Cities Beyond Perth: Best bets for growth in a new economic environment
The Changing Economy.
The recent resources boom has led to significant population and economic growth in a concentration of larger, and increasingly vibrant, regional cities and towns all across Australia. One of the epicentres of this growth and change is Western Australia.
As the resources boom shows signs of slowing, regions in Western Australia find themselves in a period of transition. The demand for labour and services in the resources sector is reducing as large projects shift from construction to production phases.
Cities Beyond Perth: Best bets for growth in a new economic environment is a research piece conducted by the RAI and informed by data analysis and consultation with the regional development organisations, local government and business and community leaders in each of Western Australia’s largest regional centres. The report outlines a framework for building a diversified, resilient and growing network of regional cities in Western Australia.
“Australia has a history of taking a reactive ‘clean-up’ approach to industry changes – such as manufacturing. It’s important we break that cycle now in Western Australia. This is a great chance for business and governments to learn from a situation that’s currently unfolding, and apply this thinking to similar cases across the country,” said Jack Archer, Deputy CEO of the RAI.
To be successful in this transition, regions in Western Australia will need to play a proactive role in creating their futures, by identifying and pursuing new competitive advantages that best capitalise on the changing environment.
Leveraging the Success of the Mining Boom
A decade of growth and development has seen Western Australia acquire new sources of potential competitive advantage.
More than half of the regional population now lives in the 12 largest towns and cities, located across each of the nine regions in Western Australia. This concentrated population provides the foundations to develop a network of larger regional cities across the State.
Significant investment through Royalties for Regions and related initiatives has also improved the quality of infrastructure available in many of these regional locations. How we best leverage these new sources of competitive advantage for regional Western Australia will go a long way to determining the ongoing success of these regions.
Why Focus on Developing the Largest Regional Centres?
Large regional towns and cities provide a central base for the delivery of health, education and other government services. The greater diversity and quality of services for residents and visitors as a result of the resources boom means the groundwork is in place for sophisticated growth pathways.
With an advanced economy and increased population size, large regional centres become a focal point for key infrastructure such as ports, airports, and major roads that enable connections to markets for regional Australia. In turn, the market size of large regional centres also ensures these key infrastructure services are more economically viable and increases attractiveness to investors.
As a result of their size and position in each region’s economy, the 12 largest cities and towns play a unique role in enabling the development of wider regional Australia.
Four Development Pathways
Cities Beyond Perth suggests there are four different types of communities based on population and economic change. Each of these four community types require different development pathways:
1) Old towns with city-sized opportunities (Albany, Bunbury, Busselton and Geraldton)
These locations have the 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 need to be further developed to secure these opportunities.
2) Places growing through connected lifestyles (Mandurah and the proposed Avon City)
Close proximity to the Perth metropolitan area offers on-going avenues for future population and economic growth in these areas, as residents can have easy access to the city while enjoying a regional lifestyle. 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 and Kununurra)
Prospects for new economic growth exist in these locations 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 and 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 by identifying opportunities available in external markets.
With the driver of the Western Australian economy changing, each of these locations must recognise and confront the new opportunities and challenges of the currant climate. The Future
To fully leverage these region-led initiatives, it will also be up to State Government to work with local community and business leaders across the developing network of regional cities.
The State Government will be required to broker competing demands amongst regions, be active in providing sustainable access to resources, and improve human capital performance, if the strategies are to have widespread success.
“Contrary to current sentiment, Western Australia is actually in a great position to act and capitalise on the prospects which have emerged as a result of the resources boom in recent years, which is good news for the state as well and as our national economy,” said Jack.
To learn more about how to leverage the comparative advantages of Western Australia’s largest regional towns and cities, read the analysis report.