Townsville's Creative Services Subsector and the NBN: a Case Study

QUEENSLAND UNIVERSITY OF TECHNOLOGY, CREATIVE INDUSTRIES FACULTY, SCHOOL OF COMMUNICATION

Townsville’s creative services subsector and the NBN: A case study

Callum McWaters Bachelor of Business (Marketing) and Bachelor of Media & Communication (Honours).

Submitted 2019, in fulfilment of the requirement for the degree of IF49 Doctor of Philosophy, School of Communication, Creative Industries Faculty, Queensland University of Technology.

Keywords: Creative services subsector, Creative Industries, Townsville, National Broadband Network, NBN, Queensland, regions, creative business, regional Trident analysis, the Creative Industries Trident II, creative industries mapping, innovation, Porter’s competitive diamond.

Abstract

This thesis uses the regional Queensland city of Townsville as a case site for exploring the links between the creative services subsector of the creative industries and the National Broadband Network (NBN). There has been intense political debate about the social and economic benefits that the NBN might provide to the Australia. Now as the NBN nears completion there is a compelling need to evaluate the impact of the infrastructure. Business people working in the creative services subsector are uniquely positioned provide valuable insights about the impact of the NBN infrastructure. Creative services are highly intangible and are therefore likely to be conducted online, as it is easy for creative services to achieve commercial scale using the internet. Many of these types of businesses are also large broadband data consumers. Townsville was chosen as the case site because of: its status as an NBN first release site, its role as a regional hub and the difficult economic conditions endured by the city from 2011 to 2016. While the growth of Townsville’s workforce stagnated from 2011 to 2016 the city’s creative services subsector grew by six percent. This suggests that creative services are more resilient to resource driven boom-bust cycles than other parts of regional economies. Interviews showed that the NBN brought with it significant benefits. Improved business productivity was achieved through the time- and cost-saving convenience of cloud computing. This case study also suggests that if barriers to using the NBN were removed, the utility of the NBN would increase.

Sub

Table of Contents Abstract ...... ii List of figures ...... vii List of tables ...... viii List of abbreviations ...... ix Statement of original authorship ...... xi Acknowledgments ...... xii Chapter One: The Promise ...... 1 Chapter Two: The creative industries in Australia ...... 6 The creative industries ...... 6 The Australian workforce ...... 8 Regionalism and unequal growth ...... 10 Distance...... 13 Chapter Three: The NBN ...... 15 User groups and service types ...... 18 NBN first release sites ...... 21 Broadband penetration ...... 22 Economic growth ...... 22 Productivity ...... 24 Job creation ...... 24 Consumer surplus ...... 24 Firm efficiency ...... 25 Application to the NBN ...... 25 Chapter Four: Methodology ...... 29 Site selection ...... 29 Research design ...... 31 Creative industries mapping ...... 32 Utilising the cluster analysis method ...... 34 Methods ...... 35 Semi-structured interviews ...... 35 Creative Industries Trident II method ...... 46 Limitations of the research design ...... 54 Preliminary policy evaluation ...... 54

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Uniqueness and transferability ...... 55 Chapter Five: Trident II analysis ...... 57 Townsville’s creative workforce 2006 to 2016 ...... 57 Pre-NBN: 2006 to 2011 ...... 60 Mid-NBN: 2011 to 2016 ...... 62 Mining in Australia and the boom-bust cycle ...... 63 Townsville’s creative economy 2016 ...... 65 The regional Trident II ...... 67 The creative economy in Queensland cities 2006–2016 ...... 69 Discussion...... 72 The resilient creative services ...... 73 Chapter Six: Creative frontier city? ...... 75 The political economy of Townsville (NQ) ...... 75 Townsville’s top employing industries ...... 76 Townsville’s development ...... 77 Specialisation and diversification ...... 77 Agricultural export base ...... 78 Strategic military location and aviation ...... 79 Recent growing pains ...... 81 The Adani Carmichael coal mine ...... 81 Other significant government policies in play 2006–2016 ...... 82 Creative Industries ...... 86 Supply ...... 86 Demand ...... 87 CI initiatives and motherships ...... 88 CI motherships and breeding grounds ...... 89 Indigenous art and culture ...... 92 A successful regional economy? ...... 94 Chapter Seven: NBN applications ...... 95 What is the NBN being used for in Townsville? ...... 95 Access to information ...... 97 Cloud computing ...... 98 Service delivery ...... 102 NBN: more than entertainment? ...... 104

Productivity or employment growth? ...... 105 Conclusion ...... 107 Chapter Eight: Technical issues ...... 108 Expanding footprint, growing complaints ...... 108 Prior to connection ...... 109 The NBN ping-pong ...... 110 Network performance ...... 111 Gigabit demand ...... 113 Untangling the situation ...... 114 Stickiness in the value chain ...... 114 The trust deficit ...... 116 Demand and pricing issues ...... 118 Revolutionary change in consumer behaviour ...... 121 The Vertigan panel forecast flaws ...... 122 Monitoring and mistrust ...... 124 Preliminary policy evaluation ...... 125 Chapter Nine: Growing pains in the growth cycles ...... 127 References ...... 131 Appendix 1 ...... 148 Appendix 1A NBN Footprint in Townsville ...... 148 Appendix 1B NBN Points of Interconnect table 2016 ...... 150 Appendix 1C Interview guide Pool A ...... 152 Appendix 1D Interview guide Pool B...... 154 Appendix 1E Interviewee list ...... 155 Appendix 1F Creative Industries Townsville 2006 – 2011 ...... 156 Appendix 1G Business profiles ...... 157 Appendix 1H Transcriber confidentiality agreement template ...... 158 Appendix 1I Ethical considerations and protocols ...... 159 Appendix 1J Notes on ABS Census data ...... 161 Appendix 1K 2006 Townsville Trident II ...... 163 Appendix 1L 2011 Townsville Trident II ...... 164 Appendix 1M 2016 Townsville Trident II ...... 165 Appendix 1N Trident II format limitations ...... 166 Appendix 1O Brisbane Trident II growth rates ...... 167

Appendix 1P Bundaberg Trident II growth rates ...... 168 Appendix 1Q Cairns Trident II growth rates ...... 169 Appendix 1R Gold Coast Trident II growth rates ...... 170 Appendix 1S Ipswich Trident II growth rates ...... 171 Appendix 1T Mackay Trident II growth rates ...... 172 Appendix 1U Rockhampton Trident II growth rates ...... 173 Appendix 1V Toowoomba Trident II growth rates ...... 174 Appendix 1W Notes on the regional trident analysis ...... 175 Appendix 1X Creative employment summary table ...... 176 Appendix 2 ...... 177 Appendix 2A National workforce growth 2006–2016 ...... 177 Appendix 2B National workforce growth 2006–2011 ...... 178 Appendix 2C National workforce growth 2011–2016 ...... 179 Appendix 2D Townsville in the North diagram ...... 180 Appendix 2E Townsville’s creative services subsector 2016 ...... 181 Embedded creatives...... 181 Creative support employees ...... 185 Specialist creatives ...... 185 Appendix 2F Townsville’s cultural production subsector 2016 ...... 188 Embedded creatives...... 188 Creative support employees ...... 190 Specialist creatives ...... 191 Appendix 2G Regional trident analysis cultural production subsector ...... 194 Appendix 3 ...... 196 Appendix 3A SafetyCulture profile ...... 196 Appendix 3B Queensland Regional area technology start up comparison ...... 197 Appendix 3C Townsville I.C.T. Business Network Directory (TICTBN) ...... 198 Appendix 3D Townsvillecreative.com ...... 199 Appendix 4 ...... 200 Appendix 4A NBN technology available in Townsville ...... 200 Appendix 4B Service delivery chain ...... 203 Appendix 4C TIO NBN contractor complaint case example ...... 204

List of figures

Figure 3.1 The nonlinear relationship between bb. penetration and output...... 23 Figure 4.1 The three modes of creative employment (Higgs & Cunningham, 2008)...... 33 Figure 4.2 Townsville Trident II results 2006, format replicated from (Cunningham, 2013)...... 49 Figure 5.1 Townsville’s creative economy 2006 to 2016 relative growth matrix...... 58 Figure 5.2 Townsville’s creative economy 2006 to 2011 relative growth matrix...... 61 Figure 5.3 Townsville’s creative economy 2011 to 2016 relative growth matrix...... 62 Figure 5.4 LGA creative workforce ’06-’16, ’06-’11 and ’11-‘16 ...... 69 Figure 5.5 LGA Creative services subsector for 06-11 and 11-16...... 71 Figure 6.1 Townsville GRP per sector in 2010/2011 (AEC)...... 76 Figure 6.2 Townsville’s top five startup target markets (Markham & Caioppe, 2016)...... 90 Figure 0.1 National employment data from the ABS 2007 and 2016...... 177 Figure 0.2 National employment data from the ABS 2007 and 2012...... 178 Figure 0.3 National employment data from the ABS 2012 and 2016...... 179 Figure 0.4 Embedded creative services employees by occupation 2016...... 182 Figure 0.5 Creative services support employees by industry 2016...... 185 Figure 0.6 Creative services specialists by industry 2016...... 186 Figure 0.7 Creative services specialists by occupation 2016...... 187 Figure 0.8 Embedded cultural production employees by occupation 2106...... 189 Figure 0.9 Cultural production support employees by industry 2016...... 191 Figure 0.10 Cultural production specialists by occupation 2016...... 192 Figure 0.11 Cultural production specialists by industry 2016...... 193 Figure 0.12 LGA Cultural production workforce for 2006–2011 and 2011–2016...... 194

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List of tables

Table 2.1 Summary table of creative industries in Australia...... 10 Table 3.1 Townsville broadband subscribers...... 26 Table 3.2 NBN key text by Katz typology...... 27 Table 4.1 Most frequently mentioned broadband applications...... 42 Table 4.2 Broadband function grouped by broadband benefits...... 44 Table 5.1 Employment growth summary table, Aus. and Townsville...... 58 Table 5.2 LGA active workforce growth in %...... 68 Table 5.3 Regional Trident II LGA active workforce growth raw figures...... 69 Table 6.1 Townsville 2011 workforce per sector (%), adapted from ABS (2017)...... 77 Table 7.1 Most frequently mentioned broadband applications...... 97 Table 7.2 Broadband function grouped by broadband benefits...... 105 Table 0.1 Calculations for ten year growth of the national workforce 2006 to 2016...... 177 Table 0.2 Calculations for the five year growth of the national workforce 2006 to 2011...... 178 Table 0.3 Calculations for the five year growth of the national workforce 2012 to 2016...... 179 Table 0.4 Non-creative industries that employ creative services specialist 2016...... 184 Table 0.5 Non-creative industries which employee cultural production workers 2016...... 190

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List of abbreviations

ABS Australian Bureau of Statistics

ACCAN Australian Communications Consumer Action Network

ACCC Australian Competition and Consumer Commission

ACNC Australian Charities and Not-for-profits Commission

ACS Australian Computer Society

ANZSCO Australia and New Zealand Standard Classification of Occupation

ANZSIC Australia and New Zealand Standard Industry Classification

AVC access virtual circuit

CVC connectivity virtual circuit

CALD culturally and linguistically diverse groups

CQU Central Queensland University

DCMS Department of Digital, Culture, Media and Sport

DSITIA Department of Science, Information Technology, Innovation and Arts

FCS Framework for Cultural Studies

FIFO fly-in fly-out

FTTP fibre to the premises

GDP Gross Domestic Product

GFC Global Financial Crisis

GRP Gross Regional Product

GVA Gross Value Added

HFC hybrid fibre coaxial

IGP Industry Gross Product iNQ Innovate North Queensland

IP intellectual property

IPTV Internet Protocol Television

ISP internet service provider

JCU James Cook University

MoU Memorandum of Understanding

MTM mixed technology model

NAIF North Australian Infrastructure Facility

NBN National Broadband Network

NCEIA North Coast Entertainment Industry Association

NDIS National Disability Insurance Scheme

PDA Priority Development Area

POI Point of Interconnect

R4R Royalties for the Regions

RDA Regional Development Australia framework

RSP retail service provider

SAF Singapore Armed Forces

SME small to medium enterprises

STEM science, technology, engineering and mathematics

TATSICC Townsville Aboriginal Torres Strait Islander Cultural Centre

TBDC Townsville Business Development Centre

TCT Townsville Civic Theatre

TICTBN Townsville ICT Business Network

TIO Telecommunications Industry Ombudsman

TRIBN Townsville Regional Indigenous Business Network

UGC user-generated content

UK United Kingdom

UNESCO United Nations Educational, Scientific and Cultural Organisation

USA United States of America

VoD Video on Demand

VOIP voice over internet protocol

Statement of original authorship

The work contained in this thesis has not been previously submitted to meet requirements for an award at this or any other higher education institution. To the best of my knowledge and belief, the thesis contains no material previously published or written by another person except where due reference is made.

QUT Verified Signature February 2019

Signature Date

Acknowledgments

When I was in Townsville for fieldwork there was a sense of distress about the economic fortunes of the city. This research has led me to the conclusion that the challenges that regional cities in Australia will face in the next decade will be much more challenging than those that they have faced in the previous decade. However, when I left Townsville I could not help but feel a sense of optimism for the city’s future. I do feel that the Townsville has great potential and a bright future. Perhaps, that is because I was blessed to meet with and speak with many inspirational community leaders.

I would like to thank every interview participant for lending me their time and sharing their experiences with me. Without their participation this thesis would not have been possible. I gratefully acknowledge and thank the Townsville Business Development Centre for offering me in-kind support, by providing me with a desk space during my field work in 2016. I would also like to thank Eduardo de la Fuente for also offering me some desk space at James Cook University during my field work in 2016. I am also grateful to Elieen Siddins for the effort she made to reach out to me with some suggestions during the recruitment phase of the project and to John Williams for his assistance contacting local creative industries businesses.

Closer to home, I owe a great deal of thanks to my supervisory team, Dr. Christina Spurgeon as Principal Supervisor and Professor Terry Flew as Associate Supervisor. Christina has been an incredible mentor not only throughout this project, but also throughout my honours project. I am truly blessed to have had such an incredible mentor in Christina for the past few years. I have study at the Queensland University of Technology for my entire academic career and I am appreciative of all the learning opportunities it has provided and to the people that have made those experiences happen.

I will be forever indebted to all my friends and family who have supported me on my PhD journey. I would particularly like to thank my friends Liam, Monique and Kieran for giving me a home to go to when I needed it the most. I must also recognize the great work that Alice and Lola did for me as research administration assistants.

Professional editor, Kerrie Le Lievre, has provided copyediting and proofreading services, according to the guidelines laid out in the university-endorsed national ‘Guidelines for editing research theses’. I would like to thank Kerrie for her editing services and all the hard work she put into editing this thesis. This research was funded through an Indigenous Postgraduate Research Award (IPRA) awarded by the Queensland University of Technology.

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Chapter One: The Promise

This thesis explores the impact of the National Broadband Network (NBN) on the creative industries in the regional Queensland city of Townsville in 2016–2017 in order to contribute to a larger national debate about the social and economic impact of broadband infrastructure in regional Australia. Through a detailed analysis of employment data, using the Creative Industries Trident II method, and semi-structured interviews with creative industries participants, this thesis concludes that there are some indications that the NBN has encouraged the growth of the creative economy in Townsville. These positive indications were mostly noticed in Townsville’s developing information and software sector. Interviews with Townsville based creative industries business people revealed that the NBN was mostly being used as a means to increase productivity by improving the efficiency of business activity through greater use and integration of applications such as cloud computing. However, unresolved issues in the telecommunications industry, such as regulation, industry cooperation, industry communication and the transparency of the NBN Co., inhibited the ability of NBN customers to use the network to its full potential.

However, it was difficult to identify growth patterns in the results of the Creative Industries Trident II analysis that would confirm or even suggest a link between the NBN and the growth of creative industries employment in Townsville. The creative industries workforce grew by 18 percent in Townsville in the decade from 2006 to 2016. Disaggregating the Trident data into the two five-year periods 2006–2011 and 2011–2016 clearly shows that the economic fortunes of Townsville changed greatly during the decade. In the 2006–2011 period, Townsville recorded a creative industries workforce growth of 20 percent, while in the 2011–2016 period the creative workforce declined by two percent. To confirm whether the circumstances that led to the decline of Townsville’s creative workforce in the 2011–2016 period were due to local factors or broader macro trends, the scope of this research was expanded to include Creative Industries Trident II analyses for eight other cities in Queensland.

The eight other cities considered were Brisbane, Bundaberg, Cairns, the Gold Coast, Ipswich, Mackay, Rockhampton and Toowoomba. The comparative analysis of the growth of the creative workforce in these cities during the 2011–2016 period confirmed that all of the cities including Townsville suffered from a slowdown in this period. It seems quite likely that the Global Financial Crisis (GFC) and the end of the mining boom could be large-scale macroeconomic events that affected the cities observed during the 2011–2016 period.

Importantly though, the creative services subsector, did not experience a decline in employment in the boom-bust cycle apparent in the decade considered here. By using the Creative Industries Trident II method, it was possible to disaggregate the creative industries workforce into two creative subsectors – the cultural production subsector and the creative services subsector. The cultural production subsector could largely be considered as business-to-consumer activities which produce a product for consumption by consumers (Hearn, 2015, p. 95). The creative services subsector is comprised of business-to-business organisations which sell products or services as inputs into a bigger value chain (Hearn, 2015, p. 95). Disaggregating these creative subsectors allowed this study to confirm the findings of previous research showing that the creative services subsector is the growth engine of the creative industries (Cunningham, 2013; Hearn, 2015). The quantitative findings from the Creative Industries Trident II analysis provided scope for the interviews in Chapters 6, 7 and 8 to concentrate on creative services subsector businesses in Townsville and their experiences with the NBN.

The NBN is the largest and most expensive infrastructure spending project in Australia’s history, and therefore has been the subject of strong partisan political debate. Almost every aspect of the project, including its cost, delivery and timing, has been the subject of vigorous debate. At the time of writing the NBN was expected to be 80 percent complete by the end of 2018 (NBN Co., 2017b). Because it is not yet complete, to this point debate has centred on projections and assumptions, making public discussion on the matter susceptible to misinformation and outright disinterest. Therefore, it was important to observe the impact of the NBN through the eyes of broadband users who did have access to the network, as this would enable grounded conclusions about the impact of high-speed broadband.

This research interrogates the three main narratives in circulation regarding the impact of the NBN and reports on an unanticipated fourth narrative. The first narrative is that consumers of entertainment services are the only beneficiaries of the network and that these users and purposes are unworthy of the large investment costs. This approach to the NBN was exemplified by the federal Liberal-National Coalition parties while they were in opposition prior to 2013 (as cited in Abbott rejects "video entertainment system", 2010). The second and more plausible of the scenarios is that the NBN will have a series of flow-on effects across a whole range of industries in the economy, but that these benefits will be mostly linked to productivity gains and cost-savings in the delivery of government services (Süßspeck, 2015). The third, more speculative narrative foresees not only productivity gains such as those in the second narrative, but also more “revolutionary” (Tucker, 2015) broadband-based products and services which are more far broadband-intensive than current applications. A fourth

narrative has also emerged as the NBN rollout has progressed, that the NBN has led to worse consumer outcomes. This narrative is not explored in this thesis

This study investigates the creative industries because of their strong links to innovation (Cunningham, 2013; Hearn, 2015), which increases the likelihood of discovering Tucker’s (2015) “revolutionary” products and applications fuelling the demand for broadband data growth. The observed structure of the creative industries could be imagined as an hourglass (Deuze, 2010), with a few large organisations that dominate the marketplace and draw upon a large pool of small organisations and contractors for resources. An overview of the current research on the NBN and high- speed broadband reveals that there is a particular lack of understanding about how small and micro businesses will use the NBN. Previous research has found that there are a large number of small- to medium-sized businesses (5 to 199 employees) and micro businesses (less than 5 employees) (SGS Economics and Planning, 2013) in the creative industries, and Hearn (2015) describes the growth of creative services employees in the creative services subsector (creative specialists) as the “boomtown” of employment. Employees in the creative services subsector tend to be employed in small and medium organisations (SMEs) and enjoy relatively stable and well-paid jobs. In contrast the employment conditions experienced by creatives in the cultural production subsector are generally not as accommodating , and could be described as precarious (Hearn, 2015).

The creative employees who work in industries outside of the creative industries (embedded employees) are often also important contributors to innovation, as they are considered to be conduits for creativity and innovation for their employers (Cunningham, 2013; Hearn, 2015). Previous research has found that creative employees embedded outside the creative industries often outnumber creative specialists working in the creative industries (Cunningham, 2013; Higgs & Cunningham, 2008; SGS Economics and Planning, 2013).

The fieldwork for this research took place in 2016–2017. During this period, the NBN footprint was small but it was growing fast (see Appendix 1A). Therefore, to have the best opportunity to observe the full range of experiences that the creative industries had with the NBN, it was important to choose a well-developed site. Two suburbs of Townsville, Aitkenvale and Mundingburra, were first release sites for the NBN. There were five locations chosen from mainland Australia (excluding the state of Tasmania) to host trials of the NBN Co.’s fibre-to-the-premises (FTTP) network rollout (NBN Co., 2010). However, Townsville remains an NBN first release site that has received little academic attention from telecommunications and media scholars outside of this work. Townsville also had the largest number of premises connected out of all NBN sites in Queensland at the commencement of the project (see Appendix 1B). It emerged as an interesting site to observe the creative industries due

to its role as a services hub for the broader north Queensland region, the comparative advantage the city has over regional rivals due to its geography, and the investigation of the creative industries as an employment growth sector In Townsville by Daniel, Fleischmann, and Welters (2015).

This thesis is comprised of nine chapters. Chapter Two explores creative industries theory and the new economy. This exploration reveals that Australia has a somewhat paradoxical relationship with its creative sector and the broader tertiary services sector. The cultural geography of Australia and its regions and the uneven distribution of wealth in the nation are also explored. Chapter Three explores the links between the NBN and the cultural geography of place, with particular reference to the first release sites of the NBN.

Chapter Four discusses the methodology used in this thesis including the justification for the selection of Townsville for the case study site, the research design, a discussion of the methods and limitations as well as ethical procedures.

Chapter Five introduces the results of the Creative Industries Trident II analysis for Townsville, as well as the comparative analysis between the Trident results for Townsville and the eight other cities studied: Brisbane, Bundaberg, Cairns, the Gold Coast, Ipswich, Mackay, Rockhampton and Toowoomba. The comparative analysis confirms that there are two distinct patterns of growth throughout the decade. There was a relative boom time in 2006–2011 and a slowdown of growth from 2011–2016, most likely due to the GFC and the end of the mining boom. The analysis of Townsville does suggest that the creative services subsector performed better than the rest of the city’s economy during the 2011–2016 slowdown, providing some support for the premise that the NBN may have stimulated creative services employment growth in Townsville.

Chapter Six explores the unique cultural geography of Townsville and the way its comparative advantages have helped to shape its industry base. Townsville’s transition from an industrial city to a post-industrial city is canvassed and it is proposed that there are fortuitous circumstances that have led to the development of a burgeoning information technology and software hub. There is evidence to suggest that the NBN has helped some of the creative businesses in the information technology and software sector to grow quickly, and that the arrival of the NBN in the area has acted as a catalyst for the information technology community to mobilise, coalesce and become more active in local policy processes.

Chapter Seven creates a framework to represent the way that interviewees from Townsville’s creative business community used broadband and the NBN. The interviewees discuss what they use broadband for and what they would like to use it for. Better broadband availability and services

allowed creative industries businesspeople in Townsville to access information faster and more reliably. The ability to use cloud computing for service delivery or to work at multiple sites was a major time- and cost-saving factor for interviewees.

Chapter Eight highlights some of the difficulties creative businesspeople had with the NBN in Townsville and the way it impacted their business. The chapter relates the negative experiences users had with the NBN to the emerging national narrative around the NBN.

Chapter Nine concludes the thesis by making the observation that all of the objects of this research: the creative services subsector, the NBN and Townsville – are at delicate stages in the history of their development. The creative services subsector is growing strongly, but misunderstandings about what the arts industries are and how they operate, especially in saturated digital media landscapes is leading to a lack of recognition of the subsector. Townsville is a regional city in a state that has been through some troubling economic times the creative services sector has been a comparatively bright spot for the local economy in the 2011 to 2016 period. So, as the city continues to face an uncertain environment the creative services subsector seems to be a group of industries deserving of greater attention. Finally, the NBN as symbolic tool for decentralisation seems to have largely disappointed and under-delivered on its promise. However, the network is not yet complete and there are many unresolved issues in the telecommunications industry. If regional cities such as Townsville want to have a thriving creative services subsector they need to continue researching and monitoring the impact of the NBN and participating in future policy discussions about Australia’s telecommunications industry.

Chapter Two: The creative industries in Australia

This chapter explores the creative industries concept and its intersection with the NBN, understood as an infrastructure tool stimulating growth in Australia’s post-industrial economy. Despite the continuing discipline-based disputes about what the creative industries are, how they should be measured and what their true nature is, there has been a noticeable change over the past two decades in the types of industries and occupations that are currently identifiable as growth sectors in the Australian economy. Will the NBN enable the creative industries to continue growing? Or will the limitations of the NBN policy be an obstacle to the growth of the creative industries in Australia?

The creative industries The United Kingdom (UK) government’s Department for Digital, Culture, Media and Sport (DCMS) creative industries mapping reports (1998, 2001) are considered to be seminal works in the popularisation of the creative industries concept. The DCMS defined the creative industries as “those activities that have their origin in individual creativity, skill and talent and which have a potential for wealth and job creation through the general exploitation of intellectual property” (1998). The creative industries, according to the DCMS list, are advertising, architecture, art and antique markets, crafts, design, designer fashion, film and video. The adoption of the creative industries concept by the UK government invigorated the intellectual arguments regarding the role of the arts, humanities and culture, and particularly their value to nation states as potential growth industries for nations seeking to offset job and revenue losses in the other industrial manufacturing sectors. These debates were already occurring in forums such as the United Nations Educational, Scientific and Cultural Organisation (UNESCO). In 1986 UNESCO created a Framework for Cultural Statistics (FCS) which aimed to develop cultural statistical methodologies for measuring cultural activities that its member nations could use as indicators of culture. UNESCO updated the FCS in 2009 to “reflect the current more inclusive approach [to creativity and culture] and the priorities of developing countries” (2009, p. iii).

For White (2014, pp. 67 - 85) there are three sociological theories which best explain the rise of the creative industries: Bell’s information society or post-industrial society; post-Fordism; and Castells’s network society. While not the first or last author to write about the post-industrial society, the US sociologist Daniel Bell is often a key figure in these discussions. Bell observed employment trends in the US and theorised about the significance of the growth of employment in industries other than the more traditional agriculture, construction and manufacturing industries. Bell realised that

technology was an important factor in the changes that were occurring in the US in the 1970s and foresaw that in the future, technology would be the object of the stratification of society, rather than capital or class as in earlier societies. The post-industrial theorists were technologically deterministic, arguing that it was technological ability that allowed a society to progress from pre-industrial (or agrarian) to industrial before moving to a post-industrial (or services-based) economy.

Another economic phenomenon in the US that occurred in parallel with the shift in employment trends towards services, and perhaps accentuated it, was the rise of post-Fordism. Post-Fordism or the post-modern economy refers to more flexible product and service value chains and a heavier focus on globalised trade. Harvey (1989) argues that because of the driving forces of capitalism, the need for unending growth and the consequences of that growth, boom-bust cycles in capitalist societies are unavoidable. When Bell’s work on post-industrialism began in 1973, most Western nations were facing an economic crisis. Because of the strong economic growth in Japan, Europe and the US in the post- war boom decades, consumer goods had reached saturation point, and there was an excess of productive capital and assets in these countries with nowhere to invest, while the productive capacity of many manufacturing industries lay idle because there were no more customers for consumer goods (White, 2014, pp. 69 - 71). Demand stagnation led to cost-cutting, outsourcing and searching for new markets. It also increased the trend toward post-industrialism, with the growth of employment in the services industries in nations that exported their industrial manufacturing sectors to other lower-cost locations. Thus firms became multi-national or even ‘networked enterprises’, which will be discussed further below in relation to the network society theory. White (2014, p. 70) argues that in contrast to the Fordist tradition where consumer goods where created as standardised functional items with long shelf lives, in the post-Ford or post-modern economy, design, packaging, advertising and innovation became important factors in convincing consumers to make repeat purchases. White (2014) considers the UK government’s adoption of the creative industries concept as an acceptance that the declines in the nation’s manufacturing sector experienced in the late 1980s and 1990s were an unavoidable product of globalisation and the post-modern economy.

Manuel Castells’s sociological theory of the network society is concerned with the impact of global economic networks enhanced and enabled by technology. Castells is particularly concerned with the way global economic networks affect concepts of space and time. In Castells’s theory, in globalised industry networks such as the financial sector in London, the ‘space of flow’ or the time of other financial events occurring around the world transcends the ‘space of places’, conceived as the actual time attached to the clock or time zone as most citizens in London outside the financial sector would experience it. This time-and-space compression is one of the most profound effects of the

network society as Castells imagines it, but not the only one. While it is easy to equate a networked enterprise with large, highly capitalised multi-national organisations, lower barriers to entering certain industries due to developments in technology means that in some industries, success in a networked society is more based on a business’s or an individual’s ability to negotiate or navigate the networks in those industries. The role of technology in enabling networked industries to proliferate globally and to lower entry barriers should not be underestimated. In the two decades in which the creative industries have been under investigation, there has been an immense growth in the sector, particularly in those industries that are exposed to digital technology.

The Australian workforce As a nation, Australia has been one of the earliest and most willing adopters of creative industries discourse. However, it is debatable whether Australia can be considered a post-industrial economy at all. In 2016 it was reported (using 2015–2016 Australian Bureau of Statistics data) that more than 79 percent of Australia’s workforce was working in the services industries (Australian Government, 2016). Despite this, most of the nation’s revenue is still generated from the mining sector, with resources accounting for more than 50 – 60 percent of the nation’s total exports (Australian Bureau of Statistics, 2018b). In 2015, Cunningham provided an overview of the response to the creative industries concept in Australian policy at that point in time. While there were important policy initiatives taking place at both the federal and state levels, Cunningham noted that adoption of the creative industries discourse in Australian policy-making had not yet paralleled that of the UK. Cunningham (2015) deduced that a major differential factor between Australia and the UK in regard to the creative industries concept adoption has been necessity. The next paragraph will introduce some key statistics used to measure the value of the creative industries to the Australian economy.

SGS Economics and Planning (2013) measured and valued Australia’s creative industries in its Valuing Australia’s creative industries: Final report. The report found that the creative industries’ value added, the measure which indicates the increase in value of goods and services at each stage of the production chain, was approximately $33 million in the 2011-12 financial year. This value had also been steadily declining since 2007–08. The report also found that in 2011–12, industry gross product (IGP) for the creative industries had declined by one percent per annum since 2004–05. This was in comparison to a growth of three percent in the broader economy over the same period. The reasons cited for the decline were the GFC and the impact of technology on some creative segments, such as the traditional print and broadcast media. According to the Australian Bureau of Statistics (ABS)(as cited in SGS Economics and Planning, 2013), 432,965 people in Australia were employed in the creative occupations in 2011, which represented 4.4 percent of the working population. In 2011, almost 40 percent of creative employment was related to advertising and marketing. Software development and

interactive content made up 22 percent of creative employment, with visual arts accounting for 19 percent. Finally, “almost half of those employed in creative occupations [were] working within non- creative industries” (SGS Economics and Planning, 2013, p. 39). Hearn (2015, pp. 101 - 105) considers the creative workforce embedded in other industries as the next reframe for creative industries policy, because embedded creatives help organisations to offer the market points of difference that add value, assist in the identification of new consumer needs and products, and enhance the absorptive creative capacity of the firm in general. The (SGS Economics and Planning, 2013, p. 37) report also showed that “the average incomes of those working in the creative industries are significantly higher than those employed within other industries of employment” (SGS Economics and Planning, 2013, p. 37).

According to Cunningham (2013), while Australia’s workforce grew by 1.75 percent between 1996 and 2006, the creative industries grew by 3.1 percent. The creative industries contributed $86 billion (6.9 percent) to Australia’s gross domestic product (GDP) in 2008–2009 (Cunningham, 2015, p. 165). Despite this, the export earnings of the creative industries were not as impressive, with only the architecture and design industries being export positive (Cunningham, 2015, p. 166). Australia continues to enjoy revenue streams from other industries, and unlike the UK, there has been no great need to develop the potential of the creative industries for export revenue. As a nation Australia has been fortunate enough to enjoy an unprecedented number of years of unbroken economic wealth creation, due in no small part to its mining resources. At the time of writing, Australia’s record of 27 consecutive years of economic growth has not been interrupted by economic recession, despite the end of the mining boom and the GFC. Regardless of national revenues, however, the economic benefits have not been spread equally throughout the nation, and many small cities and towns are not enjoying the same favourable conditions as larger urban centres such as Sydney, Melbourne or even Brisbane. For a summary of these statistics quoted here about the creative industries in Australia see Table 2.1 below.

Creative Industries in Australia summary table CI measurement Statistics Year Source 2011/12 SGS Economics and Creative Industries GVA $33m FY Planning (2013) Creative Industries Industry 2011/12 SGS Economics and $32, 666m Gross Product (IGP) FY Planning (2013) Australian Bureau of People employed in Creative 432,965 or 4.4% of Statistics as cited in SGS 2011 Industries in Aus. national workforce Economics and Planning (2013) 40% of creative SGS Economics and Advertising and marketing 2011 national workforce Planning (2013) Software development and 22% of creative SGS Economics and 2011 interactive content national workforce Planning (2013) 19% of creative SGS Economics and Visual arts 2011 national workforce Planning (2013) Approx. 50% of SGS Economics and Embedded employees creative national 2011 Planning (2013) workforce Creative industries workforce 3.1% 2013 Cunningham (2013) growth 1996 – 2006 Creative industries $8.6B 2008 (Cunningham, 2015, p. 165) contribution to GDP Table 2.1 Summary table of creative industries in Australia.

Regionalism and unequal growth Beer (2003, pp. 1-13) states that the liberalisation and integration of the Australian economy into the global economy along with the retreat of federal and state governments from industry participation have led to the phenomenon of increasingly unequal economic growth in Australia since the 1980s. Beer proclaims that for an Australian, the place where you live has become an “important determinant of quality of life” (Beer, 2003, p. 5) because the mix of industries in a region and the ability of a region to adapt to global conditions determines potential career options and the level of welfare support from the government. Beer (2003, pp. 1 - 13) asserts that it is a region’s ability to find a niche market and specialise that allows it to grow, and that not all regions are successful. This has created deep and visible political and economic tensions between people living in inner-city areas, suburban areas and rural and regional areas. Many Australian state and local governments have investigated the creative industries as a new source of job creation in the face of downturns in the traditional manufacturing and mining industries. This helps to contextualise the popularity of the “cultural turn” (Gibson, 2003, p. 211) and creative industries discourse among cultural geographers in Australia, and goes some way to explaining why Australian creative industries academics and policymakers have so warmly embraced a more refined understanding of the creative industries than the inner/outer city binaries that exist in the work of Florida (2002). Briefly, the cultural turn is an

intellectual movement which aims to place culture at the centre of enquiry (see Jacobs & Spillman, 2005).

The Northern Rivers region of New South Wales has received a great deal of attention for its creative industries. Its music industries were investigated by Gibson (2002, 2003). Gibson and Robinson (2004) and Gibson (2008) investigated the potential of the music industries and creative networks in the Northern Rivers region (primarily the North Coast Entertainment Industry Association, also known as NCEIA) to stem the flow of young people leaving the region for employment. They found that if NCEIA could improve the income-earning potential of music cultural producers, it would have economic and demographic benefits for the region beyond just job creation. Henkel’s (2010) ten-year study of the creative and screen industries in the Northern Rivers region found that “growth and development in these sectors are not confined to the major capital cities and can occur in regions such as the Northern Rivers of NSW, where certain conditions and attributes are present” (Henkel, 2010, p. 193). The conditions that Henkel referred to were the high number of producers in the region and the engagement of the local industry group in the development of both the sector and the creation of industry associations and networks. It is these kinds of endogenous local factors that Luckman, Gibson, and Lea (2009, pp. 81 - 82) identified as crucial to the development and implementation of creative industries scripts and policies.

Waitt and Gibson (2009) explored the failed implementation of a creative cities agenda in Wollongong. They identified two major factors that inhibited Wollongong’s ability to transform into a creative city: proximity and cultural legacy. Wollongong is a small city 82 kilometres south of Sydney, NSW. The city has a strong cultural affiliation with heavy industry such as steel making. It was an early mover in the creative cities movement, being the first Australian city to engage with the cultural and creative industries as an economic strategy for employment growth (Waitt & Gibson, 2009, p. 1229). The impetus for the city to investigate the cultural and creative industries was the economic decline of the steel industry in the city. Unfortunately, early attempts at implementing creative industries strategies in the city copied the standard creativity scripts of the likes of Landry (2000) and Florida (2002), largely ignoring the “endogenous” (Luckman, et al., 2009) local creative factors (Waitt & Gibson, 2009). Wollongong also failed to position itself properly in comparison to Sydney, which is less than two hours’ drive away. The city had difficulty engaging its residents in cultural events, when residents would prefer to participate in these activities in Sydney. There was also resistance from the city’s residents and civic leadership to the embrace of the cultural and creative industries, as they viewed this as being in opposition to the city’s traditionally masculine-identified industries (Waitt & Gibson, 2009, pp. 1240 - 1244). There are many other regional cities throughout the country that share

this type of masculine cultural identity linked to a major local industry, and it could be argued by the uninitiated that much of north Queensland could be assimilated with the outback, agriculture, mining and the untamed tropics.

