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The Purpose of Place Reconsidered Deloitte Australia Acknowledges and Respects the Traditional Custodians of This Land, and Their Elders Past and Present

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The Purpose of Place Reconsidered Deloitte Australia Acknowledges and Respects the Traditional Custodians of This Land, and Their Elders Past and Present Building the Lucky Country #5 Business imperatives for a prosperous Australia The purpose of place Reconsidered Deloitte Australia acknowledges and respects the traditional custodians of this land, and their elders past and present. We take seriously our commitment to promoting reconciliation with Australia’s First Peoples. Contents About this report 1 PART I Place matters 2 Place matters for prosperity 4 The purpose of place evolves 5 Place in the knowledge economy 6 PART II Place in an Australian context 10 A land of extremes 12 Five types of place 13 Regional differences 19 PART III Prosperity and place 24 Measuring prosperity in 10 dimensions 26 How prosperous are Australian places? 29 PART IV The potential of place 36 People 38 Community 40 Technology 41 Governance 44 Virtuous circles and vicious cycles 45 PART V Flourish or languish? 46 Flourishing 48 Languishing 53 What about your place? 57 PART VI Getting started 58 Who can act? 61 Where to next? 61 Appendix 66 Authors 73 Technology has trumped the tyranny of distance and place no longer matters. At least, that’s what most people seem to think. In fact, the opposite is occurring: place is becoming more important as the world’s economies are transformed by knowledge-intensive activities. Place matters for prosperity. For Australia – one of the world’s most urbanised nations – that means we need to reconsider the purpose of place. This report sets the ball rolling. What do we mean by place in Australia’s context? How is place relevant to Australia’s living standards? And what can business do to unlock the potential of place as a driver of our future prosperity? The purpose of place Reconsidered 1 Place matters Place matters Futurists have long argued that soon it will no longer matter where you live or work; you’ll be as connected to the rest of the world on a tropical island as in the We also value the heart of New York City. experience of living in Yet things haven’t worked out that way. As a place, independently telecommunications and travel have grown steadily cheaper, people have chosen to live closer together of our material needs. rather than further apart. Around the world, urbanisation continues unabated, and that Relationships we form trend looks set to persist. with our neighbours and with the surrounding “It seems that every time a new technology landscape nourish our comes along that slashes communications costs, pundits emerge declaring the death sense of belonging. of distance, that the earth is flat, or some other catchphrase suggesting that geography no longer matters. The truth is exactly the “In close proximity is, of course, a description opposite. Falling transport and communication of our natural habitat – just take a look costs are powerful drivers of concentration.” at how most of us choose to live: in cities, Professor Mario Polèse, 2013 2 suburbs, towns and villages. We are, by nature, social creatures who congregate; it’s our cultural DNA. We are not good at surviving in isolation. We rely on communities to support Why do people choose to congregate in and sustain us, and if those communities are particular places? to survive and prosper, we must engage with Place matters for prosperity them and nurture them. That’s the beautiful Place has always mattered for human prosperity. The symmetry of human society: we need direct influence of place on our material wellbeing is communities and they need us.” obvious, with physical attributes like climate, geology, Hugh Mackay, 2014 3 topography and accessibility clearly affecting the material living standards of people who live there. Place affects our prosperity indirectly as well. The People congregate in particular places because place activities, attitudes and character of the people who live matters for their prosperity. It matters directly and in a place – rather than its physical attributes – make it indirectly, materially and non-materially, and for attractive (or unattractive) for others to live there too. better or worse. We also value the experience of living in a place, Human beings flourish or languish in place. independently of our material needs. Relationships we form with our neighbours and with the surrounding landscape nourish our sense of belonging. When conflict and discord mar these relationships, we feel displaced. 1 Scharnhorst, G (2010) Twain in His Own Time: A Biographical Chronicle 2 Polèse, M (2013) 'On the Growth Dynamics of Cities and Regions – Seven of His Life, Drawn from Recollections, Interviews, and Memoirs by Family, Lessons. A Canadian Perspective with Thoughts on Regional Australia'. Friends, and Associates, University of Iowa Press. Australasian Journal of Regional Studies. 19 (1): 5–35. 3 Mackay, H (2014) The Art of Belonging, Pan Macmillan Australia. 