s potential as a driver of commercial success.
“Business needs increasing returns to deliver growth, and driving innovation and raising productivity grows profits and return on capital invested. Ignoring the dynamics of flourishing places, or failing to act as a place languishes, can lead to missed opportunities.”
Mentz cited the following example where the Territory, through the actions of business and government, was taking the initiative and creating flourishing, and productive, places by connecting communities and people:
- Airnorth: The regional airline has a continued with an ongoing commitment to providing quality scheduled air services to the regional communities of the Territory and has been to extending its network in collaboration with Territory Government, whose support has enabled the airline to recently relaunch Centre Run flights, providing sustainable air services to Katherine, Tennant Creek and Alice Springs.
Professor Harper said: “As Australia moves from farms and factories to the networks and ecosystems of a service economy, our living standards increasingly depend on economies of scale and the knowledge capital of creativity and innovation, generated by people living and working closely together.
“The challenge for Australia therefore – and particularly for governments and business – is to create and nurture places where people want to live and work, and then to catalyse a virtuous circle of economic prosperity, rising living standards, and a vibrant society and culture.
“Reconsidering the purpose of place is ultimately a call for collaboration among four groups that, individually and collectively, have so much to gain from creating flourishing places.”
The Purpose of Place: Reconsidered presents a detailed framework that classifies place and identifies the forces and players that interact to create flourishing – as well as languishing – places.
A five-way classification of regions:
- Inner city – the CBD and adjoining inner metropolitan areas
- Suburban – the metropolitan areas that lie between the inner city and outer urban areas
- Outer urban – the interface between metropolitan areas and non-metropolitan areas
- Regional cities – non-metropolitan agglomerations of at least 10,000 people
- Rural and remote – the rest of Australia.
Ten often interacting and interdependent dimensions of prosperity in place:
Inputs (the building blocks of prosperity in place)
1. Human Resources – people power
2. Natural Resources – endowed wealth
3. Physical Capital – buildings and equipment
Boosters (that influence the effectiveness with which inputs are applied)
4. Social Capital – social connections
5. Innovation and Entrepreneurship – desire for the new and willingness to take risks
6. Leadership and Contribution – capacity and willingness to lead and collaborate
Outputs (the things that make for flourishing places and prosperous lives)
7. Material Standards – economic wellbeing
8. Health and Safety – physical, mental and emotional wellbeing
9. Natural Amenity – beauty of the surroundings
10. Local Amenities – convenience and accessibility of meeting everyday needs.
Four dynamic forces that interact to catalyse flourishing in place:
Four ‘actors’(with much to contribute, and much to gain):
Where to start
“The need to boost productivity growth to sustain rising levels of material welfare is clear. Our report is very much a call to businesses, governments, communities and individuals to collaborate, as each group has something to contribute, and much to gain, from creating flourishing places,” Professor Harper said.
Reconsidering the purpose of place begins with four questions:
- What does flourishing look like?
- Which of the 10 dimensions of prosperity most need to improve?
- Which of the four dynamic forces will most likely catalyse a virtuous circle of prosperity?
- How can each of the four actors best collaborate with the others to set the process in motion?
Building the Lucky Country: Business imperatives for a prosperous Australia
Deloitte’s Building the Lucky Country series was launched in 2011 and has been developed to prompt debate and conversations across business and government on issues facing the Australian economy.
The four reports released previously are:
- Where is your next worker (2011)
Australia's problem in coming years won’t be a lack of jobs – it will be a lack of workers...
- Digital disruption: Short fuse, big bang (2012)
Australia’s business and government leaders don’t need to look far into the future to see the new wave of digital disruption headed towards them. It is already here…
- Positioning for prosperity? Catching the next wave (2013)
Where will Australia’s future growth come from? How can business and government leaders make the right decisions to position for prosperity?
- Get out of your own way: Unleashing productivity (2014)
Australia is a lucky country, with a bright future. But we have a problem – and its colour is red. Red tape, that is.
The fifth edition of our Building the Lucky Country series reconsiders the purpose of place. By collaborating to make place a driver of productivity and prosperity, Australia can unlock enormous potential.
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