Knowledge Future. Supercharging Illawarra's

KNOWLEDGE FUTURE SUPERCHARGING ILLAWARRA’S PROFESSIONAL SERVICES InvigoratingThinking business Call 13(02) 26 4229 96 4722 nswbusinessillawarrabusinesschamber.com.au.com.au To propel the Illawarra’s professional service sector and secure our place in the knowledge economy, the Illawarra Business Chamber recommends: Building the profile and presence of the Illawarra’s professional services sector through marketing, tourism attraction and procurement policy change Helping Illawarra firms better connect and collaborate through better transport linkages and networking opportunities Retaining and attracting skilled workers through placement programs and strategies to address identified areas of skills shortage Developing and promoting the Illawarra’s unique capabilities as a location for government services, back office support, as well as key growth industries such as aged care and tourism Incentivising investment in the region by supporting professional services businesses to exploit new opportunities, markets and to diversify MESSAGE FROM THE CEO Technological advances, global competition and changes in the world economy mean the jobs of the future in the Illawarra lie in the knowledge based professions. While the traditional mining and manufacturing sectors will Together with the NSW Business Chamber, of which we are remain a vital part of our economy, we must urgently a division, the IBC developed the report’s final action plan. diversify the mix of business and labour in our region. This plan draws together the findings of the research into a tangible strategy which, if adopted, will supercharge the There is a compelling case for building our professional Illawarra professional services sector and cement our region services capability here in the Illawarra. Our region has as a major economic centre. The IBC will take a leading role significant natural advantages, cost competitive operating in delivering the strategy, working with our members to conditions and a world class university educating our next implement its recommendations. generation of business leaders. Many of the actions we suggest require the cooperation Outsourcing, new cloud-based technology and the with, or the leadership of Government. As we have emergence of sub sectors such as tourism and aged care highlighted in previous thought leadership, for example, also offer great potential for our professional services linking the Illawarra with Sydney through transport businesses to expand their reach and enter new markets. infrastructure is a critical priority for our regional economy. Despite this, the Illawarra lags by more than 25% behind the The NSW Government should also look to invest in tourism rest of the state in the proportion of its economy involved in attraction facilities such as the refurbishment of the professional services. Only 6.3% of our labour market is Wollongong Entertainment Centre, as well as programs involved in the sector, in contrast with the state-wide designed to bolster entrepreneurship and new business average of 8.6%. opportunities in the knowledge sectors. If the Illawarra’s professional services were simply to reach Taking the steps we suggest will enable Government and parity, this would mean another 300 businesses and an extra business to harness the Illawarra’s outstanding capabilities 3,000 jobs. and supercharge our professional services. The opportunity to bolster our share is too good to miss. Now is the time to translate our region’s strengths into solid opportunities, and secure our place in the knowledge The Knowledge Future: Supercharging Illawarra’s economy. This will create sustainable growth prospects for Professional Services report commissioned by the Illawarra our businesses, attract highly skilled workers and propel the Business Chamber (IBC) sets a clear roadmap for achieving Illawarra toward a bright economic future. this goal. I acknowledge the work of Deloitte in conducting the research, consulting with our members and developing Debra Murphy this report. While the traditional mining and manufacturing sectors will remain a vital part of our economy, we must urgently diversify the mix of business and labour in our region. illawarrabusiness.com.au 3 EXECUTIVE SUMMARY The professional services sector is an important contributor to the Illawarra economy both in terms of Strengths employment and gross regional product. The sector • Ability to provide services to the holds untapped potential to grow and diversify the region’s specific growth region’s economy, but without focused action from • Physical assets (UOW, Port Kembla, industry and policy-makers, there is a risk that the Data Centre) sector will not live up to its full potential. • Cost competitiveness (salaries and office rents) This timely research combines economic and expert stakeholder analysis to uncover where the growth in the sector has occurred and is likely to occur in the next 5-10 years, and outlines key actions for industry and policy- Weaknesses makers to propel the Illawarra’s professional services sector. • Labour market challenges Importance of Illawarra’s professional services sector • Perception issues In terms of employment numbers, the sector has grown by • Narrow market focus an average of 1.4% per year over the last 15 years. While the • Other weaknesses (lack of professional services sector in the Illawarra remains connectivity, communication nascent, the sector has a potentially important role to play in issues, lower hourly rates) the continuing restructuring of the region’s economy. In 2015, there were significant downsizings by key employers in traditional industries throughout the Illawarra, Opportunities including BlueScope, Pentair and Wollongong Coal. The fragility in the dominant Illawarra industries highlights the • General (expanding into potential for the professional services sector to achieve regional, national and international strong growth in future periods and to assist in the broader markets) economic restructuring currently underway. • Sector specific (e.g. civil engineering, on-demand web based engineering, Current state of play out sourcing The provision of professional services in the Illawarra is largely dominated by small firms primarily servicing the local market. Many of these firms are operated by ageing practitioners with few incentives to adapt to changing Threats market conditions or pursue new growth opportunities. • General (labour market, The SWOT analysis below indicates significant untapped perception/informational, potential of the Illawarra professional services sector, but at connectivity) the same time demonstrates there are considerable barriers to be overcome. • Sector specific (scale and funding issues, reliance on other sectors, preferred suppliers lists) 4 illawarrabusiness.com.au Untapped opportunities The opportunities identified as holding the greatest potential • Cost competitiveness; for the Illawarra’s professional services sector include: • The University of Wollongong and a ready supply of • On-demand, web based engineering services; skilled graduates; • Civil/geotechnical engineering and surveying engineering; • Ongoing transition to an increasingly service- and knowledge-based economy; • Specialised consultancy and business advisory services; • A focus on ICT and innovation; and • Provision of financial advice for retirees; • Advantageous internet connectivity. • Website/app design; • Positioning the Illawarra as an ‘innovation region’ • Crowdsourcing; Illawarra Professional Services Action Plan • Tailored marketing strategies; Five strategic objectives have been identified that, if pursued, will exploit the opportunities and overcome the • Outsourcing; barriers of the Illawarra’s professional services sector • Establishing strategic partnerships; and broadly and specifically for the high growth sub-sectors. • Growth in key industries (e.g. tourism, aged care). A range of actions have been developed to pursue these strategic objectives. Implementing this Action Plan will The Illawarra possesses a number of competitive position the Illawarra as a dynamic and competitive provider advantages that have the potential to drive professional of professional services regionally, nationally and globally. services going forward, including: Strategic objective Actions 1. Building the profile and presence of the region’s professional Facilitate strategic alliances services sector Increase visibility of established professional services firms Establish the Illawarra as NSW’s premier satellite conference venue Develop and implement marketing strategy Establish a ‘Think Illawarra’ Forum Assist Illawarra based engineering firms in tendering for work Review opportunities for crowdsourcing and outsourcing 2. Helping Illawarra firms better connect and collaborate both Illawarra Smart Work Hubs regionally and across NSW Improve road and rail connectivity Establish ‘The Illawarra Group’ Facilitate and support linkages with Sydney-based firms 3. Retaining and attracting skilled workers Establish a ‘Professional Placement Program’ Identify and address skills shortages in the professional services sector 4. Developing and promoting the Illawarra’s unique capabilities Relocate government agencies to the Illawarra Promote the Illawarra as a leading provider of back office support Develop competitive advantage in Asian markets Identify professional services opportunities in the growing aged care sector Identify professional services opportunities in relation to tourism Review opportunities for data

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