Rise of the Regions Panel Discussion: CQU Festival of Change
ON SEPTEMBER 8TH, CQUNIVERSITY THEIR ANNUAL FESTIVAL OF CHANGE - A FREE ONLINE LEARNING FESTIVAL DESIGNED TO CELEBRATE AND INSPIRE CHANGEMAKING. THE 2020 FESTIVAL OF CHANGE FOCUSED ON OPPORTUNITIES TO TRANSFORM COMMUNITIES, GROW RESILIENCE AND DRIVE POSITIVE CHANGE.
The majority of Australians may live in cities – but regional Australia isn’t staying on the sidelines. Regional industries, property markets, remote working, city congestion and tree-changing have all shifted growth beyond the big smoke – so how should our communities capitalise?
Moderated by CQUniversity Vice-President Global Development Alastair Dawson, meet sectoral leaders Matt Stein, Professor John Rolf and Dr Amanda Cahill who operate across regional government, industry, and are driving regional projects for sustainable futures.
The Panelists
Dr Amanda Cahill is the CEO of The Next Economy. She has spent over two decades working with inspiring people across Australia, Asia and the Pacific to create positive change on issues as diverse as economic development; public health, gender equality; and climate adaptation.
The focus of her work at The Next Economy is to support communities, government, industry and others to develop a more resilient, just and regenerative economy. Most of this work involves supporting regional communities in Australia to strengthen their economies by embracing the transition to zero emissions. Amanda completed her PhD at the Australian National University on participatory action research approaches to economic development in the Philippines. She is an Adjunct Lecturer at The University of Queensland, an Industry Fellow at the Sydney Policy Lab at the University of Sydney, and a 2020 Churchill Fellow.
john Rolfe is a resource economist who is Professor of Regional Economic Development in the School of Business and Law at CQUniversity, and a Fellow of the Academy of the Social Sciences in Australia.
John was one of the leaders of the 2013 and 2018 Great Barrier Reef Science Consensus Statements, and chairs the Independent Science Panel for the Gladstone Healthy Harbour Partnership. He was Editor-in-Chief of the Australian Journal of Agricultural and Resource Economics from 2013-17, and is President of the Australian Agricultural and Resource Economics Society in 2019.
matt Steine is the Chief Innovation and Investment Officer for the City of Townsville where he leads the portfolios for digital city strategy, innovation and Smart Precinct North Queensland. Previous to his work at City of Townsville, Matt managed innovative financing, entrepreneurship and technology within Australia’s Department of Foreign Affairs and Trade.
Most of Matt's career has been in emerging markets including managing Pakistan, Vietnam and Bangladesh for Facebook and co-founding the global mobile identity program for the GSMA. Matt also co-founded a social enterprise putting mobile phones into the hands of women micro-entrepreneurs in the Philippines and Indonesia.
Highlights from the Panel
(listen to the podcast for full details)
[Alastair Dawson] - Recently, the Queensland State Government released its economic recovery plan, outlining six key priorities including backing small businesses, growing manufacturing across new and traditional industries, driving investment in infrastructure, investing in skills, and importantly, growing regions to attract people, talent, and investment while driving sustainable economic prosperity. The plan paints a picture of a strong state with more than $84 billion in exports, courtesy of a large resource sector. Yesterday, the government launched a mini budget, which declared it would invest in small business, renewables and job creating projects across the state, which would appear to be more than New South Wales, Victoria and Tasmania combined.
Of course, there will be challenging times and the government now forecasts $100 billion in debt and record unemployment rates, but it still believes it can deliver a very confident and sustainable future. I'm interested as a starting point; how true will this be for all of Queensland? Does prosperity and growth depend on where you're located? Will government expenditure be Metropolitan based, or can the regions who often generate much of the state's wealth, expect to see much more investment? I’ll open this up as an interesting point with Matt; how do you see COVID impacting on the future for the Townsville region?
[Matt Steine] - Alastair, thanks for the introduction and a great question. I'd obviously like to acknowledge my fellow panellists as having great expertise in this domain. I think to talk about COVID and the effect on regional economies, we probably need to have a broad understanding of the trends pre-COVID and what the drivers were that were impacting the ongoing future of regional economies in Queensland in Australia, versus our Metropolitan cousins.
