Investing in national growth – regional City Deals
Investing in regional cities’ economic performance makes good sense. Contrary to popular opinion, regional cities generate national economic growth and jobs at the same rate as big metropolitan cities. They are worthy of economic investment in their own right, not just on social and equity grounds.
However, for regional cities to be ready to capture their $378 billion output potential to 2031, immediate action is needed. Success will see regional cities in 2031 produce twice as much as all the new economy industries produce in today’s metropolitan cities.
Drawing on learnings from the UK, new collaborative work by the Regional Australia Institute (RAI) and UK Centre for Cities (CFC) spotlights criteria and data that all Australian cities can use to help get themselves investment ready.
- Blueprint for Investing in Regional City Deals: Are You Ready to Deal? provides a roadmap to help regional cities prepare to leverage their economic potential; and
- Lighting Up our Great Small Cities: Challenging Misconceptions provides economic analysis of regional city economic performance.
Are regional city economies ready for investment?
Step 1 – use evidence to demonstrate economic performance and identify attractive investment pathways.
The RAI’s latest work confirms that city population size does not determine economic performance. There is no statistical difference between the economic performance of Australia’s big five metro cities and its 31 regional cities in terms of historical output, productivity and participation rate.
So regional cities are as well-positioned to create investment returns as their big five metro cousins. The same rules apply – investment that builds on existing city strengths and capabilities will produce returns.
While no two cities have the same strengths and capabilities, regional cities do fall into four economic performance groups (gaining, expanding, slipping, slow and steady), which helps to define the investment focus they might require.
For example, the report finds that Fraser Coast (Hervey Bay), Sunshine Coast Noosa and Gold Coast are gaining cities – with progress fuelled by high population growth rates (2.6 to 4.2 per cent from 2001-2013). Similarly, expanding cities of Cairns, Central Coast and Toowoomba are forecast for growth (3.3 to 3.9 per cent annually until 2031) building on strong foundations of business entries, but needing to create more high income jobs.
Geelong and Ballarat have low population growth rates of around 1.2 to 1.5 per cent annually, but their relatively high Bohemian Index scores (creative industries) coupled with robust rates of business entries, means they are classified as slow and steady cities. They need to stimulate local businesses to deliver city growth.
Are regional cities ready to deal?
Step 2 – build capacity in the city’s lead organisations and key people and then collaborate, negotiate and do a deal.
Regional cities remain great places to live, often scoring higher than larger cities on measures of wellbeing and social connection. But if there’s no shared vision, or local leaders can’t get along well enough to get behind a set of shared priorities; if debate is dominated by opinion in spite of evidence – local politics may win the day and negotiations to secure substantial city investment will likely fail.
The Australian Government’s Smart Cities Plan has identified City Deals as the vehicle for investment in regional cities. This collaborative, cross portfolio, cross jurisdictional investment mechanism needs all players working together (federal, state and local government) along with community, university and private sector partners – leaving no place for dominant single interests at the table.
Clearly, the most organised regional cities ready to deal are those capable of getting collaborative regional leadership and strategic planning. For example, the G21 region in Victoria (including Greater Geelong, Queenscliffe, Surf Coast, Colac Otway and Golden Plains) has well-established credentials in this area, enabling it to move quickly on City Deal negotiations.
Moving past talk to investment ready
There’s $378 billion on the table, but the nation’s capacity to harness it will depend on two key things.
Firstly, shifting the entrenched view that the smart money only invests in our big metro cities. This is wrong. Regional cities are just as well positioned to create investment returns as the big five metro centres.
But, secondly, regions need to get ‘investment ready’ for success. This means they need to be able to collaborate well enough to develop an informed set of shared priorities for investment, supported by evidence, linked to a clear strategy for growth building on existing economic strengths and capabilities.
While there has been much conjecture on the relevance and appropriateness of City Deals in Australia, it is all focused on big cities. Yet it is our big and small cities that drive our national growth.
This new work released by the RAI and the UK Centre for Cities puts implementation frameworks on the table for the first time in Australia, providing regional leaders with a roadmap towards doing a successful City Deal.
Are you ready to do a deal?
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