Daniel, Fleischmann, and Welters (2016) situate their discussion of the creative industries in northern Australia in the context of the recent policy process around building a northern Australian vision from the current federal Liberal-National government. Daniel, et al. (2016) conclude that the creative industries received very little policy attention because of the unresolved debates in Australia regarding what constitutes creativity, how creativity contributes to economic development and how creativity contributes to innovation. The authors conclude that the only solution is for the fragmented creative industries, particularly in northern Australia, to come together to increase lobbying and representation efforts.

In response to rising unemployment and challenges in local industries, the Townsville City Council commissioned an investigation into the potential of the creative industries in Townsville, which culminated in the Growing the creative industries in Townsville report (Daniel, et al., 2015). This preliminary scoping study on the size of the creative industries in Townsville (Welters, Daniel, & Fourie, 2013) found that the number of creative employees in the city during the period suffered a decline of four percent relative to the growth of the rest of the city’s workforce during that period. This was despite a numerical increase in the number of creative people employed in the creative industries of 85 in the 2006–2011 period.

Fleischmann, Welters, and Daniel (2017) considered whether a creative industries cluster in Townsville would be beneficial to the growth of the sector in the city. The authors found that creative business activity was mostly focused on the northern Queensland region and that therefore, there was a great opportunity for the creative industries in Townsville to improve upon the sense of cooperation and collaboration in the community. The authors found that co-location of creative businesses could also assist in capturing the leakage of creative work to the large southern cities such as Brisbane, Sydney and Melbourne (Welters, Daniel, & Fleischmann, 2018).

Daniel (2013) found a lack of awareness of, or engagement with, key creative sector policy documents at the national, state and local levels by the creative sector in Townsville. Daniel (2013, p. 120) speculates that the reason for this lack of engagement is that commercially-driven participants may not feel that traditional arts bodies and policies will support their goals. In a follow-up study, Daniel (2014) expanded his scope of enquiry to include the city of Cairns. Daniel (2014) develops the themes of disconnect between creative industries workers and policies in north-eastern Australia that

were first revealed in Townsville in (2013). Distance, isolation and the lack of relevance of arts policies all emerged as important themes in the study (Daniel, 2014). Daniel (2015) interviewed 38 creative people in Cairns and Townsville to discover that, while place is a significant motivator and an influential factor in creative practise, it is also somewhat of a double-edged sword. The pleasant tropical environment of Townsville and Cairns and the lifestyle this provides for residents is considered a strength of the region; however, the relative distance from other major capital cities creates a sense of isolation, disengagement and disenfranchisement. In an analysis of 11 interviews with key representatives of arts stakeholder organisations, Daniel (2016) found that there were 4 areas of ongoing challenges: “the relevance and impact of policy, significant changes in government funding, the fragmented nature of the creative industries and the isolation of north Queensland” (Daniel, 2016, p. 267).

The challenges identified in Townsville and north Queensland bear a great resemblance to the issues identified in the creative industries investigation of Darwin. The Creative tropical city: mapping Darwin’s creative industries report (Lea et al., 2009) was the output of a landmark creative industries mapping exercise in Australia. It was one of the first studies of its size and significance to be conducted in a capital city in Australia outside of the usual Australian creative cities of Melbourne, Sydney and Brisbane. The report aimed to map the creative industries and investigate the applicability of national and international creative industries strategies to Darwin in the Northern Territory (NT), as well as identifying opportunities for the creative industries in Darwin to continue growing. This research used a range of methods including investigating employment statistics, conducting individual interviews, mapping exercises with research participants, focus groups with creative industry sector representatives, and establishing a policy feedback exhibition. The report found that Darwin did indeed have a thriving creative sector, but that it was incredibly fragile due to the small size of the city’s population and its remoteness. In a related research output Luckman, et al. (2009, pp. 81 - 82) acknowledge that not all aspects of creative industries and creative cities policy scripts were transposable to the unique challenges of Darwin. Instead, the authors recognised the need for creative scripts to acknowledge endogenous conditions and to create a dialogue and balance between the community and its goals (Luckman, et al., 2009, pp. 81 - 82).

Distance In both the cases of both Darwin and Townsville the remote location of the cities is a barrier to creative industries growth (Daniel, 2015; Daniel, 2016; Daniel, et al., 2015; Lea, et al., 2009). Broadband and greater internet connectivity are often seen as opportunities to bridge the gap of distance between people, and it is this optimistic view of broadband connectivity that is expressed in the Creative tropical city: mapping Darwin’s creative industries report (Lea, et al. (2009). Fleischmann,

et al. (2017, pp. 237 - 238) recognise that there are still ambiguities regarding the way greater broadband connectivity, and specifically the NBN, will affect creative industries. On the one hand, they accept that the NBN will increase the pressure on local creative industries in Townsville by exposing them even further to global competition, but on the other, they acknowledge that it may increase the capacity for fostering better local relationships in a dispersed region such as north Queensland. Alizadeh and Farid (2017) suggested that the NBN first release sites, which included select suburbs of Townsville, were chosen as political ‘pork barrels’ to appeal to swing voters in the 2010 and 2013 federal elections. While this is entirely possible, the NBN had always been considered a national scheme which would provide equity in telecommunications infrastructure between rural and regional areas (Australian Labor Party, 2007). Given the issues of uneven economic development between cities and rural areas, and the optimistic view that broadband could decrease feelings of social and economic isolation, it does seem logical that rural and regional areas would be the most beneficial sites to start deploying better infrastructure. These regional and rural areas, like Townsville, often have less access to infrastructure because infrastructure spending is usually proportioned on a population basis. Daniel (2016, p. 267) alludes to the cultural divide between north and south Australia on the issue of infrastructure spending: while urban planners and economists might view infrastructure spending determined through the lens of regional development as ‘pork barrelling’, residents of Australia’s sparsely populated north, who have an acute self-awareness of their isolation, view it as a fair and equitable distribution of infrastructure resources.

Chapter Three: The NBN

As adoption of the internet grew globally in the 1990s and 2000s the range of applications, products and services available online proliferated and so too did the amount of data necessary for these new applications. Broadband internet services were developed to deliver consumers more data at faster rates and broadband was linked to economic and development. Broadband penetration (the number of people and business with access to broadband) and price became major indicators of technological development and were measured, reported and benchmarked. This caused something of a broadband space race (Market Clarity as cited in Given, 2008). In Australia the results of these benchmarking activities were disappointing and while there was support for action, there was a lack of consensus in politics and in the telecommunications industry about the root of the issues (Given, 2008). The Australian Labor Party (ALP), as the federal opposition party from 1996 to 2007, had long opposed the Howard government’s handling of the Telecommunications industry particularly privatisation of Telstra (Barr, 2000, pp. 105-110). Perhaps because of ideology or perhaps because of pragmatism the party considered the re-entry of the state into industry as the solution to the problems in the telecommunications industry and the answer to Australia’s perceived low broadband penetration and high data prices. At the 2007 Federal election the Howard government was defeated by the Australian Labor Party (ALP) led by Kevin Rudd. With the electoral endorsement of the new government the nation had, apparently also provided a mandate for the National Broadband Network (NBN). The original proposal that the ALP presented to the electorate was for a public-private partnership to deliver a fibre-to-the-node (FTTN) network over five years to 98 percent of the population with minimum speeds of 12 megabits per second at a cost of 4.7 billion (Australian National Audit Office, 2010, p. 13). The ALP government terminated a tender process for the project in controversial circumstances in April of 2009. The request for tender process found that none of the proposals submitted by the private sector were suitable (Australian National Audit Office, 2010).

On the same day the tender process was cancelled the government announced its new NBN policy via press release. The new policy, often referred to as the NBN Mark II was a departure from the previous policy. The new policy was for the government in partnership with the private sector (the private partnership never eventuated) to invest $43 billion in creating a new organisation (the NBN Co.) to rollout a fibre-to-the-premises (FTTP) network to connect 90 percent of Australian homes with speeds of up to 100 megabits per second (The Office of the Treasurer, 2009). The remaining 10 percent of houses would be connected to wireless and satellite technologies delivering speeds of up to 12

megabits per second (The Office of the Treasurer, 2009). This was only the first of many major policy developments of the contentious policy and the chaotic nature of the NBN was not assisted by the chaotic nature of federal Australian politics at the time.

On 24 June 2010 Julia Gillard succeeded Kevin Rudd as leader of the ALP and as Prime Minister of Australia. Following a Federal election in August 2010 the ALP formed a minority government with the support of the Australian Greens party and three key independent MPs. It is strongly believed that the NBN was the deciding factor for the three independent MPs in choosing to support the ALP in forming minority government in 2010 (Alizadeh, 2017). Later in 2010 the Parliament voted to structurally separate Telstra’s wholesale and retail operations. The government saw this as a necessary element of their NBN and post-NBN telecommunications industry structure, where the NBN offered wholesale access to broadband infrastructure to ISPs who operated in the retail market. This government provided the NBN with a statement of expectations. The NBN began to rollout slowly over 2011-2013. There was a great deal disillusionment with the minority Gillard/Rudd ALP governments of 2010-2013 and the Abbott led Coalition won office at the 2013 Federal election. With the new government came a new NBN policy which aimed to utilise existing parts of telecommunications infrastructure for the NBN to drive down the costs of the NBN to the government.

Since the announcement of the NBN in the lead-up to the 2007 election, the policy has inspired a considerable amount of interest and scepticism. This is no doubt due to the level of public investment required, and the highly politicised nature of the telecommunications industry (Apperley, Nansen, Arnold, & Wilken, 2011 para 1), as well as some of the more dubious and secretive reasons for policy shifts that reflect the underlying ideological differences between Australia’s major political parties (Scales, 2014). As the NBN is the largest and most expensive infrastructure-building project in Australia’s history, high levels of interest and attention are not unwarranted. In 2010, Trevor Barr published a seminal article, ‘A broadband services typology’, which became the centrepiece of a presentation to the Senate Select Committee on the NBN and part of this Committee’s Final Senate Report. Barr had long argued that too much of the NBN debate was focused on

alleged regulatory bottlenecks preventing further major investment, or about appropriate responsibilities for infrastructure investments and choices by government and the private sector, or about the business dynamics of possible network operators, especially Telstra… [However, the most glaring absence of attention for] both policy makers and researchers, is about new issues concerning the users and consumers of broadband. (Barr, 2007, p. 210)

In summary, Barr argued that too much attention had been given to arguments about how to best supply the market with high-speed broadband and not enough time had been spent considering how consumers would use high-speed broadband. Barr was arguing for a change in thinking, from economic supply considerations (industry, government, size of pipe) to demand-side economics (consumers and uses of the NBN). To this end, Barr developed a broadband services typology for understanding the different kinds of services that consumers, government and industries might want to deliver or consume over the NBN. He identified three categories of broadband services: unmanaged services, managed services and publicly-supported services. When considering the NBN debate in Australia and why the creative industries had until that point not featured more prominently in the public discourse, Cunningham (2011b) concluded that the government had struggled to navigate the myriad of complex issues in the field of telecommunications as well as the digitisation and convergence of media platforms and content. Cunningham (2011b) found that the great cost-saving opportunities for government-delivered, publicly-supported services had overshadowed other debates regarding the possible impacts of the NBN. Cunningham (2011b) draws attention to the fact that the creative industries and their range of activities are not isolated to only one category of Barr’s typology (2010), but instead are relevant to all three categories. A brief discussion of the categories in Barr’s (2010) typology and their relation to the creative industries (Cunningham, 2011b) will continue below.

Unmanaged services include the bulk of website activity, including search engines, e-commerce and social networking. Because of the lack of network supplier involvement in this category, Barr concluded that any growth in unmanaged services would have a negligible impact on the viability of the NBN (Barr, 2010, pp. 188 - 189). However, Cunningham foresaw tensions between the established creative industries and the growth of user-generated content (UGC). The rapid growth of UGC and the ability to monetise it, in conjunction with piracy, has the potential to significantly erode the profitability of the copywriting industry (Cunningham, 2011b, pp. 17 - 18). Cunningham argues that in terms of policy actions, there is a need for patience when considering regulating broadband applications in the unmanaged space, and less of a need for public subsidisation of Australian content creation in this category of broadband service. However, Cunningham also argues that there is scope for government support for Australian content creation in this space on the grounds of its experimental nature and potential for the development of profitable formats and innovations (2011b, p. 20).

Managed services are those services offered as tiered services by broadband suppliers. Internet Protocol Television or IPTV is a prime example of this, and is considered to be one of the potential leading innovations that could come from the NBN (Barr, 2010, p. 188). Growth in these types of

services would be crucial to NBN viability. Much like in the unmanaged services category, Cunningham (2011b) considers the competitive tensions that will arise between new industry players and their business models and the established creative industries and their business models. Although the emergence of IPTV might disrupt the traditional market structure of the Australian television industry, Cunningham (2011b, pp. 20 - 21) does not consider Australian content regulations or quotas to necessary from the outset. However, recognising the oligopoly operating in Australia’s broadcast industry, Cunningham recommends some form of anti-siphoning laws (see Department Communications and the Arts, 2019 for a descrption of the laws) to ensure a level playing field between old and new players.

Cunningham (Cunningham, 2011b, p. 21) also raises the prospect of an Australian Content Innovation Fund to incentivise the inclusion of Australian content by online aggregators and distributers, allowing visibility and reach for existing and new Australian content without the need to develop the platforms. Publicly-supported services are those services which were not widely available on the internet and were unlikely to develop in the immediate future as managed services because they were not likely to be profitable for a broadband network supplier in the absence of public funding. Examples of publicly-supported services include e-health, e-government and distance education (Barr, 2010, p. 188). These services were perceived as important to the social dividends of the NBN, as their potential to create cost savings for government departments is vast.

Cunningham considers public broadcasters to be the most obvious government-delivered service with links to the creative industries. Given the wholesale erosion of the business models of traditional media services, Cunningham (2011b, pp. 19 - 20) views the loss-leader argument about public broadcasters to be more relevant than ever. To summarise, public broadcasters act as format and content research and development leaders who bear the heaviest losses, so that commercial operators can efficiently adopt formats and content that are appealing without risking unnecessary capital themselves. Cunningham predicted that publicly-supported services would see further government outlays, not only for continuing research and development activities but also across the spectrum of government services, and that this would be a large source of employment growth for content and application designers and producers.

User groups and service types Barr’s (2010) broadband services typology provides a useful tool for understanding the spread and depth to which certain aspects of NBN debate have been canvassed in existing academic literature. To date, there has been a large focus on forecasting NBN demand (de Ridder & James, 2013; Deloitte Access Economics & Queensland Department of Employment Economic Development and

Innovation, 2011; Vertigan, Deans, Ergas, & Shaw, 2014), as well as tracking perceptions of the NBN by users and potential users (Adams, 2009; Gregg, 2012; Nansen, Arnold, Wilken, & Gibbs, 2013), household take up of NBN and earlier broadband use (Apperley, et al., 2011; Nansen, Arnold, et al., 2013; NBN Co., 2014, p. 11; Wilken, Arnold, & Nansen, 2011), changes in media consumption due to broadband accessibility (Nansen, Arnold, et al., 2013), and socio-political issues constructed around the concept of the digital divide (Featherstone, 2011; Freeman, 2012; Morsillo, 2012).

Ordinary residential consumers and culturally and linguistically diverse (CALD) groups are well represented in the literature because the commercial viability and social dividends of the NBN rely on these groups taking up managed and publicly-supported NBN services. Indeed, the provision of managed services by commercial third-party providers (for example, IPTV services) is only likely to become profitable once a large proportion of Australian homes and businesses are connected to the NBN (or equivalent high-speed broadband connection) (Barr, 2010). In order for CALD communities to share in the benefits of publicly-supported services such as e-health and distance education, other barriers to connectivity such as distance and isolation also need to be addressed, such as the lower than average use by these groups of information communication technologies (Freeman, 2012).

There has been considerably less interest in how small to medium enterprises (SMEs) might use high-speed broadband to develop new unmanaged services or extend existing ones. Following the logic of the Barr broadband services typology (2010), this is because these unmanaged services will have next to no effect on the commercial viability of the NBN. Despite the fact that SMEs accounted for “slightly less than one-half of private sector industry employment and contributing approximately one third of private sector industry value added in 2010–11” (Clark et al., 2012), Bowles (2013a) found that small businesses were are at risk of exclusion from the digital economy due to the low level of ICT skills and lack of plans to leverage the NBN. Bowles (2013b) suggested that SMEs were one of the many groups at risk of finding themselves on the wrong side of the digital divide.

Debates about the NBN have tended to be highly charged, overtly political and at times extremely technical, often losing sight of the initial purpose of the network, which was to improve Australian productivity and rebalance the Australian economy (Martin, 2010; Roberts, 2007). It is for this reason that the findings of Bowles (2013a; 2013b) in relation to gaps in knowledge about SMEs’ understanding of NBN services are interesting. While developing the digital capability of SMEs might not contribute to the commercial viability of NBN managed or publicly-supported services, the potential indirect influence of SMEs on the crucial first steps of NBN take-up is relevant to larger questions of NBN viability. It is also relevant to other aspects of reducing the costs of government service delivery to SMEs and increased efficiency associated with the digitisation of these services. It

has been established that SMEs experience difficulty in anticipating the applications of broadband and how they can use it to innovate (Deloitte Access Economics & Queensland Department of Employment Economic Development and Innovation, 2011, p. 19). Otherwise, very little is known about the interests of SMEs in any categories of broadband services.

Conversely, large organisations, including governments, are expected to benefit greatly from the NBN. Arguably, the significance of state and local governments as providers of publicly-supported NBN services, including the Queensland state and Townsville local governments considered in this thesis, is a means by which they can influence NBN developments. The Commonwealth exercises direct control over NBN policy through its constitutional responsibility for such matters in the processes outlined so far, as well as having indirect influence by virtue as its role as a provider of publicly-supported services. The (Deloitte Access Economics & Queensland Department of Employment Economic Development and Innovation, 2011, pp. 22 - 27) found that NBN benefits could accrue to large organisations including the Queensland government and private service providers with interests in the following types of activities: telehealth, telework, creative Industries, advanced smart electricity grids, intelligent transport systems, water systems, remote mining and cloud computing.

The National digital economy strategy (Australian Government. Department of Broadband Communications and the Digital Economy, 2011) identified state and local governments as the drivers of greater digital engagement (Freeman, 2012), arising from their roles in service delivery and place in certain industries as market participants. Under the former Newman state government (2012– 2015), the Queensland Department of Science, Information Technology, Innovation and the Arts (DSITIA) created the GoDigitalQld plan (Queensland Government. Department of Science Information Technology Innovation and the Arts, 2014) which set out this state government’s approach to the digital economy. The DSITIA plan assumed a leadership role in the development of government- delivered services (publicly-supported services, in Barr’s scheme) through broadband-enabled applications, as well as support for improving digital skills, capabilities and access to information communication technologies (ICTs) for the state.

The NBN will be approximately 80 percent complete by the end of 2018 (NBN Co., 2017b). While many of aspects of the network, such as its effects on internet pricing and affordability, may not be truly observable until some time after it is complete, there are already some emerging trends regarding the way the NBN is being used. Given the curiosity that surrounds the NBN, it is unsurprising to note the growing body of literature dedicated to documenting all aspects of the NBN’s arrival in certain towns and cities. Of these, the NBN first release sites often make for interesting case studies because it is in these locations that the NBN footprint is the most developed.

NBN first release sites As Apperley et al. observe, geography is “relevant for understanding the differential uptake of the NBN” (2011, p. 2). This influence was even more marked following the federal Abbott government’s decision to include the existing hybrid fibre coaxial (HFC) and other pre-NBN network architectures in the NBN footprint. Apperley, et al. (2011) observed that there was a differential take- up of NBN fibre connections to premises at the first release NBN sites. These sites (and earlier trial sites) included: Midway Point Tasmania; Armidale, Kiama Downs and Minnamurra in New South Wales; Brunswick in Victoria; Aitkenvale and Mundingburra in Queensland; and Willunga in South Australia.

Gregg’s (2012) ethnographically-inspired exploratory case study of Willunga was considered a landmark study. It provided a snapshot of the town’s perceptions of online technology and its place in everyday life prior to arrival of the NBN. It discovered that opinions of the NBN were mixed, and while there was some positive enthusiasm, many residents were unable to identify personal benefits from the network, had little knowledge of how to utilise broadband beyond enhancing activities they already engaged in, and thought of it as a tool to enhance leisure activities. One of the findings of the Nansen, Arnold, et al. (2013) study of Brunswick was that the NBN was considered a luxury good. However, the Nansen, Arnold, et al. (2013) study of Brunswick differed greatly from Gregg’s (2012) study. Nansen, Arnold, et al. (2013) used a more longitudinal approach and quantitatively measured changes in household media ecology from 2011–2012. This longitudinal approached allowed them to give a much more descriptive account of what was important to residential users of the NBN. One of the most interesting findings from their study was that NBN-connected households were twice as likely to be used as places of work than non-NBN houses. The Nansen, Arnold, et al. (2013) study followed on from other important research completed at the NBN trial site of Midway Point, Tasmania by Wilken, et al. (2011) and (Nansen, Wilken, Arnold, & Gibbs, 2013). This study again focused on residential users and how their media ecology evolved in response to the NBN. The Wilken, et al. (2011) pilot study reached a similar conclusion to the 2013 Nansen at el. study of Brunswick, namely that “the meanings and uses of new technologies often adhere to familiar, routine, past modes of use” (Wilken, et al., 2011, p. 10 para 8). Different demographics, localised installation policies, cost factors and logistics have all had effects on the take-up rate of the NBN across first release sites (Apperley, et al., 2011).

The works discussed in this section suggest that the location and demographic profile of the surrounding population seems to have some influence on take-up of the NBN. It also reflects the general focus of studies of NBN first release sites on residential users. Both the Gregg (2012) and Nansen, Arnold, et al. (2013) studies were supported by parties with interests in the relative success

or failure of the NBN. Gregg’s research was commissioned by the South Australian Government and the work by Nansen et al. was commissioned by the Australian Communication Consumer Action Network (ACCAN). It appears that outside the work of Bowles (2013a; 2013b), very little academic attention has been given to SMEs and the NBN. Not all NBN first release sites have received academic attention, including the Townsville suburbs of Aitkenvale and Mundingburra.

Given the cultural and economic geographical distinctiveness of Townsville and the fortuitous circumstances that led to the suburbs of Aitkenvale and Mundingburra being among the NBN first release sites, Townsville presents itself as a prime location to observe the effects of the NBN on the creative industries. Observing the effects of the NBN on the creative industries in Townsville in the context of a small local economy provides a realistic scope of analysis where various complexities can be addressed. Chapter Four will explore the methods used to observe the effects of the NBN on the creative industries in Townsville, so that the phenomena observed can be related to a broader context of the NBN’s impact on the creative industries nationally.

Broadband penetration Katz (2012) completed a review of broadband literature and grouped the existing work into five categories based on the object of the study. The five categories are: studies that observed economic growth, the impact on productivity, impact on job creation (relating to both the building of the infrastructure and positive network externalities), the creation of consumer surplus and impact of broadband on firm efficiency. Katz (2012, p. 4) found that while studies on the effect of broadband on economic growth did confirm that broadband had a positive effect, the strength of this positive effect varied widely. Studies that Katz (2012) included in this categorization of broadband literature investigated the aggregate impact (of broadband) on GDP growth, the differential impact of broadband by industrial sector, the increase of exports, and changes in intermediate demand and import substitution.

Economic growth Investigations of the aggregate impact of the NBN on GDP are interesting but cannot provide any insight about the impact of the NBN on creative industries in Australia. Broadband studies that focus on different industrial sectors of economies, increase of exports due to broadband and as well as those that measure changes in demand and import substitution are all interesting issues to consider in relation to the NBN. However, there are several methodological difficulties which arise when trying to apply these types of studies to the creative industries and the NBN in Australia. There are creative industries methodological difficulties gathering appropriate data types. Katz (2012, p. 5) describes the

methodological issues related to broadband studies as the lagged effect of broadband on the economy and the non-linear impact of the NBN on the economy.

As Katz (2012, pp. 5-7) explains there is not a linear relationship between broadband adoption and output. This is consistent with the diffusion of innovation theory (Rogers, 1962), where the greatest benefits of an innovation accrue to those who adopt it earlier. The current understanding of the relationship between broadband penetration and economic output is that it is an inverted U shape as can be seen in Figure 3.1 below. The benefits of higher broadband penetration may be difficult to establish until penetration reaches the critical mass threshold. Then once penetration increases to saturation point broadband is theorised to have reducing economic benefit or possibly even negative benefits. Negative effects of broadband penetration could be attributed to things such as the substitution of local labour for other labour.

Figure 3.1 The nonlinear relationship between bb. penetration and output.

The other issue that Katz (2012, p. 7) observed in relation to economic growth studies is the lagged effect. For most infrastructure, including broadband the impact it has on GDP in one year is difficult to determine because the impact is only reflected in relevant statistics two or more year later. This is because statistical research of this nature uses regressions of cross-lagged indicators (Katz, 2012, p. 7, para. 5). This is particularly relevant when attempting to measure the impact of the NBN while rollout is in progress. Any observations that might be made in the field, might not be reflected in statistical analysis for another two years. As (Katz, 2012, p. 8) there is a range of “organizational transformation” process that need to occur before firms can utilise broadband GDP statistics do not capture these activities. Rather the lack of impact of broadband on GDP statistics in any given year may indicate that organisations are going through this transformational process. These statistical GDP

studies do not describe how or why a firm is using broadband. This is particularly relevant for the case of the NBN in Australia where there is conjecture about how the infrastructure will be used.

Productivity To understand broadband productivity Katz (2012, p. 9) introduces and describes the causality model of ICT innovation and diffusion and the growth of the information workforce. As economies mature and become more information intensive, the number of information workers in the workforce increases. Eventually information workers become a bottleneck in business processes and as a result firms invest in and adopt new technologies to further enable information workers. Thus, the hypothesis in the causality model of ICT and productivity is that information intensive industries would likely be among the first adopters of broadband technology as it enables information workers to be more productive in their existing functions.

Job creation Katz (2012, pp. 10-14) subdivides studies aimed at investigating job creation effects of broadband networks into two categories: construction and broadband positive externalities. Because broadband infrastructure construction work and its flow on effects have limited interactions with the creative industries, the impact of direct, indirect job and increased household welfare from infrastructure construction of the NBN will not be discussed here. Broadband positive externalities on job creation covers a wide range of studies which investigate: innovation, new applications and services, internet search, telehealth and telemedicine, new forms of commerce, intermediation and disintermediation, the mass customisation of products, business revenue growth and the growth of services industries (Katz, 2012, p. 12). Research methods in these types of studies have used econometric regression analyses and top down multipliers. Katz (2012, p. 12) found there was positive evidence to support the proposition that an increase in broadband penetration did have a positive effect on job creation. However, these results varied widely from 0.2 percent to 5.32 percent for every one percent increase in broadband penetration. The methodological difficulties in these studies appears to be the wide number of variables that could influence or bias the data. Therefore, to address these short comings (Katz, 2012, p. 13, para. 2) recommends using time series data for employment, broadband penetration, human capital statistics at a disaggregated level. It appears many of the quantitative projection models fail to consider the growth of the creative service sector.

Consumer surplus According to Katz (2012, p. 14) consumer surplus methodologies are used to understand the value of an investment by quantifying the utility consumers are gaining from the current situation and the increase or decrease in that utility after the investment is made. Willingness to pay (WTP) methods are used to determine what value and utility that potential consumers assign to the objects of the

consumer surplus studies. The Vertigan panel cost benefit analysis report (Vertigan, et al., 2014) was a consumer surplus study. Consumer surplus studies attempt to capture a whole range of non- economic benefits that also accrue under certain investment scenarios which are not captured by economic growth or employment methodologies.

Firm efficiency Under this category Katz (2012, pp. 15-17) discusses a range of micro-economic studies which focus on business expansion, product innovation and new business creation. Katz (2012, p. 16) reports that broadband enabled firms generate between 7.5 to 10 percent more foreign sales, when compared with service firms that are not broadband enabled. Firm level research has also been used to describe how broadband can impact on job creation.

Application to the NBN Data availability is one of the core challenges of this study because “the overarching condition guiding the selection of one approach over another is driven primarily by data availability” (Katz, 2012, p. 4). All of the statistical models investigated by Katz (2012) are related to the incremental benefits which accrue in relation to broadband penetration. Therefore, to apply any of the statistical models which Katz (2012) explores it is necessary to have transparent data regarding subscribers to the NBN. However, when this project commenced the NBN Co. did not report detailed disaggregated data on NBN subscribers at a level smaller than state (for example Queensland, New South Wales, Victoria etc.). What the NBN Co. did publish was NBN premises ready for service figures (see Chapter Four for further discussion). The premises ready for service figures indicated the number of properties which the NBN construction had past. However, even though the NBN may have passed a property that did not necessarily mean that the owners of the premises could purchase an NBN enabled broadband services from a retail service provider (RSP). Therefore, using the premises ready for service figure as an indicator of NBN penetration would overestimate the impacts of the NBN.

NBN penetration At the national level, the Australian Bureau of Statistics (ABS) collected and reported on the number of Australian internet and broadband subscribers (in 2019 and beyond the Australian Competition and Consumer Commission will take over this data collection and reporting responsibility). However, the Australian Bureau of Statistics (ABS) did not differentiate between the subscriber base of the NBN and other broadband networks. While in the original conception of the NBN project was that it was to be a ubiquitous network the competition policy objectives of various governments have introduced infrastructure competition into the market and so broadband subscribers cannot be assumed to be connected to the NBN infrastructure. There is a problem determining the subscriber base of the NBN. For example, as can be seen in Table 3.1 below in

Townsville broadband penetration was 41%, which grew to 71% in 2011 and 83% in 2016. The NBN first release sites were announced in 2010 and would have taken more than twelve months to build and become active for consumer to purchase subscriptions. Therefore, in Townsville the activity related to the NBN should be present in the 2011 to 2016 period.

Townsville internet/broadband subscribers/ census period 2006 2011 2016 41% 71% 83%

Table 3.1 Townsville broadband subscribers.

If the information in Table 3.1 is taken a face value it appears that the NBN project in Townsville has slowed the growth of broadband penetration in the area. What complicates the calculation of NBN penetration in Townsville that in the 2016 Census the ABS stopped asking what type of internet connection residents were connected to (broadband or dial up internet). So, the broadband penetration estimation for Townsville in Table 3.1 is overestimated as it is also likely to still include some residents who are still connected to dial-up internet services. Also, the NBN rollout map in Appendix 1A shows that there is a small pocket of the town that is covered by a broadband network that rivals the NBN, therefore the broadband figure for Table 3.1 is also likely to include subscribes connected to networks other than NBN. In addition, not all areas of Townsville had switched over to the NBN in 2016. This means that the 83 percent broadband penetration rate in Townsville in 2016 is not equivalent to the NBN achieving an 83 percent penetration rate. Trying to estimate the exact state of broadband penetration at any one point in time is incredibly difficult, particularly when information relating to the NBN and its progress is suitable for the intended purpose. Just as broadband penetration creates methodological constraints for this study so too does the availability of timely and accurate creative industries data.

Creative industries data The creative industries are not a standard homogeneous group of industries. The creative industries draw together a broad range of arts industries, cultural industries and services workers into its broader umbrella. The creative industries do not occupy their own division in any of the official industry and employment statistics gathered by the ABS. Therefore, any attempts to measure creative industries by standard economic metrics such as employment growth, industry size, income, exports, or imports are complicated by the need to find appropriate methodologies for this collective of industries and occupations. There is a method which exists to measure creative industries profitability, however this requires access to confidential information on the Australian Business Register (ABR).

Access to the Australian Business Register to do the creative industries financial trident method has only been granted once in the past (see Chapter Four for further discussion of this method). The SGS Economics and Planning (2013) report details a number of economic measures which could be adapted for use in this study, however without reliable quantitative data about the penetration of the NBN at any given point in time trying to measure the strength of the relationship between economic creative industries indicators and NBN penetration is fruitless.

Furthermore, most of the statistical models which Katz (2012) investigates can only model theoretical benefits of broadband once the infrastructure construction is complete. These cannot provide any insight on a current rollout. Quantitative projection models also cannot explore issues which might affect the ability of people and businesses to connect to and use the NBN. Therefore, a more practical methodological approach to determining the impact of the NBN on the creative industries might be to approach the task deductively. For example, examining the state of the creative industries in a certain location where the NBN is and then from those observations creating a causal link between the NBN and the creative industries.

So which observations about creative industries are useful for determining the impact of the NBN and which observations would further advance knowledge about the NBN in Australia? Table 3.2 below uses Katz’s typology to summarise the NBN impacts literature reviewed for this thesis. It shows that key Australian literature has focused on the employment opportunities the might be enjoyed as a result of broadband infrastructure network externalities. The growth of creative industries employment related to the NBN is likely to be of great interest. There also does not appear to be literature that discusses productivity gains and firm efficiency (in the way that Katz 2012 describes them).

Key NBN texts by Katz broadband study type Key text/ Katz (2012) Economic Productivity Employment Consumer Firm bb. categories growth gains (b) network Surplus efficiency externalities Tucker (2015) × Barr (2010) × Cunningham (2012) × Vertigan, et al. (2014) × Süßspeck (2015) ×

Table 3.2 NBN key text by Katz typology.

As it has already been established, this research is interested in exploring the impact of the NBN in Townsville. It is very difficult to access disaggregated statistics such as firm efficiency and

productivity at the level of a Local Government Area (LGA) let alone for such an unorthodox collection of activities that make up the creative industries. Therefore, qualitative research which provides rich insights into how creative firms in Townsville have used the NBN to improve their productivity and firm efficiency will be the aim of the research.

The way that creative industries firms adapt to the new broadband infrastructure and use it as an input into their business raises questions about their output. Could the NBN help develop a comparative advantage for certain industries which have access to it? The ALP FTTP NBN Mark II was praised as a piece of national infrastructure for the economic benefits it would provide to the nation, specifically the concept that it might allow Australian firms to develop a comparative advantage in service delivery. Or could a certain region like Townsville which had access to NBN infrastructure much earlier than other towns and cities develop a comparative advantage in digital industries? However, the introduction of the MTM NBN increased the need to consider how broadband could help develop comparative advantages for certain industrial sectors. Can the efficiency and productivity improvements that creative industries firms gain from using the NBN help develop a sustainable regional comparative advantage for a city like Townsville?

This chapter has explored some of the current issues related to the NBN in Australia, including the methodological difficulty of estimating the impact of the network on small communities. Given the lack of reliable data about the NBN and the progress of the rollout applying existing statistical economic models is impacts is difficult. These challenges justify taking a qualitative approach to discovering the impact on the NBN on local communities. Given the focus of Australian NBN literature on employment network externalities (see Table 3.2) a methodological focus on employment is likely to complement existing literature, while the creative industries focus will reveal knowledge that has so far only been speculated on (Cunningham 2011b).

Chapter Four: Methodology

The potential of the NBN was alluring to many residents of rural and regional Australia for the role it could play in reducing the effects of time and spatial boundaries. Any initiative that could bridge the social and economic gaps between regional and rural areas the nation’s big cities attracts a great deal of attention in Australian polity. Meanwhile, there is growing interest, both nationally (Daniel, et al., 2015; Gibson, 2008; Gibson & Robinson, 2004; Henkel, 2010; Lea, et al., 2009; Waitt & Gibson, 2009) and internationally (Chapain & Comunian, 2010; Chapain & De Propris, 2009; Comunian, Chapain, & Clifton, 2010; Granger & Hamilton, 2010; Lorenzen & Andersen, 2012; Marco-Serrano, Rausell-Koster, & Abeledo-Sanchis, 2014; Van Heur, 2010) in the creative industries as a growth sector for employment and as an option for local economic diversification, particularly the fast-growing creative services subsector (Cunningham, 2013). This chapter outlines the research design for a single- site case study using Townsville as the unit of analysis to observe the impact of the NBN on the creative industries. This chapter details how and why semi-structured interviews with creative industries businesses and the Creative Industries Trident II mapping methods were used to build a detailed longitudinal case study of the impact of the NBN on Townsville. This study uses a holistic case study methodology to understand how creative industries businesses are using the NBN. The politicised nature of the NBN and experiential nature of the NBN mean that every person who encounters it experiences it in different ways. To understand how business are using the NBN it is important to understand not only how they use the NBN but how they interpret their own use of broadband. To this end the primary source of data collection in the study is semi-structured interviews which will be discussed later in this chapter. The purpose of this approach is to test the popular narrative that the NBN is an expensive entertainment device and the counter narrative that the NBN is an income and employment creating strategy.

Site selection Studying the impact of the NBN is difficult because of its relatively recent history, the fast-paced expansion of its footprint and the countless number of factors in the telecommunications industries and broader economy that shape its end users’ broadband experiences. A case study methodology encourages the use of boundaries to acknowledge these types of dynamic influences. Geographic and temporal boundaries provided the focus necessary for the study to holistically analyse one case site in-depth. For this study, it was important to select a case site that had a sizable portion of its population connected to the NBN. This was important because this research took place before the NBN was complete. Even in cities such as Townsville where the NBN rollout was deployed first, large

areas remained unconnected even when they were NBN ready. The distinction between a property being declared NBN ready and the owners of those properties being able to purchase and use NBN services is important because often there were months in between the two steps. The lack of transparency in the way that the NBN Co. operated made determining how many people were able to purchase and use NBN services at any given time difficult.