For a long time over Australia's broad economic growth and development, we've seen the uptake and increase in jobs, particularly in the services sector and the knowledge economy. Before COVID, I think we continued to see some of the most capable and talented people being attracted to businesses that were taking on high growth challenges and opportunities, and unfortunately for regional Australia, a lot of that was clustering in metro areas.
Now, I think through both strategic planning and this wonderful opportunity that COVID has presented, it has effectively reduced the advantages that being in a densely populated metropolitan city have created. It's highlighted the opportunities both for resilience but also ongoing sustainability, of having dispersed populations, coupled with the great investment in ICT, and specifically the NBN.
We certainly see that that connectivity, coupled with an incredible lifestyle, COVID is probably presenting new opportunities for us. If only we can make sure we are adapting quickly enough to take advantage of them.
John, how are you seeing the Central Queensland region in terms of its development and possibly taking on Matt’s point of COVID removing some of the advantages of metropolitan regions? Are you seeing similar things, or do you have a different perspective?
[Professor John Rolfe] - Similar things. The regions have generally not suffered as badly as urban areas with COVID, and that's partly because populations are more spread out and there are not the same amount of controls. Because we don't have as big a services sector, we're more reliant on other sectors such as the resource base, which have tended to tick over as normal. But looking forward, there's pluses and minuses that are emerging. Some of the pluses are that I think we're learning to work remotely in Australia, and that is freeing up some of our population to be based outside of urban areas.
That's where I think Matt talking about getting the services and infrastructure so people can work remotely is really critical. Because even if only 5% of the workforce moves out of urban areas into regions, that will be a game changer in terms of regional development in Australia.
But against that, we're also seeing some other forces apply. A lot of people have gotten used to online shopping, for instance, and a lot of people have got used to getting services more remotely. It means that people don't necessarily have to have their local shop or their local supermarket providing the same level of services we used to. Online services and shopping, that's going to tend to be based in big urban areas. We've got these opposing forces going on at the moment and it's not really clear how it will play out over time. To what extent will workforces work remotely? And to what extent will service delivery and shopping delivery move to online? Those are just two of the challenges going on at the moment.
That's a really interesting example. I notice, for instance, if you travel around cities like Rockhampton, you'll see a significant increase in the number of retail spaces that have actually closed as a consequence of COVID. [I’d like to] flick back to Matt, just for a second before we come to Amanda, to delve into that question a bit more. Matt, are you seeing in the retail spaces around Townsville much change, or is there still room to grow for retail spaces in the region?
[Matt Steine] - I think my broader perspective on retail is that there were ongoing trends that were challenging the viability and ultimately the value, especially that [process of] taking something that was produced somewhere else and packing it, putting it on a shelf, paying for real estate and having somebody come and access that locally.
I think that broader trend has been accelerated by COVID. There is also a shift towards people wanting to have locally produced content, and I think that goes for food, clothes and experiences. At the same time that we've seen this rise in digitisation, we are seeing a democratisation through big platforms like Amazon, Alibaba and Gumtree even.
I think as we help local businesses transition to be able to make the most of those online opportunities, we may see the resurgence of that idea of the local craftsperson across that range of items.
Then the ability for them when you're regional not to just only think about serving your local small population, but to think about an addressable market that is global, I think that presents a great opportunity for us as well.
Whilst it can be a difficult transition for some, I think it is one that we needed to make longer term, and as long as we can support businesses in making that transition, I think there's some great upsides.
Great, thank you. Amanda, you do a lot of consulting around the state, with government and with industry. What trends are you seeing emerge as a consequence of COVID?
[Amanda Cahill] - I think John and Matt have made a good point that a lot of the things that we're seeing actually were trends that were already starting. The other things I'd throw in there is the increase of automation we're seeing in the resources sector, which is actually reducing jobs in that sector. But also, there are opportunities [and Matt sort of touched on this] of entering into a new phase of if you've got the digital technology in place and the marketplaces, you've got local infrastructure around things like renewable energy.
Cheap energy sources and good transport infrastructure can open up new industries, and that relocalisation of a lot of the processing and manufacturing that already happens across regional Queensland is often invisible in the discussion.
There's an opportunity to actually reduce prices in the circular economy in terms of waste. That idea of instead of waste, how do we recover resources locally and use them in different ways?