4 “ The report of my death was an exaggeration.” Mark Twain 1 The purpose of place evolves As in the agricultural economy, scale and Our prosperity is intimately connected to place and technology drove productivity in the industrial how we interact with it. The rise of average living economy. Technological innovations, like the steam standards through time reflects the evolution of place engine and the power loom, catalysed an era of mass and the purpose we assign to it. production. Place was valued for its ability to support secondary industry rather than primary industry. In early agricultural times, when primary industry Ease of locating and expanding factories, proximity dominated, place was valued for what could be grown, to energy sources, ease of accessibility for workers gathered or mined there, and how easily produce or closeness to markets stood at a premium. could be transported to market for trade and exchange. Places became more productive as the scale of land Industrial processes also revolutionised transport and under cultivation and the size of forests, fisheries or communications. The railway was born, along with the mines increased, and technology improved. overland telegraph. The scale economies of industrial production, together with improved transport and The Industrial Revolution saw a dramatic change in communications, reinforced a tendency to centralise the purpose of place. New sources of energy and in larger towns and cities, drawing people away power-driven machinery released manufacturing and from rural locations. processing from cottages and watermills, establishing them in new and different places and on a grander Industrialisation paved the way for specialisation of scale. Secondary industry was born. Labourers labour, higher incomes and a wider range of goods progressed from being farmers, fishermen and miners and services available for sale to a broader class of to become engineers, craftsmen, factory workers and consumers. Material standards of living rose, but seamstresses. And they moved from farms and rural diseconomies also emerged in the form of social and villages to live in factory towns. environmental problems like overcrowding, poverty, pollution, crime and disease. Industrial towns offered low-skilled workers higher “The idea [of the Industrial Revolution] wages on average than they could earn in rural areas. was radical: that one’s living would be They came in their droves, but life in such places earned by leaving one’s land or back-room could be ‘nasty, brutish and short’. workshop, and that instead of cottage industry or farming, one would go to the machine and be paid to work on it and with it as a factor of production.” Dave Maney, 2015 4 4 Maney, D (2015) 'The Biggest Story Of Our Lives: Economic Revolution', www.forbes.com/sites/economaney/2013/03/01/the-biggest-story-of- our-lives-economic-revolution The purpose of place Reconsidered 5 Place in the knowledge economy Knowledge workers are highly educated, and typically In the post-industrial era, the production of services work in teams to create outcomes beyond the capacity (tertiary industry) creates more economic value than of individuals working alone. They also work with either agriculture or manufacturing (Chart 1.1). sophisticated technologies to manipulate symbols The most highly valued services are those intensive and ideas to solve complex problems and develop in ideas, knowledge and creative skill. innovative products and services. Chart 1.1: Proportion of workers employed in primary, secondary and tertiary industries (actual and forecast, Australia) % 8% 27% 64% 5% 18% 77% 4% 16% 80% 90 80 70 60 50 40 30 20 10 0 1980 2014 2023 Primary Secondary Tertiary Note: Primary industry is defined as agriculture and mining; secondary industry is defined as manufacturing, construction, electricity, gas, water and waste systems. Tertiary industry is defined as all other sources of employment, including information media and telecommunications, education and training, retail and wholesale trade, professional services, and transport, postal and warehousing services. Source: Deloitte Access Economics 2015 6 The purpose of place in a knowledge economy is to facilitate the productive interaction of knowledge workers. Even in a world of instant global connectivity, this typically involves them working in close proximity. Knowledge workers spark off one another as they interact; ideas are their stock-in-trade. These ideas are “The core idea at the center of information- honed and developed as they are exchanged in common based agglomeration economies is that all meeting areas within offices – often serendipitously of our knowledge builds on things that we around the proverbial water-cooler – or in cafés, parks, learn from people around us. The central restaurants and other venues nearby. premise is that the presence of knowledgeable Although modern telecommunications allow neighbors enables an apprentice steelworker such interactions to occur virtually and over long to learn his craft, but it also makes a distances, knowledge workers continue to travel to biotechnology researcher more innovative. meetings and conferences all over the world, or they The interaction of smart people in urban congregate in office towers and technology parks in areas both enhances the development of their home cities.
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