There were few sources of publicly-available data on the rollout of the NBN, and the data published by the NBN Co. has changed over time. Currently (2018), the NBN Co. only publishes rudimentary figures such as the number of premises connected, and number connected by infrastructure type and by state. More finite data is not accessible, and it is difficult to ascertain how many end users actually have an NBN service, or which type of infrastructure they are using and where these end users are located within state boundaries. The interviews conducted for this study spanned a twelve-month period from July 2016 to July 2017. In 2015 and 2016 it was still possible to access data on the number of premises ready for service by NBN point of interconnect (POI). At that time, this data was published by NBN Co. and reproduced by many individuals and organisations such as myNBN.com (currently known as finder.com.au). Points of interconnect, or POIs, refers to the part of the NBN infrastructure where “retail service providers (ISPs, or phone providers) connect their network to the NBN network to service end-users” (myNBN, 2015b). Because access to an NBN Co. POI attracts a one-off connection fee to be paid by each ISP, POIs effectively segment the Australian internet market into 121-one sub-markets. Premises ready for service is an internal NBN Co. term that means building and construction for which the NBN Co. is responsible is complete. Theoretically, once premises are deemed ready for service by the NBN Co., a landowner should be able to arrange connection to the NBN infrastructure through an internet retail service provider (RSP). However, there is usually some time between premises being deemed ready for service by the NBN Co. and end users actually being able to purchase and use NBN-enabled services. Consequentially, there is a procedural difficulty in equating premises ready for service numbers with actual active NBN subscribers. Despite this, at the commencement of the project, premises ready for service was the best way to estimate the NBN footprint and the size of the customer base.

To have the best chance of discovering how creative industries organisations were using the NBN, it was important to select a site that had a well-developed NBN footprint (premises connected) and balance this necessity against the scope and limitations of the research. At the commencement of this project there were 23 POIs active in Queensland (see Appendix 1B for more details) and these POIs were spread across 10 of the 11 regions in Queensland. The Brisbane Central region had the most premises ready for service (which is used here as the proxy for active NBN users) at close to 92,000,

spread across seven POIs. After Brisbane Central, the region with the most premises ready for service was the North Queensland region. The North Queensland region corresponds with the local government areas that make up Townsville. This region had approximately 42,600 potential NBN users in February 2016 and only one POI. This meant that the POI in Townsville serviced the greatest number of potential NBN users as of February 2016. Although the Brisbane Central area had more potential users, these users were spilt over seven different POIs, or seven different sub-markets. If the Brisbane Central area were chosen as the case site there might well have been a large and easily accessible pool of potential research participants, but it would not address a key concern of this thesis, which is the impact of the NBN on the creative services subsector in the regions. The need to explore and develop the different geographical contexts related to the POI location and the activities of the telecommunications industry in each market to contextualise the findings would equate to a multiple case study methodology, which is beyond the scope of the research (see Appendix 1B for detailed information regarding QLD NBN POIs). Investigating Brisbane Central would have also done little to address the themes of regionalism in NBN rhetoric that were alluded to in Chapter Three. These considerations, in conjunction with the apparent lack of literature on the development and rollout of the NBN in Townsville as identified in Chapter Three, made Townsville an attractive site for this investigation. The timing of the thesis also coincided with the shift to the MTM NBN rollout. Sites across Townsville have received FTTP, FTTN and Fibre-to-the-building (FTTB also expressed as FTTb or fibre-to-the-basement) technology. The creative industries in Townsville had also recently been the subject of investigation, most notably in the Growing the creative industries in Townsville report by Daniel, et al. (2015). This prior research was extremely helpful for understanding the context of the creative industries in Townsville, a site with which the researcher was unfamiliar before this project.

Research design This study used creative cluster analysis methods in conjunction with other methods to determine how creative industries businesses in Townsville were using the NBN and what they were using it for. Cluster analysis research is concerned with revealing the driving economic forces that enable locations to develop a competitive advantage. The concept of clusters was popularised by Porter (1990), and in Porter’s (1996, p. 87) definition, “a cluster is a group of industries connected by specialized buyer-supplier relationships or related by technologies or skills”. Creative cluster studies, then, could be considered as a subset of Porter-style cluster studies (Pratt, 2004, p. 50). The need for cluster analysis methods to holistically and systematically account for factors affecting the competitive environment strongly matches the need for holistic and dynamic understanding of the factors affecting Townsville as a unit of analysis in this case study. This research is a case study that utilises cluster analysis methods rather than a cluster study because it is more concerned with discovering, observing and reporting on the responses of creative industries businesses in Townsville to the NBN as a distinct phenomenon than with exploration of Townsville’s competitive advantage, or the role of the NBN as a factor in a possible future competitive advantage (although these topics

are discussed briefly throughout the thesis). How data is presented and used dictates whether research is a cluster analysis or a cluster study.

Creative industries mapping Employment mapping exercises are often used in broader creative cluster studies with the aim of identifying and promoting local competitive advantages, and to advance the creative sector in a specific geographical location as its leading growth sector (Pratt, 2004, p. 51). The latest iteration of creative industries employment mapping techniques, the Creative Industries Trident II method (Cunningham, 2013), was used in this study to generate longitudinal employment data for the creative industries in Townsville from 2006 to 2016. In a review of policy literature covering the first decade of the lifespan of the creative industries concept, Flew and Cunningham (2010) concede that while questions remain regarding the definitional coherence of the creative industries, there is emerging consensus about the size, scope and significance of the sector in advanced and developing nations. Some of these advancements have come from the development of creative industries mapping techniques. As Cunningham (2011a) writes,

the perceived need to map the so-called creative industries arose from the imprecision of official statistics in grasping the emergent nature of the creative industries. These issues are part of the broader challenges of measuring effectively domains undergoing substantial change through the rapid convergence of the computer, communication, cultural and content industries. (p. 26)

Higgs and Cunningham (2008) detail the three waves of creative industries mapping methodologies and how each wave was developed to address the issues apparent in measuring employment in the creative industries. The UK’s DCMS Mapping Studies reports (1998, 2001) established creative industries and creative industries mapping, but because of its innovation, the framework to support analysis of the industries was lacking. Higgs and Cunningham (2008, p. 10) note that the three key limitations of the DCMS reports were that they lacked segment definition, appropriate data sources and classification, and granular data. Like this first iteration of creative industries mapping research, the second iteration also utilised industry data to estimate the size of the creative industries. However, an important development in the second iteration was the inclusion of occupational data. The use of industry and occupational data created a matrix of creative employment, where there are at least two different types of creative employees. Those two types of creative employees would later be known as creative specialists, who are employees working in a creative occupation in a creative industry, and embedded creatives, who are employees in creative industries working in industries that are not considered to be creative. The third wave of mapping, to which the Creative Industries Trident method belongs, includes in its evaluations of the creative

workforce employees who work in a non-creative occupation but are still employed in the creative industries. The Creative Industries Trident II method that is used in the study is a development of the original Creative Industries Trident method and as such also belongs to the third wave of mapping methodologies. The major innovation in the Creative Industries Trident II method is that it further disaggregates the data by creative industries subsector. The value of this innovation to this research will be expanded on in the method section. In the Creative Industries Trident, these workers are known as creative support workers and include administrators and other professionals whose work supports the creative industries. Cunningham (2011a, p. 27) found that in comparison to the Trident method, creative industries mapping methods that utilise only industry activity codes “underestimate the employment impact of some creative sectors by up to 40%”. To summarise, the Creative Industries Trident method proposes that any estimation of the creative industries must include the creative specialists, the embedded creatives and the creative support workers. These three modes of creative employment resemble the three points of a trident, which is what inspired the naming of the mapping method developed by Higgs and Cunningham (2008) as the Creative Industries Trident. A visualisation of the three modes of creative employment in the Trident approach can be seen below in Figure 4.1.

Figure 4.1 The three modes of creative employment (Higgs & Cunningham, 2008).

In the Australian context, the data sets used for creative industries mapping come from the Australian Bureau of Statistics (ABS) Census of Population and Housing (the Census), which is generated every five years. The ABS asks every Australian to complete the Census as part of a larger project to monitor and identify significant trends in the Australian population. Some of the questions in the Census ask what type of employee each person completing the Census form is and what industry they work in. A creative industries ‘map’ is extracted from the employment and industry data generated from the Census and cross-tabulated. Measuring changes in employment patterns is an important indicator of the strength of the creative sector because measuring income at a finite level

is almost impossible without the consent of the entity or individual involved. Measuring the output of creative activity is also difficult for such a broad collective of industries such as the creative industries, where outputs take the form of cultural products like paintings or sculptures and intangible assets like copyrights, as well as service experiences, which tend to be non-homogeneous. Therefore, it is possible to view changes in employment patterns as indications of demand in the greater economy for creative goods and services. An increase in employment might indicate strong demand for the creative outputs those employees make and decreases in employment could indicate changes in consumption patterns of the creative good or service in question.

This research generated the Creative Industries Trident II for Townsville from the 2006, 2011 and 2016 ABS Census data. These three sets of data provide a ten-year snapshot of creative industries employment growth in Townsville and provides a pattern of creative industries employment growth for 2006–2011 and 2011–2016. These two windows can be taken to represent a before (2006–2011) and after (2011–2016) observation of the effect of the NBN on creative employment in the city. As only a very small number of approximately 110 homes, businesses and institutions in Townsville were able to subscribe with retail service providers (RSPs) for NBN-enabled services from October 2011 onwards (NBN Co., 2011), it is unlikely that the influence of the NBN would have impacted the 2011 ABS Census employment results.

Utilising the cluster analysis method The Creative Industries Trident II data was used in this research as a type of inventory to discover and appreciate the size of the creative industries in Townsville. Pratt (2004) asserts that there are many problematic elements to clustering studies, and chief among his criticisms is their narrow focus on the transactions of individual firms and business value chains. Pratt (2004) argues that rather than focusing on transaction costs and value chains, a more contextual view of governance structures and networks is necessary, particularly in relation to the creative industries and their structures. Deuze (2010) describes the business landscape of the creative industries as having an ‘hourglass’ structure where there are a small number of large players in each sector competing with a large number of small organisations, independents and contactors (Flew & Cunningham, 2010, p. 120). Combining employment mapping data with semi-structured interviews allows this case study to relate its findings to the individual firm level and also to the broader production chains and patterns of the creative industries identified by Pratt (2004).

However, it would be impossible to claim that there was a correlation or causal relationship between the NBN and the creative industries based solely on the results of the Creative Industries Trident II data. The case study methodology allows this research to contextualise the changes

observed in the Creative Industries Trident II data and argue that by gathering information from interviews with creative industries businesses and selected specialists, a connection between creative industries jobs growth and the NBN can be established. The next section will report on the headline findings of the specific methods used, as well as the processes involved in the semi-structured interviews and the Creative Industries Trident II analysis.

Methods

Semi-structured interviews Semi-structured interviews were used to identify how small to medium businesses in Townsville’s creative services subsector were using the NBN, or how they expected to use it if they were not already connected. The interviews with creative industries businesses provided the crucial discovery which this thesis aimed to make – how are creative services subsector businesses using the NBN? Are they using it to innovate or are they using it for mere productivity-raising activities? Are they creating new and novel products and services, are they experimenting with businesses models and new market segments, or even reaping the rewards from improved distribution capabilities? These questions strike at the core of contemporary discussions regarding the creative industries and the NBN. This thesis hopes to provide evidence about the role of the creative industries in innovation. The focus on the creative services subsector and its relationship with the NBN (broadband) also underscores the nation’s social and economic transition from a society based on primary industries to one based on services. There is some anxiety in Australia regarding this economic transition, and disappointments with key pieces of infrastructure only inflame these tensions.

The headline findings from the interviews suggest that creative services subsector businesses in Townsville primarily used the NBN for productivity-raising activities, and that the co-ordination and communication issues in the Australian telecommunications industry value chain had in many instances overshadowed the benefits of the NBN for them. Detailed descriptions of how creative services subsector businesses in Townsville use the NBN and the obstacles in the Australian telecommunications industry value chain that interfered with the potential of the NBN will follow in later chapters. This section describes the processes and design of the semi-structured interviews that provided the basis for the observations of Townsville’s creative services subsector with the NBN from 2010 to July 2017, when the qualitative research concluded.

Interview guide design Semi-structured interviews were chosen over other interview types because they provided consistency in the interview process and ensured that interviewees addressed topics that the interview guide was designed to probe, as well as providing enough latitude for interviewees to raise

their own issues and impart their own character and experiences into the data (Weerakkody, 2009, pp. 167 - 168). This interview approach helps to address Pratt’s (2004) criticism that some cluster studies have a focus on individual firms and industries rather than on a broader understanding of value chains and the impact of institutions on the structure of industries. Expert stakeholders such as policy makers and relevant stakeholder advocates were also interviewed to ensure that the qualitative data captured the extent of larger trends affecting the Townsville economy. The two different types of interviewees prompted the development of a second, slightly modified interview guide for Pool B interviewees (the expert stakeholders).

This study made a concerted effort to reach commercially-orientated creative organisations (primarily), and as such there was recognition that potential interviewees were time poor. The interviews were designed to last approximately 25 to 30 minutes and every effort was made by the researcher to accommodate the most convenient day, time and place for the interviewee to participate. As a result, many of the participants were interviewed at their place of work. There were six standard questions asked of each interviewee, with several prompts and probes scripted and used as appropriate. The questions were inspired by Porter’s diamond model (Porter, 1990). The diamond model provides a framework of factors that businesses must account for to understand their competitive environment and build a competitive advantage. The four elements in Porter’s diamond model are factor conditions, demand conditions, related and supporting industries, strategy, structure and rivalry, and in some representations of the model, government and chance events are also considered necessary elements. Factor conditions generally relates to elements of the industry which a necessary to operate. In the case of a nation, Porter considers skilled labour and infrastructure as factor condition (Porter, 1990b). Demand conditions are “the nature of home-market demand for the industry’s product or service” (Porter, 1990b, p. 76). The related and supporting industries condition refers to the presence of necessary supplier industries which provide inputs into the industry in question that are also other internationally-competitive industries (Porter, 1990b, p. 76). The firm strategy, structure and rivalry edge of the diamond related to the competitiveness of an industry and what larger political and economic forces are driving those competitive trends (Porter, 1990b). In some extended models of Porter’s diamond, government and chance events are also included to acknowledge the impact these factors have on markets.

There were six standard questions posed to each Pool A interviewee (Appendix 1C). Question 1 is a basic icebreaker question but is designed to encourage interviewees to give as much detail as they care to about their own career paths, which has the potential to link seemingly unrelated industries and occupations to the interviewee’s current occupation. Question 2 aims to understand who the

customers of their business are and what value propositions the interviewee and their organisation offer to their customers. Question 3 asks about inputs into the business and is an attempt to gain an understanding of the broader value chain of creative service or production work that the interviewee operates in, as well as identifying what other industries support the one that the interviewee belongs to. Question 4 asks the interviewees to describe how their organisation uses the internet. This allows the interviewees to describe how embedded the internet and digital content are in their operations in their own words. Questions 4 and 5 were intended to discover the strategy of the creative firms in their rapidly restructuring industries. Question 5 aims to ask firms to consider what changes they might make in response to the changing digital environment in the near future. Question 6 rounds out the interview by reiterating elements of previous questions so that interviewees will provide a detailed description of the way in which they have changed their business operations for better or worse in response to the NBN. The NBN as a vital piece of digital infrastructure is a factor condition that should, theoretically, benefit the creative services subsector.

The interview guide for the Pool B interviewees differed slightly but was also inspired by Porter’s diamond. The Pool B interviews had four questions (see Appendix 1D). The first question was an icebreaker question designed to ease the interviewee into the process, while the last question sought to understand local networks. In this context local networks include things such as informal support groups, social networks and industry alliances. The second and third questions aimed to discover how the interviewee perceived the value of the NBN as a factor condition, its impact on the structure of industries and strategies or certain local firms, and the demand for broadband data in Townsville. The framework of the semi-structured interview approach provided a structure for the analysis of the data collected from the interviewees. The process of data analysis is discussed further below.

Sampling and recruitment The Creative Industries Trident mapping method provided some direction and scope to the interview process in terms of understanding the size and composition of the potential pool of interviewees. An early iteration of the Creative Industries Trident method indicated that there were over 1,000 creative employees working in Townsville’s creative economy, according to the 2011 Census data. However, the Trident data could not be used to indicate how many creative firms were operating in Townsville. Therefore, it was difficult to employ probability sampling techniques, and a convenience sampling approach was adopted. Potential interviewees, either individuals or organisations, were researched through publicly-available information and at least forty-one potential interviewees were identified. Fifteen interviews were conducted and of those fifteen, the data from ten are included in this research. There were three instances of recording device failure that corrupted the interview data to the point where the inclusion of the data in the research was not feasible. Two

interviews were not included in the analysis due to time constraints, despite being otherwise successful. To add perspective to the findings in the case study and to assist in capturing the complex social and economic context of the city, many of the interviews were conducted in Townsville during a field trip from June to July 2016. During the field trip, desk space was kindly provided by the Townsville Business Development Centre (TBDC). This field trip yielded eight interviews, four with people who had a creative services background, three with specialist stakeholders and one other interviewee (for a full list of interviewees, see Appendix 1E). The four creative services specialists interviewed were John de Rooy from John de Rooy Photography, Mick Devine from Calxa, a financial software and app creator, Sandor Kovats from Vetta Productions, and Tracy Raiteri from Townsville Social Media Marketing. The three Pool B interviewees were Simon Millcock, formerly of the Townsville City Council, Ryan Daniel, a senior academic from James Cook University (JCU), and Matthew Bulat, an IT enthusiast and local industry champion among other formal and informal roles. There was one interviewee whose suitability to be included in the creative industries is contentious. Glen Stewart is a sign writer from North Point Neon Signs. While the Townsville scoping study (Welters, et al., 2013) included sign writers in their estimates of the size of the creative economy based on employment (see Appendix 1F), the Creative Industries Trident method does not include them in the workforce estimates (Cunningham, 2013). When organising the data for the frequency tables shown in Tables 4.1 and 4.2, it was decided to identify Glen and North Point Neon Signs as a creative service because of the commercial nature of sign writing and their position in value chains as advertisers. We will return to these interviewees and their experiences with the NBN in later chapters.

Contacts within the Queensland Department of Science, Information Technology and Innovation and the Townsville City Council disseminated a recruitment e-mail to their local information technology and creative industries networks on behalf of the researcher. Most of the interviewees who participated responded to those e-mails. Further interviewees were contacted either by e-mail or telephone, but direct contact yielded very few interviewees.

In late 2016, after the field trip, the search for interviewees continued and the Trident method was updated to the Creative Industries Trident II. The reasoning behind the shift to the Trident II method is explored briefly here, but also in greater depth in the Creative Industries Trident II method section. When this project commenced, it utilised a variation of the Creative Industries Trident method and attempted to describe the creative digital industries (Higgs, Cunningham, & Pagan, 2007, pp. 30 - 35). The Creative Industries Trident method proposes that there are six subsectors of the creative industries: music and performing arts; film, television and radio; advertising and marketing services; software development and interactive content; writing and publishing; and architecture design and

visual arts (Higgs, et al., 2007, pp. 7 - 8). The creative digital approach attempted to capture the nature and characteristics of those industries and occupations that were new and growing, and for these reasons the subject of much academic and media attention. They were qualitatively different to many of the traditional arts also captured in creative industries definitions and mapping methods. The Creative Industries Trident using the creative digital approach was abandoned in favour of the Creative Industries Trident II method because it grouped the creative industries into two subsectors based on the characteristics of the outputs of these industries and occupations. This provided a sounder theoretical framework for the division of the creative industries than the six subsectors in the original Trident (Cunningham, 2013). The division of the creative industries in the Trident II method into two subsectors based on their outputs also provided a logical framework for capturing, analysing and discussing the tensions in creative industries literature. The change from Trident to Trident II method also had consequences for the interview process. It broadened the scope of eligible interviewees to include cultural production employees and industries.

A further fifty potential interviewees were identified through publicly-available information. Many of these potential interviewees included community groups and organisations which were overlooked in the initial search for potential interviewees because of their non-commercial nature. Recruitment of these interviewees continued from August 2016 to March 2017 and yielded four successful interviews with cultural production representatives Michal Beroun from Grail Films, Scott Morrison from DUO Magazine, Warren Cheetham from the Townsville City Library network and local sculptor Sue Tilley. A further four participants were interviewed but recording device failures compromised the data. These interviews were conducted with Carly Lubicz from Calculated Media and TheGo Townsville, Doug Willis from Simpler IT, Renee Turner from JESI and Warren Cheetham from the Townsville City Library network. All of these interviews were conducted via telephone from Brisbane (see Appendix 1E for list of all interviewees). All business interviewees were connected to an NBN FTTP connection either at the time of the interview, except Glen Stewart from North Point Neon Signs. For further information on the businesses and how long they had been connected to the NBN see Appendix 1F business profiles.

All of the successful interviews, including those that were conducted via telephone, were recorded and later transcribed. Transcription was done by third parties, and to protect the identities of the interviewees and the data they provided transcribers were required to sign confidentiality agreements. An example of these confidentiality agreements can be found in Appendix 1H. It should also be noted that all interviewees were asked for their consent to be made identifiable in the research and that all participants agreed. For more information on ethical considerations and protocols relating

to this see Appendix 1I. From the full transcripts, truncated interview transcripts were produced by the researcher and provided for interviewees to review. These truncated transcripts allowed interviewees to verify the accuracy of the data and see the context in which it was presented. Providing truncated transcripts served two purposes; it presented the data to the interviewees in a context that was similar to how it would be used in the final thesis and was less time consuming and therefore less onerous for the research participants. The structure of the interview guide provided a strong template for organising and presenting the interview data according to the corresponding interview questions for the truncated transcripts.

Data analysis The outline of the semi-structured interview guide helped to simplify grouping the data from the qualitative interviews. For the most part, it was possible to group statements made by interviewees and compare them by interview question. However, it was necessary to change the questions so that they were more finite in nature than the interview questions. There were seven themes that the data was organised around. The first theme was the centrality of broadband to the business. It was made apparent through the Creative Industries Trident II method that some industries were more digitally exposed than others, and so the value of the internet and broadband would differ depending on which subsector the businesses in question belonged to: the creative services subsector or the cultural production subsector. The second theme related to broadband applications and attempted to capture the range of different applications and uses of broadband that participants discussed. The data in the second theme informed a series of frequency tables that are used later in this thesis to draw conclusions about how the creative services subsector in Townsville is using the NBN. The frequency tables, their outcomes and the processes used to develop them will be discussed after the other themes used to organise the qualitative data are discussed.

The third theme aimed to capture large macro trends such as changing practises in industries and global forces. The themes four and five explored specific experiences with the NBN. The fourth theme was dedicated to exploring negative experiences with the NBN and the telecommunications industry. This theme largely forms the basis of Chapter Eight. Question 6 aimed to capture the changes that interviewees have perceived since the introduction of the NBN and the answers to this question translated to the fifth theme: changes since the NBN. Theme six was dedicated to understanding the network characteristics of Townsville and the industries which operate in Townsville. This is where the contributions of the pool B were mostly explored. While only fragments of that data are explicated reported in the thesis, the data provided valuable contextual information which guided the research process. The seventh theme addressed the economic conditions in Townsville. It was necessary to isolate the interviewee’s perception of the economic climate of Townsville. There was a great deal of

contextual evidence to suggest that Townsville’s economy was in a depressed state during the course of this project (2016–2017). Opinions about the cause and severity of the economic climate in Townsville were divided, but what was apparent was that conditions had deteriorated recently, and the city was facing imminent challenges.

Frequency tables One of the prime motivating factors that made this project necessary was the theoretical and political impasse in public discussions regarding the NBN and Australia’s telecommunications market structure. The entrenched ideological arguments over the cost of the project and data demand in Australia broadly represent an argument for incremental change versus one for revolutionary change. Proponents in favour of both the Fibre to the Premises (FTTP) (Tucker, 2015) and the Mixed Technology Model (MTM) NBNs (Vertigan, et al., 2014) were able to generate competing claims regarding how best to serve the needs of the Australian community. However, it appears that the proponents of both sides of the NBN debate have failed to persuade the electorate and the argument remains at a stalemate. That is why examining what is happening on the ground, in a bounded case study where the conditions affecting broadband data demand and supply are addressed, can provide a fresh perspective. By identifying what applications the creative services subsector (the supposed heavy data users) are using the NBN for, this thesis hopes to bring nuance to the incremental versus revolutionary change element of the NBN debate. That is why Chapter Seven is dedicated to describing how the creative services subsector in Townsville was using the NBN during the period covered by this study.

To understand how the creative services subsector in Townsville was using the NBN, statements made by the interviewees that mentioned broadband applications or potential applications were grouped into theme two, which was concerned with broadband applications and uses of the internet. Each statement made by an interviewee was assigned a broadband application code. The coding schematic was adapted from Süßspeck (2015). Süßspeck (2015) created a quantitative forecast which showed the impact that the NBN would have on the Australian economy. This analysis found that building the NBN could boost real GDP by 1.8 percent and real household consumption by two percent. To calculate these figures, Süßspeck (2015) focused on six categories of online services: cloud computing, electronic commerce, online higher education, telehealth practice, teleworking and entertainment. However, the coding schematic was adapted to capture other uses of the NBN which may not necessarily be reflected in the categories that Süßspeck (2015) defines. The final schematic involved twelve codes, five of which were included in Süßspeck (2015) original analysis. The education category as defined in Süßspeck (2015) was problematic because it referred to online higher education; however, in the context of regional towns and cities it was also necessary to have a code

that captured the delivery of mandatory (primary and secondary) education to remote locations via different communication channels. Therefore, the online education code was split into two different codes: non-mandatory online education and mandatory education. From these, a further five types of broadband function were added: access to information, video, voice over internet protocol (VOIP), and research, development initiatives and service delivery. Detailed descriptions of these codes can be found in Chapter Seven, which is dedicated to exploring how the Townsville-based interviewees used the NBN. Table 4.1 (below) displays the results of the frequency analysis.

Table 4.1 Most frequently mentioned broadband applications.

However, in order to relate the findings of the frequency table back to the NBN and broader discussion about the economic impact of broadband, it was necessary to aggregate these broadband function codes in into higher categories. The broadband functions that were identified in the previous section and listed above in Table 4.1 were group into four types of broadband benefits. The broadband functions of access to information, cloud computing, VOIP and telework were all grouped under business efficiency and productivity. These types of broadband applications were the most commonly discussed subjects among interviewees. This is not all together surprising considering that this is a study of the way that businesses use broadband. The examination of the Katz (2012) broadband study (found in Chapter Three) determined that business productivity and efficiency were likely to be the most the most useful approaches to take for this study. However, the qualitative open-ended nature of semi-structured interviews means that the analysis framework needed to be flexible to account for unexpected answers. This need to be flexible and open led to the inclusion of the consumer surplus section.

While this research is focused on how creative industries business in Townsville use the NBN, there needs to be some acknowledgment that businesses were not interviewed for the project -

people were. It is people who run business, especially in the creative industries where the sector is full of sole traders, casual and part time laborers and businesses are usually small or micro enterprises. This analysis of broadband functions is a socioeconomic categorisation of NBN applications, rather than a list of applications and their underlying broadband utility. Although this study was supposed to focus on the creative industries and private enterprise the potential positive gains to society from the efficient delivery of government services enabled by broadband were far too great to ignore. Therefore, the efficient delivery of government services category was created and separated from the other category which related to efficiency.

A separate video production category was created to highlight the economic role of video production in Townsville as a profitable endeavour. Video production and the production of multimedia content, including advertising and marketing is an important growth sector in the economy. Although access to high speed broadband did allow interviewees to create better quality videos faster, the narrow constructs of productivity and efficiency do not capture the full scope of the phenomenon occurring with the growth of video content and internet capability. For many creative industries and employees in the industry video is the product. The results of this more highly aggregated frequency table are displayed below in Table 4.2, and the significance of these findings is discussed further in Chapter Seven.

Table 4.2 Broadband function grouped by broadband benefits.

Limitations Because of the choice to focus on the experiences of creative businesses with the NBN, it must be acknowledged that there is an inherent bias in the outcomes of these interviews. As the interviews asked businesspeople what they use broadband for, the outcomes will represent how people use broadband for work and in that sense fail to capture other benefits that the NBN might provide to people outside of the workplace. However, this research does not attempt to ignore the benefits that broadband provides to people outside of their work lives but addresses a gap in the current discussion about broadband in Australia. The arguments in Australia’s NBN debate that have motivated this research are rooted in philosophical perspectives which are deeply divided by tradition and history. On the one hand, economists who apply a more traditional approach to the NBN tend to favour the Coalition government’s MTM NBN because they accept that the government must compromise and build the infrastructure, and that the most cost effective way to do so is to utilise existing pieces of infrastructure (see (Vertigan, et al., 2014), for example). The proponents of the ALP’s FTTP NBN model are more generally informed by heterodox economic schools of thought such as behavioural or evolutionary economics, and often a range of other academic fields such as engineering (for example, see (Tucker, 2015).

The proponents of the ALP’s FTTP NBN model assert that the data demand forecasting techniques of classical economists fail to capture the true nature of data demand in Australia. While these critiques are based on methodological detail and process, there is a philosophical underpinning to the critique of the rational broadband consumer, particularly in the estimates of (Vertigan, et al.,

2014). Those in favour of the MTM NBN have clearly demonstrated the benefits of high speed broadband for entertainment activities and other welfare gains for private individuals (Vertigan, et al., 2014). This project does not dispute that private individuals will benefit greatly from the increased welfare gains and entertainment possibilities that high-speed broadband delivered via the NBN can provide. Rather, what it aims to observe is how businesses are using broadband, to determine if there is evidence of revolutionary growth in data usage by creative services subsector businesses. What is revolutionary in terms of internet, broadband, technology and business is difficult to determine, but this thesis takes the view that changes to business practises and business models that were not accurately predictable before the NBN are sound indicators. So, interview findings are presented subject to the following caveat: while improved business productivity and new broadband-enabled applications developed due to the introduction of the NBN are important to the interviewees, the findings may not represent the most common broadband applications, the most data intensive broadband activities, or even most the most important broadband activities in Australia.

Despite being guided by the results of the initial Creative Industries Trident analysis, determining the appropriate sampling technique and sample size for the interviews was difficult. Prior to the commencement of field work in 2016, the project proposed a quota system of sampling. In this quota system, at least two interview participants from each of the six creative industries subsectors identified in the Creative Industries Trident method would need to be interviewed, in addition to reaching saturation point before the interviews could conclude. This representation goal was later abandoned due to time constraints and some limitations in the potential pool of research participants. For example, early iterations of the Creative Industries Trident analysis indicated that at face value, many industries were not active in Townsville in 2011. The music and performing arts subsector were particularly poorly represented in the Trident results. For example, the results of the Trident for 2011 showed that industries such as music and other sound recording activities had no employees. In late 2016, after the field trip to Townsville and with the adoption of the Creative Industries Trident II method, there was a more theoretically sound way to represent the breadth and diversity of industries and occupations that encompass the creative industries. The division of the creative industries and occupations into the subsectors of creative services and cultural production based on their economic output provided an alternative path for this project to achieve representation of the broad spectrum of activates in the creative industries and the intersection between these people, their activities and the NBN.

Not all of the data collected from interview participants was treated with equal importance. As was clarified earlier, interview questions and data analysis themes were developed to identify specific

factors that affected a firm’s ability to compete internationally. Three themes were developed to understand factors other than the NBN and how they affected the business or creative activities of the interviewee (themes three, six and seven). Themes three, six and seven were less significant to the outcome of the qualitative data analysis because the nature of how these factor conditions affected the economic environment and thus the individual interviewee can be extrapolated from secondary sources. However, themes one, two, four and five, which were developed to relate to the principal phenomenon being studied in this thesis – the NBN – are only discoverable through primary data from the qualitative interviews. While saturation point is considered to be the guiding methodological principal for sound qualitative data, the work of Saunders et al. (2018) highlights the inconsistent use of the principle, and instead proposes different models for understanding the saturation point in qualitative research based on a review of current literature. Saunders, et al. (2018) suggest that four models of saturation are most commonly applied in qualitative research, with some research even using a combination of several models. It was apparent after ten interviews had been collected that there was “data saturation” (Saunders, et al., 2018, p. 5) in relation to themes one, two, four and five. According to Saunders, et al. (2018, p. 5), data saturation “relates to the degree to which new data repeat what was expressed in previous data”. For example, theme two, which related to what applications and uses the creative organisations had for the NBN, informed the frequency tables described in Table 4.1 and Table 4.2. The disproportionate spread of the results of the frequency tables to applications focused on business productivity led to the conclusion that further data collection would not change the outcomes of that analysis. It is arguable that the further inclusion of more cultural production employees would have developed the analysis further in relation to themes three, six and seven. However, due to the time and resource constraints and the limited pool of potential interviewees, the research addressed this issue by narrowing its scope to explicitly focus on the creative services subsector of the creative industries and their experiences with the NBN. While the results of the cultural production subsector are included in the analysis of the Trident results discussed in the next chapter, they are not the focus of this study.

Creative Industries Trident II method As mentioned earlier in the chapter, this study utilised the Creative Industries Trident method, particularly the Creative Industries Trident II method, to generate longitudinal employment data for Townsville’s creative economy from 2006 to 2016. A subset of this analysis included a comparison of longitudinal data on creative employment in Townsville and eight other Queensland cities for the 2006 to 2016 period. While creative industries employment had previously been mapped for Townsville for 2006 to 2011, there are philosophical and methodological differences between earlier works and the way that creative industries employment in Townsville is mapped and presented in this thesis. The

Mapping the creative industries in Townsville: a preliminary scoping study (Welters, et al., 2013) used Throsby’s (2008) concentric circle model of the creative industries to segment and present the employment data for Townsville, and a second wave mapping methodology utilising only industry and occupation data (see Appendix 1F) (Higgs & Cunningham, 2008, pp. 12 -14). The Creative Industries Trident method includes both industry and occupation data, in addition to creative support workers, in its estimations of the size of the creative workforce – for example, employees such as a “secretary in a film production company” (Higgs & Cunningham, 2008, p. 15). Creative Industries Trident II data for 2016 would not be directly comparable with the mapping data generated in Welters, et al. (2013) (see Appendix 1F for results from the Welters et al. (2013) study). The following section provides more detail on the Creative Industries Trident II method, particularly how the data was calculated and displayed.

The Creative Industries Trident II method builds upon the original Trident method by grouping the various industries and occupations included in the analysis into two subsectors, rather than six. The six segments in the original Trident – music and performing arts, film, television and radio, advertising and marketing services, software development and interactive content, writing and publishing, and architecture design and visual arts – are reorganised into the cultural production subsector and the creative services subsector. The cultural production subsector is comprised of industries and occupations “that focus on the production of cultural products and experiences for final consumption” (Cunningham, 2013, p. 133), and the creative services subsector is comprised of industries and occupations that are “business-to-business activities like design, architecture, digital content, software development, advertising and marketing” (Cunningham, 2013, p. 133). The benefit of this representation of the creative industries is that so far it has shown consistent patterns in the two subsectors, with the creative services subsector growing fast and the cultural production subsector declining. The Trident II method was also developed by Cunningham (2013), but uses relative growth rates to compare changes in the creative sector to changes in overall employment in a given location – whether that be town, city, state or nation. The occupations and industries included in the Trident II analysis for this thesis are identified below and grouped by the creative subsector to which they belong, either cultural production or creative services. This research uses four-digit Australia and New Zealand Standard Classification of Occupation (ANZSCO) and four-digit Australia and New Zealand Standard Industry Classification (ANZSIC). The industries and occupations included in the Trident II analysis of Townsville were derived from (Cunningham, 2013); see Appendix 1J for technical notes on the use of ABS Census data. In the next sections the industries and occupations which belong to each subsector are listed.

Cultural production subsector For this research, the following thirteen ANZSCO four-digit occupations were included in the cultural production subsector: Actors, Dancers, and Other Entertainers; Music Professionals; Performing Arts Technicians; Artistic Directors and Media Producers and Presenters; Film, Television, Radio, and Stage Directors; Authors, and Book and Script Editors; Journalists and Other Writers; Librarians; Gallery, Library, and Museum Technicians; Library Assistants; Visual Arts and Crafts Professionals; Archivists, Curators, and Records Managers; Jewellers.

For this thesis the following nineteen ANZSIC four-digit industries were included in the cultural production subsector: Reproduction of Recorded Media; Music Publishing, Music & Other Sound Recording Activities; Performing Arts Operation; Performing Arts Venue Operation; Motion Picture and Video Production; Post-production Services and other Motion Picture Activities; Radio Broadcasting; Free-to-Air Television Broadcasting; Cable and Other Subscription Broadcasting; Newspaper Publishing; Magazine and Other Periodical Publishing; Book Publishing; Other Publishing (except Software, Music and Internet); Libraries and Archives; Jewellery and Silverware Manufacturing; Museum Operation; Creative Artists, Musicians, Writers, and Performers; Directory and Mailing List Publishing.

Creative services subsector For this thesis the following thirteen ANZSCO four-digit occupations were included in the creative services subsector: Advertising and Sales Managers; Advertising and Marketing Specialists; ICT Sales Managers; ICT Business and Systems Analysts; Multimedia Specialists and Web Developers; Software and Applications Programmers; ICT Support and Test Engineers; Photographers; Architects and Landscape Architects; Fashion, Industrial and Jewellery Designers; Graphic and Web Designers, and Illustrators; Interior Designers; Urban and Regional Planners.

For this thesis the following ANZSIC four-digit industries were included in the creative services subsector: Advertising Services; Software Publishing; Internet Publishing and Broadcasting; Internet Service Providers and Web Search Portals; Data Processing and Web Hosting Services; Computer System Design and Related Services; Architectural Services; Other Specialised Design Services; Professional Photographic Services.