The internet of things [is valuable] as well. How do we hook things up so that information and energy can flow efficiently across the region? This can be seen as very exciting, but it's also very threatening for people, and I think we need to have much more of a public conversation around - what does that change mean for regions?
How do we prepare workforces? What's the role of regional universities in working with industry to develop the skills that we need, and how can we address a lot of the skills shortages that are already there in terms of digital technology, finance, health services? What I found last year, where we've consulted about 500 people across the state, is there's actually a lot of awareness of the changes that are happening, but there's also a lot of fear.
[We need to] actually bring people together to say, “what are your strengths in this place? Where are the gaps, and how do we fill those gaps? What's the role of universities? What's the role of government and industry?” It’s actually thinking about how we plan for that change over time, instead of it happening really suddenly overnight.
I'd like to unpack that a little bit more. Is there a role for government, or is the private sector really driving things? One of the things that Matt talked about was the opportunities as things change, and so does government have a role to play? Because what you see in these changing economies with automation and technology, is that there are players who rise to the fore where others who haven't been able to adapt as well fall out. Where does the market get left to run its course? Does government have a role to drive that in the right direction, or is there a combination of both? What sort of things are you finding in the conversations you’re having?
[Amanda Cahill] - We didn’t just consult with industry, we consulted with government, all levels of government industry, social service groups, unions, environment groups and community organisations.
The majority of people were industry or government related, and the interesting thing that came out of it actually [which really surprised me in a couple of forums] was industry advocating for a role for government.
Actually, across all of the forums, including community focused forms and industry roundtables, a really interesting discussion about democracy and where government has been letting people down [occurred]. The industry players were saying there's only so much we can do, unless there is a role for government in investing in large-scale infrastructure like the NBN or energy transmission infrastructure. Industry can't build that on its own, things like having the right legislation and regulations in place. This is industry advocating for that, which really surprised me. To actually level the playing field and make sure the right standards are in place, they are doing long term workforce planning. There was actually quite an interesting discussion of industry pushing back against government, saying you can't just leave it to the market, you have a role to play.
Communities are advocating for government to bring the right players together, to have really honest conversations about what change means and how regional communities can lead their own planning process on that.
The government has a role in coordinating that, so we had local government saying we're doing what we can, but there are some portfolios in federal and state government we don't get to control, so you actually have to help us lead our own planning processes around that. Then there were more controversial conversations around democracy and should we be looking at some of the interesting democracy experiments happening around the world, around citizen assemblies and making decisions and participatory budgeting and using digital technology to enable much more direct influence over decisions.
That is actually really surprising. Often the industry will say step out of the way, let's get on with it. Matt, how do you find that? You talk about the role of being able to adapt and getting regions to be adaptive. That obviously is a role in a sense for government to do or to help. How do you actually help communities, particularly regional communities, which don't always have the resources? How does government take a role in helping communities be more adaptive?
[Matt Steine] - Great question, Alastair. I think to be honest, if we had the perfect answer, we would probably be in a slightly different situation today than we are. I'll just very briefly touch on the idea in terms of overall goals around a sustainable future economy. I think, at that regional level, this does represent the measure of the adaptive capacity for the region to be resilient in the face of challenges. I think North Queensland with cyclones, floods, droughts at times and obviously now COVID [that the rest of Australia is sharing in] has certainly had its share of that.
I think we have proven to have quite a resilient economy, but then it's about having the key stakeholders equipped to adapt to take advantage of change for positive outcomes. When COVID has come along, what are those business models that are COVID resilient?
How can we quickly shift to ensure that we quadruple down on those business models to help them absorb and grow, and take in perhaps unemployed staff and or resources that are being transitioned out to other parts of the economy? I think Amanda's work with The Next Economy has been is one of the key initiatives around getting people to think around this. For Townsville, Townsville was the first city in Australia to have a city deal, where we're seeking to align federal, state and local layers of government towards a long-term vision that goes beyond the political cycle.
Now, fantastically, the local leadership created a Townsville Community Partnership Plan, that [I'm sure Amanda will be excited to know] actually includes an ambition towards participatory budgeting. I think engaging the community in helping to determine that precious allocation of resources is critical to that path moving forward.
