Regional economies more diverse than we think
Regional economies are often imagined as reliant on one or two major industries, highly vulnerable to changes adverse shocks in on employment security and incomes as markets shift over time. But new research from the Regional Australia Institute has found that many regions in Australia are – like the national economy – highly diverse, from capital cities to very remote communities.
Released today, Economic diversification and the competitiveness of regional Australia, is the first in a series of papers from [In]Sight: Australia’s regional competitiveness index. Data from [In]Sight reveals that of Australia’s 560 Local Government Areas, 252 are classified as ‘highly diverse’, sustained by a broad range of industries including agriculture, tourism, mining, manufacturing and retail.
“A lack of diversity is often identified as a key threat facing Australia’s regions”, says our General Manager of Research and Policy, Jack Archer. “But this data suggests that the reliance of regional economies on specific industries may be overstated.”
Mr Archer said the spread of diversity across Australia’s regions shows that there is potential for all regions, no matter what their size, location or natural strengths, to respond to shifting local and International market demands. Innovation, infrastructure, human capital and technological readiness have been identified as positively impacting on the level of diversification within a region.
However, there are also some regions with diverse economies that are not highly competitive, meaning that it is less about the number of industries within a region, and more about how this is being leveraged. “The challenge for most regions is to build the strength of existing industries to make the region less vulnerable to changes in markets over time”, Mr Archer said.