The next wave of reform means Western Australia’s cities and regions – 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 Western Australia Managing Partner Michael McNulty said that, while business, governments, communities and individuals could all contribute, investing in place should be imperative for business.
“Western Australia is endowed with incredible natural assets and has developed thriving urban centres based on Perth, but stretching up and down the coast from Butler to Mandurah, as well as a number of successful secondary regional hubs such as Bunbury, Albany, Geraldton, Port Hedland, Karratha and Broome,” he said.
“But just like anywhere else, our ‘places’ also have their pros and cons. Some inevitably flourish, just as others languish.
“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.”
McNulty cited a number of examples where Western Australia, through the actions of business and government, as well as communities and individuals, was taking the initiative and creating flourishing, and productive, places:
- Perth: The significant investment in Perth over the last 10 years of the mining boom has seen the city grow and flourish. Significant investment in developments like the new Perth stadium at Burswood, and at Elizabeth Quay are bringing the city and the Swan River together again, and Yagan Square is opening the city up to the entertainment precinct of Northbridge
- Curtin University: The University is transforming itself into a ‘socio-economic village’, creating a place that not only caters to students and employees, but more broadly to the local community. Simple things are recreating place and vibrancy at the campus across the arts and culture, food, sport and recreation, offering choice of experience, and engendering a new sense of place
- Pilbara Cities: The Pilbara Cities initiative is an example of the state’s regional cities and towns maximising the benefits of a transitioning mining sector. The significant investment by many of the country’s largest businesses in social infrastructure for remote towns and communities, as well as the volunteer services that private sector employees often provide, are great examples of how the private sector can invest in the communities that their employees operate in to ensure flourishing and thriving places.
“An ongoing challenge is ensuring that outside Perth, the regions, and particularly those in the north, are seen as locations where families and communities can prosper,” McNulty said.
“There is huge opportunity in developing remote agricultural precincts, such as the Ord River East Kimberley project, however they can only succeed business, government and the community come together and collaborate.”
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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