Format The Creative Industries Trident II matrix The combined matrix grid and sum format of the Creative Industries Trident II in this study has been replicated from Hidden innovation: Policy, industry and the creative sector (Cunningham, 2013, pp. 136-137). Figure 4.2 (below) has two parts; the latter part shows the number of employees in the

city’s creative workforce and how many employees are in each creative subsector. The size of the total creative workforce and the size of the workforce in each subsector are also displayed as a percentage of the city’s general workforce. The matrix section of Figure 4.2 (below) shows how the creative workforce totals were calculated. The cells in the matrix record the number of employees per mode of employment (specialist, embedded and support occupation) by sector type (cultural production, creative services or non-creative). For clarity, the cells and numbers in Figure 4.2 (below) and all Creative Industries Trident II matrices used in the thesis are shaded. Cells and numbers which are related to the cultural production subsector are shaded in light grey. Cells and numbers which are related to the creative services subsector are shaded in dark grey. In the matrix section of Figure 4.2 (below) there is a cell which displays the label active workforce. In this research active workforce refers to the number of people included in the Census data minus those people who have been assigned as not applicable for an industry or occupation. Generally, the not applicable category is used for residents who are not employed. There are various reasons why a person may not work such as being under the minimum working age, being unemployed or retired. The active workforce cell is left unshaded to signify that it is separate from the other cells in the matrix.

Figure 4.2 Townsville Trident II results 2006, format replicated from (Cunningham, 2013).

In Figure 4.2 (above), the Creative Industries Trident II data is presented for Townsville 2006. At the bottom of Figure 4.2 the total creative industries workforce is displayed (1,649 people). It represents 2.51 percent of the city’s total workforce in 2006. The size of the creative services subsector workforce can be found above shaded in dark grey and expressed both in raw numbers (1,015) and as a percentage of the city’s total workforce (1.54 percent). Above the creative services subsector workforce is the cultural production workforce, shaded in a light grey and also expressed in both raw figures (634) and as a percentage of the city’s overall workforce (0.96 percent). These creative workforce totals are calculated by adding the cells in the matrix part of Figure 4.2 which correspond

to each subsector. To calculate the cultural production workforce, it is necessary to total the cultural production specialists, the cultural production employees working in the creative services subsector, the cultural production employees embedded outside of the creative industries and the support workers employed in the cultural production industries. To calculate the creative services workforce, it is necessary to total the creative services specialists, the creative services employees working in the cultural production subsector, the creative services employees embedded outside of the creative industries and the support workers employed in the creative services industries.

Using Figure 4.2 as a guide, the number of cultural production specialists can be found in the top left-hand corner of the matrix (182 employees). The cultural production employees working in the creative services subsector can be found in row one, column two of the matrix (6 employees). The cultural production employees embedded outside of the creative industries can be found in row one, column three (207 employees). The support workers employed in the cultural production industries can be found in row three, column one (239 employees). The sum of these four numbers is 634 employees, and this is the total of the cultural production workforce. All of the cells related to the cultural production subsector are shaded in light grey. To express the size of the cultural production workforce as a percentage of the city’s total workforce, it is necessary to know how many people the city’s workforce has. The size of the active workforce can be found in row three column three of the matrix (active workforce65,773 employees). The active workforce number is then divided by the size of the cultural production workforce and multiplied by 100 ([65, 7773/634]*100).

The creative services specialists can be found in row two, column two of the matrix (172 employees). The creative services employees working in the cultural production subsector can be found in row two, column one (41 employees). The creative services employees embedded outside of the creative industries can be found in row two, column three (478 employees). The support workers employed in the creative services industries can be found in row three, column two (324 employees). The sum of these four numbers is 1,015 employees and this is the total of the creative services workforce. All of the cells related to the creative services subsector are shaded in dark grey. To express the size of the creative services workforce as a percentage of the city’s total workforce it is necessary to know how many people the city’s workforce has. The size of the active workforce can be found in row three column three of the matrix (active workforce 65,773 employees). The active workforce number is then divided by the size of the creative services workforce and multiplied by 100 ([65,7773/1015]*100).

It must be noted at this stage that Figure 4.2 represents the combined Trident results for the Local Government Areas (LGA) of both Townsville and Thuringowa. For this study, the ABS Census

geographical description of Local Government Area (LGA) was determined to be the most appropriate unit of data collection. In 2008 the local council governments of the City of Thuringowa and the City of Townsville amalgamated to form the Townsville City Council. This created a minor difficulty in generating accurate Creative Industries Trident II data for Townsville in 2006. To address this issue, the analysis was completed for both the Townsville Local Government Area (LGA) and the Thuringowa LGA. These figures were then aggregated to create a representation of the creative workforce in the area in question for 2006 that could be compared with Trident II findings for later years. Therefore, it should be noted that in this study the Townsville figures for 2006 include figures for both Townsville and Thuringowa LGAs (see Appendix 1K for the raw data). The matrix found in Figure 4.2 was replicated for the Townsville LGA for each three of the Census periods (2006, 2011 and 2016) to generate the data needed for longitudinal analysis. Raw figures for the 2011 and 2016 Trident II analysis can be found in Appendices 1L and 1M respectively.

Trident II relative growth matrix A relative growth matrix is shown in Figure 4.3. The relative growth matrix was generated by consolidating two Trident II growth matrices. The purpose of this analysis is to provide a ten-year snapshot of employment growth in the 2011 to 2016 data set and two snapshots of five-year growth from 2006 to 2011 and 2011 to 2016. This is useful because the growth observed in the overall workforce and the creative sector may not be consistent over time. Volatility in the growth of a city’s workforce and creative sector may be masked somewhat in a ten-year snapshot, as results average out over time. Therefore, observing growth in the two five-year periods (2006 to 2011 and 2011 to 2016) in conjunction with the ten-year period provides a more dynamic understanding of the city’s workforce and creative sector growth trajectory. The growth matrix expresses the change in the size of each Trident segment from one period to the next in a percentage format. The growth of the city’s total workforce from one period to the next is also expressed. Having these growth figures for the city’s overall workforce and the city’s creative workforce for the period allows for close analysis of the creative sector growth characteristics and influences.

Displayed below in Figure 4.3 is the relative growth matrix of Townsville’s creative economy for 2006 to 2016. There are some minor limitations regarding the formatting of the relative growth matrices. The matrix format is used to display the growth of the different types of employees over time, which is expressed by using a percentage format. However, if a certain type of employee grows from zero or to zero it is difficult to display this change in a percentage format. Figure 4.3 is one of these cases, and there is a zero in the Figure (over page) to represent the fact that while there were some cultural production employees in the creative services subsector in 2006, by 2016 the number of this type of employee had grown to zero (for more information, see Appendix 1M).

Figure 4.3 Townsville Trident II results 2006 to 2016.

While the results of the Creative Industries Trident II analysis for Townsville for the 2006 to 2016 period are discussed in detail in the next chapter, there were some interesting observations which prompted the comparative analysis of Trident II data for several cities. The Creative Industries Trident II analysis showed that there was a slowdown in employment growth from the first five-year period (2006 to 2011) to the second five-year period (2011 to 2016). The slowdown in growth was significant and if the root cause was not soundly addressed prima facie, it could appear as if some local factor was behind the slowdown in employment growth, or perhaps even the NBN itself. However, there were a number of well documented macro events affecting Australia’s economy during the period of observation, including the peak of the mining boom and eventual drop in prices of mineral exports and the global financial crisis.

The regional Trident II analysis To determine whether the slowdown in employment growth was indeed a macro factor, or a combination of several factors, it was necessary to consider the broader context of the state of Queensland in the 2006 to 2016 period. The eight other cities observed for the regional Trident II analysis were Brisbane, Bundaberg, Cairns, the Gold Coast, Ipswich, Mackay, Rockhampton, Toowoomba. While creative industries index approaches are often used to compare the creativeness or creative potential of cities, index methods are inherently flawed. As Gibson and Brennan-Horley (2006) highlight, inner city areas will almost always score more highly on cultural and creative indices because the density of the population attracts arts and other cultural funding over less densely populated areas. While the regional Trident II analysis does inherently seek to compare and benchmark the cities against each other, as in Gibson and Brennan-Horley (2006), the careful interpretation of the data and the longitudinal observations of sectoral change provide the context that is often missing in index methods. The regional Trident II analysis addresses this issue by

comparing the workforce of Townsville to several different cities, not only in its major capital, but also in the interpretation and analysis stages. Mindful that rural and regional locations will not share the same employment trends as city areas due to the influences of geography, demographics and the political economy, the analysis in this research also endeavours to avoid the oversimplified comparisons that index methods are accused of (Gibson & Brennan-Horley, 2006).

Eight other cities were selected for use in the regional Trident II analysis for a range of reasons, including how inclusive the city’s LGA was of the NBN POI locations (see Appendix 1B). Of the ten Queensland regions that had NBN POIs (see Appendix 1B), nine were represented in the regional Trident II analysis and include the cities of Brisbane, Bundaberg, Cairns, the Gold Coast, Ipswich, Mackay, Rockhampton, Toowoomba and Townsville (see Appendices 1O to 1V). There are several political, social and economic reasons why the LGAs associated with these regional centres are interesting to observe in relation to Townsville; see Appendix 1W for a further description of these reasons.

To generate the regional Trident II analysis, a Creative Industries Trident II growth matrix for each city was created for 2006, 2011 and 2016. Relative growth matrices were then generated for each city for each period (see Appendices 1O to 1V). The data for the nine cities (including Townsville) were then plotted onto bar charts so that differences in the growth rates could be easily observed. Finally, three different bar charts were produced for each period of analysis: one which depicted the whole creative economy and one for each of the creative services and cultural production subsectors.

Limitations One of the core assumptions of this research was that not only would the NBN improve business productivity, but it would also contribute to the growth of the creative services workforce in regional cities. However, the interviews confirmed that improved broadband was mostly used for productivity- improving measures rather than for innovative new applications and services or job creation. Whether these productivity gains will be observable in existing productivity measurements and statistics is a question for future investigation. But as Robert Solow’s (1987) infamous quip illustrates, productivity statistics are still catching up to the digital age: “you can see the computer age everywhere but in the productivity statistics”. The usage of employment statistics and the creative industries Trident II to observe these changes largely did not find any growth in the creative services workforce that could be attributed to the introduction of the NBN to Townsville. This is despite evidence from a Senate Committee enquiry into the NBN showing that the NBN may have indeed been the catalyst for many creative service jobs (Luke Annear as cited in Senate Joint Standing Committee on the National Broadband Network, 2017). While the evidence that Mr. Annear provided is limited to his company

SafteyCulture, it is a promising sign that unfortunately was not captured as primary evidence by this study. The statements provided by SafetyCulture founder Luke Annear to Senate Committee enquiry on the NBN will be discussed further in Chapter Six.

In their examination of Townsville’s creative industries, Daniel, et al. (2015, p. 17) found that while many of their participants were confident about their income and profitability in future years, their perspectives on employment growth were more pessimistic. In other words, while the participants were projecting growing income and profitability, the increased gains did not translate into the additional hiring of extra staff members. Daniel, et al. (2015, p. 17) point to a number of factors that could be contributing to this scenario, including “project productivity labour increases, current overstaffing, or alternatively, it could relate to a shortage of qualified workers in the region”. If the NBN was a factor contributing to the productivity labour increases that Daniel, et al. (2015, p. 17) reported, then perhaps a method which measured business income would have been more appropriate than one measuring employment. As Daniel, et al. (2015, p. 17) explain, theoretically business income grows in lockstep with increases in labour productivity. Therefore, by observing the income growth of creative industries businesses over time (2006 to 2016), it might be possible to deduce the impact of the NBN on creative industries businesses. The Creative Industries Financial Trident method was developed to provide information about creative industries businesses’ size and income (Higgs, et al., 2007, pp. 12 -16). It utilises custom confidentialised extracts of data from the Australian Business Register (ABR), a standardised business reporting platform that streamlines the processes for business to report income to government for taxation purposes (Commonwealth of Australia, 2018). If the Creative Industries Financial Trident were used in this study, or in any future studies, to infer the impact of the NBN on labour productivity increases observed in creative businesses, any observations would still require verification and triangulation with other data sources. While the Creative Industries Financial Trident method was initially considered as method for this study, time constraints and the difficulty in obtaining a custom confidentialised extract of data from the ABR meant that this method was not pursued.

Limitations of the research design

Preliminary policy evaluation Considered efforts must be made to avoid premature and inaccurate judgements about the relative success or failure of the NBN project based on the data collected for this thesis. As a project and a business, the NBN relies on having a critical mass of end users on the network for the NBN Co to turn a profit. It must be acknowledged that by observing the NBN at such an early stage of the rollout, before every potential customer in the nation, let alone the case site of Townsville is connect

and using NBN services, that the price and availability of data in Australia at this point in time is unrepresentative of the true demand for broadband. Because of the low number of customers using the in-progress NBN (in 2016-2017) compared to the completed NBN (2021), data prices may be artificially high and high volume data services may not be as available now as they will be in future. It is also quite likely that the economic rents beings extracted from early NBN end users are going to be high until the network achieves critical mass. Therefore, it is important to draw attention to this negative consumer outcome at the early stage of the NBN but also to maintain perspective. There is every possibility that the artificially high data prices causing negative consumer outcomes may resolve itself as more NBN end users are connected. So, there is a need to be cautious about assuming the relative success or failure of the NBN project before it is at its full capacity and has achieved the ubiquitous national presence and national customer base that is the foundation of the project and the NBN Co.’s data wholesale pricing model. That is why it is important to reiterate that this project is a snapshot of the early rollout of the NBN and its impact on Townsville’s creative services subsector. This research took place between July 2016 and July 2017, and while it does evaluate the early progress of the NBN and contemplate how the NBN might continue to further impact the creative services subsector, it does so based on observations made at a relatively early stage of NBN completion. There will be a need for ongoing research on the impact of the NBN on the creative services subsector and the broader creative industries as the NBN continues to develop. The full scale of the impact of upgrading the nation’s digital infrastructure may not be recognisable for decades.

Uniqueness and transferability Many elements of the case study could be replicated in future research, especially the methodology. The Creative Industries Trident II analysis could be conducted for any town or city at any point in time, so long as the data sets in use are available from the ABS. With some modifications, the semi-structured interview guide could also be used at any other point in time to determine the factor conditions affecting the competitiveness of firms, conditions in their immediate economic surroundings and industry value chain. In Chapter Eight, interviewees’ negative experiences with the NBN are explored and the stories of the Townsville-based interviewees are compared to emerging complaints from NBN users in other areas. In this way, some of the observations that follow in later chapters about barriers affecting the ability of creative services organisations to utilise the full benefits of the NBN may be universal. Despite the value in relating the experiences of Townsville-based creative services organisations with the NBN to NBN developments happening elsewhere, there is a need for caution when considering the transferability of the case study to other sites. As a case study on the most developed NBN site per POI (in terms of premises connected) in Queensland, which was conducted over a twelve-month period between 2016 and 2017, at a crucial point in time when the

first MTM NBN premises were connected, the timing of this research makes it unique. It is quite likely that many of the issues explored in thesis will have changed or taken a different form already. It is the timing and context of this study that make it truly unique. It provides a pre-emptive policy analysis of the NBN at a crucial point in time in the development of the policy. This case study observes the impact of the NBN on the creative services subsector in Townsville and attempts to capture a detailed understanding of the political and economic dynamics coinciding with the introduction of the infrastructure to the city. The next chapter will explore the Creative Industries Trident II results from 2006 to 2016 to understand longitudinal creative employment trends in Townsville, the NBN and other possible factors that might be affecting them.

Chapter Five: Trident II analysis

This chapter investigates the Creative Industries Trident II results for Townsville and eight other Queensland cities to appreciate the nature of Townsville’s creative workforce from 2006 to 2016. Townsville hosts a fast growing and resilient creative services subsector, which continued to grow in 2011–2016 despite the general trend of an employment slowdown in the same period. The presence of a cyclic boom and bust is apparent in the data of the Queensland cities with the 2006–2011 period being the boom and the bust occurring in the 2011–2016 period. There are a range of possible causes of the boom bust cycle including the GFC and fluctuations of commodity prices. However, it seems that the combination of the sheer size of a city’s population and overall workforce, as well as the composition of its industry base, shielded the cities from some of the more extreme negative employment growth experienced by smaller Queensland in the 2011–2016 period. What makes the growth of Townsville’s creative services subsector significant is its resilience in the 2011–2016 period, despite the city’s isolated geographic location. The analysis in this chapter suggests that Townsville’s established role as a civic and administrative services hub Beer and Clower (2009) for the broader north Queensland region may be the main reason behind the growth and stability of the city’s creative services subsector.

This chapter is split into two major sections, with the first being dedicated to a detailed exploration of Townsville’s creative workforce. The second half of the chapter is dedicated to the Regional Trident II analysis. The Regional Trident II analysis is used to understand the relative size of the creative workforce in each city and the performance of those workforces over time to identify the uniqueness of Townsville’s creative workforce. Both the Townsville section and the Regional Trident II section use the Creative Industries Trident II combined matrix grid and sum format replicated from Cunningham (2013), which was first introduced into this thesis in Chapter Four, Figure 4.3.

Townsville’s creative workforce 2006 to 2016 In Chapter Four, Figure 4.3, the Creative Industries Trident II combined matrix grid and sum displayed the growth results for Townsville’s creative workforce for the ten year period 2006–2016. This was introduced to demonstrate how to the headline figures analysed in this thesis were calculated. That same matrix grid and sum format is re-used here in Figure 5.1 and supports a detailed discussion of the growth of Townsville’s creative workforce from 2006 to 2016. In this chapter, only a cursory description of the steps necessary to generate the data in Figure 5.1 will be provided. For a full account of how the Trident data is generated please refer to the Chapter Four discussion about, Figure 4.3.

Figure 5.1 Townsville’s creative economy 2006 to 2016 relative growth matrix.

To ground the detailed discussion of the growth of Townsville, the following section also uses estimates of national workforce growth over the same time periods as a point of comparison. Table 5.1 (below) is a summary table which shows the employment growth in a percentage format (active workforce) of Australia and Townsville for 2006-2016, 2006-2011 and 2011-2016. For further details regarding the Townsville employment growth rates see Figure 5.1, 5.2, 5.3 and Appendices 1K, 1L, 1M. For national workforce growth rates see Appendices 2A, 2B, 2C.

Employment growth summary table: National and Townsville growth Employment growth/year 2006-2016 2006-2011 2011-2016 National 16% 10% 5% Townsville 21% 21% -1% Table 5.1 Employment growth summary table, Aus. and Townsville.

The combined matrix grid and sum format of the Creative Industries Trident II has two major components: the matrix grid and the sum part. In the matrix grid, the number of each of eight different types of creative employees is recorded. The four types of cultural production employees are shaded in light grey in Figure 5.1: these are cultural production specialists working in cultural production industries, cultural production workers employed in creative services, cultural production employees embedded in other industries, and support workers employed in cultural production industries. The four different types of creative services employees are shaded in dark grey in Figure 5.1: these are the creative services workers employed in the cultural production industries, creative services specialists employed in the creative services, creative services employees embedded in other industries and support workers employed in the creative services industries. There is another cell in the matrix grid in Figure 5.1 which is not shaded, and which represents the city’s workforce. In the diagram, it is called the active workforce. The active workforce digit is included in the diagram because it is the number used to determine the size of the creative workforce and the size of each of the creative subsectors in

relation to the rest of the city. In the lower part of the diagram the ten year growth trends derived from 2006–2016 employment figures shown in the top part of the matrix are summarised for jobs in the cultural production workforce, the creative services workforce and the total creative industries workforce. Again, the figures relating to the growth of the cultural production employees is shaded in light grey while the total growth of the creative services employees is shaded in dark grey. The total of size of the creative workforce left unshaded.

Most of the digits in Figure 5.1 are displayed in a percentage format to denote change over time, except for the digit that represents the number of cultural production employees working in the creative services industries, which displays a simple zero. There are several reasons why one of the Creative Industries Trident II relative growth matrices might display a zero rather than a digit in a percentage format (see Appendix 1M for more information). In the case of the cultural production employees working in the creative services industries in Figure 5.1, the zero result reflects the reality that according to the ABS Census data, the number of this type of employee shrank to zero after 2006.

From 2006 to 2016 Townsville’s workforce grew by 21 percent (Figure 5.1), from 65,773 in 2006 to 79,382 in 2016 (for raw figures see Appendices 1K and 1M). This was greater than the growth of the national workforce over the same period, which grew at approximately 16 percent (see Appendix 2A for more detail). The greater demand for workers in the city strongly indicates that there were some exceptional economic circumstances affecting Townsville in this ten-year period. During the ten- year period growth in the creative sector was 18 percent, which is also higher than the national average which indicates a strong demand for creative labour. Figure 5.1 shows that the growth of Townsville’s creative sector was not spread evenly between the cultural production subsector and the creative services subsector.

Figure 5.1 shows that the cultural production subsector declined by 11 percent over the ten- year period while the creative services subsector grew by 35 percent. The contrast between the high growth of the creative services subsector and the negative growth of the cultural production subsector is consistent with previous observations of the creative workforce made using the Creative Industries Trident II relative growth matrices (Cunningham, 2013, p. 137). The growth of Townsville’s creative services subsector is high in three out of the four Trident modes (as seen in Figure 5.1). Of interest is the growth of the number of creative services employees embedded in other industries, growing at 28 percent over the ten-year period. Cunningham considers creative employees embedded in industries other than the creative industries to be an indicator of innovation because it demonstrates the demand for employees who are skilled at manipulating cultural symbols in industries where the impetus of these activities had not previously occurred (Cunningham, 2013, p. 137).

Following Cunningham’s interpretation, the high growth rates of creative services employees embedded in non-creative industries from 2006 to 2016 indicates that Townsville local industries and businesses went through a significant period of change. However, this data does not explain what the nature of this change is. For example, is Townsville captive to global and national trends? Does the high growth of the creative services subsector simply reflect a greater integration of technology, software and digital media into business practises? Or are there other local factors that explain these changes, such as the introduction of the NBN to the city? To answer these questions, a deeper investigation into the growth patterns of Townsville’s creative workforce is necessary. This deeper investigation will begin in the next section, which considers the Trident II results for the two five-year periods of ABS Census data, beginning with the 2006 to 2011 period.

Pre-NBN: 2006 to 2011 For this study, the 2006 to 2011 data provides a baseline indication of the growth of the creative workforce in Townsville before the introduction of the NBN. From 2006 to 2011, Townsville’s workforce grew by 21 percent see the active workforce in Figure 5.2. Townsville’s workforce grew from 65,773 people in 2006 to 79,784 people in 2011 (for raw figures see Appendices 1K and 1L). This was more than double the growth of the national workforce, which grew at approximately ten percent over the same five-year period (see Appendix 2B for more detail). This strongly indicates that there were some exceptional economic circumstances affecting Townsville in this five-year period. While employment in both the overall workforce of Townsville and the creative services subsector grew rapidly (27 percent for the former) during the period, employment in the cultural production subsector also experienced growth at a rate close to the national average, at nine percent (see Figure 5.2 over page).

Figure 5.2 Townsville’s creative economy 2006 to 2011 relative growth matrix.

While the cultural production subsector generally performed well in the 2006 to 2011 period, the number of cultural production employees working in the creative services industries fell from six employees in 2006 to zero in 2011 (see Appendices 1K and 1M for raw figures), as noted earlier in the ten-year results. The number of cultural production employees embedded in other industries was high at 22 percent. The growth of the cultural production subsector was so unusually high in Townsville during this period that the growth of cultural production employees embedded in other industries outpaced that of the creative services employees embedded in other industries. This trend is consistent with, Cunningham’s previous observations in relation to national trends, that “the only real growth over the decade for cultural production workers is found in employment outside of the cultural production sectors – embedded in creative services sectors and across all other industries” (Cunningham, 2013, p. 126).

However, the apparent growth of the cultural production subsector from 2006 to 2011 in Townsville is out of step with national trends observed by other in the same period. Even the number of cultural production specialists (cultural production employees in the cultural production subsector) records a high level of growth, in comparison to the national growth of cultural specialists at 0.7 percent in 1996 to 2006 (Cunningham, 2013, p. 137). It seems apparent that the economic circumstances in Townsville from 2006 to 2011 which determined the demand for creative employees was somewhat different from the national growth patterns observed by Cunningham (2013, pp. 119- 148). Regardless, the dynamic between the two subsectors, where the cultural production subsector grows slower than the creative services subsector, is present in the data (Figure 5.2) and is consistent with previous observations.

Mid-NBN: 2011 to 2016 The NBN was introduced into Townsville during the 2011 to 2016 period and ISPs began to market services to individuals and businesses for purchase. If the NBN had a positive impact on employment in Townsville, we would expect to observe some of these changes reflected in Trident data II for this period. From 2011 to 2016, Townsville’s workforce declined by one percent (see Figure 5.3 below), down from 79,784 in 2011 to 79,382 in 2016 (for raw figures see Appendices 1L and 1M). This change is so small that here it will be described as static. The apparent slowdown in the growth of the workforce observed in Townsville in this period was inconsistent with growth in the national workforce in the same period which grew at five percent (see Appendix 2C for more detail). Again, this difference suggests that the Townsville’s economic circumstances are somewhat unique to the city. Townsville’s aggregated creative industries suffered a decline of two percent during the 2011 to 2016 period (see Figure 5.3). This decline can be isolated to the cultural production subsector, which suffered a decline of 18 percent. Despite the decline in cultural production, the creative services subsector continued to grow at six percent, consistent with the national average for the same period. While the creative services subsector continued to grow in the 2011 to 2016 period, its growth was much slower than that recorded in the previous period, though still slightly higher than the national average growth at five percent (Appendix 2C).

Figure 5.3 Townsville’s creative economy 2011 to 2016 relative growth matrix.

Figure 5.3 also shows that there were significant declines in the number of cultural production employees in all the Trident segments. The only exception is cultural production employees working in creative services and this is because there were none of these types of workers recorded in either 2011 or 2016 (see Appendices 1L and 1M for raw figures).

Figure 5.3 presents a mixed picture of the fortunes of employees in the creative services during the 2011 to 2016 period. While employment of creative services specialists and creative services

employees embedded in the other industries experienced growth, the number of creative services employees working in the cultural production industries did not. This is likely due the general decline of the cultural production subsector. In 2006 to 2011 (see Figure 5.2), creative services employees working in the cultural production industries recorded a decline of 12 percent, which increased to 47 percent in 2011 to 2016 (see Figure 5.3).

The examination of the Trident II data in two distinct periods, 2006–2011 and 2011–2016, revealed that the two creative subsectors (cultural production and creative services) in Townsville share the same dynamic that has been observed at the national level in prior studies (Cunningham, 2013). This dynamic is that the creative services subsector tends to perform well, and the cultural production subsector is in decline. The other major observation relates to the overall growth performance of the nation’s and Townsville’s workforces. In the 2006–2011 period, national employment growth was ten percent, and Townsville’s cultural production subsector almost matched the national average, while the creative services subsector strongly outpaced it. In the 2011–2016 period the national workforce growth slowed to five percent. During this period Townsville’s overall workforce was static and the city’s creative services subsector grew above the national average at six percent, while the cultural production subsector declined by 18 percent. It appears that whatever events were affecting workforce growth in the 2006 to 2016 period, Townsville was impacted to a greater degree than the national average. In 2006 to 2011, Townsville’s workforce and creative workforce grew faster than the average national workforce. Then in 2011 to 2016 the slowdown of workforce growth was more apparent in Townsville than the national average. This raises the question of what factors are driving workforce growth and why the workforce growth trends in Townsville are more volatile than the national average?

Mining in Australia and the boom-bust cycle Mining is an important economic sector in the Australian economy, and it is likely that trends in the industry have great impact on the towns and cities where sector related activities are geographically and economically concentrated. Australia is the fourth largest mining nation globally, after China, the U.S. and Russia (U.S. Department of Commerce, 2018). Resource exports contribute 50 to 60 percent of the nation’s total exports (Reserve Bank of Australia, 2018) and output from the mining sector accounts for approximately seven percent of the nation’s annual GDP (U.S. Department of Commerce, 2018). One quarter of Australian mines are located in Queensland and most of the nation’s coal exports come from the eastern states of Queensland and New South Wales (U.S. Department of Commerce, 2018). In the 1994/5 financial year mining accounted for 4.7 percent to the national gross value added (GVA), however by 2017/18 the industry contributed 8.8 percent

(Australian Bureau of Statistics, 2018b). From During the peak of the mining boom in 2010/11 share of gross value added peaked at 9.9 percent of GVA (Australian Bureau of Statistics, 2018b).

The investment boom in Australia’s mining industry has been unprecedented and while the investment phase has wound down the increase in capital stock is expected to see continued high levels of mining production in the country in future (Australian Bureau of Statistics, 2018b). The success of the mining industry and the related industry income peaks and troughs is relevant to this study for several reasons. Townsville is a located in a geographically strategic position which makes the city an ideal location to base temporary workforces for large mining projects and its port facilities provide export potential. Therefore, it is logical to assume that when the mining industry is doing well, Townsville will also be doing well. However, the aim of this study is to investigate what is driving the growth of the creative industries. Economists and arts economists would generally consider arts products to have an elastic demand. Therefore, it could be assumed that as discretionary income increases people might buy more art and cultural goods. Is the increased employment in creative industries in 2006 to 2011 a reflection of their being more discretionary income for Townsville residents to spend on cultural products? Is the growth of the creative industries attributable to increased purchasing power of consumers due to an unprecedented influx of income due to mining activity? Or is there some of other factor driving the growth of the creative industries in Townsville, and if so, what could it be? The creative services sub-sector has quite different characteristics (being mostly comprised of business to business professional creative and cultural services) compared to the cultural production sector which is comparable to the more traditional arts activities. We will return to the latter question in the next section while the discussion here will focus on determining the impact of the mining boom on Townsville.

In a briefing paper prepared for the progressive think tank the Australia Institute, Krockenberger (2015) linked population growth in Australia to migration and in particular net overseas migration. Krockenberger (2015) argued that net overseas migration is linked to employment opportunities, and during the 2006 to 2011 period Australia’s mining boom was taking place. While many capital cities benefited greatly from the mining boom in terms of employment and population growth, some regional areas also benefitted greatly due to their strategic locations near mining operations and minerals corridors (Hugo et al., 2015; Krockenberger, 2015). Both Hugo, et al. (2015) and Krockenberger (2015) found that Townsville benefitted greatly from the flow of migrants during the mining boom period, no doubt attracted by the work opportunities it provided. Townsville is geographically located in a strategic location to capitalise on the mining boom. As a costal north Queensland city, it lies on the edge of the Galilee basin and has a superior port for minerals exports

compared to other Queensland coastal towns and cities north of Brisbane. Townsville also happens to be located within a corridor for three other significant industries (see Appendix 2D).

The most likely explanation for the slowdown in employment growth in the nation and Townsville in the 2011 to 2016 period was the fluctuation of minerals prices and the transition in the mining industries from a building to an extraction phase. It is possible that the GFC was also a factor influencing employment growth during this period. Previous creative industries mapping exercises have concluded that the GFC had an impact on the creative industries in Australia, particularly the marketing and advertising industries (SGS Economics and Planning, 2013, p. 9). While it is possible to determine that these large macroeconomic events affected employment growth in Townsville, it is difficult to verify the extent of their impact on employment growth. The Regional Trident II analysis of nine local government areas in Queensland (see Appendix 1O to 1V for LGA Trident data) somewhat addresses this issue by observing the employment growth trends in several cities, meaning that it might be possible to confirm these broader economic trends. Yet despite these apparently challenging employment conditions in 2011–2016, the creative services subsector continued to record strong growth in Townsville (see Figure 5.3).

Townsville’s creative economy 2016 The analysis of employment in Townsville’s two creative subsectors (see Appendices 2E and 2F for more information) for 2016 revealed that while there are great differences between the cultural production and creative services subsectors, both have strong synergies with the government sector. This is unsurprising given, Townsville’s economic specialisation in government administration (Beer and Clower (2009). For the creative services subsector, it appears the growth activities mostly relate to communications and information technology occupations (see Appendix 2E for more information). The unanswered question in relation to creative services employment growth in Townsville 2016 is what is causing it. Is it the case that there is an increased demand for creative labour or does Townsville have an oversupply or creative firms (Potts & Cunningham, 2008, p. 193). Also unknown is whether creative services skills and knowledge is being transferred to other sectors of the economy. Or is there some other factor at play in Townsville? Is there some great event or industry that is disrupting normal economic patterns and causing a disproportionate increase in the demand for creative services in the city?

Many industries and occupations in the cultural production subsector include activities that might be considered traditional arts that require government subsidies (Potts & Cunningham, 2008, pp. 891 - 892). There are also activities in the subsector that seem to operate as standard market driven industries (Potts & Cunningham, 2008, pp. 892 - 893), such as jewellers and the jewellery and

silverware manufacturing industry (see Appendix 2F for more detail). There also appear to be synergies between the cultural production subsector and other industries such as the traditional broadcast industries and newspaper publishing. However, the largest synergies between the cultural production subsector and Townsville’s economy in 2016 appear to be found in government-related industries like education, government administration and defence (see Appendix 2F for more information). The apparent strength of the relationship between the two creative subsectors and Townsville’s broader government sector raises further questions about the relationship between government spending and the creative sector.

During the time span of this research (2006–2016) there were many changes of government at the local, state and federal levels, all of which could have affected the growth of the local creative economy. At the local level there have been three changes of the local council, as well as the amalgamation of the two local councils formerly known as the City of Thuringowa and the City of Townsville. There have been four state governments, including the Newman Liberal-National (LNP) government. There has also been a great deal of churn in Federal governments of both political stripes. The incoming 2013 Liberal-National Coalition government pledged many resources to northern Australia. Northern Australia development policies have continued to advance, despite the transition of leadership within the Coalition from Tony Abbott to Malcolm Turnbull in 2015. Given the relationship between Townsville’s creative economy and the government sector, it is important to consider the implications of policy changes, arts funding changes and changes in the structure of the public sector. While some of these considerations are detailed in Chapter Six, there is a case to be made for more research in this area. The impact on Townsville that the reductions to the public sector workforce that occurred under the Newman Liberal-National Queensland government of 2012–2015 are yet to be fully discovered.

This thesis, however, is concerned with the understanding the drivers underpinning the growth of the creative services subsector in Townsville. Could it be the introduction of the NBN to the city? Or is this growth a reflection at a regional level of a global trend for a greater demand of employees with creative skill sets in response to the “progressive embedding of the Internet and associated digital applications and services into the general economy” (Cunningham, 2013, p. 134). And how might the two developments of increased broadband capacity and an expanding creative economy be related? Does the high growth of the creative services subsector in Townsville reflect the existence of a nascent business cluster? The Regional Trident II discussed below provides some context about the uniqueness of Townsville’s creative economy via its response to the macroeconomic conditions identified earlier in this chapter. By evaluating and appreciating the different rates of growth in each of the nine cities

included in the Regional Trident II analysis, it is possible to identify the strengths and weakness of Townsville’s creative economy relative to that of other cities.

The regional Trident II When considered in isolation the Townsville Creative Industries Trident II data does not explain the cause of the slowdown in employment growth during the 2011–2016 period. Because this thesis is interested in the relationship between the creative services subsector and the NBN, the examination of the Trident II data that took place earlier in this chapter was framed around the NBN (pre-NBN and mid-NBN). However, if this study did not consider and address other variables that may have affected the growth of the creative services subsector, it might be possible to incorrectly assume that NBN was contributing to the slowdown of employment growth during the 2011–2016 period. To avoid erroneous assumption and to further determine the significance of Townsville’s creative services subsector closer consideration needs to be given to other variables. These other variables are identified here by comparing Townsville’s creative workforce with of eight other Queensland cities. The eight other cities observed for the regional analysis were Brisbane, Bundaberg, Cairns, the Gold Coast, Ipswich, Mackay, Rockhampton and Toowoomba. To compare the data for these eight cities with Townsville, a series of Creative Industries Trident II matrices and relative growth matrices were completed for 2006, 2011 and 2016 for all of these cities (see Appendices 1O to 1V). The relative growth of the creative workforce in each city and the two creative subsectors were calculated and plotted on graphs for easy comparison. The regional Trident II bar chart which shows the growth of the cultural production subsector will not be discussed in the body of the thesis, as the cultural production subsector is not the focus of this thesis. The data relating to the cultural production subsector is, however, included in Appendix 2G.

To understand the growth of the creative economy in each of the cities, it is important to first understand the growth of the city’s active workforce. Table 5.2 (over page) shows the growth rate of each city’s workforce in the two five-year periods from 2006 to 2011 and 2011 to 2016, and for the decade 2006 to 2016. The official names of the LGAs are used to represent the cities, which are presented in alphabetical order. The ten-year workforce growth rate for each city appears to be quite high, with almost every city approaching 20 percent. The Bundaberg Regional Council and Toowoomba Regional Council show workforce growth that is very high.

LGA active workforce growth (%) LGA 2006 – 2011 2011 – 2016 2006 – 2016 Brisbane City Council 11% 6% 17% Bundaberg Regional Council 140% -12% 111% Cairns Regional Council 32% -11% 17% Council of the City of Gold Coast 6% 12% 19% Ipswich City Council 36% 2% 38% Mackay Regional Council 57% -17% 30% Rockhampton Regional Council 125% -39% 36% Toowoomba Regional Council 98% -6% 85% Townsville City Council 21% -1% 21% Table 5.2 LGA active workforce growth in %.

