4 myths of Australia’s Great Small Cities
Regional cities have a new prominence in Australian economic policy. They have been included in the Australian Government’s Smart City Agenda and are an increasing focus for state urban and regional policy. But regional cities are still widely misunderstood, presenting a real challenge if government, policymakers and regional city leaders are to get regional city policy right.
While it is accepted that regional cities house 4.5 million people and have output important to the national economy, misguided assumptions prevail that they are second rate investments compared to big cities and that they are stuck in a cycle of low (or no) growth.
The Regional Australia Institute’s new work ‘Lighting Up our Great Small Cities: Challenging Misconceptions ’ busts these myths. It sheds light on the recent economic performance of regional cities and sets expectations for their future growth.
All data supporting this work is available online via the RAI’s Great Small Cities Data Tool .
Myth 1: Slow or declining growth?
While regional cities are often characterised as having slow or negative growth, as a group their medium-term economic performance has been comparable to the economy as a whole. In fact, prior to 2007 regional city growth outpaced the growth rates of Australia’s largest cities.
Myth 2: Regional cities will be left behind in the new economy world
Australia like other developed economies is becoming services focused. It is assumed that regional cities are inevitably being left behind in this trend as significant airtime is given to the benefits of agglomeration and the recent concentration of growth in our metro capital CBDs. However the data shows regional cities are in fact making the transition. Regional cities are already producing more output in new economy industries (finance, education, health and professional services) than old industries (agriculture, mining and manufacturing), with all cities growing their new economy industries over the last decade.
Myth 3: Population size is the most important factor in predicting economic performance
Regional cities are often characterised as interesting, only when they are big. This drives a misconception that all the benefits of cities grow with population size. In fact when it comes to participation, historical growth or projected growth in output there is no statistical difference between big or small regional cities.
Myth 4: Past performance is the best predictor of future growth
While trends are important, history does not predetermine the destiny of a city. Changing macro-economic conditions are having a significant impact on regional city growth trajectories and a third of all regional cities have already, or are predicted to change their output growth trajectories in the next few years. Some high growth places are slipping back to average levels (e.g. Gladstone and Mackay) and others are expanding more rapidly (e.g. Hobart). Developing smart strategies that respond to changing trajectories is important to successful small cities policy.
What is the payoff from busting these myths?
By busting these four commonly held myths on regional cities we can provide clear focus for future urban investments in Australia. Cities need investment that cultivates their city performance, regardless of their size.
Our regional cities are shifting to new economy industries, keeping pace with metro performance and are expected to maintain growth.
The RAI’s projections of future regional city growth are positive. Regional cities have the potential to produce at least $375 billion in output in 2031, representing a 65 per cent increase from 2013 levels and a contribution of 15 per cent to the national economy. Putting this output in today’s terms, regional cities in 2031 will produce twice as much as all the new economy industries alone produce in today’s metropolitan cities.
Achieving sustained growth in regional cities will require a locally tailored policy approach. In contrast to our major cities where congestion and settlement patterns constrain performance, the goal in small cities should be to tune up the ‘economic engine’ that drives growth.
Across our diverse regional cities we need to nurture new industry specialisations, better enable local business growth, attract more people to the workforce and build on existing lifestyle and affordability advantages to stimulate investment and city growth.
A Blueprint for how to do this is featured in the companion report ‘Blueprint for Investing in City Deals: Are You Ready to Deal?’
What is your city doing to tune its economic engine?
As an extension of the RAI’s ‘Great Small Cities’ research and policy agenda, this work is practical and useful in getting ready for a City Deal. Go online to read the reports and join the conversation. We want to hear what you are doing locally to grow your city.
Do you have a burning issue that needs addressing or an idea that could grow all regional cities? If so, let us know. We look forward to sharing more in the future and welcome your comments and ongoing engagement.
For more information, contact:
Dr Leonie Pearson, Leader – Great Small Cities Program