Growing Sydney's Economy
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STRATEGIC DIRECTION E GROWING SYDNEY’S ECONOMY METROPOLITAN PLAN FOR SYDNEY 2036 | PAGE 127 Introduction Sydney is home to Australia’s largest economy, innovation, productivity, knowledge intensity and A strong one whose strength is derived from a diversified carbon efficiency (Industry & Investment NSW economy in and sophisticated industry structure and broad 2010). Achieving this outcome and maintaining economic base. Industry & Investment NSW a strong and dynamic economy will be a broadly Sydney and estimates Sydney’s economy accounts for almost based task involving many arms of governments NSW provides a quarter of Australia’s Gross Domestic Product and the private sector. (GDP) and 70 per cent of the NSW economy. It the resources has a key two–way relationship with the State’s SYDNEY’S STRENGTHS AND to fund regional economies—processing their products COMPETITIVE ADVANTAGES and providing a gateway for exports and imports, as economic, well as being a substantial market for their finished Sydney’s economic strength is underpinned by its social and products. competitive advantages, which include: • a diversified, sophisticated industry structure cultural A strong Sydney economy provides: that is highly service and knowledge focused infrastructure • resources to fund economic, social and cultural • a dynamic, globally competitive and growing infrastructure financial services sector, fortified by its size and • the income to fund a skilled workforce diversity. Sydney also has a significant cluster of • residents with capacity to purchase goods and carbon market services that help position it as a services, and centre for emissions trading and reporting • the opportunity to manage the region in an • a highly skilled and multi–lingual population. environmentally sustainable way Approximately 43 per cent of Sydney’s population aged 15 or older has a post–school Sydney’s economy is currently very healthy after qualification and one in three residents speaks a almost two decades of virtually uninterrupted language other than English at home growth, despite the global financial crisis. Its • five major universities (including two in the size and diversity shield it from many global and world’s top 50) and campuses of two other regional economic challenges. Australian universities, 20 Cooperative Research Centres and Centres of Excellence Although Sydney scores highly in global economic including CSIRO, National Information rankings, Infrastructure Australia (2010) has and Communications Technology Australia highlighted the need to retain skilled labour and (NICTA), Australian Nuclear Science and avoid the ‘brain drain’ to other global centres. Technology Organisation (ANSTO), National Measurement Institute, and the Defence Science The NSW Government vision for 2020 is an Technology Organisation economy that will be more than 30 per cent larger • four major medical schools and four of than it is today, driven by growth in highly skilled, Australia’s major teaching hospitals, as well as high–value–added industries. The NSW industry high quality medical research precincts in the base will be internationally recognised for its east, west and north PAGE 128 | METROPOLITAN PLAN FOR SYDNEY 2036 • physical infrastructure such as sea and airport The rail link’s extension to Parramatta, Sydney’s The global facilities, logistics hubs and telecommunications second CBD, will improve accessibility for more economic infrastructure, and Sydney workers, unlocking further economic potential. • a strong transport network with Australia’s corridor will highest capital city public transport use Additional economic opportunities along this grow as the and a $50.2 billion program of transport extended corridor must be pursued, especially as improvements over the next 10 years Chatswood and Macquarie Park reach capacity. Chatswood The initial focus will be to connect residents in the to Epping SYDNEY’S GLOBAL Growth Centres with employment opportunities ECONOMIC CORRIDOR along the corridor via the North West and South rail link is West rail links. extended The Global Economic Corridor extends north and south from the Sydney CBD. To the north it runs TRENDS AND OPPORTUNITIES to connect through North Sydney, St Leonards and Chatswood IN THE COMING DECADES Macquarie to Macquarie Park and to the south through Pyrmont–Ultimo and Green Square to Port Botany For the next decade and beyond, many factors Park to and Sydney Airport. It is a substantial corridor, will provide opportunities and challenges for the Parramatta clustering jobs and economic activity in finance and region’s economy. The NSW Economy in 2020— business services, information intensive industries, A Foresighting Study (Access Economics 2010) was global and national transport and multimedia. commissioned by the NSW Innovation Council and identifies four ‘mega–trends’ that will considerably Already near high income residential areas, access impact the shape and performance of the NSW and to the corridor was boosted by the Chatswood to Australian economies. Epping Rail Link which connects Macquarie Park and Macquarie University with further residential areas and Major Centres such as Chatswood and Hornsby. MACQUARIE PARK METROPOLITAN PLAN FOR SYDNEY 2036 | PAGE 129 Four significant trends impacting the NSW economy growth path to 2020 and beyond (Access Economics, 2010) 1. 3. CLIMATE CHANGE MITIGATION AND RAPID DEVELOPMENT ADAPTATION, AND TRANSITION TO OF THE DIGITAL ECONOMY A LOW CARBON ECONOMY Climate change will create opportunities and challenges for The information economy will have both a direct and indirect NSW industry over the next decade. It will create opportunities effect on the composition of the NSW economy. These for businesses specialising in carbon reduction technology, changes are being brought about by the rapid development consulting services, research and trading. It will also shift of new products and services around the globe including the incentives towards renewable and lower emission electricity introduction of intelligent systems in virtually every part of generation technologies, with the largest impact being to bring the economy. The roll–out of the National Broadband Network forward commercially proven technologies. It will also provide (NBN) provides the potential to extend these developments impetus to reduce greenhouse gas emissions in all aspects of through the economy and society. business with a variety of implications for various sectors of Sydney’s economy. 2. 4 . DEMAND AND COMPETITION FROM EMERGING ECONOMIES AGEING AND GROWING POPULATION The growth of China and India also presents opportunities and An implication of the demographic shift will be changing service challenges for the NSW economy. Many sectors are expected requirements, particularly in health, aged care and housing (with to benefit from growth in China and India, primarily mining increased rates of dementia and disability). An ageing population and related industries such as construction and utilities. The will also have direct impacts upon the supply of labour; this will growth in these countries’ middle classes will continue along be reflected in workforce changes and how work itself is managed. with demand for new high value goods and services. This will be A relatively older population will also have different consumption particularly important for NSW as a service economy, especially patterns, with increased demand for leisure, tourism and in the growing export areas of education, health and professional financial services at the expense of more durable products such as services. However, there will be greater competitive pressures cars and whitegoods. Overall population growth will substantially from these economies as they increasingly move from production impact the required stock of dwellings and related infrastructure of less complex goods into higher–value manufacturing and in NSW. services. Australia’s surging mining sector, driven by rapid growth in Asia will also have further competitive implications for NSW. Higher terms of trade and exchange rates will have negative implications for trade–exposed areas, such as manufacturing and tourism. SOLAR INVESTORS SOLAR PAGE 130 | METROPOLITAN PLAN FOR SYDNEY 2036 The combined influence of these trends will shape While population growth will always stoke These trends the NSW economy’s growth path and overall the economy, further opportunities need to be will shape structure over the next decade and beyond. Overall, supported through well–targeted initiatives and these trends are likely to raise living standards and actions from business and government. the NSW benefit the NSW economy. However, some sectors economy’s will need to adapt to profoundly different incentives Demand for freight transport is projected to grow and opportunities to meet future challenges. rapidly over the coming decades, as a result of growth path economic and population growth. Nationally, and overall In 10 years, NSW’s five largest sectors by share of freight delivery is expected to triple between 2006 value–add are expected to be: and 2050 with more containers moving through structure • financial and insurance services— Port Botany, on motorways and dedicated rail over the next Sydney is well placed to build on its existing freight lines, with increased deliveries to businesses strong financial services reputation and and shops throughout Sydney. decade and sound regulatory system beyond • construction—economic and population While significant in its own right,