The first five-year period (2006–2011) shows positive growth for all of the cities, with growth in some of the smaller cities being close to or over 100 percent. This means that in this period, the size of the workforce in those cities doubled. The 2011–2016 period shows that workforce growth had slowed across the board for all LGAs except the Gold Coast. In the 2011–2016 period the rate of growth of the Gold Coast’s workforce increased. In this period only three cities had workforces that continued to grow: the Gold Coast, Brisbane and Ipswich. Townsville recorded a decrease in its workforce in this period of one percent, as was noted earlier in this chapter. It appears that the largest cities were somewhat insulated from the variables which led to the slowdown in workforce growth. These observations support the earlier proposition that there were significant macro economic factors at play during the 2011–2016 period that affected the growth of LGA workforces and thus the LGAs’ creative economies.

Table 5.3 (over page) shows the raw numbers for each city’s workforce during the Census periods of 2006, 2011 and 2016 according to ABS Census data. The cities are listed by their official local council name; however, unlike in Table 5.2, they are arranged in descending order from largest to smallest by workforce size in 2016. This is important because the workforce growth over the periods was uneven across the cities. As a result, several cities leapfrogged others over the decade in terms of the size of their workforce. In 2011, the size of Ipswich’s workforce eclipsed that of Cairns and the growth of Toowoomba’s workforce saw it become a city with a larger workforce than Mackay. This indicates that Ipswich and Toowoomba were more exposed to the drivers of positive growth than Cairns and Mackay during the 2006–2016 period. These are important considerations when observing the growth of the creative workforce and the creative services subsector in each city.

LGA active workforce by year LGA 2006 2011 2016 Brisbane City Council 471, 875 523, 731 553,324 Council of the City of Gold Coast 218, 327 231, 587 260,529 Townsville City Council 65, 773 79, 784 79,382 Ipswich City Council 54, 993 74, 744 75,924 Cairns Regional Council 56, 397 74, 406 65,964

Toowoomba Regional Council 34, 741 68, 753 64,403 Mackay Regional Council 36, 404 57, 178 47,478 Rockhampton Regional Council 22, 078 49, 723 30,088

Bundaberg Regional Council 14, 134 33, 859 29,867 Table 5.3 Regional Trident II LGA active workforce growth raw figures.

The creative economy in Queensland cities 2006–2016 The growth rates of the creative sector in each of the nine cities (Brisbane, Bundaberg, Cairns, the Gold Coast, Ipswich, Mackay, Rockhampton, Toowoomba and Townsville) are plotted in the column chart in Figure 5.4 below (see Appendix 1X for creative employment raw figures by city). Figure 5.4 shows the growth of the creative workforce in each of the nine cities for the three periods of interest; 2006-2016, 2006-2011 and 2011-2016. When observing the ten-year growth rates of the cities creative workforces Cairns appears to be an outlier among the cities, with its creative workforce declining by 20 percent over the ten-year period. Townsville records the slowest growing creative sector, at 18 percent, while Brisbane, Mackay and the Gold Coast all record similar amounts of growth in the creative workforce at approximately 30 percent. Bundaberg and Rockhampton recorded even higher growth at 40 and 45 percent respectively. The creative workforces of Toowoomba and Ipswich grew at exceptional rates of: 78 percent and 91 percent respectively.

Figure 5.4 LGA creative workforce ’06-’16, ’06-’11 and ’11-‘16 .

If the same boom-bust cycle that was observed in Townsville’s creative economy (Figures 5.1, 5.2 and 5.3) and in the general workforce of the nine LGAs (Tables 5.1 and 5.2) was affecting the creative economy of the nine cities, it should be possible to observe different rates of creative workforce growth across the periods 2006–2011 and 2011–2016.

All the cities experienced growth in creative industries employment in the 2006–2011 period, and in the 2011–2016 period all experienced slower creative industries employment growth (see Appendix 1X for creative employment raw figures by city). Indeed, creative industries employment declined for six of the cities during the 2006–2011 period. It continued to grow in only Brisbane, the Gold Coast and Ipswich. Brisbane and the Gold Coast are considered large cities by Queensland standards, and it seems likely that the scale of these larger cities insulated them somewhat from the economic forces behind the slowdown of growth in the 2011–2016 period.

However, the growth of Ipswich and Townsville somewhat contradicts this explanation. Throughout the period of observation (2006–2016), Townsville remained the third largest LGA by workforce size (Table 5.3). The growth of Ipswich’s general workforce saw it climb from the fifth largest city in 2006 to the fourth largest in 2011, overtaking Cairns (Table 5.3). If creative economy growth were only influenced by size of the general workforce, then in the 2011–2016 period we would expect Townsville (the third largest LGA) to outperform Ipswich (the fourth largest LGA). Instead, what is observed in Figure 5.4 is that in 2011–2016, Ipswich’s creative economy continued to grow while Townsville’s declined slightly. So, while larger cities might be less affected by the macro economic events that caused the employment slowdown in 2011–2016, it seems that growth in Ipswich did not follow this trend. Also, Ipswich, like the Gold Coast is part of the larger Southeast Queensland conurbation, which (arguably) has a population critical mass. Therefore, it is possible that the growth of Ipswich’s creative workforce is related to the general workforce growth in the broader Southeast Queensland region. However, this is not the case for Townsville, which is a large regional centre located far away from Brisbane and other large cities. Based on Figure 5.4, the creative industries workforce growth in larger Queensland city’s like Brisbane, the Gold Coast and Townsville can be described more stable. The creative industries workforce growth in these cities grows more slowly in boom times and suffers lower declines in bust times (see Appendix 1X for creative employment raw figures by city).

Figure 5.5 shows the relative growth of the creative services subsector for each of the nine cities over the two periods 2006–2011 and 2011–2016. As was apparent in the earlier examinations of Townsville’s creative economy (Figures 5.1, 5.2. and 5.3) and the LGA workforce tables (Tables 5.1 and 5.2), there are noticeable differences in the LGA creative services subsector growth rates during the

two periods. In contrast to the growth of the cultural production subsector (Appendix 2G), the growth of the creative services subsector appears stronger in all nine cities. For the most part, this growth peaked higher in the 2006–2011 period than each city’s cultural production subsector did (Appendix 2G) in the same period. In general, the slowdown of growth suffered in the creative services subsector of the LGAs in the 2011–2016 period were smaller than those observed in the Gold Coast and Rockhampton. The growth of the cultural production subsector in the Gold Coast appears to be somewhat different from that of the other cities, and this is discussed in Appendix 2G. The unstable growth of Rockhampton is also discussed in Appendix 2G due to the comparative outperformance of the city’s creative services subsector by its cultural production subsector in the 2011–2016 period. Cairns and Toowoomba also emerge from Figure 5.5 as interesting sites in relation to the creative services subsector, particularly in relation to the declines they suffered in the 2011–2016 period in the cultural production subsector (Appendix 2G).

Figure 5.5 LGA Creative services subsector for 06-11 and 11-16.

While Cairns had the fourth largest LGA overall workforce in 2006–2011 (Table 5.2), in 2016 it was overtaken by the fast-growing Ipswich (Table 5.3). In a similar fashion, Toowoomba had the seventh largest workforce size in 2006, but in 2011 it overtook Mackay to become the sixth largest in both 2011 and 2016 (Table 5.3). Continuing with the proposition that the growth of the creative workforce in larger cities is less volatile in both boom and bust periods than that of smaller cities, the declines suffered by Cairns and Toowoomba in the 2011–2016 period in Figure 5.5 seem problematic. Cairns, a larger city, suffered a 36 percent decline in its creative services subsector, which completely reversed the gains made by this subsector in the previous period. Toowoomba, on the other hand,

experienced one of the largest increases to its creative services subsector workforce in the 2006–2011 period and only suffered a relatively small decline in the 2011–2016 period. The growth and decline of the creative services subsector in Cairns seems to indicate churn in the economy, where any jobs that were created in the 2006–2011 period were lost in the following period. It is possible that the increase in creative services employees in Cairns in the 2006–2011 period was related to temporary circumstances, such as the mining boom. Cairns is also a well-known tourism hub in north Queensland and it is possible that difficulties in the tourism industry related to the GFC may have impacted negatively on the city’s creative services subsector. These possibilities are discussed further in Appendix 2G in relation to Cairns’ cultural production subsector. The relatively small decline in Toowoomba’s creative services subsector in 2011–2016 seems to indicate that the population growth and employment growth in the subsector appear to be more stable and related to the long-term growth of the city. It is possible that Toowoomba was an attractive regional location in comparison to other regional cities due to its proximity to Brisbane in the state’s south-east corner and therefore able to withstand the employment growth slowdown of 2011–2016.

Toowoomba and Ipswich (Springfield Lakes) were both chosen as NBN second release sites. The performance of the creative services sector in 2011-2016 in these sites is mixed. Creative services employment growth in Toowoomba declined by four percent, while in Ipswich it grew at three percent (Figure 5.5). In comparison to the other towns in the same period the performance of creative services employment growth in both Toowoomba and Ipswich seems strong. While it is tempting to link creative services employment in these LGAs with the NBN there is insufficient evidence to do so at this point in time. As Table 5.3 shows both towns had relatively high active workforce growth in 2011- 2016 in comparison to the other towns (Ipswich grew by 2% and Toowoomba only declined by -6%). Although the growth of the creative services sector in both cities exceeded the growth of their active workforce in 2011-2016, this is not enough evidence to show that the NBN influenced the employment growth in the towns in the period. Creative services employment growth in Toowoomba and Ipswich also outpaced the growth of the city’s active workforce in 2006-2011 when no impact from the broadband network is expected to be noticeable in the employment statistics (see Table 5.3 and Figure 5.5).

Discussion There is a pattern that can be observed across the cities, of accelerated declines and slower growth in the 2011–2016 period compared with the 2006–2011 period. The presence of this pattern in most of the cities observed strongly suggests that there are macro economic factors that affected the demand for the creative workforce throughout Queensland. It appears that there is some relationship between the size of a city’s population and its exposure to volatile growth (either positive

or negative) in the creative sector. Creative industries employment in the two most populous cities observed Brisbane and the Gold Coast, continued to grow in the 2011–2016 period despite the general employment slump. Townsville, the third most populous city, recorded much smaller declines in comparison with other smaller cities such as Toowoomba, Rockhampton or Mackay (Figures 5.4 and 5.5). However, Cairns had a similar-sized population to Townsville (Table 5.3) and its creative sector suffered some of the most significant declines in the 2006–2011 period. So, although the sheer size of a city and its workforce has some impact on creative workforce growth, it is not the only factor.

The wide range of growth rates across the nine cities strongly indicates that local factors do impact on a city’s demand for creative employees. It is beyond the scope of this thesis to investigate which local factors impacted the growth of the creative workforce in each city, other than Townsville. However, continuing with the proposition that the slowdown in growth for creative employees observed in the 2011–2016 period was linked to volatility in the mining and extractive sector and its related flow-on effects, it seems likely that the different industries based in any given city and their integration into the broader mining sector are a significant factor for consideration. During the 2011– 2016 employment slump Townsville’s creative services subsector continued to grow at six percent. It appears that the social and economic conditions in Townsville are suitable for a thriving creative services subsector.

The dynamics of Townsville’s creative workforce, explored in Figures 5.4 and 5.5 and Appendix 2G show, that the creative services subsector is generally outperforming the cultural production subsector, as is consistent with previous Trident research findings (Cunningham, 2013, p. 137). If the NBN were having a widespread negative effect on the creative economy, it seems likely that the creative services subsector would have recorded slower growth than the cultural production subsector across the nine cities. With the level of analysis undertaken in this chapter, it seems unlikely that the NBN is the cause of the 2011–2016 slowdown in creative employment growth. With the possible exception of Cairns the impact of the GFC on creative industries’ employment growth is not obvious in the data presented in this chapter.

The resilient creative services Townsville’s creative services subsector grew quickly over the decade 2006–2016. This growth can be attributed to synergies with the government sector and some other notable industries. The Regional Trident II analysis of Townsville, Brisbane, Bundaberg, Cairns, the Gold Coast, Ipswich, Mackay, Rockhampton and Toowoomba confirms that Queensland experienced a boom-bust cycle, in the decade 2006–2016, with the boom period being captured in the 2006–2011 data and the bust period in the 2011–2016 data. The most likely explanation for the volatile growth in the creative sector

of the nine cities is that it was related to the mining boom. In comparison to the other cities, Townsville seems to have a similar growth pattern to Brisbane, Ipswich and the Gold Coast. Brisbane, the Gold Coast and Townsville tended to grow more slowly in the boom period and decline more slowly in the bust period. This suggests that there is a relationship between the size of a city’s population and its economic resilience during difficult economic periods. In contrast to Townsville, the more dramatic gains of Cairns in the boom period and declines in the bust phase also suggest that the mix of industries in a city is as significant to the growth of the creative workforce as the sheer size of the city.

This analysis confirms earlier work regarding Townsville’s role as a services hub for the broader north Queensland region. The analysis in this chapter suggests that Townsville’s specialisation (Beer & Clower, 2009) in government administration has insulated the city from cyclic employment slowdowns to a greater degree than is the case for Queensland cities. The creative services subsector has also helped build Townsville’s resilience to cyclic employment downturns. The creative services subsector continued to grow in 2011–2016 while the city’s overall workforce stagnated. Employment growth of the creative services subsector also suggests that there are significant transitions underway in the city’s economy. While it is unclear if the creative services subsector is creating employment demand for other industries, or if other industries are experiencing increased demand for the creative services, what is clear is that any productivity and efficiency gains in the subsector had positive impacts in the city. It remains the case, however, that Townsville is struggling with a low-growth environment. It is against the generally grim backdrop of static workforce growth job losses and business closures, that the qualitative data for this research was collected. Chapter Six takes a broader view of Townsville’s continued social and economic development from a former frontier town to a modern post industrial economy where the creative green shoots of a promising economic future are now laid bare in the wake of Townsville’s difficult employment circumstances.

Chapter Six: Creative frontier city?

This chapter attempts to further establish how Townsville has developed historically so that we can understand how it might continue to evolve in the future. To provide this level of rich detail, it was necessary to draw on a wide range of sources, from history books to various government policies. It was established in Chapter Five that Townsville’s creative economy shares many synergies with government related services and that Townsville has developed an economic specialisation in government administration and defence (Beer & Clower, 2009). This suggests the significance of this specialisation for the development of a creative workforce. Themes of ambition, entrepreneurial spirit and the paradoxical advantages and disadvantages of Townsville’s strategic geographical location are continuous throughout the city’s history. This chapter details some historical, political and economic factors that have combined to form the identity of Townsville as it currently exists.

The political economy of Townsville (NQ) Townsville is located 1,354 km north of Brisbane and hosts Queensland’s third largest population size by LGA after Brisbane and the Gold Coast. In 2015 the population of Townsville (by LGA) was 193,946 according to the ABS (2017). Townsville recorded strong population growth in the decade from 2000 to 2012, growing on average by 2.2 percent per annum (AEC, p. 4). Based on projections, the Townsville City Council expects the population to grow by 20,000 people, or a total of 10 percent, by the early 2030s (AEC, p. 7). However, as the analysis in Chapter Five showed, there were unusual circumstances driving population growth from 2006 to 2011 and this growth has subsequently slowed. Several towns and shires in the Townsville and North-West Queensland regional development area co-ordinated through development agendas under the Regional Development Australia (RDA) framework. This allows North Queensland towns and cities to specialise and complement each other in certain activities. A good example of this evident in the distinctive positioning of Cairns and Townsville. While Cairns is considered a popular tourist destination, Townsville attempts to attract more specialised education-based tourism and crowds for large events such as the V8 super cars (S. Millcock, personal communication, June 22, 2016).

A footnote in the Townsville 2013–2017 plan describes Townsville’s two standout industries:

there is a relatively large contribution made by construction; this reflects the city’s high population and economic growth rates and the subsequent demand for infrastructure, housing and commercial construction. Secondly there is relatively large public administration, safety, health care and social assistance sectors; this reflects

Townsville’s traditional role as North Queensland’s state and federal government hub. (AEC, p. 5 footnote 1)

Figure 6.1 below shows which industries in Townsville contribute the most to gross regional product (GRP).

Figure 6.1 Townsville GRP per sector in 2010/2011 (AEC).

Many of the initiatives in Townsville’s Townsville city economic development plan 2013–2017 (AEC) presumed that the strong population growth of the previous decade (2000–2012) would continue for the next decade. This underpinned many of their assumptions such as infrastructure building, service developments and resource management. There appears to be a distinct lack of identification and acceptance in the Townsville city economic development plan 2013–2017 that the past decade of growth had been based on a boom-bust cycle as evidenced in Chapter Five, although it must be acknowledged that boom-bust cycles are certainly easier to identify in hindsight.

Townsville’s top employing industries The top five employing industries in Townsville in 2011 (shaded in grey in Table 6.1 over page) are health care and social assistance, public administration and safety, retail trade, construction, and education and training. These five industries employ over 50 percent of Townsville’s workforce. The public administration and safety category accounts for almost 12 per cent of Townsville’s workforce and is also the highest contributor to the region’s GRP, contributing more than 17 percent of gross regional product (GRP), as seen in Figure 6.1 above. This corroborates previous findings that public

administration is Townsville’s regional specialisation (Beer & Clower, 2009) In Figure 6.1 Defence spending is categorised under the public administration and safety category.

Percentage of 2011 Townsville workforce employed by sector Health care and social assistance Administrative and support services 3% 12.5% Public administration and safety Wholesale trade 11.9% 3% Retail trade 10.7% Mining 2.9% Construction 9.9% Financial and insurance services 1.6% Education and training Rental, hiring and real estate services 8.1% 1.6% Manufacturing 7.6% Electricity, gas, water and waste services 1.6% Accommodation and food services 6.9% Information media and telecommunications 1.4% Transport, postal and warehousing Arts and recreation services 5.1% 1.3% Professional, scientific and technical services Agriculture, forestry and fishing 0.5% 4.7% Other services 3.7% Total no. of people employed 87019 Table 6.1 Townsville 2011 workforce per sector (%), adapted from ABS (2017).

Since 2012 Townsville has suffered from a stubbornly high unemployment rate, and from May 2016 till July 2017 it recorded the highest unemployment rates in the country for fifteen consecutive months (Labour Market Information Portal, 2018a, 2018b). Fleischmann, et al. (2017, p. 116) have credited this downturn to a structural decline in the local manufacturing sector; however, the Regional Trident II analysis in Chapter Five suggests that a larger macroeconomic event is behind the downturn. In Chapter Five it was hypothesised that the volatility in the mining and extractive sectors was the likely cause of such a significant macroeconomic event. A downturn in the local manufacturing sector of Townsville might, in conjunction with the volatility in the mining and extractive sectors, explain why Townsville’s unemployment rate was considerably higher and more persistent than that of other Australian cities. Despite unemployment rising high in Townsville during 2016 and 2017, the city still showed a great deal of resilience compared to the other cities in the Regional Trident II analysis. In Chapter Five, the explanation for Townsville’s (relative) resilience was that its industry and economy were different to those of other cities and therefore less exposed to the ebbs in the mining industry. The next section of this chapter traces the historical development of Townsville and its economy, to understand why the city is more resilient than others in the face of the apparent commodity bust period experienced during 2011–2016.

Townsville’s development

Specialisation and diversification Beer and Clower (2009) performed a cluster analysis and regression analysis on the 1961, 1991 and 2001 Census employment data to discover a link between economic specialisation in Australian

regional towns and economic growth. Over the 40-year period Beer and Clower (2009) identified nine clusters in 1961, growing to fourteen in 2001. Townsville was identified as a city with a manufacturing specialisation in the 1961 census employment data, changing to a public administration and defence specialisation in 1991 and community services and government administration services in 2001. For Beer and Clower (2009), the catalyst for the development of Australia’s urban regional centres is the integration of the Australian economy into the greater global economy, which began in earnest in the mid to late 1970s and increased in pace in the 1980s and 1990s. Like much of the literature on geographic cultures, the outcome of Beer’s and Clower’s analysis focuses on the dichotomy between the benefits and drawbacks of diversified and specialised economies. Beer and Clower (2009, pp. 384- 385) found that economic diversification in regional towns and cities led to inconsistent growth patterns with large variables between the growth patterns. In comparison, specialised economies “had the most success with respect to population and labour force growth” (Beer & Clower, 2009, p. 385). This is an interesting observation in relation to Townsville, as the city has a broad revenue base generated from a diverse range of industries. According to the Townsville City Council, no one sector contributes more than 18 percent of the city’s GRP (AEC, p. 5). Table 6.1 does somewhat support these findings, while the diverse base of revenue sources that the Townsville City Council enjoys somewhat contradicts them. What is clear is that government-related services employee make up a large percentage of Townsville’s workforce, which is consistent with the findings of Chapter Five. In Chapter Five the relationship between Townsville’s creative economy and the government sector was revealed. However, thinking of Townsville as a government town somewhat diminishes its entrepreneurial history and achievements.

Agricultural export base Townsville was founded by two entrepreneurs seeking to capitalise on the growing expansion of agricultural activity in north Queensland in the mid-to-late 1800s. The business partnership of John Melton Black and Robert Towns is largely credited with creating the foundations of the city. Gibson- Wilde (1984, pp. 15-32) provides a detailed historical account of the timeline of events that led to the establishment of Townsville. Although Townsville was not the first port town to be settled by European pastoralists in north Queensland, it had a natural advantage over the other settlements of Mackay, Bowen and Cardwell. Gibson-Wilde (1984, p. 32) summarises the practical logistical factors that made Townsville a superior site for a pastoral port settlement: “the reasons for its founding were solely that it offered the best and quickest route from the coast to the interior and a reasonable harbour together with a satisfactory site for a boiling-down works which Robert Towns required” (p. 32).

Strategic features of the city’s location, such as the easy access corridors to inland (Bell, 2010, p. 10) areas and port suitability, continue to play a vital role in Townsville’s economy. Appendix 2D shows the city’s superior geographical location in comparison to some of its neighbouring towns. Tyrell, Mellor, and Monypenny (2010) confirm that the unique geographical location of Townsville is still one of the greatest drivers of its economic success. The location and selection of Townsville are therefore the bedrock of the city’s economic strength. The military is just one of many industries which has relocated to and grown in Townsville due to is strategic location and the cunning political nous of political decision-makers.

Strategic military location and aviation White (2007, pp. 66-67) traces the politics of northern development back to post-World War II fears that external forces were a threat to the nation’s security. Discourses regarding the economic development of the north had already existed in local Queensland politics for some time, but the security threat strengthened the appeal of northern development discourse. At the federal level, “the Curtin–Chifley Labor governments adopted a policy of decentralisation designed to facilitate regional settlement beyond the capital cities” (White, 2007, p. 66). From 1942 to 1943 the population of Townsville ballooned from 25,000 residents to 100,000 due to Townsville’s strategic proximity to the Pacific theatre of war (McIntyre, 1992, p. 2). While land-based fortifications, heavy artillery, and naval ships were located in the town, much of the war in the Pacific was aerial based combat, and much of the military activity in Townsville was aviation-related.

In the 1960’s, the geopolitical climate shifted due to the Cold War conflict. Australia was eager to align itself with the United States of America in the looming conflict. In the face of imminent danger, the Australian Federal Government needed to expand the nation’s defence capabilities. According to White (2007), Townsville’s Lavarack barracks became a major part of the Australian Federal Government’s response to the growing security concerns of the Cold War era. The Menzies government adopted a more conservative approach to the development of northern Australia. This conservative approach was viewed as a political weakness, which was exploited for political gain by the Australian Labor Party (ALP). White suggests that the theme of northern development is amplified in Queensland because the state has a large population in the north of the continent and historically was the one of the first states to suggest it was being neglected by the federal government (White, 2007, p. 67).

The ultimate deciding factor in Townsville being chosen as the site over other northern locations will remain a disputed point in Australian history. Nonetheless White’s historical insights are persuasive. White argues that the combination of the town’s assumed emotional support for the

military due to its World War II history and Australia’s role in as a US ally in the Cold War, coupled with the political imperative to provide economic and civic development in northern Australia, combined fortuitously for Townsville’s economic benefit. White also theorises that Townsville’s existing airfield may have played a role in making the town more favourable than other northern sites.

While it must be acknowledged that the circumstances that led to the Lavarack barracks being located at Townsville were indeed fortuitous, White’s account diminishes the influence of the political agents who drove the northern development agenda. These political agents could be thought of as entrepreneurially-minded people who saw the opportunities in policy discourses around northern development. White’s account also diminishes the potential importance of Townsville’s airfield in attracting the military presence. A strong aviation presence is valuable to military efforts and the two industries share many synergies. The diversity of Townsville’s industry and infrastructure in the 1960s, as well as the political climate, led to the fortuitous chain of circumstances that White (2007) explores.

The political theme of northern development still echoes in national and Queensland politics, for example in the current Federal Coalition government’s Developing northern Australia: our north, our future white paper and related initiatives of the Office of Northern Australia and the North Australia Infrastructure Facility. The potential impact of these initiatives on Townsville’s creative economy will be explored briefly in section on the political economy of Townsville later in this chapter.

Singapore Armed Forces expansion The historical political manoeuvrers that based a military presence in Townsville continue to have positive economic consequences for the city to this day. On May 6, 2016, the Australian federal government and the Singapore government signed a memorandum of understanding (MoU) to increase military training of the Singapore Armed Forces (SAF) in Australia. North Queensland and Townsville are poised to benefit greatly from the deal through the development of strategic defence assets, and from increased economic activity in the region associated with the temporary presence of SAF personnel. Blaxland (2017) briefly explains the significance of the deal and its trade and geopolitical benefits. Under the MoU, the SAF presence will increase from 6,000 to 14,000 personnel per year (Blaxland, 2017). The SAF personal will be present in north Queensland for training for up to 18 weeks per year (Townsville City Townsville City Council, 2017). KPMG has estimated that more than AU$2 billion will be invested in upgrading and developing new military infrastructure in Rockhampton and Townsville between 2016 and 2026 (Townsville City Townsville City Council, 2017). A KPMG (2017) report estimates that the military infrastructure development in Townsville will earn the city more than $26 million in income per year of development and more than $10 million in revenue once development is complete. That same report suggests that local construction and agricultural

industries will be well placed to capitalise on the economic opportunities provided by the military instillations.

Recent growing pains This section explores some local issues in the region and the ways in which they are affecting Townsville. Its second part details a range of policies that are helping to shape the political economy of the region. The mining industry, like many other industries, has benefitted from Townsville’s strategic geographical location (see Appendix 2D), but the latest proposed open-cut coal mine has provoked something of an existential crisis for Townsville and the nation.

The Adani Carmichael coal mine The Adani Carmichael coal mine is a proposed project located in the Galilee basin in western Queensland. The project is one of several that are being developed to mine the Galilee basin for mineral resources. However, the Adani Carmichael coal mine has become a focal point of popular contention due to the size of the proposed mine and the perceived trustworthiness of the Adani company. The project has also received a considerable amount of public attention due to the number and quantum of concessional loans that have been offered at various stages to Adani, by federal, state and local governments. As the self-styled capital of North Queensland, Townsville is positioned to benefit from the approved mine in a number of ways.

Townsville has secured the Adani headquarters, with up to 500 workers being located in the city (Cameron, 2017). Proposed rail and airport infrastructure to help export the coal also promises job opportunities in Townsville. An increased presence of fly-in, fly-out (FIFO) workers may also have economic benefits. However, opinions about the Adani project are divided, between those who think the project is good and those who think it is bad, as well as a large group of people growing ever more sceptical of its feasibility. The growing uncertainty has been caused by the long approval process, the bitter political arguments and the difficulty the Adani company has had in securing the necessary finance. Reflected in the Adani Carmichael coal mine controversy is an existential crisis for Townsville, and for Australia more broadly. At the end of the mining boom, should the country throw its weight behind the largest coal mine ever proposed despite the questionable financial returns, or should investment be redirected toward new productive industries and infrastructure that also hold the promise of revenue? Regardless of whether the Adani Carmichael coal mine ever exports a speck of coal, or even many hundreds of tons, it seems that the controversial project is emblematic of a range of different developmental choices and opportunities being pursued in north Queensland. Some other choices, opportunities and associated government initiatives supporting these developments are detailed below.

Other significant government policies in play 2006–2016 This section outlines various economic development policies from the three tiers of government (local, state and federal) aimed at stimulating the economy in north Queensland. The scope of this section is limited to activities that appear likely to have an impact on Townsville’s creative economy. Concessional loans to the private sector are a mechanism used by all three tiers of government as an incentive for infrastructure development.

Local government The Townsville City Council is the government body closest to the residents of Townsville and is therefore also involved in an advocacy role and a partnership capacity with the state and federal governments in local economic development. Initiatives driven by the city council are outlined in its Townsville city economic development plan 2013–2017 and include infrastructure developments so that the city can function more like the capital city it aims to be. It is therefore unsurprising that many of the Townsville City Council’s initiatives have a heavy emphasis on building infrastructure.

Townsville Priority Development Areas There is an extensive list of urban development projects happening in the city. The Townsville City Waterfront Priority Development Area (PDA) scheme is one of the most important projects. It aims to gentrify key areas of the CBD along the foreshore and river banks. The scheme splits the waterfront area into seven distinct precincts for development and aims to stimulate cultural and economic activities reminiscent of Florida’s (2002) formula for creative cities.

Townsville concert hall Responding to concerns in the community about the capability and usability of the entertainment centres and spaces in the city, the Townsville City Council commissioned Jennifer Bott AO to conduct a feasibility study on the construction of a new concert hall in Townsville. Bott identifies a “significant gap” between “demand for cultural facilities, and the supply of these facilities” (Bott, 2017, p. 8). The existing Townsville Civic Theatre (TCT) is the main venue for local and professional touring musical performers, despite its acoustic design being for theatre and spoken-word performance. There are a range of other performance spaces throughout the city, but none of these spaces meets all the needs of Townsville’s cultural production community and touring performers. Bott recommended change to the business model of the TCT and supported construction of a new concert hall to address the demand and supply issues facing cultural precincts in Townsville. The lack of venues and the less-than-ideal operation of the TCT, as Bott describes it, may have played a part in the low negative growth of the cultural production sector in Townsville as observed in the Creative Industries Trident II analysis of Chapter Five.

Stadium and combined entertainment centre One of the key policy agreements between the local Townsville City Council, the Queensland state government and the federal government in the 2016 Townsville city deal was the stage one funding arrangement for the development of a new sports stadium in Townsville. The combined Townsville stadium and entertainment centre is a polarising development in the local community, with proponents in favour of the development being particularly boisterous in their support for the project. However, local entrepreneur Warwick Powell has written a series of articles outlining his opposition to the project. The crux of Powell’s opposition to the project is that two of the three economic studies on the stadium have concluded that it will not earn enough revenue to cover the ongoing costs to the public. Therefore, not only will taxpayers pay for the initial development, they will also face high ongoing costs to maintain the stadium, most likely through higher taxes (Powell, 2016a, 2016b, 2016c, 2016d). While a great deal of financial burden will be placed on Townsville residents, a few land owners and retailers adjacent to the development site will benefit from the project. Powell summarised the situation as “robbing public Peter to pay private Paul” (Powell, 2016a).

Townsville has been drought-declared for many years, and anecdotally, many residents who are critical of the Townsville City Council’s infrastructure development plans raise the city’s water security as a higher priority than the stadium. Townville’s main dam is the Ross River Dam. The Ross River Dam is currently holding 20 percent of its overall capacity at the time of writing. The city of Townsville is on Level Three water restrictions, limiting the use of water to one hundred megalitres per day (Townsville City Council, 2018a).

There is a strong sense that the Townsville City Council is responding to an incredibly difficult economic transition period with populist policies that provide quick fixes and short-term job creation. One of the few initiatives embarked upon by the council that appears to have a more long-term strategic focus is the investigation of the local creative industries.

State government Royalties for the Regions Royalties for the Regions, also known as R4R, was an initiative of the former Newman-led LNP Queensland government policy that ran from 2012 to 2015. The policy attempted to redirect revenues from mining-related activity to mining-related regions, with the rationale that government services and infrastructure in the regions had been squeezed due to the mining boom and the related influx of people, but government funding was not meeting the needs of the booming communities. The additional funds administered through R4R would be used on the apparent accumulated backlog of infrastructure projects. The R4R program strongly echoes the West Australian state government policy with a similar name, Royalties for Regions, which operated from 2008 to 2014. What made the West

Australian policy so controversial was that 25 percent of the state’s mining and petroleum royalty revenue would need to be distributed back to areas outside of West Australian cities. This meant that there was the potential for more beneficial projects with greater returns in metropolitan areas to be put aside in favour of regional funding. There was also mounting evidence that the policy was not sustainable.

The Queensland policy had a similar intention of distributing revenue from mining-related activities back to regional areas, although not to such a dramatic degree. The Queensland R4R policy was also controversial, because there was evidence that the Newman government minister responsible for administering the program was not following his own guidelines for selecting projects for funding (Queensland Audit Office, 2015). In summary, the accusation was that the while the program was well intentioned, the administration of the fund was not rigorous and was open to misuse. Townsville was awarded funds for several projects under the scheme, and there is no suggestion here that those funds were granted inappropriately. The Queensland R4R policy was replaced by the Labor Palaszczuk Government’s Building Our Region program in 2016.

Catalyst infrastructure program The catalyst infrastructure program is a Palaszczuk government policy that has been implemented from 2015 onwards. The policy is a $59 million infrastructure fund aimed at stimulating developments that generate economic benefits, particularly in the areas of water, road and sewage infrastructure. Some loans have been secured and have contributed to the development and expansion of the Townsville airport (Queensland Airports Limited, 2017).

Federal government NDIS The National Disability Insurance Scheme (NDIS) is a Federal Government scheme introduced by the Gillard Labor government. Townsville was selected as a trial site for the scheme in 2013. The policy aims to invest in the early life of severely disabled people to improve their outcomes later in life. Some creative services providers have been able to benefit from the introduction of the NDIS in Townsville. The introduction of the scheme creates a niche group of consumers with disposable incomes that they otherwise would not have. These new customers are creating demand for specialist services and solutions to their problems. Matthew Bulat explains the opportunities the NDIS has created for local creative services providers and the problems they are trying to solve:

the service providers have to be able to cope with workers traveling all over town and trying to do time sheets and stuff and the recipients ordering different services and trying to

timetable it all… they are trying to do cloud mobile stuff to make that work. Because we are the pilot [town] we have to make our own sort systems. (Bulat, 2016)

Smart cities plan In 2016 the Townsville City Council, the Queensland state government and the Australian federal government signed off on the Townsville city deal. The city deal is the name of the agreement reached between the three tiers of government and the local community under the Turnbull government’s Smart Cities policy. Smart Cities is an area of growing discourse in urban planning, particularly across European nations. While there is still debate about what exactly constitutes a smart city, some of the common themes include the use of ICT networks and sensors to provide real-time data to allow for optimal service delivery, human-centred and co-design of services and infrastructure, innovation and sustainable development. An example of a smart city and smart city initiative would include the MK:Smart initiative in the town of Milton Keynes, England. While the Turnbull government’s policy is named after the smart city concept, it is questionable how many of the core principals of innovation and sustainable growth are present in the Townsville City deal.

What the city deal policy framework does is create a funding and cooperation framework for the three tiers of government and the local community. Much of the Townsville City deal seems to reflect commitments that the Townsville City Council had already made in other policy documents such as the Townsville city economic development plan 2013–2017. The real achievement of the city deal policy is a political one. By having a funding and cooperation mechanism in place, it is hoped that more consistency and cohesion between the different parties can be reached behind closed doors, thus neutralising at least some of the bitter partisan debates that take place about local infrastructure spending. The timing of the Townsville City deal was indicative of the political nature of the policy. Townsville’s city deal was the first to be created and signed off on by all the involved parties, and came during the very highly contested 2016 federal election. The Turnbull Government was under immense pressure in north Queensland, and in the Townsville-based seat of Herbert. The Labor party at all levels of government, the Labor-aligned Townsville City Council, the Palaszczuk state government and the federal Labor party applied enormous pressure to the Turnbull Government to contribute funding toward the combined Townville stadium and entertainment centre. With the Townsville city deal, the Turnbull Government announced that it would contribute towards funding to the stadium. Despite this, the Coalition incumbent MP in Herbert still lost his seat at the 2016 federal election to Labor candidate Cathy O’Toole by a small margin. Whether or not the stadium issue translated into local votes is very difficult to tell because of the boosterish claims of those parties supporting the initiative.

Northern Development Infrastructure Fund The incoming 2013 federal Coalition government had a vision of turning northern Australia into a more economically productive region. To implement this policy vision, the Developing northern Australia: our north, our future white paper process was put into motion. The outcome of the process was the establishment of the Northern Australia Infrastructure Facility (NAIF) a commonwealth entity which reports to the Office of Northern Australia. The NAIF is a $5 billion fund offering the private sector concessional loans to build productive revenue-generating infrastructure in northern Australia. Despite reporting on a number of projects being under consideration by NAIF, at the time of writing no concessional loans have been approved. Critics of the infrastructure fund argue that the premise of the NAIF is unrealistic, and that if the private sector saw attractive opportunities in northern Australia concessional loans would not be required (Lyon in Remeikis, 2017). In the view of sceptics such as Lyon, the federal government’s NAIF policy is more about evoking strong emotions of pride and patronage from northern voters. There also seem to be strong echoes of the political theme of economic underdevelopment that came with the paranoia of northern invasion in the post-World War II and Cold War periods.