One of the things that Smart Precinct as a not-for-profit is incredibly grateful for is that we have received funding from Townsville City Council and the Queensland Department of State Development Innovation, specifically to play that catalytic role in supporting and attracting local high growth businesses to be globally competitive, and to remain based in North Queensland. I think it is that leadership, vision and catalytic role in helping the economy transition the government has. I also think we shouldn't forget it isn't about either market or government, because government is such a large player in the market.
I think the work that Lara and the team through Social Innovation at CQU have been talking about is the role of government procurement to lead the market and give signals to the private sector, in terms of where things are going. I'm really excited that there's some real commitment to exploring the future of energy around hydrogen in North Queensland, as well as supporting lithium ion battery plants and development. I think these industries in combination with the macro-economics and those catalytic roles at the micro-economic level [are essential]. Then, I have to acknowledge the work of Queensland's Chief Entrepreneur Leanne Kemp. Her and her team have been working alongside key players within the department, like Sarah Pearson, to ensure that the whole of the regional innovation ecosystem can work together.
I think this is the only way that we will succeed, not as isolated small cities, but as a network of innovation agents, sharing best practice sharing procurement opportunities, and even importing best practice from overseas.
Thank you for that, that's really interesting. I’m just wondering, you note that all up and down the State of Queensland, there are a number of communities who are actively getting involved in hydrogen projects. How do you as a region stop each particular region cannibalising each other? The other question of course is that notion of Smart Precinct. Townsville’s done Smart Precinct particularly well. But, it's not the first region that's talked about smart cities or smart regions, almost every local authority used to talk about the Smart City, I think Logan tried to do that. But Townville’s managed to get that right. What are the ingredients for making sure that your region actually does things that work well, so it's not just chasing the latest buzzword?
[Matt Steine] – Alastair, I think you're talking about some of the really key challenges that face regional leadership, whether that's in academia or business, or in our specific role. I think it does take individuals with a vision beyond their own patch to reach out to other regions and say how can we compete together? To be honest, I think there's actually some lessons that we could learn domestically, from our cousins at DFAT and the broader international aid community, when they do think at a multinational and regional level about how those systems work.
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I am sure Amanda is going to have a far more nuanced and insightful perspective in terms of energy, so I will pass that over to her. But I think we could spend a billion dollars poaching businesses out of Sydney, Melbourne, Singapore, San Francisco and Israel to come to Townsville. But if there isn't a long term, fundamental reason and advantage in them being here, that is not going to be money well spent. Understanding what our potential strengths are and how we can work within broader systems is critically important. I think this is where things like advanced manufacturing play around IOT.
Of course, you should have your IOT manufacturing in every regional city, but because our primary producers, mining and engineering services are coming up with ideas, having people locally that can turn that idea into a product that may then ultimately serve global markets is critical.
I think there's some really interesting plays going on around that advanced manufacturing locally.
Excellent, thank you for that. I want to ask John; you've been looking at regions for a long time now in the research that you do. Are you noticing different plays in the way the government is responding to region's now? Is there more of a genuine shift, or is government still very Metropolitan centric in its sort of approach to doing things? Communities in the regions, have they they've gotten into the swing of that?
[John Rolfe] - I think government pay a lot of lip service to regional development, but if you look at the outcomes, it's really not improving. We're seeing a continued concentration into the urban areas. It's partly driven by where the jobs and opportunities are. But if you look at where specialist services and government investment is, a lot of it’s concentrated in metro areas.
For instance, in health, Queensland Health spends millions of dollars to fly people to Brisbane for treatment every year from all of these different regional cities. The whole system set up is to generate the specialist services in the capital, and then bring everybody in.
That's happening across just about every sector of the economy. We're seeing that specialisation, and it always seems to end up being in the capital city. One of my beefs at the moment [just to digress] is the Inland Rail proposal between Brisbane and Melbourne. Sounds great in theory, but in reality, what's happening in Brisbane is that they’re busy planning for a lot of agricultural processing to be located in Brisbane, because that'll be the end of the rail head.
What's going to happen is that all of regional Australia between Melbourne and Brisbane will end up with the real value add, coming to Brisbane and generated at the capital city. This is the outcome of quite faulty planning.