Creative Industries In order to achieve its growth objective of becoming a capital city, the Townsville City Council identified the creative industries as an opportunity for economic development and industry diversification in its Townsville city economic development plan 2013–2017 (AEC, p. 32). This objective led to the joint Townsville City Council and James Cook University Growing the creative industries in Townsville report (2015). The report and its related research outputs mapped the local creative industries and conducted a supply and demand analysis of the local creative industries. It focused on architecture, design, advertising and marketing, software and digital content and film, thereby excluding from its analysis many of the activities referred to in this research project as cultural production activities. While the justification for focusing on the economic development of the high- growth elements of the creative industries is sound, it does mean that the economic value of the cultural production industries remains largely unknown. This is a limitation which is also apparent in this thesis and was discussed in Chapter Five.

Supply The creative industries supply analysis (Daniel, et al., 2015, pp. 9 - 20) revealed a number of interesting strengths, weaknesses, opportunities and threats for the local creative industries. The supply analysis identified the lack of professional development opportunities and the cost associated with existing professional development opportunities as a threat to the local sector. The analysis determined that half of all businesses revenue was earned by the construction, retail and business

services industries; all of these industries are susceptible to business cycles and therefore so are the downstream creative industries businesses. It was estimated that approximately 25 percent of the local creative industries labour that was generated was outsourced to creative firms outside of Townsville. While this leakage of creative work is a weakness, it also provides a major opportunity for the local creative industries to try to retake the business they are losing to external firms. Respondents also felt that although they anticipated improved profits in the next three years, they did not believe that this revenue would translate into jobs growth. This predicted jobless growth is of crucial importance because of the major claim of creative industries discourses that the sector is a vehicle for creating employment. There was also a perception that there was something of a skills shortage in Townsville, and the analysis also found that there was a lack of awareness of and training on the innovation potential of the creative industries. There were opportunities for greater inter-firm collaboration and for the development of geographical areas of interest to the creative industries to allow for greater use by the local sector, as identified by a hotspot analysis.

Demand Daniel et al.’s demand analysis (Daniel, et al., 2015, pp. 21 - 31) considered both the drivers of import leakage of creative services work, and what types of services creative industries business are most commonly engaged with. The key finding in regard to the drivers of import leakage was a lack of awareness of local creative industries businesses, and the fact that non-Townsville-based firms were often considered for larger projects. The analysis also found that creative services were most commonly engaged with for advertising, marketing and promotion, while there was little understanding of the “human-centred innovation processes” (Daniel, et al., 2015, p. 30) and opportunities that creative services could provide.

The report made several recommendations based on its findings, and some initiatives have begun to develop in response. Some of these initiatives will be explored in the following sections of this chapter. However, the supply analysis found that the local creative industries were highly reliant on the construction, retail and business services industries. It is also apparent how much of a significant factor distance and location are for the creative industries based in Townsville. The political and economic advantage Townsville has in comparison to other Queensland regional towns is its strategic location, yet it is also the city’s distance from the state capital that makes it difficult for its creative industries to invest in professional development and to compete with rival service providers. It seems that there is a paradoxical relationship between the advantages and the disadvantages to the city and its residents, and the distances between the city and Brisbane.

CI initiatives and motherships Deuze (2010) describes the business landscape of the creative industries as having an ‘hourglass’ structure, in which there are a small number of large players in each sector competing with a large number of small organisations, independents and contactors (Flew & Cunningham, 2010, p. 120). What is generally missing from the creative industries business landscape is the medium-sized organisations (hence the hourglass analogy). The ABS (2010) defines medium-sized businesses at those which employ 20 to 199 employees. Flew and Cunningham (2010) write that arts policy and application has in the past often been oriented towards large cultural institutions and flagship events, or the ‘motherships’ which all creative activity in the city revolves around. In contrast, the smallest stakeholders at the bottom of the hourglass are often ignored because of their loose professional affiliations and lack of lobbying clout (Flew & Cunningham, 2010). While this study is limited by not having access to creative industries business data, this section briefly explores the business landscape of the creative industries. It identifies organisations such as James Cook University as current creative industries motherships in Townsville and identifies SafetyCulture as an emerging mothership. The potential of Innovate North Queensland (iNQ) is also explored as an initiative that could develop the missing middle in the creative industries business landscape of Townsville.

Following the joint investigation into the local creative industries by Townsville City Council and James Cook University, several industry development initiatives have begun in an attempt to address some of the opportunities identified in the Growing the creative industries report. It is unlikely that any of these initiatives would have had enough time to have a positive impact on the growth of Townsville’s creative workforce during the 2011–2016 ABS Census data used in Chapter Five. However, these initiatives are noteworthy economic development strategies which may have future impacts on Townsville creative workforce. A dedicated local creative industries incubator and co- working space has developed under the banner Innovate North Queensland (iNQ). Officially launching in late 2016, iNQ prides itself on being a startup institution. It has strong ties to the existing community of local entrepreneurs and successful startup businesses. As an institution, iNQ aims to address three key weaknesses in the Townsville’s creative milieu: the lack of a dedicated creative industries precinct, the lack of investment in the creative industries and the limited resources of the entrepreneurial startup community (Markham & Caioppe, 2016). By drawing together local talent as mentors and potential investors, iNQ allows the so-called venture capitalists of Townsville to pool their limited resources into ventures that have the greatest possibility of attracting further funding and success, national and internationally. iNQ’s status as the recognised and dedicated space for the creative industries might highlight tensions in the local economy between creative production workers and creative services works; it has quite strongly aligned itself with the startup community, which often

tends to have a heavy focus on technology and providing new and novel services through the application of technology. Therefore, the creative services subsector of the creative industries tends to have much more overlap with iNQ than the cultural production subsector. iNQ may have positive impacts on the creative services subsector of the creative industries in future; however, it seems unlikely that it will have any type of stimulatory effect on the cultural production subsector.

CI motherships and breeding grounds With the exception of a few key creative specialist occupations, the Growing the creative industries report concluded that there was no issue with the local creative talent pool. The talent pool of future creative employees is generally well served by Heatley Secondary College and the co-located Townsville Creative Technologies College, which have a specialised focus on creative industries and STEM-related subjects for secondary and tertiary education, while James Cook University (JCU) is a major institution in the city’s economic and innovation systems, with a specialisation in tropical research. In Matthew Bulat’s own words, JCU brings “in the big speakers on business and the tropics and stuff like that” (Bulat, 2016), which is an important contribution to new ideas and innovation in the city. JCU provides an undergraduate talent pool of creative industries workers, engineers and ICT workers. The establishment and development of JCU, Queensland’s second university, is an example of the determined vision Townsville residents have of their city and their role in North Queensland. A history of the first 40 years of JCU can be found in Bell’s (2010) Our place in the sun: a brief history of James Cook University 1960–2010. Central Queensland University (CQU) has also expanded into Townsville in recent years, and it is expected that the competition between the two universities will continue to develop the future workforce and make contributions to the growth and innovation systems in Townsville.

Unexpected motherships Townsville’s startup ecosystem There is a particular interest from policymakers in startup organisations as a source of innovation, disruption and new economic growth: this is evident in some of the initiatives under the Queensland state government’s Advance Queensland policy. Startups are generally considered to be companies that are “primarily focused on developing innovative digital technology and intellectual property (IP) with a high leverage on labour, an innovative scalable business model, capable of rapid growth, and under five and a half years in age” (Markham & Caioppe, 2016, p. 7).

It is the particular overlap between the software and development application industries and the role of startups in generating new IP that produces overlapping interests in the startup community and creative industries. For this thesis, the software and applications industries were included in the Creative Industries Trident II analysis as a component of the creative services subsector, as discussed

in Chapter Five. Over 2014–2015, DSITIA published a series of reports about the local start-up ecosystem in Queensland. The Regional Queensland startup ecosystem report (2016) examines the startup ecosystem of seven cities outside of Queensland’s southeast corner, including Townsville. The report found that all sites of investigation showed signs of startup activity and innovation in the agricultural technology space (Markham & Caioppe, 2016, p. 40). Despite agriculture only accounting for four percent of Queensland’s GRP, the report concluded that the development of agricultural technology was logical due to the location of these industries in regional centres, alluding to the effects of knowledge spillovers. The report also showed that each region had its own unique mixture of target markets for technology startups. Figure 6.2 shows Townsville’s top five technology startup target markets. The appearance of safety as an important market for technology startups in Townsville could be explain by knowledge spillovers from Townsville’s specialisation in public administration and safety services (Beer & Clower, 2009). In a similar fashion, the relative attractiveness of the manufacturing sector as a target market could also reflect the number of people in Townsville employed in the manufacturing sector (Table 6.1) and the value the sector provides to the city’s GRP (it contributed 6.9 percent of total GRP in 2012, as shown in Figure 6.1). While agriculture is not a high-value or high-employing sector for Townville, the city’s role as an export hub for the surrounding regions where agriculture is a major sector probably explains the attractiveness of the sector for startup technologies.

Figure 6.2 Townsville’s top five startup target markets (Markham & Caioppe, 2016).

The report noted that Townsville was a curious case site, as it is home to one of Australia’s fastest growing technology companies, SafetyCulture. (Markham & Caioppe, 2016, p. 6) even suggested that SafetyCulture is an example of how “startups can be wildly successful in region centres”. Markham and Caioppe (2016, p. 44) provide a profile of SafetyCulture and founder Luke Anear (Appendix 3A) and explain that Luke developed a deep knowledge of the safety industry while working in Sydney. The knowledge that Luke developed as a safety and compliance officer in Sydney,

coupled with Townsville’s low cost of living and family network, allowed him to develop SafetyCulture. To contextualise the technology startup ecosystem in the seven regions it studied, DSITIA prepared a table comparing the regions on various figures (Appendix 3B). When the regions were compared on their startup density (the number of startups per population), Cairns was ranked first with 1 startup per 5,000 people, Rockhampton second with 1 startup per 12,000 people and Townsville and Toowoomba a tied third with 1 startup per 16,000 people. This is curious, as Townsville by far has the largest amount of tech startup funding and the largest population figure among the surveyed cities. Cairns and Rockhampton emerge as unusually good places for technology startups.

Although at first glance the appearance and success of SafetyCulture might appear to be the product of endogenous local growth, with the firm capitalising on knowledge spillovers from Townsville’s specialisation in public administration and safety, this is unfortunately not the case. SafetyCulture is the product of exogenous growth, as founder Luke Anear developed his entrepreneurial idea for an online safety auditing application from his history working as insurance investigator. There was some vital local help at the earliest stages of SafetyCulture, with Anear approaching Professor Ian Atkinson from James Cook University for recommendations for a software engineer (Anear as cited in The Social Deck, 2015). Anear and Professor Atkinson appeared before an Australian Senate Joint Standing Committee 2017 on the NBN to provide evidence on the positive impact the NBN has had on their research and business respectively. There is also another notable IT application company in Townsville with a safety and administration background: JESI. Less is known about the foundation and initial development of JESI, so it is difficult to speculate as to whether the organisation is a product of endogenous or exogenous growth.

Townsville’s ICT community While the success of Townsville’s startup sector is based largely on the fortunes of a few successful organisations such as SafetyCulture and JESI, these are not the only software and ICT companies in Townsville. Indeed, ICT-related industries seem to have a long, if unchronicled, history in north Queensland. The Australian Computer Society (ACS) was officially founded in 1966 and the north Queensland chapter, which is based in Townsville, is more than 40 years old, making it apparently one of the oldest. The strength of the ICT community is also bolstered by the presence of the high performance computing unit located at James Cook University under the stewardship of Professor Ian Atikson. In an interview for this study, Matthew Bulat described the way in which the arrival of the NBN to Townsville was a catalytic event for the ICT community and led to much collaboration, particularly in regard to the Townsville ICT Technology Business Network (TICTBN):

It [TICTBN] sort of nearly followed the NBN because we needed it to co-ordinate and leverage NBN, so we were in on all the early NBN planning meeting and all the NBN visits and the digital hub and digital enterprise training and we had all them in and shared our ideas. (Bulat, 2016)

The ICT business network allows the local ICT and related communities to collaborate on issues as they see fit, and one of the initiatives of the TICTBN has been a local directory service for potential customers to find suitable TICTBN service providers. The TICTBN directory and URL for the directory can be found in Appendix 3C. The active nature of the ICT community and its overlap with the recent activity raising the profile of the local creative industries must also be acknowledged. With some of the major recommendations of the Growing the creative industries report centring on raising the profile of local creative industries and promoting greater collaboration on large projects to capture creative services import leakage, townsvillecreative.com (Appendix 3D) was created using some of the same resources as the TICTBN directory. This synergistic use of resources between the two groups, which share many industries and workers, is an encouraging sign of strength in the local community.

Indigenous art and culture As a state, Queensland is home to approximately 30 percent of Australia’s Aboriginal population according to the ABS 2016 Census data (Australian Bureau of Statistics, 2017). Townsville (as the ABS standardised geographical SA4 unit) hosts approximately 10 percent of Queensland’s total indigenous population, which is over 18,000 people. The traditional land owners of the area are now known as Townsville are the Bindal people and the Wulgurukaba people (Townsville City Council, 2018b). However, despite the concentration of indigenous people in Townsville, this study did not discover or identify the significance of indigenous arts and culture in Townsville’s creative economy. This is surprising, as it has been previously established that there are strong connections between indigenous people and cultural production work in northern regions of Australia: for example, see Koenig, Altman, and Griffiths (2011). Given the concentration of the indigenous population in north Queensland and the number of important recent historical indigenous figures from north Queensland, such as Eddie Mabo, it seems that indigenous art and culture should be more visible in Townsville’s creative economy than they are.

Townsville, as the closest city to many of the islands in Cleveland Bay, acts as a services and transport hub for the islands. Palm Island hosts a population of 5,000 people (Palm Island Aboriginal Shire Council), with a large proportion of those residents being Aboriginal Australians. Palm Island is an autonomous community run by the Palm Island Aboriginal Shire Council. The history of Palm Island is an indictment on Queensland and national race relations, and controversies surrounding the island,

such as the Palm Island death in custody case, are still ongoing. The traditional Palm Island landowners were the Bwgcolman people. Palm Island became something of a prison island where supposed indigenous ‘trouble makers’ were sent away from mainland Australia from 1916 onward. Later indigenous communities were relocated from Christian missions to Palm Island. A more detailed account of the history of Palm Island can be found at the Queensland government’s Australian and Torres Strait Islander cultural awareness website (Queensland Government, 2018a) and in Watson (2010). Watson (2010) prefaces her history of Palm Island with the retelling of the death of Cameron Doomadgee whilst in police custody in 2004, the community riots that followed and the sensational reaction of the broader community to those events. By opening the book with a retelling of the accounts of the Palm Island death in custody case and the riots that followed, Watson’s work begs the reader to question how far we have really advanced in race relations. Her probing questions provide a poignant point of reflection for this study and its failure to identify the contributions of Aboriginal and Torres Strait Islander culture to Townsville’s creative economy. In the feasibility study for a new concert hall, Bott (2017, p. 25) comments that “there is a remarkable silence and invisibility of Aboriginal and Torres Strait Islander culture in Townsville”. Bott continues to make recommendations to remedy the lack of visibility of the Aboriginal and Torres Strait Island community’s arts and culture.

During the time that this study was undertaken, a key indigenous cultural institution was closed in controversial circumstances. The Townsville Aboriginal Torres Strait Islander Cultural Centre, also known as the Cultural Centre, CC and TATSICC, was a multi-purpose site that housed a museum, gift shop, meeting spaces and activities related to Aboriginal and Torres Strait Islander history, art and culture. It also ran business mentoring programs for local indigenous artists (The Aboriginal and Torres Strait Islander Cultural Centre). TATSICC was a well-known local institution and a tourist attraction. Unfortunately, it is now closed and the circumstances behind its closure remain relatively unknown. The institution had been receiving tax-exempt status as a charity; but the Australian Charities and Not- for-profits commission (ACNC) stripped the institution of its status as a charity (Australian Charaties and not-for-profits Commission, 2017). In a press release dated May 05, 2017, ACNC Commissioner Susan Pascoe AM is quoted as saying, “…when we find serious circumstances of mismanagement, or deliberate breaches of the ACNC Act or Government Standards, we will revoke charity status”(Australian Charaties and not-for-profits Commission, 2017).

The tone of the ACNC press release and the sudden closure of the TATSICC seem to suggest that the institution will not return. In the wake of the closure of TATSICC, the Umbrella Studio Contemporary Arts gallery has positioned itself as a champion of First Nations art (Umbrella). There is also a Townsville Region Indigenous Business Network (TRIBN), which has published a directory

featuring approximately 50 indigenous businesses or businesses run by high-profile indigenous people (Townsville Aboriginal and Torres Strait Islander Business Directory, 2015). Eight of these businesses relate to the creative industries and several of them were approached to participate in this study, without success.

As a fly-in, fly-out researcher, it was difficult to penetrate the cultural production network of local artists. Indigenous perspectives remain absent from this analysis. The concentration of Queensland’s indigenous population in north Queensland and notable contributions of north Queensland Aboriginal and Torres Strait Islanders to politics, sport, culture and art do not seem to be consistent with the apparent lack of involvement in Townsville’s creative economy as shown from 2006 to 2016 in this project. For these reasons, another limit of this study is that it does not capture the significance of Indigenous involvement to Townsville’s creative industries. The contribution of north Queensland Aboriginal and Torres Strait Islanders to north Queensland’s creative economy demands further academic attention.

A successful regional economy? Townsville has been a complex site to observe and analyse for this case study. The need to uncover the dynamic relationships between the city’s general economy, its creative services sector and the NBN has led to the historical and political approach taken in this chapter. Townsville’s strategic location in north Queensland and its distance from Brisbane are the city’s raison d’être. However, the imaginations as well as the anxieties of people who live in the north are captivated by the potential of their region. The history of the city is one that should be viewed through a lens of entrepreneurialism. From the city’s foundations right through to the current frontier of creative and technology-based startups, the identity of Townsville has been shaped by entrepreneurs who can capitalise on the strategic geographical location of the city. Many of the great hopes for the NBN was the ability for the network to bridge time and space differences. For residents in Townsville, who are conscious of their great geographical distance from Brisbane and indeed other major population hubs in the nations the NBN is an opportunity. Some of the ways that Townsville based creative industries business are using the NBN are discussed in the next chapter.

Chapter Seven: NBN applications

This chapter discusses insights gathered from interviewees about the business-related, applications that the NBN is being used for in Townsville. The most frequent uses of the NBN in Townsville are presented using the voices of the interviewees wherever possible. To find the most common uses for the NBN in Townsville’s creative services subsector, this chapter reintroduces two frequency tables which first appeared in Chapter Four, Tables 4.1 and 4.2. These tables adapt the work of Süßspeck (2015) and (Katz, 2012) to create a more dynamic understanding of who uses the NBN and for what benefits. This framework allows the qualitative information presented in this chapter to be generalised to broader discussion about the economic benefits of broadband.

What is the NBN being used for in Townsville? There are four competing narratives regarding what the economic benefits of the NBN will be. The first is that the NBN will have a negligible impact on the Australian economy, other than increasing broadband data consumption and the fortunes of video entertainment streaming services. This view of NBN benefits was apparent in the federal Liberal-National coalition parties’ comments when they were in opposition prior to 2013, and expressed by the then leader Tony Abbott (as cited in Abbott rejects "video entertainment system", 2010) in these terms: “Everyone knows that IPTV is the business case… If people want to stay home and watch videos that is fine there is nothing wrong with that, but do we really want to spend fifty billion dollars on that”.

The second narrative is that the NBN will have a series of productivity flow-on effects that will have a positive effect on the Australian economy and the welfare of the Australian people. Although the size of the economic impact in terms of dollars and increased welfare is subject to much debate, it is a position that is consistent with the official view of the current federal Liberal-National coalition government and the past Australian Labor Party governments.

The third, alternative narrative advanced throughout this thesis is that not only will there be a series of productivity and welfare gains, but also increased employment in the creative services subsector. While the Creative Industries Trident II analysis for Townsville in Chapter Five found little evidence to support the proposition that the NBN was having a positive effect on creative services employment in the 2011–2016 period, it is important to validate these findings with another data source. The fourth narrative which emerged throughout the time that this project was underway was that overall the NBN was not improving the end user experience of broadband. This forth narrative was present in Townsville and is reported on in Chapter Eight. Interviews were conducted with people

in Townsville’s creative services subsector to determine the impact of the NBN. As discussed in Chapter Four, creative services businesspeople were asked about their businesses and how they have integrated the NBN into their core functions. Interviewees were also asked if the core functions of their businesses or the level of broadband integration into their daily activities had changed with the introduction of the NBN (see Appendices 1C and 1D for a sample set of interview questions).

To ensure the relatability of the interview data to broader discussions about the impact of the NBN on the Australian economy, a coding schema for broadband functions was adapted from

Süßspeck (2015). Süßspeck’s (2015) model of the potential impact of the NBN identifies cloud computing, electronic commerce, online higher education, telehealth practise, teleworking, and entertainment services as six distinct but interrelated broadband activities. This research uses all of these categories of broadband activities except for online higher education. Instead, for this study, the education category was expanded to capture all types of education applications, not just online higher education. Two education codes were created for the study to reflect the breath of the education sector: mandatory education services and non-mandatory education services. Süßspeck’s schema was further expanded to include another five categories of broadband function that were identified during coding.

The interviews demonstrated the need to distinguish the act of consuming online video content, such as entertainment and advertising, from the act of producing online video content. While video production and video consumption could be considered two sides of the same coin, they are treated as separate functions in this study. Service delivery was an important function of broadband for creative businesses. As was access to information and VOIP services also emerged in interviews as important uses of broadband. While is arguable that VOIP services would be captured in either the telehealth or the teleworking category in Süßspeck’s original schema, the potential cost savings from using VOIP are so great that for this study, VOIP was distinguished as its own category. While VOIP can be a means for telework and telehealth practise, it can also be used as a less expensive alternative traditional landline-based telephone services. The VOIP category created for this study captures the use of VOIP services where they are primarily adopted for their ability to reduce telecommunications costs. The ability to use the NBN to increase access to information was also an important function of broadband internet for interviewees not encompassed in Süßspeck’s schema. Access to information in this study refers to the ability to use the internet through, but not limited to, search engine websites like Google to access information on any topic. This is an important but underrated function of the internet. Basic economic theory dictates that perfect market conditions exist when everyone knows the prices, qualities and whereabouts of products offered (Frijters, 2009, p. 48).The ability to access

information and upload it to the internet should increase competition among industries by empowering end users with knowledge about products, services, production techniques and prices. This theoretically forces actors within industries to compete more vigorously, creating downward pressure on prices for services and goods. This encourages vendors to develop either specialities or more effective means of production of their goods and services so that they can continue to compete on price. Thus, the internet brings many industries and markets closer to a state of perfect competition, although it is widely understood that perfect competition is never truly achievable.

Table 7.1 (below) uses the expanded Süßspeck schema of NBN applications to show which were most frequently mentioned by the interviewees. Access to information and cloud computing emerge from the table as two of the most frequently mentioned functions of the NBN. The next section will detail some of the ways in which Townsville-based creative services businesses benefited from improved access to information, cloud computing and service delivery. The discussion that will follow focuses on these three broadband functions because they are among the mostly frequently discussed applications by the interviewees. While service delivery was discussed less than some other applications, the value that the interviewees who discussed it placed upon it justify exploring that function in more depth.

Table 7.1 Most frequently mentioned broadband applications.

Access to information Access to the seemingly unlimited amount of information available on the internet is one of the most important benefits and possibly one of the most difficult to describe. Glen Stewart of North Point Neon Signs muses on the way that the internet has changed over time from a quagmire of information to a practical utility:

there was the days of the dial up when we all first started and that was basically useless [chuckles] with doing a lot of things a lot of it was just there for, the information out there wasn’t really to business. I would say it’s really changed and gone from being a junk information on the internet, and as they say going out to get information on the internet was literally surfing the internet and surfing through all of the garbage to find a couple of crumbs. (G. Stewart, personal communication, June 28 , 2016)

Stewart’s experience of the internet has greatly changed due to the significant amount of maintenance needed for North Point Neon’s digital presence.

although it was a significant task, there have been benefits, because of things like Google, and with how much information they put out there now, businesses like ours, we can get on there and find information that’s actually relevant to even ourselves when it comes to neon, illuminated, LED’s, that sort of thing we could find that sort of thing because Google pushes you to put relevant information out there and that sort of thing on your website otherwise you will get canned. (Stewart, 2016)

Kovats and Vetta Productions also use the internet daily to search for information and products relevant to their design work, as Kovats says:

we do a lot research as far as looking on YouTube for the type of video that we want to produce. The design crew are looking at different types of design and doing their research online. We use some stock photography and stock images, sometimes and we need to be looking for those online. (Kovats, 2016).

Not only does Vetta Productions research new products and production methods, it also sources core inputs of its work online. These simple and important functions allow businesses to benchmark their work against others and develop their own products and services, leading to a more competitive marketplace and theoretically a better price for consumers.

Cloud computing One of the most frequent uses for the NBN among the interviewees was cloud computing. Cloud computing is a term used to describe the way that ICT services “can be accessed over a network from a remote location on demand” (Minifie, 2014). In many instances, cloud computing was used because it was cheaper and more effective than using hard drive storage. In other circumstances the creative businesses used cloud computing to manage outsourced work as either a service provider or a service purchaser. In this section, the benefits cloud computing provided to interviewees are discussed in

relation to the remote production of products and services and the storage and convenience it provides.

Remote service production Mick Devine is the founder of Calxa, a software company that provides budget management tools. Devine remotely manages a team of software developers in addition to the Townsville based staff:

our development team is actually based in mostly in the Ukraine, managed from here. Better internet improves communication there, it improves the speed of updating things, it improves all sorts of things in terms of moving things [files and documents] around. (M. Devine, personal communication, July 15, 2016)

John de Rooy of John de Rooy photography noted that it was easier to capitalise on his work by preferring that customers buy hard copies of his photographs. De Rooy operates his full-service photography business from his home, like many other small businesses. He also sources some printing services from a business located in Adelaide. With the NBN, de Rooy notes the simplicity of sending files over the internet to the printing laboratory in Adelaide:

We probably send a lot work to labs just using internet and FTP. We send a lot of big files, just over the air to the lab and they print them same day and they are here a day later. At the moment, we are doing a big project and we are using a lab in Adelaide, generally I can send images down today and the pictures are back here two days later. (J. De Rooy, personal communication, June 24, 2016).

While the ability to upload large amounts of data to the cloud is important for maintaining de Rooy’s position in the market, for DUO Magazine the greater capacity for uploads and downloads is crucial to their plans to expand. Scott Morrison, executive producer of DUO Magazine, notes the advantages that cloud computing might provide to his organisation in its expansion from Townsville to Cairns below:

We are expanding into Cairns, which is another thing, it’ll be interesting to use the NBN for our expansion because it’ll be all cloud-based programs in both centres so yeah, we wouldn’t be able to do that if we didn’t have that tech. (S. Morrison, personal communication, November 17, 2016)

DUO’s core business, like many other media products, is to produce content to attract an audience and use those readership figures to attract advertising dollars. DUO is a high-end publication

and has a strong sense of community, promoting and discussing notable local people and events. One of the challenges DUO faces is that the cost of content production is rising. DUO has a strong interest in being able to work via distance, as Morrison explains:

what happens is that we have writers who are not in Townsville, because most, a lot of the writing we can do over the phone, or via email. So, writers now are outsourced I guess our work base is much more than the Townsville region, because there’s simply just not enough people doing it here or to that level I suppose. (Morrison, 2016).

While DUO is focused on its core audience in North Queensland, Vetta Productions feels that with its skill and ability it could be globally competitive. With the NBN, Vetta Productions has been able to claw back local film production work that would have previously been lost to Brisbane based companies:

a client called us from Brisbane wanting a video here in Townsville; they didn’t want to send a film crew up. They use a platform, that’s like a platform for video collaboration, so it’s like the Uber of video production they call it. It allows film crews and editors and lighting assistants to work together collaboratively on one project via this online platform and it works really well and its designed specifically for different crews to be able to be involved in a project with others in the same area and then have the clients anywhere in the world, basically. It’s a platform that I think has a great potential to be used for collaborative projects and we wouldn’t ever consider using it without the NBN. We are uploading everything to that platform, every draft and they are providing us asset logos and audio files and there is a lot of backwards and forwards. So, without the NBN we probably wouldn’t be able to do it at all. (Kovats, 2016).

This is a significant example of the ways in which cloud-based services and the NBN are helping local business be more competitive and stop creative leakage. One of the major opportunities that the Growing the creative industries in Townsville (Daniel, et al., 2015) report identified was the opportunity to win back work lost to other cities such as Brisbane and Sydney. Hopefully, Vetta Productions and other local creative services businesses will continue to use the NBN and cloud-based services to stem to creative work leakage to southern capitals.

The potential of decentralisation has long and storied history in Australia, enjoying a political currency in the nation’s polity. The prominence of the decentralisation narrative in Australian polity is, without doubt, driven by the country’s relatively small population spread vast distances outside of

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the eastern seaboard area, and a certain egalitarian principal that everyone should be equal. The NBN and its champions have, since its inception, promised that the project would enable decentralisation and promote the ability of small businesses in rural and regional areas to compete with their cousins in the large capital cities (Australian Labor Party, 2007). Although there are still several years before the NBN will be complete, it appears as if Calxa, John de Rooy Photography, DUO Magazine and Vetta Productions have been able to capitalise on the NBN as a tool for decentralisation. By using cloud computing, Calxa, John de Rooy Photography and DUO Magazine can efficiently outsource elements of production to meet their customers’ needs or to make significant savings. Thanks to the NBN and cloud computing, Vetta Productions is more competitive as a local based production house than production houses based in Brisbane. But the ability to outsource production work, as either the outsource service provider or outsourced service purchaser, is not the only benefit that NBN-enabled cloud services offer to the creative industries.

Storage and convenience Devine (2016) has noted that the NBN has made it “more easy and more practical to use cloud based stuff like [Microsoft] Office 365 rather [than use] our own exchange server”. Matthew Bulat, President of the Australian Computer Society’s North Queensland chapter, business consultant, former Townsville City Council employee and information technology champion, explains why using cloud-based storage is such an advantageous proposition for businesses in Townsville:

you can have a cloud server, a basic one, for around fifteen dollars a month, A MONTH, we spend more in electricity for a server up here let alone the capital and the depreciation and software, [laughs] so, you can fire one up. If you have it pre- planned, you can sort of describe something and say go live and it can be on in about twenty minutes [laughing]. I've got one cloud project to do with jobs. You know, the documentation of jobs for the mining industry, that’s in Amazon cloud and I don’t think I've spent forty bucks yet on the services. You can store files, you can do databases, you can do, servers you can do web servers. You can have redundancy. Triple redundancy out of Sydney, so it's good for backups too, you can do real time back up and sort of archive your backup. So, it’s important in this town (M. Bulat, personal communication, July 27, 2016).

For Tracy Raiteri, the woman behind Townville Social Media Marketing, the bandwidth that the NBN has made available to her means that she can now begin using cloud computing and stop relying on temperamental external hard drives to store important documents: “now I have got this huge band

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width, good speeds, so I’ll be backing up to the cloud. Yes. I’ve just started using Cloud Base accounting software, so I am on Quick Books online” (T. Raiteri, personal communication, June 29, 2016).

As well as providing cheap and convenient storage, Vetta Productions has found that cloud computing via the NBN helps to keep their specialist computer design programs up to date and running well:

we have a lot of software that we use, the whole Adobe creative cloud, we all use a lot of software, multiple programs, so if a major update comes in, MAC OS upgrades, Adobe upgrades; that’s not a problem anymore. Previously you would have one person doing and update it would slow the whole office down, where only one of us could do it at a time. Now we get updates fairly regularly so we can just do it, it doesn’t matter. Whenever we want, bam [claps], upgrade it, update it. Done. (Kovats, 2016)

Cloud computing offers the creative industries in Townsville cheap storage options; as Bulat points out, the cost of running a physical computer server is more expensive than the cloud-based options. Using cloud-based servers for data storage also allows local business to avoid loss of crucial data due to extreme weather events. Extreme weather events such as flooding from cyclones and severe storms are not uncommon in tropical North Queensland. Not only does cloud computing offer cheaper, safer and more convenient data storage, it can also save time with regard to maintaining computer programs. For Vetta Productions, the time saved by having NBN-enabled cloud programs that can easily update means the company can spend its time productively working on services for its clients.

Service delivery The ability of creative services businesses to receive and deliver multi-media files online was a priority for the interviewees. As Sandor Kovats from Vetta Productions describes,

delivery of videos to the client is a big one, where we are uploading files to YouTube or Vimeo or providing them with a download link. Delivery of commercials to stations is done over internet as well. (S. Kovats, personal communication, July 12, 2016)

Vetta Productions is a full-service production house, which includes print, radio, television and internet advertising. Vetta Productions is in the heart of the Townsville central business district (CBD). Prior to the arrival of the NBN, Vetta Productions faced many challenges when trying to deliver its finished products to clients. In Kovats own words,

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because the file sizes that we send are fairly large, like, 120Mbs with the system we use to deliver to stations, so previously that would mean a walk over to the internet café to deliver that because as you know upload speeds are really, really bad, we are talking like .5 Megabit upload. (Kovats, 2016)

As a producers of rich multi-media content, the ability to quickly upload files has had a dramatic impact on the workflow of the employees at Vetta Productions. Now, the process of uploading files for online delivery to clients takes only several minutes, whereas before the NBN it could take up to half an hour or more:

When we deliver to stations we use something called IMD, which is the delivery platform. When you upload a file, it does a lot of quality checks on the file to make sure its ok for television and some of those checks we can’t do ourselves. We get it right most of the time but sometimes when we upload the file it will give us an error or a caution on some of the elements of the file, so we need to go back and make those changes to the file and re-upload it. So, as you can imagine, it used to take half an hour to upload and then it would give us an error and it would usually just be something minor, we would have to go and re-do it all over again. Now it takes a minute or two to upload the file, so it’s a huge difference. It means we can meet tight deadlines and get those videos uploaded and we’re not so concerned about triple checking everything to make sure its ok before we upload it. (Kovats, 2016)

Michal Beroun of Grail Films reported similar issues to those experienced by Kovats on behalf of Vetta Productions regarding uploading files to clients. Beroun detailed his frustrating situation before the arrival of the NBN, where he was dealing with limited internet capacity: “it took hours to upload one hundred megabytes and sometimes basically took down and start again, it was a disaster” (M. Beroun, personal communication, November 11, 2016).

Beroun struggled for so long with his internet connection that he tried almost anything to get a better connection. He even went so far as to pay to have a new fixed-line telephone cable installed:

I even dug new… paid for new line, for the phone line but it wasn’t good enough because the line was damaged in the pits of the Telstra… It was a disaster, it looked like it was almost going to corrupt my business, you know? It is extremely dependent [on the internet]. (Beroun, 2016)

The NBN has been of unmeasurable benefit to Grail Films, saving time uploading files to clients. Beroun is also acutely aware of how much the NBN has saved in terms of dollars:

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now I have got NBN through Optus and I have a fast connection and unlimited uploads and I’m saving right [laughs] now paying one hundred and sixty dollars per month, just before the bill was about six hundred dollars and I had to be careful not to go over the wireless limitations, downloads, uploads. (Beroun, 2016)

While improved access to information, cloud computing and the improved capacity to deliver services online were important to creative services businesses, the myriad of other applications for broadband in the expanded Süßspeck schema were rarely mentioned. While this thesis is based on a case study of Townsville, it is important to ensure that the theoretical link between the NBN and creative employment and NBN and business efficiency and productivity can be tested in other locations in future. To illustrate the ways that the NBN stimulates the creative services sector in Townsville and how this might translate to other towns and cities outside the scope of this research, it is necessary to aggregate the broadband functions found in Table 7.1 at a higher level.

NBN: more than entertainment? Table 7.2 (over page) shows the twelve broadband functions listed in Table 7.1 grouped into four categories of economic activity: business efficiency and productivity, video production, consumer surplus and efficient delivery of government services. These four categories emerged a priori from

Katz (2012) (business productivity and efficiency and consumer surplus) and a posteriori from the interview data.

The political rhetoric of the NBN had long been linked to hypothetical improvements in productivity that would be present across a broad range of industries and occupations in Australia. (Saari, 2006) states that productivity can only be measured in relation to other concepts of economic activity such as profitability and surplus value. When exploring the qualitative data, many of the broadband functions discussed by the interviewees are described in terms of efficiency. For example, Vetta Productions is a full-service production business and while the NBN did not change the products Vetta Productions created, it did make delivering existing products to clients faster. Therefore, the efficiency of NBN-enabled applications has created results in terms of a surplus of time for Vetta Productions. The business can then use this surplus of time to pursue profitable activities such as attracting more clients. If there are other profitable activities to pursue, the efficiency of the broadband function has created a potential productivity gain for Vetta Productions.

The consumer surplus category was created to reflect the non-monetary benefits that business people might enjoy from the NBN in their capacity as private citizens. The inclusion of this category allow this research to test the Vertigan review’s proposition (Vertigan, et al., 2014) that the greatest beneficiary of the NBN would be private consumption. The government service delivery efficiency

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category was included to measure and represent the interest government service providers show in online platforms. The video production category emerged from the data as a necessary category to distinguish the act of producing video content, which is different from the act of distributing or consuming video content. The consumption of video content is mostly captured by the private consumption category, while the distribution of video content is mostly captured by the business efficiency category.

Table 7.2 Broadband function grouped by broadband benefits.

Table 7.2 shows that most of the broadband functions mentioned by the interviewees were aimed at improving efficiency in existing business processes. Video production and private consumption were tied at second, and government service delivery efficiency had the least number of mentions in the qualitative data. There is an explicit bias in this research, as it was aimed primarily at creative services businesses, and the results of Table 7.2 must be interpreted with this in mind. If this study were aimed at broadband consumption by private citizens, like the Vertigan review (2014) was, it is likely that the private consumption category would be more strongly represented than business efficiency. Table 7.2 illustrates the benefits that the NBN can deliver to Australian businesses through productivity gains.