We need things like the railhead to go to somewhere like Gladstone, so that you go into another port. You shouldn't just automatically concentrate things in a capital city every time.
That’s clearly one of the challenges in making regions economically sustainable, not having enough service delivery. There's always been the government moving services from time to time. Government services tend to move out, and I’ve noticed a lot of states have moved government services out, but invariably, they always tend to find their way back to metropolitan area. They don't seem to stick, and I did want to come back to that.
Amanda, we talked about the energy and the hydrogen projects, and there are any number of those hydrogen projects, which are again, driven as a stimulus project for regions. The resource sector is a really big sector for Queensland, it drives a lot of the economy for revenue. But you still see this fly in fly out mentality. I'm sure when you talk to businesses and government that still is, you don't build strong communities when the people who are driving the functions of those regions are flying in doing the work and flying back, and communities don't see the benefits of that. What feedback are you getting?
[Amanda Cahill] - I think that's the choice of the moment, and particularly with the billions of dollars that are going to be spent around economic recovery, what are we investing in? There is an opportunity to invest in people being in place, rather than [what John said]. It’s interesting, there's a lot of discussion in the forums that we've done this year around learning the lessons from the LNG expansion in terms of what we need to do with renewable energy.
Even if modestly, we're accepting the current government's plan to get to 50% renewable energy by 2030, there's a huge amount of construction work that needs to be done to get us up to that level. Now, are we going to be investing in building those skills up regionally? Or are we just going to do the fly in fly out system again? The implications are that the money doesn't stay in the region.
There's issues particularly around renewable energy construction, that a lot of the jobs around are short term, but there are actually a lot of ongoing jobs and maintenance and operations once they're up and running. It's about how do we get the right mix? It's about how we do that planning over a 10-year period of time to get us to where we need to go. But also thinking about the future of mining and a lot of talk around diversifying mining in Queensland. The really good news around investing in the Copper Stream 2.0 Project to link Mount Isa and Townsville opens up a lot of opportunities, in terms of minerals processing and actually keeping things like the copper refinery in Townsville competitive internationally if we can access that renewable energy.
Again, it's about what are we investing in? What are we exploring? It's not just the resources sector, but which parts of the resources sector are we investing in for the future, and how do we link all of those pieces up?
I think it was certainly very telling yesterday when the Queensland Treasurer announced that there would be investment into energy, alternative renewable energies and hopefully, we might see investment going into the regions. There's been a lot of talk at a national level about Australia's excessive reliance on manufacturing from that side of the country, and that we've become a net importer of technology and manufactured products. Do you think COVID has perhaps given an opportunity for us to think more seriously about bringing that manufacturing back?
[Amanda Cahill] - There was actually a lot of talk last year, even before the bushfires, around the fact that regions have become more vulnerable.
There was a sense that people were saying a lot of services have been ripped out and taken away from regional centres, and people felt that they were actually more resilient in the past than they are now in terms of services and local manufacturing.
That was information already coming out, and then post the bushfires when we did the forum in February this year before COVID, there was even more focus on the importance of things being decentralised, to actually be able to withstand a whole lot of external shocks.
COVID has just added another layer on top of that in terms of global financial pressure and shocks, and not being able to access a global supply chain. I think the conversation has been building and now its people saying we just don't have what we need locally to withstand a whole lot of different external shocks.
Now's the time to invest in people, services and infrastructure. We can actually provide the basics that we need as a starting point, and then build on those strengths to then be able to export out.
John, any views on that?
[John Rolfe] - I think that it's often very difficult for Australia to compete in the manufacturing area, that's not going to change. Just looking at what happens in other countries, manufacturing works or grows well when you get a very strong network of firms that are good at making things and a very long history of skills development. You don't just start a manufacturing hub from nothing. You've got to build, and it takes a long time to grow it.
I think that the trick for the regions to do this is to find an area where they think that there is some potential for manufacturing that will build on one of their local capabilities, the local strengths, and then to concentrate on that rather than just advertising for any manufacturing business to come.
For instance, in Mackay, it could be machinery within the mining sector or something like that. It's got to build on a local need, and a local strength.
[Amanda Cahill] - Can I just add to what John was saying? I think that there is a shift, although I definitely agree with what you're saying. I guess joining what you're saying with what Matt’s saying, there is an emerging opportunity that means that we're competitive in a way that we haven't been before.
If you can bring the energy prices down [which renewable energy can], if that's planned and managed appropriately, as we transition from coal-based electricity to renewables, you’ve pretty much got zero energy costs, the digital technology, and the automation coming online, which then replaces that labour cost.
For the first time in a long time, Australia has a chance to be competitive in a way that it hasn't been before, and I think that's the interesting question. That is a question at the moment, as to whether we can take advantage of that. But we've got to build on what's there.
I guess that gets back to that question of how adaptive communities can actually be, and whether they can actually realise the opportunity and become competitive in those sorts of environments. Matt, Townsville has a long history of supporting a lot of the resource activities it has. It has a large fly-in fly-out workforce that live there, but also has ports and a large industrial environment. How are you seeing that discussion around manufacturing development, new manufacturing opportunities, is it part of the conversation in that region?
[Matt Steine] - I think absolutely, and part of it does go back to the idea of sovereign capability. Rather than it being idealistic, it's actually about appropriately pricing downside risk on some of these elements.
I think then understanding the value to the economy [and businesses more broadly] of having locally skilled/talented people, companies, and ecosystems can generate new ideas and foster productivity. That can solve things for a local context that you might not get out of a manufacturer that's thousands of kilometres away.
I think to John's point about needing a critical mass of the right types of people and companies before you see success in things like advanced manufacturing ecosystems is something that I think we're all beginning to understand better. I think even the most far right thinkers are having a discussion that perhaps we have met some of the limitations or downsides in unfettered global trade, without a consideration for having capabilities available to you on shore in terms of resilience.
Whilst I think I'm a big believer in elements of participatory budgeting [in terms of helping people to make choices], particularly where there is opportunity cost over precious dollars in terms of how it affects them, we also begin to see the success of market economies like Singapore, where there is very clear and deliberate leadership around items like energy.
I don't have all the answers, but in the places that I've lived, I think it is hard. You need to have a situation where the state and local markets can work together, and I think we could do a lot better in planning out a total regional economy. I think with what we have seen happen with the NBN, we need to be thinking in terms of other core enabling infrastructure for regions.
That's a really fascinating point. It's interesting that we are at this university led discussion, and that we haven't really talked a lot about the role of universities in the regions at this point in time. Perhaps you can just tell us what do you see as the changing role of universities and where do you think the gaps are between what universities are currently doing to prepare young people for skills in the future?
[Amanda Cahill] - One of the really strong themes that came out of all the regions that we worked in was the role of the local university, which are CQU when we're in Rocky and Gladstone and JCU in North Queensland. It was really interesting, as it wasn't just talking about workforce development.
People talked about the important role universities play as a hub for bringing people together to work out problems locally or do that planning and work with local government and other players as a facility, and actually physically having a lot of resources that communities use, as a procurer of services and actually supporting the local economy.
[Additionally] working very closely with industry, around research and development and being able to respond, as Matt was saying, is what's needed locally. I think there's still challenges ahead, but I think regional universities play an incredibly important role in helping communities manage change.
Excellent. John, I wonder if I could just ask you the similar question, what do you perceive the role of universities is in the region?
[John Rolfe] - I'm going to be a lot more provocative here Alastair. I read that our responses [and this is a global response] to COVID is we are really protecting our older population and putting all the costs into our younger population. Young people are out of jobs, they're out of work, they're not able to socialise, a lot of them are locked out of education at the moment, and there are really big impacts on their careers.
It's the other way around from what normally happens in times of crisis. Normally, when you have a big depression or a war, it changes the wealth distribution in society, and it's the people who've got skills and education and can find new opportunities, they’re the ones who flourish. At the moment, we're not unlocking that in our society.
I think the challenge we've got in Australia is how do we give young people a go? That's something the government I think should be paying more attention to. But at the university sector, I think universities have got a role in trying to train young people and not just train them to have a job or profession, but train them to think about what society is going to look like in the future? What are the opportunities in the future? Because it's not going to be the same and at the moment, we are missing that spark a little bit.
That's a great conversation to actually make people think about as they go beyond this conversation.
Amanda Cahill, John Rolfe and Matt Steine, thank you very much for your contribution today.