Productivity or employment growth? Table 7.2 indicates that for the creative services subsector in Townsville, the main benefits of the NBN are improving business efficiency and achieving productivity gains. This chapter introduced four competing narratives about how the NBN would impact the Australian economy. The NBN was

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expected to either have little impact on the Australian economy outside of increasing the use of broadband for private use of streaming services like Netflix (Vertigan, et al., 2014), or create small but widespread productivity gains throughout the Australian economy (Süßspeck, 2015). The third hypothesis was that there would be some mixture of widespread productivity gains, as in the second scenario and other, more revolutionary but difficult to record and measure, changes arising from the adaption and integration of broadband for applications that have previously not been possible (Tucker, 2015). Table 7.2 indicates that the second scenario is at play in Townsville’s creative services subsector. If the experience of the Townsville creative services subsector with the NBN is indicative of the broader impact of the NBN in Australia, it is to be expected that the outcome of the NBN, when the network is complete, may be a two percent rise in national GDP in Australia as modelled in Süßspeck (2015, p. 13).

In Chapter Five, employment in the creative services subsector was used as measure for evaluating the impact of the NBN on the creative industries in Townsville. While there was a considerable amount of growth in the creative services subsector, none of the interviewees who participated in this research explicitly linked the NBN with employment in their industry. Indeed, recent work on the creative industries revealed that creative businesses felt they would experience “jobless growth” (Daniel, et al., 2015, p. 17) in the next several years. None of the interviewees who took part in this study discussed particularly innovative ways of using broadband that could be described as “revolutionary”(Tucker, 2015). However, this does not mean that there is an absence of employment growth in Townsville’s creative services subsector that can be linked to the NBN, or a lack of innovative capacity in the city. In Chapter Five and Six, Townsville’s burgeoning information technology (IT) and software application sector is explored. There are some strong examples of software companies based in Townsville that are using broadband to disrupt existing industries, and by their own account these businesses are growing fast. The absence of these themes in the qualitative data suggests that there were issues with the methodological design of the study or the execution of the interview processes. This was raised in the discussion of limitations in Chapter Four. Another theme which emerged from the qualitative data was the paradoxical advantages and disadvantages of the geographical location of Townsville.

It must be acknowledged that the opinions of the interviewees expressed in this research represent the views of some of Townsville’s earliest NBN users. Many of the positive and negative views expressed by the interviewees in the data reported in this thesis may not represent their full and considered views on the NBN. The views of many of the interviewees may have changed over time. Changes in the NBN are constant, and perhaps without some of the early teething issues,

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Townsville creative services organisations might have been or by now might be quite satisfied with their NBN service. During the progress of this study, the NBN Co. added new technologies to the MTM suite of platforms used to deliver the NBN, complicating the variabilities of the network capacity and performance from an end user’s point of view. This makes it more difficult to generalise the experience of the interviewees to other NBN users outside of Townsville and this period.

Conclusion This chapter used the information gathered from interviews with research participants to propose that the greatest uses of the NBN for creative services organisations in Townsville have so far been for business efficiency and productivity. The access to cloud-based computing to send, retrieve and collaborate on projects presents immeasurable opportunities for the creative services subsector in Townsville. To many of the interviewees, the NBN is a tool to address the disadvantages and perceived weaknesses of running a business based in Townsville. Interviewees indicated that the perceived difficulties created by the time and distance between Townsville and other major markets and customers can be somewhat addressed with broadband applications. The value of these practical time- and cost-saving benefits is difficult to measure. This may be the reason why the productivity and efficiency gains that the NBN provides to businesses have been overlooked in Australia’s broadband policy debate. Quantitative projection-based models such as those found in the Vertigan review (2014) have focused heavily on data consumption without proper regard for the shift in industry and employment trends that have seen the creative services subsector growing at a rapid pace. Regardless of these academic issues, the introduction of the NBN to the Australian telecommunications industry has caused a slew of issues for consumers. Some of these consumer issues which are affecting the ability of businesses to grow or even maintain their existing activities are explored in the next Chapter.

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Chapter Eight: Technical issues

This chapter explores negative issues that end users in Townsville and across the nation have had with the NBN. It draws on services marketing and supply chain management theories to understand how and why these issues came to be, and their significance to the Australian telecommunications industry. In many ways, the telecommunications industry in Australia could be thought of as a “wicked” (Althaus, 2013, pp. 54-55) issue. Wicked policy problems can be described as policy areas where the problem is always shifting and potential answers to the problem create further problems (Althaus, 2013, pp. 54-55). The NBN policy was aimed at addressing infrastructure bottlenecks in Australia’s telecommunications industry. However, as the policy development process evolved the goal of the NBN appears to have shifted, and the observations generated by this investigation of creative services in Townsville reveal that a great number of new policy issues have arisen in the new telecommunications industry landscape. This raises the question of whether the obstacles to connecting to and using the NBN are limiting the usability of the network, and whether this had an impact on the findings presented in Chapters Five, Six and Seven.

Obstacles to NBN use that the interviewees participating in this study identified include network congestion, network outages and dropout events. Interviewees also reported problems related to the marketing, promotion and awareness of the NBN. There was also anecdotal evidence of poor communication between the NBN Co. and RSPs. The unavailability of high volume data services also emerged from the interview data as a complex issue with consequences for this study. It is also worth noting that while there are a range of different NBN technologies available in Townsville under the MTM NBN rollout (see Appendix 4A for a list of suburbs and available technologies) all of the interviewees contacted for this project had FFTP connections or were subsequently connected to FTTP (see Appendix 1G for business profiles).

This chapter is organised in four sections. The first two describe negative issues encountered by interviewees in trying to use the NBN, while the third section attempts to trace the origin of these issues to their root cause and the fourth links them back to the broad direction of the Australian telecommunication industry.

Expanding footprint, growing complaints In its 2016 annual report, the Australian Telecommunications Industry Ombudsman (TIO) recorded over 13,000 new complaints about NBN services throughout the year (2016). This represented a doubling of complaints from the previous period (2014–2015). The TIO also noted that

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the growth in the number of active services on the NBN was greater than the growth in complaints (2016, p. 17). For the Federal Government and the TIO, this represented a sound outcome. It is arguable that the national sentiment towards the NBN Co. at the time was negative, suggesting that people were not as accepting of these results as the Federal Government or the TIO. The most significant complaints the TIO recorded were related to network faults and connections. The TIO described these faults as: slow data speeds, unusable services and dropouts (2016, p. 15). The TIO generally referred to connection issues as delays and missed appointments between RSPs, sub- contractors and end users (2016, p. 15). What makes many of the complaints reported to the TIO frustrating for the end users is that there is a lack of clarity in the telecommunications industry about which parties are responsible for certain activities.

A simplified overview of the current Australian telecommunications industry landscape generally includes three or four stages in a service delivery chain before the consumer get their service. At the first level is the NBN Co. as the network wholesaler. At the second level are large telecommunications organisations who either act as intermediaries in the delivery chain and/or provide services to consumers. It is at this stage of the service delivery chain that organisations like Telstra and Optus occupy. These data wholesalers sell their services, such as access to backhaul networks which connect to the NBN POIs and the wider domestic and international networks. An example of a smaller internet service provider (ISP) that buys NBN services from Optus is SpinTel (Dinham, 2016). The qualitative evidence gathered from Townsville for this study suggests that there is confusion about which part of the service delivery chain faults are occurring at and which is responsible for it (see Appendix 4B for an overview of the NBN service delivery chain). However, even before connecting to the NBN, potential end users face hurdles to have their broadband services connected.

Prior to connection Connecting to the NBN is the responsibility of the individual end user. The first step in the process is for the end user to inform themselves of when the NBN will become available in their locale. To assist end users, the NBN Co. has provided a rollout map, available on its website. However, many end users are indifferent to broadband and may not feel any incentive to use the NBN rollout map website. For many people, their first engagement with the NBN Co. is often a letter informing them of the deadline at which their existing services will be switched off. This can be an unsettling experience, which fosters negative sentiments towards the NBN. In their study of the early rollout in Midway Point, Tasmania, (Nansen, Arnold, et al., 2013, p. 24) found that because of the opt-in system the NBN Co. was forced to operate in (by legislation and because of the way property rights in Australia work) many residents could not approve connecting to the NBN. This raises concerns about the digital divide

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increasing in Australia, for tenants and those residents who might have failed to engage in the NBN rollout. If end users and residents want to contact the NBN Co., there is a call centre located on the Gold Coast where NBN Co. employees can advise on NBN rollout information. However, the contact information for this centre is difficult to locate on the company’s website, and before connecting to the NBN the communication between end users and the NBN Co. is limited and somewhat coercive. Once potential consumers initiate the connection steps, communication between the customer and the NBN Co. does not improve.

The NBN ping-pong According to the TIO’s 2016 annual report, complaints about contractors missing appointments with end users was the biggest new NBN-related complaint. Problems often occur when there are technical issues with pre-existing infrastructure that is either damaged or in some way irregular. In his interview, Matthew Bulat verified that these frustrations were present in Townsville:

there is a lot of missed appointments and stuff [between end users and contractors] and that really ticks people off [end users]… the contractors try to do it like – if [the job connecting end user premises to broadband infrastructure] its straight forward its straight forward and if it’s not straight forward then they go back [to the retail service provider, without communication with end users] and say that one’s not straight forward – so missed appointment and it’s not really great for customer service. (Bulat, 2016)

Given the number of parties involved in organising a connection, it is unsurprising that communications and expectations between the parties become confused on so many occasions. End users must first contact their RSP to have the NBN connection arranged. The RSP will then organise sub-contractors to connect the consumer’s premises to the RSP’s backhaul network, which interfaces with the NBN. The backhaul network generally refers to the intermediary network that connects the NBN to the international network infrastructure (see Appendix 4B). The NBN infrastructure is the spine, and many other organisations, including many RSPs such as Telstra and Optus, own and operate their own backhaul networks (see Appendix 4B). If there are issues in the backhaul network, often sub-contractors will not have the knowledge or experience to complete the task. This leaves the end user without any NBN connection and with limited recourse to remedy the situation while the RSP and the sub-contractors come to some arrangement to get the job completed. That is why, if connecting a consumer is anything other than standard, sub-contractors often cancel appointments with end users with little or no warning.

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The TIO has provided a case example of how time consuming and expensive these missed appointment situations can be for small business people (Appendix 4C). The NBN Co., with cooperation from RSPs, has implemented some measures to address issues with contractors; unfortunately, this is just one issue at one stage of the NBN customer service experience. NBN customers face many further difficulties even once they are successfully connected.

Network performance

Outages A number of interviewees discussed several widespread internet outage events that occurred in late 2015 and early 2016. Scott Morrison of DUO Magazine describes the impact of these outage events on his work flow:

I would say, probably, it doesn’t happen more than four times a year, so I wouldn’t say that’s often but the hard part is… it’s pretty dramatic for us. Because really we can’t do anything, just sit around and have a cup of coffee and that’s about it. (Morrison, 2016)

Both Scott and Mick Devine from Calxa reverted to using their mobile phones if emergencies arose during these outage events, which often lasted for hours. In Mick’s words, “you resort to hammering your phone to do anything” (Devine, 2016). When probed about these outage events, Mick recounted the lack of communication from either the NBN Co. or his RSP explaining why the service failure occurred. Mick contacted his RSP for an explanation, only to be given a very general answer which provided no indication of how and when the situation would be rectified. Devine recounted, with more than a hint of scepticism in his tone, how he was told that the network was experiencing “…technical problems” (Devine, 2016).

In the kinds of events detailed above there are often several instances of service failure, often with more than one party in the service delivery chain at fault. In Devine’s case, it was likely that the original fault occurred in either the backhaul network or the NBN network infrastructure. It is unclear which party was responsible for the fault. However, the second service failure was arguably the fault of Devine’s RSP for providing poor customer service. Devine’s RSP provided limited information about the cause of the outage and did not find a suitable resolution to his issue. Because the wholesaler and retailers depend on each other, when one underperforms, it affects the consumer in ways where it is difficult to distinguish which party is at fault. Devine’s situation provides an example of the asymmetrical nature of information regarding telecommunications infrastructure that the Australian Competition and Consumer Commission (ACCC) had identified as a market failure (Australian Competition and Consumer Commission, 2013, p. 1, para 4; Riordan, 2013). As a result of service

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failures and the asymmetrical nature of information regarding network performance, consumer expectations are not met and the consumer’s perception of the NBN becomes negative. For example, the lack of a detailed response from Devine’s RSP explaining the issue compounded the disappointment he had already felt with the NBN for other reasons:

The biggest disappointment with the NBN for us has been those outages. There have also been performance issues occasionally as well; in terms of there has been times when it has just run slow. I thought that was never supposed to happen, I thought we had so much capacity it wouldn’t. (Devine, 2016)

Although NBN outages were a common concern among the interviewees, it was by no means the only issue they reported with using the NBN once they were connected. Congestion on the NBN and its impact on end user experience is discussed below.

Congestion Glen Stewart from North Point Neon Signs keenly observed that despite the positives of the NBN, the telecommunications backhaul network had not been upgraded. While the NBN is building the spine of Australia’s new broadband infrastructure, other organisations such as Telstra and Optus use their own backhaul infrastructure to connect residents and businesses. Steward believes the combined effect of having more people doing more things on the internet in Townsville without an upgraded backhaul network is exacerbating data peaks and troughs during certain periods of the day:

[before] if everyone had 18mb per second they just went back to 1.2 I think they said, because everyone in the whole street connected to the NBN, upgraded all their speed and everything like that and smashed it and now it’s overloaded. So, it’s back to old days, where the actual – even though the framework is there, the actual pipeline back to the exchange and that sort of thing physically can’t handle that many people on the network there now. So yeah that will be the next upgrade after this upgrade. (Stewart, 2016)

Tracy Raiteri from Townsville Social Media Marketing also had mixed feelings about the NBN’s performance. When Tracy considers her own experience of the NBN and the experiences of others in her professional network, the NBN seem to fall short of expectations:

some businesses that I have spoken to said that even with the NBN, the quality of it and the speed hasn’t been that much of a benefit anyway. I mean, I noticed a huge benefit because we had such a low bench mark to start with that I am ecstatic with

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my ten times faster. A lot of businesses that I have spoken to just say ‘well it drops out, it’s not stable, it doesn’t seem to be any faster’. (Raiteri, 2016)

John de Rooy from John de Rooy Photography seems to be the exception in the case of the NBN in Townsville. He reported having no issues with the NBN other than a small delay from Telstra while they resolved a technical compatibility issue related to specialist Telstra small business hardware.

The task of the NBN Co., to satisfy a non-uniform national marketplace with various types of broadband users with an array of data needs, was always going to be a difficult one. However, there are certain practises within the NBN Co. that contribute to dissatisfaction with the NBN experience. Some of these concerning practises in relation to pricing and demand forecasting issues are discussed further below.

Gigabit demand Pricing of NBN services is a difficult issue, particularly when it comes to the high-tier broadband services. Early in 2017, NBN Co. CEO Bill Morrow published a blog post and made a series of media appearances in which he argued that there was little demand for gigabit broadband services in Australia. As evidence, Morrow stated that the NBN Co. had been selling RSPs gigabit services for over four years, yet none of the RSPs were selling those services to their customers (Morrow, 2017). Therefore, ipso facto, there was no demand for gigabit services. Bulat confirms that RSPs failed to make gigabit services available in Townsville: “[retail service providers] are not geared for gigabit connection either… SafetyCulture is dying for that gigabyte connection and Telstra says, ‘ah, well our processes aren’t in place for that’” (Bulat, 2016).

In his blog post, Morrow makes explicit the bias in the NBN business model towards serving residential consumers, rather than producers of cultural and intellectual property (IP):

In a heavy usage household, right now it’s likely you’d struggle to generate the need for anything close to 1Gbps – if you had five 4K TVs streaming 4K movies simultaneously then that’s only around 100Mbps being consumed – leaving 900Mbps idle. (Morrow, 2017)

It is for these reasons that Morrow claims that there is no demand for gigabit services. It is possible to view the situation as a Keynesian example of bad equilibrium, where the pessimism of the NBN Co.’s data demand assumptions may be having a self-confirming effect on demand for data. Keynesianism is an economic theory describing the way that short-term “business cycles can come about due to self-confirming expectations” (Frijters, 2009, p. 139). Equilibrium is another important concept in economics, in which all resources are utilised to their maximum efficiency and no actor can

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improve their outcome by changing their behaviour (Frijters, 2009, pp. 12-13). Morrow and the NBN Co. do not seem to factor in the possibility that the high price of their gigabit services is what is having a damping effect on demand for the services. Bulat provides a grounded example of how the NBN Co.’s pricing of gigabit services scares potential end users away, in a way that cuts through the jingoistic economic argument:

Some of the numbers being spruiked for the gigabit connection is just wrong. Like, if a hundred-meg [Megabit Mb] connection cost hundred, hundred and fifty [dollars], why would a gigabit connection cost like seventeen thousand [dollars]? Where is that coming from? [laughter] Yeah [laughter], so, like if they spread that word, nobody is gonna touch it, and if you can’t order it, nobody is gonna use it [laughter]. (Bulat, 2016)

Previous NBN rollout site research studies have found that there is a great of confusion and difficulty for end users engaging with the NBN (Nansen, Arnold, et al., 2013, p. 24). However, to understand if these obstacles to NBN adoption are impacting on the way that creative businesses are using or not using the NBN, it is important not only to acknowledge these issues but also to understand the policy circumstances that have created the situations.

Untangling the situation Many of the negative issues and experiences that are associated with the NBN by end users are related to business practises of the NBN Co. Some of these were developed inside the organisation; however, many are aimed at achieving the NBN’s explicit political goals. This section will identify some issues discussed by interviewees that could be related back to the NBN’s political goals.

Stickiness in the value chain The current Australian telecommunications industry structure has created some unintended but not entirely unforeseen inconveniences for end users. As Kohler suggested in 2010 (Kohler, 2010 para 1) Telstra and other RSPs are shackled to the performance of the NBN, and vice versa. It could be inferred that the actors in the Australian telecommunications value chain have “sticky” (Kim & Choi, 2015, p. 65) relationships. In supply chain management theory, a “sticky” (Kim & Choi, 2015, p. 65) buyer-supplier relationship is one of four types of relationships that can exist between organisations. Kim and Choi’s buyer-supplier relationship typology (2015) builds on the traditional cooperative- adversarial buyer-supplier dichotomy that exists in supply chain management theory (Carter, Smeltzer, & Narasimhan, 1998; Monczka, Petersen, Handfield, & Ragatz, 1998). This expanded buyer- supplier typology describes the way firms view each other, as either partners or adversaries, and the intensity of the relationship between the two firms. According to Kim and Choi’s typology, firms that

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are closely tied and are co-operative have a “deep” (Kim & Choi, 2015, p. 65) relationship, while firms which have a close relationship that is adversarial in nature are labelled “sticky” (Kim & Choi, 2015, p. 65). Firms which have relationships that are distant, loose and adversarial in nature are called “transient” (Kim & Choi, 2015, p. 64), while firms with distant relationships that are also co-operative in nature are labelled as “gracious” (Kim & Choi, 2015, p. 64). According to Kim and Choi, none of the four types of relationships is necessarily better than the others; however, they each have trade-offs, perhaps making a particular type of buyer-supplier relationship more beneficial in certain circumstances.

Deep relationships are closely coordinated, cooperative relationships that facilitate orderly, reliable flows of information and materials, helping both organisations to achieve synergies between their goals (Kim & Choi, 2015, p. 65). Stability is the main benefit of deep relationships, but this stability comes at the risk of diminishing returns and lack of diverse perspectives on changes in the marketplace (Kim & Choi, 2015, p. 65). Sticky relationships are characterised by a lack of synergy and by supplier opportunism, while in transient buyer-supplier relations the greater ambiguity between parties that only work together sporadically provides each organisation with more flexibility. A gracious relationship provides flexibility and the infrequent nature of contact between the organisations allows for innovation (Kim & Choi, 2015, pp. 65-66).

Opaque industry transfers The MTM NBN model requires the NBN Co. to have a close business relationship with Telstra, which supplies services and information. This raises a question about the extent to which the NBN is now faced with similar problems of market failure that beset other telecommunications carriers prior to the NBN, arising from Telstra’s market dominance. At the Supplementary Budget Estimates for 2016/2017, held on October 18 2016, Morrow gave further insight into the way that the NBN Co. and Telstra work together to determine the quality of the existing copper network and which technology is suitable for the delivery of the NBN to certain areas:

We would typically go to Telstra and ask for that information [about the quality of the existing copper network] once we have proceeded further, but we would not— because that costs us money when we have to ask Telstra for that information—ask it until we knew there was a commitment that somebody was going to pay for the technology choice or the upgrade from satellite to this approach. Then we would collect that data. (Bill Morrow as cited in Supplementary Budget Estimates 2016-17 (October 2016): Communication and the Arts portfolio)

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Being able to assess the quality of the existing copper infrastructure to determine which type of NBN technology selected areas will receive should be a core part of what the NBN Co. does. The monetary impost that Telstra enforces on the NBN Co. regarding this crucial information is an indicator that the relationship between these two organisations may well be adversarial. It is these types of opportunistic tactics that thrive in sticky relationships (Kim & Choi, 2015, p. 65) between buyers and suppliers, and ultimately force end users to pay more for goods and services. For example, in this case the fee Telstra charges the NBN Co. must be absorbed by the NBN Co., putting pressure on either the price of the NBN Co.’s services or its revenue. This fee adds complexity to the NBN Co.’s planning and pricing processes.

The sticky nature of the relationship between the organisations in the value chain is also observable in the interactions many of the Townsville interviewees had with the NBN or their RSP. For the NBN to have a positive reputation, not only do its pipes have to function properly, the RSPs must also provide adequate backhaul networks to facilitate an end user experience and customer service experience when things go wrong. The NBN ping-pong between the NBN Co., RSPs and RSP sub- contractors discussed earlier in this chapter is an excellent example of the ways in which a more distributed value chain in the Australian telecommunication industry has led to poor outcomes for end users. The lack of communication between the NBN Co. and end users because of its role in the product chain as a network wholesaler, and the tactical opportunistic business behaviour of Telstra, leaves customers with a general trust deficit towards the NBN Co.

The trust deficit While some of the interviewees reported that they were satisfied with their NBN service experience, these users were in the minority. The overwhelming theme that emerged from the data was a sense of disappointment. While the sources of disappointment varied for respondents, the most common complaints were either the long lead-in time between stages of the rollout and activation processes, or a technical performance that was less than expected. As Bulat explained, unless consumers had a particular interest in technological matters and information technology, they needed to be guided through the NBN processes: “…at the start nobody knew what was going on, so, and even now, people don't know the connection steps. So, it's not advertised [laughter]” (Bulat, 2016).

Service organisations, particularly those such as telecommunications providers that deal with the most intangible services, often need to educate their customers and guide them through the service experience (Fisk, 2007, p. 131). The issue in the case of the NBN is that end users are not the customers of the NBN Co. They are the customers of the RSPs, which act as intermediaries between the NBN Co. and end users. This raises the question of which party is responsible for educating end

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users: is it the NBN Co., the RSPs, or some other party? In an exchange in the Supplementary Budget Estimates for 2016/2017, held on October 18 2016, Bill Morrow (the CEO of the NBN Co.) made it clear that from the NBN Co’s point of view, they were not responsible for educating end users and that this responsibility lay with the RSPs:

Can I emphasise that by the nature of the design of NBN being a wholesale-only company, the service providers are intended to actually be the interface to the end user consumers about offerings, about products and about solutions, and that really should be the first port of call for them to talk to a retailer. There are many of those on our website that they can choose from to speak about what services are available for them. (Bill Morrow as cited in Supplementary Budget Estimates 2016-17 (October 2016): Communication and the Arts portfolio, 2016)

The perception that the NBN Co. lacks transparency and public accountability has compounded with other service failures (such as performance issues and communication issues cause by value chain sickness) to create a negative service experience for end users. For example, many of the interviewees in Townsville were frustrated and disappointed at how long it took to rollout the network. It was not until many years after the announcement that the NBN would be coming to Townsville that end users were able to access the network. At least three interviewees mentioned that they only got access to the NBN in the six months prior to the interviews (2015–2016). Sandor Kovats from Vetta Productions recounted how difficult the wait for the NBN was while he was forced to deliver his business services to clients from an internet café: “we were waiting for it for a long time before then [April 2015], but, yeah it wasn’t until [sigh] relatively recently we got it” (Kovats, 2016).

Raiteri made an insightful comment about the way that the communication strategy for the rollout built up expectations and then left residents with little information of any substance for years:

If you look at any of the maps, I mean we only got ours… probably had it two or three weeks now, and I remember being part of some local community…yes the steering committees… three and four years ago when they first put in the first NBN, the problem was that the NBN was originally provided to residents, not to businesses, so by doing those presentations about: ‘These are all the great thing businesses can do with NBN’, was like poking someone in the eye with a fork, because it’s like ‘you don’t have NBN and what you could be doing if you had it’! But you are going to have to wait five years. (Raiteri, 2016)

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Devine thought the promotional-style public information events were not of much help. Mick recounted the general gist of the events: “it was something along the lines of, ‘it’s going to be wonderful and you’ll have high speed internet and you will have it very soon’” (Devine, 2016). However, Mick was so disappointed with how long it took to get the Calxa office connected to the NBN that it became a consideration in relocating the organisation:

we moved in here last October or something and it was already connected and it was one of the reasons that we moved out of our old office, because even though we had the box on the wall three years ago… it was about two months before we moved out [in 2015] that we got the letter [from the NBN Co.] saying we’re ready to connect it now. (Devine, 2016)

While the Australian telecommunications industry is engaged in a finger-pointing exercise in which the NBN Co. blames RSPs and RSPs blame the NBN Co. for poor customer service and poor network performance, outcomes for end users are ignored. One of the most intractable industry debates is about the pricing structure of the NBN Co.

Demand and pricing issues Market intelligence, pricing and broadband demand forecasting decisions that the NBN Co. make all have flow on effects to RSPs, and eventually to end users. Thus, as already explained, the relationships between the different parties in the NBN value chain share the characteristics of “sticky relationships” (Kim & Choi, 2015). This section provides a more in-depth analysis of some of the key factors that determine the NBN Co.’s price structures, and how these assumptions led to the presumed unavailability of gigabit NBN connections in Townsville, as Matthew Bulat described earlier in this chapter, during the period that this study was completed.

NBN Co. pricing and demand forecasting There are 121 points of interconnect in the NBN structure across Australia where RSPs and other infrastructure backhaul providers can connect to the NBN. Each POI captures a geographic location, essentially creating 121 different broadband markets in the country: in the telecommunications industry these are known as connectivity servicing areas. There is one POI that covers Townsville, and as such the city could be considered its own broadband retail marketplace. According to Eyers (2014), there are four component charges that comprise the final wholesale price of NBN Co. data to its wholesale customers. There is a one-off charge for connecting to each POI for the first time. The second NBN Co. charge is a monthly fee per POI that the access seeker (RSP or other backhaul infrastructure provider) is connected to. NBN access seekers (RSPs or other backhaul infrastructure providers) must also purchase a connectivity virtual circuit (CVC) pipe per POI, or market they wish to

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serve. The CVC is essentially the cost of buying the pipe that sends and receives data over the access seeker’s backhaul network and the NBN. The more money access seekers spend on CVC, the more data their end users can send and receive. The fourth fee is known as the access virtual circuit (AVC) is administration costs accrued by NBN Co. related to identifying an access seeker’s traffic over its network. This charge allows the NBN Co. to tell which access seekers are using their network and how much data they are using. In summary, the four NBN Co. wholesale charges are the AVC, CVC, monthly POI subscription and the one-off POI connection fee. Some telecommunications organisations claim that having so many POIs prices them out of the national market because they cannot afford the capital to pay for access to each connectivity area and compete with larger backhaul providers like Telstra who have existing backhaul infrastructure in the POI locations (Barwick, 2010; Hackett, 2010; Horan, 2010).

Demand driven pricing philosophy The rate and structure of the NBN Co.’s wholesaling price, particularly the CVC charge, has been criticised for many years for being too high and discouraging RSPs from offering end users high volume and high speed data services (de Ridder & James, 2013, para 10). Proponents of the CVC charge claim it is a financial incentive for the NBN Co. to sell higher-tier services. In early 2017, the NBN Co. announced its plans for a change in the CVC pricing model (NBN Co., 2017a). This change reduces the CVC fee as the average number of broadband subscriptions increases. Morrow foreshadowed this change in the CVC fee formula at the Senate Estimate hearings for the Environment and Communications on 18 October 2016:

Our CVC pricing has come down more than twenty percent of the last twenty months from twenty dollars in February of 2015 to fifteen dollars seventy-five [cents] now [October 2016]. Part of this reduction comes with an industry volume discount based model and we are now consulting on a discount model that moves this to an RSP average, allowing retailers to further differentiate their product offering and pass along lower prices as end users demand more data… as data usage continues to increase over the network we expect CVC pricing to drop further. (Bill Morrow as cited in Supplementary Budget Estimates 2016-17 (October 2016): Communication and the Arts portfolio)

At the core of Morrow’s rationalisation for the reduction in the CVC charge is the idea that demand-driven growth for higher speed and higher data broadband services would lead to a logical reduction in the CVC price point.

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However, there is a view that the NBN Co.’s wholesale data price was always too high, and that the price should have been lower to stimulate data demand. There does appear to be some anecdotal evidence that the high price signals of the NBN actually stopped cautious RSPs from buying high-tier broadband services and slowed the growth of data demand. One of the core differences between businesses that provide products and those that provide services is the tangibility of the purchase. Scales have been developed to judge the tangibility of services, with services directed at the mind being on the higher end of the scale. Broadband is a service that according to this scale would be considered highly intangible. Marketing and promotion of highly intangible services is incredibly difficult, as customers often have trouble establishing expectations and quality measures, and this makes intangible services feel like they have more risk involved (Fisk, 2007, p. 172). The price of a service then is often used as an indicator of the quality and risk involved in the purchase, and even so, a consumer can often find it difficult to assess the value of a service until after purchase (Fisk, 2007, p. 172). This point is illustrated by de Rooy’s cautious approach to upgrading his broadband:

When we first took it on, I can’t even remember what sort of package we bought but because we had digital office technology we were straight in with quite a bit of data here. At the start I thought, maybe we don’t even need that much data, but I found very quickly we are pushing lots of data up and down. Particularly uploads, here because we have a lot of action with files that we need to upload to laboratories our upload need has been much greater than I thought and it’s amazing now. I can upload a hundred files to a lab in four minutes, it’s just amazing, there is no waiting, there is no glitches, it just happens. (de Rooy, 2016)

de Rooy is an astute professional who displayed a firm understanding of how much data his daily photography business activities consumed before he was connected to the NBN. The uncertain improvement in service quality meant that de Rooy approached upgrading his broadband data package cautiously, as it was not an improvement in task productivity that he could experience prior to purchase, consistent with theories of services and risk (Fisk, 2007, p. 172). Once de Rooy had experienced the NBN service and the greater data speeds it allowed, his behaviour changed. He no longer needed to wait to upload large files or groups of files overnight; he could do it immediately. The greater broadband capacity allowed de Rooy to control his workflow better and do tasks when it suited him, rather than scheduling his uploads around broadband data speed peaks and troughs. In this case the users’ control and convenience increased their use of data. de Rooy’s experience is an example of broadband data demand that is difficult to forecast because of a notable change in

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consumer behaviour. The flaws of standard broadband data forecasting demand techniques will be discussed below in relation to entertainment streaming services in Australia.

Revolutionary change in consumer behaviour Netflix is a video on demand (VoD) streaming service that was introduced into the Australian domestic market in March 2015. Domestic video on demand (VoD) rivals Stan and Presto (now defunct) launched in Australia at around the same time as Netflix to gain a first-mover advantage over the global giant and carve out some market share. However, Roy Morgan research released in June 2015 showed that Netflix had one million viewers, which was three times the number of viewers for rivals Stan, Presto, Quickflicks and Foxtel Play combined (Roy Morgan Research, 2015). In 2017 the VoD industry continued to experience incredible growth, spearheaded by Netflix. In the first quarter of 2017 an estimated one in three Australians had a Netflix subscription (Roy Morgan Research, 2017). Roy Morgan Research General Manger Tim Martin equates the success of the VoD industry and Netflix with the nature of Australian consumers as early technology adopters and argues that the growth of the VOD market follows the traditional innovation diffusion curve (Martin as cited in Roy Morgan Research, 2017). However, Barr (2015) contests the conclusions made by VoD enthusiasts, including Tim Martin, that the success of the VOD industry and Netflix can be reduced simply to the nature of Australian consumers as early adopters of technology. Barr (2015) takes a moderate view of the role of Netflix in the Australian media landscape, addressing some of the more exaggerated claims made by technological utopia enthusiasts and prophets of doom who predict the end of free-to-air TV as it is currently known. Barr (2015) envisions that Netflix will play a complementary role in the Australian media landscape as a content aggregator targeted at those who can afford to pay for the service. In the complementary media landscape that Barr foreshadows, more traditional media will continue to exist and play on their strengths, such as free-to-air television streaming live sports.

The competitive advantage that Netflix and other similar VoD services have over media platforms such as free-to-air television is their non-linear, advertising-free format which gives consumers more control over the way they consume content. For example, with streaming services consumers can view an entire series of an episodic show in one sitting. In the weeks and months following the introduction of the streaming services to the Australian domestic market, internet service providers (ISPs) had difficultly providing consumers with enough bandwidth to meet the demand caused by end users’ viewing habits. Customers of the ISP iiNet were most notably affected, with backhaul shortages (Grubb, 2015; Ramli, 2015) causing data slowdowns and dropouts for consumers. In April 2015, Telstra’s Chief Operating Officer reported that internet video content including VoD, YouTube, Facebook and other video content and platforms accounted for more than half of Telstra’s internet traffic (McKenzie as cited in Mason, 2015). David Buckingham, iiNet’s Chief

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Executive, said of the arrival of Netflix in Australia: “we got 6-to-12 months' worth of data growth in six weeks. Nobody can forecast that. This is an unprecedented shift in the market that no one anticipated” (Buckingham as cited in Ramli, 2015, para 4).

Buckingham’s comments about the unprecedented growth of broadband data demand due to the introduction of Netflix to the Australian market could be viewed as a public relations tactic aimed at saving face with iiNet customers who felt let down by the company’s performance. However, the fact that other ISPs also experienced unprecedented growth in data demand adds some legitimacy to his comments. However, ISPs knew that Netflix had been planning an Australian launch for some time, and so it seems difficult to understand how they misjudged the potential future growth in data demand. The fact that the growth in data demand seemed to be underestimated across the whole telecommunications industry raises questions about the ability of standard business forecasting models to account for unexpected and growth. It is this kind of “revolutionary” growth driven by a shift in consumer behaviour that (Tucker, 2015, 31:50-36:25) warned was unaccounted for in the assumptions that underpin the Vertigan panels Cost-Benefit analysis (Vertigan, et al.) and justification of the MTM NBN. The impact the NBN had on de Rooy’s workflow and the spike in broadband data demand from customers provide two clear examples of what (Tucker, 2015) describes as revolutionary change in consumer behaviour. In both of these examples, consumers used broadband to complement their lifestyles rather than organising their lifestyles around their broadband capabilities.

The Vertigan panel forecast flaws When the Coalition announced its Plan for Fast Broadband and an Affordable NBN in April 2013, they promised that by 2016 every Australian should enjoy download speeds of up 25 megabits and by 2019 most houses should have access to 50 megabits download speeds (Abbott & Turnbull, 2013 para 3). In addition the Coalition’s broadband policy would be supported by an NBN Co. commercial review to adjust to the new policy, a policy audit to determine how the NBN Mark II policy became the official broadband policy of the ALP Government and an independent study of the nation’s telecommunications needs which would include a cost-benefit analysis of the Coalition’s NBN plan (Abbott as cited in Abbott & Turnbull, 2013 para 4). The fact that Labor’s NBN policy was not supported by a cost-benefit analysis became a popular political attack against the NBN Mark II policy (Braue, 2014), which narrowed the scope of public debate about reform of the telecommunications industry to a false dichotomy of FTTP vs FTTN NBN delivery technology. The FFTP vs FTTN (or later MTM) NBN debate obfuscated the fact that both political parties had similar NBN policies now and that both policies shared many of the same flaws and virtues (LeMay, 2013). After the Coalition was elected at the September 2013 Federal election Malcolm Turnbull as Communications Minister announced a

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range of reviews of the NBN including the Vertigan Panel which was tasked with completing the highly anticipated cost-benefit analysis.

The Vertigan Panel was comprised of Michael Vertigan, Henry Eras and Alison Deans. The inclusion of Henry Ergas on the panel was a lightning rod for criticism of the Panel and the Panel’s findings. Henry Ergas was a vocal critic of the NBN project and former economist for Telstra (Clare, 2014b). For many industry and political participants, the outcomes of the Vertigan review were considered a fait accompli and merely a means for the collation to further justify their MTM NBN policy (Gregory, 2014). This left the Coalition open to politically harmful claims of nepotism and “jobs for the boys” (Clare, 2014a) which seemed to have left a question mark over the credibility of the findings from the report. In addition to these overtly political attacks on the panel’s findings many of the findings and recommendations of the report were also controversial.

The Vertigan panel (2014) found that the assumed rational ‘household broadband consumer’ preferred to choose lower speeds at lower costs. The Vertigan panel therefore concluded that broadband consumers had an elastic demand for broadband speed and that their willingness to pay for broadband was greater at lower speeds. Consumers were expected to find diminishing value in greater broadband speeds. Goods and services which show these characteristics of diminishing returns are often referred to as luxury items. However, for creative service providers, broadband is less of a luxury item and more of a utility:

We need to have that [broadband] infrastructure and for us stuff like office space isn’t that important, everyone has electricity and a phone, the internet is like a vital cog in the wheel for us, it’s not optional for is we use it constantly, every day. (Kovats, 2016)

When constructing their different broadband user profiles, to estimate broadband data demand the Vertigan panel argued that as households incrementally take up higher bandwidth services, business will be incentivised to service those households with high data consuming services. This logic greatly simplifies the business landscape and omits the role of business-to-business organisations and their data needs. The Vertigan panel’s assumption of an ordinary household’s willingness to pay for broadband and a business’s willingness to pay for broadband seems tenuous (Vertigan, et al., 2014, p. 78, para 2). The modelling approach taken by the Vertigan panel to estimate broadband data demand explicitly excludes “extreme high users” such as “people working at home on professional animation or analysing astronomical data sets might need to up- or download very large files” (Vertigan, et al., 2014, p. 32, para 3).

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Creative services professionals such as Raiteri, de Rooy and Kovats could be considered extreme high users of broadband, and it is these users this thesis is most concerned with. This is because, as was discussed in Chapter Five, the growth of employment in the creative services subsector is high, which means there are going to be more “extreme high users” (Vertigan, et al., 2014, p. 32, para 3) of broadband in the future. The modelling approach taken by the Vertigan panel builds a snapshot in time of broadband demand, leading to conclusions that are not reflective of the changing nature of employment and the embedded role the internet plays in increasing the productive capacity of industries, particularly the creative services subsector.

The Vertigan panel concluded that those businesses which view broadband as an essential to their activities have greater capacity to relocate than ordinary residential broadband users (2014, p. 78, para 5). The assumption that all bandwidth-intensive organisations have the capacity to relocate is problematic because, as established in Chapter Three, the creative services subsector is comprised of business-to-business organisations. If smaller rural and regional cities such as Townsville lacked any creative services subsector because of the unavailability of broadband, the flow-on effects to other industries would be notable. The erroneous identification of broadband as a luxury good by the Vertigan panel (2014) overlooks the value that the data-intensive creative services subsector adds to local economies. The hyper-rationalisation of the Vertigan panel (2014) that data-intensive organisations should move to locations where suitable services are available also casts doubt on the NBN as a tool for economic and social development.

Monitoring and mistrust As early as 2013 the ACCC showed awareness of two potential issues in the Australian telecommunications market that were have been discussed earlier in this chapter in relation to the experience of NBN end users in Townsville. The ACCC perceives there to be a market failure in the telecommunications industry at the RSP level. The failure is caused by RSPs and end users having asymmetrical access to information (Australian Competition and Consumer Commission, 2013; Riordan, 2013). RSP marketing and advertising of bandwidth speed is heavily regulated by the ACCC because it is easy for RSPs to use misleading advertising techniques to persuade end users about bandwidth and other technical information. One of the most intractable issues is when RSPs advertise the maximum capacity supported by the infrastructure platform (for example HFC or FTTP) even though that ‘maximum’ capacity would never be achievable in the end user’s circumstances due to technical restraints between the NBN and the backhaul. Situations where this discrepancy between the advertised service and the service performance occur are magnified by the stickiness in the broadband value chain. End users have difficulty identifying which party (NBN Co. or RSP) is responsible for their poor broadband experience, as many of the experiences of Townsville residents

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showed. The other issue identified by the ACCC is the potential for end users to feel a perceived sense of unmet expectations once connected to the NBN due to the high expectations created by policy (Riordan, 2013, pp. 3-4, para 4).

In 2013 the ACCC began a policy process to implement a broadband performance monitoring and reporting (BPMR) program aimed at reducing the stickiness between the NBN Co. and RSPs by providing end users with more information about the actual broadband performance they can expect. The program will “use hardware-based devices to perform remote testing of around 4,000 households to determine typical speeds on fixed-line NBN services at various times throughout the day” (Australian Competition and Consumer Commission, 2017, para 2).

The ACCC hopes that the program will provide end users and ISPs/RSPs with accurate information regarding broadband transfer rates (speeds) in order to address the asymmetric nature of information in the broadband market. The ACCC cites examples from the UK, US, Singapore and Canada in supporting their claims. The program will cost $7 million over four years, beginning in July 2017 (Department of Communications and the Department of Communications and the Arts, 2017). This may be a small price to pay to have a market worth $4 billion (Australian Competition and Consumer Commission, 2017) operate efficiently, but the question must be asked :will this be an ongoing cost burden to the government or the industry, past the initial four-year period? Will the cost of the regulation rise over time, and if it does, will it continue to be a worthwhile investment of resources?

While clarity of information might not necessarily reduce stickiness in the NBN value chain, it does limit the direct impact of adversarial relationships between the NBN Co and RSPs on the end user. However, the indirect impact of adversarial relationships between parties, in the form of flow- on costs like those discussed earlier in this chapter in relation to Telstra charging NBN Co. fees for information about pit and pipe infrastructure might not be solvable through market forces. Only the results of the monitoring and reporting regime will be able to adequately answer this question.

Preliminary policy evaluation It is apparent that there is a market failure in the retail end of the industry and that end users do not have fair access to information about what standard of broadband service they should be able to expect. There is an apparent lack of an authoritative and trustworthy source of broadband-related information. This has had a number of effects, from failure to inform residents about how to engage with the NBN, to RSPs and subcontractors providing poor customer service. Even customers who are lucky enough to have been connected still experience dropouts and congestion over the NBN, diminishing the value of the network upgrade.

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The myopic decision of the Vertigan Panel (2014) to exclude the “extreme high users” of broadband from their data estimates has played a role in delaying gigabit broadband services to cities such as Townsville and potentially increased the price of the services once they do reach marketplaces. However, the NBN has improved broadband for some of the most poorly-served broadband customers in Australia. While the NBN intervention has been an ambitious policy, the results to date do not appear to be palatable.

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Chapter Nine: Growing pains in the growth cycles

This research provides a snapshot of the creative industries and the NBN in Townsville from 2011 to 2017. However, the observations that can be made about these subjects based upon the analysis in this thesis extend far beyond this period. The city of Townsville has the goal of becoming an official capital city of North Queensland and it appears as if the creative services sector will play an important role in this development trajectory for the city. The creative services subsector which is comprised of industries and occupations that are “business-to-business activities like design, architecture, digital content, software development, advertising and marketing” (Cunningham, 2013, p. 133) is a promising sector for employment growth and income creation. The resilience of the creative services subsector throughout the 2011 to 2016 employment trough indicates the importance of the sector for a truly diversified economy that is insulated from boom and bust cycles in the manufacturing and mining sectors.

Although the evidence to suggest that the NBN will increase creative services employment needs reinforcement by further research, the evidence provided by SafetyCulture founder Luke Annear to Senate Committee enquiry on the NBN (2017) provides an encouraging confirmation that there is indeed a link. However, it must be noted that issues in the broadband retail market and failures of regulation and legislation in the telecommunications industry greatly overshadowed the benefits of the NBN to the city of Townsville at the time of writing. The overwhelming feeling of dissatisfaction with the NBN in Townsville paints a bleak picture of telecommunications industry interventions and reforms.

The NBN provides a complex and compelling policy challenge that will be analysed and discussed for years to come. Telecommunications industry insiders, academics, economists, politicians and engineers are all of different opinions of about when, where, why and how could these policy issues have arisen and how could they have been avoided or better mitigated. While all these questions are important, sadly the contributions of this thesis are limited in that regard. For example, one of the most highly politized issues in the NBN debate is the FTTP vs MTM NBN and the contestable benefits that each model of NBN delivery might provide in comparison to the other. While Townsville is a site with a mix of various technologies (see Appendix 4A) the interviewees who participated were all on, or later connected to FTTP technology (see Appendix 1G). The FTTP vs MTM NBN debate has dominated recent public discourse about the NBN and while discussion about what technology should be used to build Australia’s new broadband infrastructure and at what cost are not unimportant, the

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discussion has become somewhat distracting. Chapter eight explored a slew of issues that consumers in Townsville and the nation had with the NBN and the retail broadband market and none of the issues explored in that chapter are exclusive to one type of NBN delivery technology. In other words, it seems apparent that issues like the unrealistically high price of broadband data, the unavailability of megabit services, network congestion and outages, poor customer service from RSPs would all be as prevalent with a full FTTP NBN rollout or the MTM NBN. While the Government has made some continued and discrete efforts to improve outcomes for consumers in the NBN era it does not appear there has been a consistent approach that considers the outcome of telecommunications legislation and regulation change.

On the 17th April 2018 the Federal Government announced the Telecommunications Consumer Safeguards review to address these types of issues post-2020. While there is great potential for this review to address many of the issues relating to the NBN explored in this thesis there are strong suspicions about the timing of the review. Aiming to have new consumer safeguards in place in the post-2020 Telecommunications industry would clean up the industry while shielding the NBN from onerous transparency disclosures and costs relating to consumer compensation. It seems reasonable to assume that in a post-NBN rollout environment where strong consumer safeguards exist and the industry has had some time to settle that the benefits of broadband might start to step out of the shadows of the shambolic industry. Future investigations into the link between the NBN and creative services employment should be far less inhibited by the atmosphere of mistrust and confusion.

Based on the current state of the telecommunications industry and the impression of the NBN expressed in this thesis it would be difficult to conclude that NBN was a successful example of a government intervention into a free market. However, there is a need to be cautious about making such bold declarations. The NBN is a long-term project and as alluded to earlier, the introduction of stronger regulatory frameworks which provide greater certainty and protection to consumers could have alleviated many negative NBN experiences. There is still time for the NBN infrastructure and vertically separated market structure to have impact (positive or negative) on broadband data price and availability. A question worth considering at this point in time is why has it taken so long for the Australian polity to consider consumer protections in this transitionary stage of the telecommunications industry and broadband retail market space? It appears if governments of both political stripes have gone to lengths to ensure that the NBN Co. is not subject to legislation and regulation which would force it to be transparent and would likely improve consumer outcomes and interaction in the broadband retail market space (for example the secrecy regarding NBN Co.’s pricing forums). Is the secrecy and lack of transparency surrounding the NBN simply a consequence of the

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nature of government involvement in the project or is there a way that the project could roll out without these distortionary effects on the market?

This study began at a challenging time when the NBN was changing direction and begging to implement the Coalition’s MTM NBN policy. Although the Coalition government was elected in late 2013 there was a lag time between then and the implementation of the MTM NBN. This resulted in a great deal of confusion and uncertainty as residents waited to find out which type of technology they would be connected to. Many residents and businesses wondered if their current broadband woes were related to the change in government policy. The city of Townsville also found itself in difficult economic conditions where weakening employment threatened the growth trajectory of the town.

Since then the unemployment rate in Townsville has remained stubbornly high but has not reached the peaks experienced during May 2016 to June 2017. There could be a number of reasons to suggest that the economic conditions of the city have improved slightly since the study concluded. Commodity prices have improved slightly from the lows they plumbed throughout the duration of the project and it appears as if a scaled down version of the Adani-Carmichael coal mine project will procced. In Chapters Five and Six the relationship between cyclical activity in the mining sector and employment growth in Townsville was canvassed. The question that this thesis was unable to answer in relation to creative services employment in Townsville was if the growth witnessed in Townsville was a downstream effect of mining activities. Given the growth of creative services employment in Townsville during the 2011 to 2016 period when the mining industry was in transition and commodity prices were soft the interpretation in thesis is that demand from other sectors was driving the growth creative services employment. Furthermore, the weakness in the mining industry forced the city to look beyond traditional industries for employment growth and revenue. Will the improving conditions in the mining industry distract the city from its project to continue diversifying its industry base? If there is a resurgence of mining related income and employment in the region related to mining activities, whether that be the Adani-Carmichael coal mine project or any other project, what will the impact on the creative industries be? These are questions which deserve continuing research.

Another interesting issue which was raised in the thesis that deserves further attention is the unique spatiotemporal dynamics which the city operates in. Townsville locals are acutely aware of the disadvantages of being located so far away nation’s largest cities located in the South. While the study did collect some examples of the ways businesses could use broadband to bridge the time and distance barriers between them and their markets here too the limitations of the NBN and the Australian telecommunications industry obscure the potential social and economic benefits. There were two notable examples of interviewees who used the NBN in this way. Tracy Raiteri of Townsville

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Social Media Marketing used her improved broadband capacity to host and participate in more webinars that are a necessary part of her business, and Vetta Productions. With the NBN Vetta Productions has been able to compete with other full-service production firms to stem the tide of creative product leakage from the city that Daniel, et al. (2015) identified as a priority for creative industries in the region. It is important to consider to what degree the consumer protection issues in the retail end of the telecommunications industry has obstructed impeded the ability for Townsville creative service providers to participate in economic activities beyond the geographical boundaries of the city. As the telecommunications industry develops it will be interesting to observe whether these improvements have a noticeable impact on the number Townsville based creative service providers trying to export their goods and services beyond their geographical region.

However, the most compelling observation made in this research is the resilience of the creative services sector in Townsville in 2011 to 2016, a period that could be described as a devastating for local workers. The creative services emerge from this research as a compelling industry for job creation and an obvious sector to support for cities and regions looking to grow their communities, grow their employment opportunities, diversify or broaden their economic industry base and make investments which yield returns to the community. This study contributes to creative industries literature by confirming that not only is it is possible to have a creative career in a regional cities, with the continued deployment of the NBN and the incremental improvements expected in the industry over time it might soon become easier to find opportunities to support your creative enterprise beyond the geographical boundaries of the location you live in.

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Appendix 1

Appendix 1A NBN Footprint in Townsville

The picture on the left shows the footprint of the NBN in Townsville according to the NBN rollout map found on the NBN Cos website. The picture is a screenshot taken on 30 September 2015. The picture on the right is a screenshot of the NBN footprint in Townsville and surrounding areas 10 April 2017. Over the course of the research project changes in NBN Co. publications and standard business practices.

The NBN Co. stopped publishing disaggregated data beyond the state level making it difficult to determine the size of the NBN footprint in any given area. The NBN Co. also changed the user interface on the NBN rollout map on their website. On both the 2015 (left) and 2017 (right) version of the NBN rollout map there are three stages of NBN availability. Build preparation is show in green this indicates to users that NBN construction will begin in the area soon. Build commenced is displayed in brown, this lets users know that the NBN is currently under construction in certain areas and should be available at some point in the near future. Finally, services available is shaded in purple this lets users know that the NBN should be available to them at that point in time. Blue areas on the map allow users to see if there are other similar comparative networks in the area. In the 2015 version displayed in the above diagram on the left there are two shades of purple (services available) and brown (build commenced). The different shades are used to indicate fixed line infrastructure (darker colour) and fixed wireless (the lighter shade). However, on the 2017 version different textures are used to represent the different technologies. In the 2017 NBN rollout map diagonal lines are used to represent fixed line infrastructure and circles are used to represent fixed wireless technology.

While these differences are likely to be undistinguishable in the diagram above it is necessary context to describe the difficult in providing accurate ways to describe the expansion of the footprint

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of the NBN over the course of the project. This is just one of the many ways which the NBN project is lacking transparency and accountability. However, what is clear from the diagram above is that the NBN footprint did expand greatly from 2015 to early 2017. It is also important to point out the large areas of Townsville do not have NBN services available in 2015 (left) rollout map of Townsville.

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Appendix 1B NBN Points of Interconnect table 2016 QLD NBN sites by POI as at February 2016

QLD Region QLD NBN POI Ready for service premises (Queensland Government, 2018b) (myNBN, 2015a) (myNBN, 2015a)

Brisbane central Brisbane Interim Agg 35, 161 Brisbane central Aspley 27, 168 Brisbane central Acacia Ridge Depot 15, 831 Brisbane central Camp Hill 8, 904 Brisbane central Woolloongabba 4, 830 Brisbane central Aspley Depot 0 Brisbane central Eight Mile Plains 0 Greater Brisbane total 91, 894 North QLD Townsville 42, 594 Darling Downs South-West Toowoomba 39, 516 Mackay Issac Whitsunday Mackay 27, 339 Wide-Bay Burnett Bundaberg 25, 486 South East QLD (West) Goodna 15, 262 South East QLD (West) Bundamba 4, 921 South East QLD (West) Ipswich 4, 415 South East QLD (West) total 24, 598 Far North QLD Cairns 18, 708 South East QLD (North) Petrie 8, 195 South East QLD (North) Nambour 5, 526 South East QLD (North) Caboolture 0 South East QLD (North) total 13, 721 Central QLD Rockhampton 3, 042 South East QLD (South) Merrimac 1, 540 South East QLD (South) Southport 756 South East QLD (South) Nerang 285 South East QLD (South) Slacks Creek 0 South East QLD (South) total 2, 581 Notes to Appendix 1B

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The NBN Points of Interconnect (POI) 2016 table was used as an aid in determining the size of the NBN footprint in Queensland cities in February 2016, and was influential in guiding the case site selection. This table was adapted from material found on myNBN (2015a) and the Queensland Government (2018b) Department of State Development, Manufacturing, Infrastructure and Planning websites. The Department of State Development, Manufacturing, Infrastructure and Planning divides the state into eleven different regions for administration purposes. Those regions are Brisbane Central, South East QLD (North), South East QLD (West), South East QLD (South), Darling Downs South- West, Wide Bay-Burnett, Central QLD, Mackay Isaac Whitsunday, North QLD, North West QLD, Far North QLD. The table above displays the cities where NBN points of interconnect (POIs) are located, the number of ready-for-service premises per POI and which regions (according to the Queensland Government 2018 taxonomy) the POIs are located in, as at February 2016. The Brisbane Central, South East QLD (West), South East QLD (North) and South East QLD (South) regions all had several POIs located within them. To allow for simple comparisons to be made between the regions, those regions with several POIs within them were totalled. Of all of the eleven regions in the Queensland Government (2018b) Department of State Development, Manufacturing, Infrastructure and Planning taxonomy, only one did not feature in the table: the North West QLD region.

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Appendix 1C Interview guide Pool A

1. Hi XXX, thank you for taking the time to speak with me today. Can you tell me how and why you become involved in your industry/business?

Potential prompts and probes from this question include: How long ago was that? Was it easy to go into this field? What is your educational background? Did you need any formal qualifications to enter the industry? Do you enjoy working in the business/industry?

2. What is your core business? Who are your customers? Are you mainly a b2b or b2c facing organisation? And what kinds of inputs do you require to deliver your products and/or services?

Potential prompts and probes from this question include: Do you have a range of different customers? Are there certain demographics or niche market segments that you target your products/services to? Has the market changed at all since you have been in this business/industry? Can you describe those changes?

3. What kinds of products and services (inputs) do you require to deliver your products/services (outputs) to customers?

Potential prompts and probes from this question include: Instead of trying to think of every single input, could you name five inputs which you think are the most important to your organisation? Where do the internet and broadband rate on your list of important inputs?

4. How does your organisation use the internet? What kind of applications do you have for it?

Potential prompts and probes from this question include: Do you use it for purchasing and procuring stock? Do you use the internet for office communication? Do you use the internet to try to market yourself or reach new customers? Do you deliver your service or product directly to your customers using the internet? Has your use of the internet at work changed at all in the past few years? Do you think your use of the internet will change in the next few years?

5. Have you considered using the internet to try anything new?

Potential prompts and probes from this question include: Have you tried reaching new customers/market segments/niches using the NBN? Have you thought about trying to reach new customers/market segments/niches using the NBN? Have you tried or thought about trying to develop any new products or services using the NBN? Do you think there any new services or products that you or your industry could develop using the NBN that your customers would be interested in? Are there any resources you have used to help you think about what you might do with the NBN?

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6. What kind of impact has the NBN had on your business/work?

Potential prompts and probes from this question include: Overall, would you say the NBN has been positive or negative for you and/or your business and why? Overall, would you say the NBN has been positive or negative for Townsville and why? How do you feel about having better broadband? Would you say that your feelings about the NBN are affected by the politics of the policy?

We are almost at the end of the interview now and I do have a few more questions I would like to ask you before we wrap up.

7. Has the NBN had an impact on your bottom line?

Thank you for taking the time to speak with me xxx. It has been very interesting to learn more about you and your organisation/work. Your experience of the NBN and opinions on the policy are very important. Would it possible for us to stay in contact and/or do something similar to this when I visit Townsville again?

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Appendix 1D Interview guide Pool B

1. Hi XXX, thank you for taking the time to speak with me today. Can you tell me about your role with your organisation?

Potential prompts and probes from this question include: In your role/industry/organisation what interaction have you had with the NBN? Are you/your industry/organisation supportive of the NBN policy vision of improving? Do you/your industry/organisation have a position on the different NBN policies?

2. Do you think the Townsville community benefits at all from having the NBN?

Potential prompts and probes from this question include: How do you think the community benefits from having the NBN? Are there any negatives about having the NBN in Townsville? Do you think the NBN benefits residential consumers and business users equally? Townsville is an economy which is currently struggling; do you think the NBN has a role to play in easing some of the burden? Do you think the NBN has led to or will lead to a growth of service industries in Townsville?

3. Do you think the Townsville community is making good use of the NBN?

Potential prompts and probes from this question include: Do you think any new and unique broadband products/applications/services will be invented here in Townsville? Why? Why not? What are the residents/community/communities/businesses using it for? What are the most popular business applications? What are the most popular residential applications? Are you aware of any local special interest groups which have formed to guide NBN implementation and development? What support and information is available for businesses who want to use the NBN?

4. Do you know of anyone other person or organisation that might be interested in participating in this research project?

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Appendix 1E Interviewee list

Interviewees

creative Interviewee type Name/Business subsector

Cultural Michal Beroun – Grail productions production workers Scott Morrison – DUO Magazine Mick Devine – Calxa Creative Pool A John de Rooy – John de Rooy Photography services Tracy Raiteri – Townsville Social Media Marketing workers Sandor Kovats – Vetta productions Glen Stewart – North Point Neon Signs (creative Other services) Total 7 Simon Millcock – Townsville City Council Pool B Matthew Bulat – IT specialist and advocate Ryan Daniel – James Cook University Total 3 Sue Tilley – Sculptor (cultural production) Data excluded from analysis Warren Cheetham – Townsville City Library Network (cultural production) Total 2 Carly Lubicz – Calculated Media/TheGo Townsville (creative services) Corrupted data Doug Willis – Simpler IT (creative services) Renee Turner – JESI (creative services) Total 3 Grand total 15

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Appendix 1F Creative Industries Townsville 2006 – 2011

The above table is taken from Welters, et al. (2013, p. 9) and shows their estimate of Townsville’s creative workforce, using a second wave creative industries mapping method that utilises Throsby’s (2008) concentric circles model to visualize the scope of the creative industries. There are some differences between the figures found in this table and the results of the Creative Industries Trident II analysis. The discussion regarding these differences is located in Chapter Five.

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Appendix 1G Business profiles

Creative sub- Size (no. NBN Length of time on the NBN (at time of Interviewee Businesses Longevity sector employees) technology interview)

Glen Stewart North Point Neon Creative 10 Established FFTP Not NBN connected at the time of Signs services 1989 interview. Subsequently connected.

John de Rooy John de Rooy Creative 3 Estimated 1999 FTTP Connected 2014. Connected for Photography services approximately 20 months. Michal Beroun Grail productions Cultural 1-10 Established FTTP Connected 2015. Connected for production 2000 approximately 12 months. Mick Devine Calxa Creative 11-50 Established FTTP Connected 2015. Connected for services 2008 approximately 6-8 months. Sandor Kovats Vetta productions Creative 2-10 Established FTTP Connected 2015. Connected for services 2011 approximately 14 months. Scott Morrison DUO Magazine Cultural 2-10 First published FTTP Connected 2015. Connected for production 2006 approximately 6-8 months.

Tracy Raiteri Townsville Social Creative 2-10 2010 FTTP Connected June 2016. Connected for Media Marketing services several weeks.

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Appendix 1H Transcriber confidentiality agreement template

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Appendix 1I Ethical considerations and protocols

While it was expected that participation in this project would not be onerous or harmful to participants the ethical clearance processes did identify some considerations relative to the welfare of research participants. The intention of this research was to provide grounded examples of how creative industries business use the NBN and the general NBN experience in Townsville. To ensure that the data and the findings of the research had the most potential to affect change in future policy work related to the NBN, the creative industries and the economic future of Townsville it was important that participants be identifiable. Having identifiable research participants adds credibility to their statements because audiences (and potential audiences) understand that participants use the cover of anonymity to make false or vexatious claims about their telecommunications provider, the NBN or any other party. Having real people describe they ways that the NBN helps their business and the ways that the NBN hinders their business cuts through a bitter partisan issue with the type of clarity that is desperately missing from the current discourse.

However, it is not unreasonable to consider that many actual and potential research participants may feel uncomfortable being personally identifiable by the research because of the increased scrutiny the participants might feel from other parties, whether that increased scrutiny is intentional or unintentional. This point is particularly relevant in a small town or city where the population is small and networks are close.

Another minor consideration in the project was how to ensure that participating in the research was quick and easy for time poor research participants. As noted throughout the thesis Townsville had been through a very difficult period of economic transition during the time that the research project was undertaken. Many people in the city had lost their jobs, many businesses had closed and business conditions were difficult. It was important to make the research process as quick and simple for research participants as possible. These two ethical considerations had several impacts on the research ethics processes.

Interviewees were contacted directly via email or telephone. All participants who were contacted by email received a copy of the research outline at this point in time. It was stated clearly on that form that research participants would be identifiable unless they specified otherwise. Before interviews began, interviewees had the opportunity to ask any questions regarding the interview and the process involved in participating in the project. It was made clear to interviewee before the interview began that the data collected was to be presented in the thesis and related work in a way that they interviewees would be identifiable to the audience. Each research participant completed a

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consent form to participate in the interview and on that form indicated that they consented to having their information identifiable. Interviewees had two chances to indicate their consent to have their participation in the project be identifiable. Once in written form on the consent form and once verbally before the interview began. Every research participant completed a consent form and indicated the consent to be made identifiable. Every research participant provided their verbal consent to have their data and statements made by them identifiable to audiences. If there were inconsistencies between a research participant verbal and written consent to made identifiable, their data would have been made unidentifiable. This situation did not occur. After the interviews had been concluded transcripts were provided to interviewees so that they could verify the accuracy and veracity of statements attributed to them.

As described in the sampling and recruitment sub-section of Chapter Four, this research used a truncated interview transcript for ease and convenience. The truncated interview transcripts allow interviewees to not only check the accuracy and veracity of statements attributed to them but also allowed the interviewees to see the context that their information and statements were being used in. Participants were encouraged to and had an opportunity to check transcripts for accuracy and veracity and several participants requested changes be made to their transcripts. All requested changes were made.

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Appendix 1J Notes on ABS Census data

To ensure the clarity, reliability and relatability of the findings of the Creative Industries Trident II results generated for this research, it is important to clarify some technical matters in relation to the use of the Australian Bureau of Statistics (ABS) Census data sets. The ABS uses standardised industry and occupation codes known as the Australian New Zealand Standard Industrial Classification codes (ANZSIC) and Australian and New Zealand Standard Classification of Occupations (ANZSCO). Both the industry and occupation systems use six levels of categorisation to organise all occupations and industries into a hierarchy. The hierarchy provides a simple, logical relationship between the different sectors of the economy. Each level of categorisation splits the data into more minute and fine-grained data. Generally, the more fine-grained the data, the greater the reliability of the results. This study uses four-digit data because it is consistent with similar research in the field, most notably a scoping study on the creative industries in Townsville by Welters, et al. (2013), which was used as an input into the Growing the creative industries in Townsville report (2015). To use the more fine-grained five or six digit ANZSIC and ANZSCO codes would have required the purchase of access to the full version of TableBuilder, which is an issue for a study of this limited scope. The more fine-grained data would have also created additional complications with regard to protecting the privacy of individuals.

The ABS Population and Housing survey is a part of the national Census, which occurs every five years. The Census is an enormous logistical undertaking by the Federal government and the ABS. A part of the unspoken social contract between the government and the general population is that the government will keep Census information confidential and in return the general population will be provided with robust population-related statistics for evidence-based policy making. To ensure confidentiality with Census data released to the public through the TableBuilder application, the ABS applies random perturbation to its data sets. Perturbation works by adjusting some cells in the dataset so that individuals who completed the census under the promise of anonymity cannot be located or identified using ABS data sets in TableBuilder. This becomes particularly important when working with small data sets. Previous creative industries employment mapping exercises have focused on the national level, using six digit ANZIC and ANZSCO data (Cunningham, 2013; SGS Economics and Planning, 2013), or on the state level. However, as this study focuses on a much smaller regional level, the likelihood of individuals becoming identifiable is greater. Therefore, it would be expected that random perturbation would be applied to a greater degree in smaller-scale studies such as this one.

Another technical matter with regard to the ABS data sets was the need to account for the large amount of change which had occurred in standardised ABS recording, accounting and presentation

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methods in the last decade, and the limitations it might present. In 2006, the Australian Standard Classification of Occupations (ASCO) was replaced with the ANZSCO schema and the Australian Standard Industrial Classification (ASIC) schema was replaced with ANZIC. In 2011, the ABS changed the geographical standards that it used from the Australian Standard Geographical Classification (ASGC) (Australian Bureau of Statistics, 2009) to the Australian Statistical Geography Standard (ASGS) (Australian Bureau of Statistics, 2018a). The ABS uses standardised and non-standardised geographical units of output to differentiate between areas of certain population densities, economic functions and legislative and administrative controls. To avoid any compatibility issues, this study used local government areas or LGAs as the unit of measurement for the Creative Industries Trident II mapping and the comparative analysis of Trident II results for the nine cities. The noticeable challenge that the change of occupation and industry standards in 2006 presented was that it limited the comparability of data from Census periods prior to 2006. Hence not only did the observation of the data from the 2006, 2011 and 2016 Census periods advance the goal of the project in investigating the impact of the NBN, but the years also conveniently aligned under the new ANZSCO and ANZIC schemas. Longitudinal creative economy data that reaches further back in time beyond 2006 might assist in understanding patterns in the creative economy in Townsville, particularly boom-bust cycles, but its value in the analysis of the impacts of the NBN are not apparent.

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Appendix 1K 2006 Townsville Trident II

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Appendix 1L 2011 Townsville Trident II

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Appendix 1M 2016 Townsville Trident II

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Appendix 1N Trident II format limitations

There is a minor limitation with the format used for the Trident II relative growth matrices found in Figures 4.3, 5.1, 5.2 and 5.3 and Appendices 1L to 1S. The primary function of the relative growth matrix is to show growth from one period to the next and express it in a simple percentage format for comparison. If the number of creative employees grows from zero or shrinks to zero from one period to the next, it is impossible to express that change as a percentage. If the number of creative employees does not change from one period to another it is also difficult to accurately express that information in a percentage format. This is important when interpreting the relative growth matrices found in the Appendices following this section, as there might be several reasons why a matrix displays a result of zero for certain types of employees.

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Appendix 1O Brisbane Trident II growth rates

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Appendix 1P Bundaberg Trident II growth rates

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Appendix 1Q Cairns Trident II growth rates

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Appendix 1R Gold Coast Trident II growth rates

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Appendix 1S Ipswich Trident II growth rates

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Appendix 1T Mackay Trident II growth rates

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Appendix 1U Rockhampton Trident II growth rates

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Appendix 1V Toowoomba Trident II growth rates

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Appendix 1W Notes on the regional trident analysis

The South East QLD (North) region is not represented in the regional Trident II analysis because, unlike the other regions and LGAs, the POIs in the region are split over two LGAs – Moreton Bay LGA and Sunshine Coast LGA. For this reason, the Moreton Bay LGA and Sunshine Coast LGA and the South East QLD (North) region are not included in the analysis. The North West QLD region is also not included in this analysis because when the table in Appendix 1B was constructed, the region did not have a POI specifically servicing it.

The Gold Coast was selected in addition to Brisbane as they are both are metropolitan cities and are Queensland’s two most populous cities. Townsville has an overt political goal of becoming north Queensland’s provincial capital city, and there are many historical rivalries between different cities in north Queensland for the title. Some of Townsville’s current claims to the title are its diversified economic base and its large population. One of Townsville’s rivals for the role of provincial capital is Cairns, which has a comparable population. Evaluating the creative sectors of these two cities provides valuable insight into the dynamics of the politics of north Queensland. Toowoomba is an agricultural city west of Brisbane which lies within the south-east corner of Queensland. Toowoomba was a site of interest, having the third largest NBN footprint in Queensland at the commencement of this project after Brisbane and Townsville (see Appendix 1B). Toowoomba is also an agricultural hub, and the city acts as a services and communications hub for the broader Darling Downs area, playing a similar role to the one Townsville has in north Queensland. Having the Trident data for both Toowoomba and Townsville provides the opportunity for points of similarity and contrast to emerge because both sites share common functions to their broader regions as services hubs. Ipswich was chosen because, much like Brisbane, the Gold Coast and Townsville, it has a reputation for being a fast-growing city. Mackay and Rockhampton were chosen because they are regional areas that lie outside of Brisbane’s southeast corner. Both Rockhampton and Mackay are port city’s which should have benefitted greatly from a mining and resources boom. Bundaberg is an agricultural city, well known for its sugar cane production and alcohol manufacturing. Bundaberg is located in the Sunshine Coast region, which is one of the fastest growing regions in Queensland.

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Appendix 1X Creative employment summary table

Creative employment summary table (raw figures) Year 2006 2011 2016 City/Creative Cultural Creative Total Creative Cultural Creative Total Creative Cultural Creative Total Creative employment production services Industries production services Industries production services Industries Brisbane 8, 539 29, 061 37, 600 8, 992 34, 703 43, 695 8, 440 39, 537 47, 977 Bundaberg 120 156 276 232 396 628 141 319 460 Cairns 640 1, 153 1, 793 783 1, 564 2, 347 437 996 1, 433 Gold Coast 3, 852 8, 139 11, 991 3, 749 10, 047 13, 796 3, 928 11, 757 15, 685 Ipswich 426 824 1, 250 489 1, 859 2, 348 474 1, 910 2, 384 Mackay 196 364 560 287 698 985 180 548 728 Rockhampton 231 300 531 365 761 1, 126 331 439 770 Toowoomba 359 549 908 643 1, 192 1, 835 467 1, 145 1, 612 Townsville 634 1, 015 1, 649 693 1,294 1,987 567 1, 372 1, 939

In this table the total creative industries employment figure per town according to the Trident II calculations are listed for nine cities analysed in the regional trident analysis. The number of creative employees in the town are listed for the census periods of 2006, 2011 and 2016. The total number of creative industries employees in the town is calculated by adding the number of employees in the cultural production subsector and the creative services subsector.4

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Appendix 2

Appendix 2A National workforce growth 2006–2016

Using figures extracted and adapted from the ABS (Australian Bureau of Statistics, 2007, 2016) the workforce growth rate of the nation for the ten year period 2006–2016 is calculated.

Figure 0.1 National employment data from the ABS 2007 and 2016.

Seasonally Ten year Seasonally adjusted adjusted AUS growth rate of AUS workforce Dec workforce AUS workforce 2006 Dec 2016 '06 to '16 10,337,300 11,985,900 16% Calculation [(11, 985, 900 - 10, 337, 300)/10, 337, 300]*100

Table 0.1 Calculations for ten year growth of the national workforce 2006 to 2016.

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Appendix 2B National workforce growth 2006–2011

Using figures extracted and adapted from the ABS (Australian Bureau of Statistics, 2007, 2012) the workforce growth rate of the nation for the five year period 2006 to 2011 is calculated.

Figure 0.2 National employment data from the ABS 2007 and 2012.

Seasonally Ten year growth Seasonally adjusted AUS adjusted AUS rate of AUS workforce Dec 2006 workforce Dec workforce '06 to '11 2011 10,337,300 11,421,300 10% Calculation [(11, 421, 300 - 10, 337, 300)/10, 337, 300]*100

Table 0.2 Calculations for the five year growth of the national workforce 2006 to 2011.

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Appendix 2C National workforce growth 2011–2016

Using figures extracted adapted from the ABS (Australian Bureau of Statistics, 2012, 2016) the workforce growth rate of the nation for the five-year period 2011–2016 is calculated.

Figure 0.3 National employment data from the ABS 2012 and 2016.

Seasonally Ten year growth Seasonally adjusted AUS adjusted AUS rate of AUS workforce Dec 2011 workforce Dec workforce '11 to '16 2016

11,421,300 11,985,900 5% Calculation

[(11, 985, 900 - 11, 421, 300)/11, 421, 300]*100

Table 0.3 Calculations for the five year growth of the national workforce 2012 to 2016.

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Appendix 2D Townsville in the North diagram

A diagram featured in the Townsville city economic development plan 2013-2017, sourced from the Queensland Government 2011. The diagram shows the geographical advantage of Townsville, as it lies at the intersection of four crucial industry corridors: the minerals corridor to the northwest, the agricultural basin to the west, the coal and coal seam gas reserves in the Galilee basin and the tourism corridor running south to north from Brisbane to Cairns.

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Appendix 2E Townsville’s creative services subsector 2016 This Appendix explores detailed information regarding the different creative and non-creative occupations and industries which are driving the growth of Townsville’s creative services subsector. A series of pie charts and tables is used in this section to discuss the significance of certain occupations and industries to Townsville’s creative services subsector. One type of creative employee which was not included in the analysis here is creative services employees working in cultural production industries. In terms of the size of Townsville’s creative workforce, this type of creative employee has the lowest representation in the Trident II results after the cultural production employees working in the creative services subsector. The number of creative services employees working the cultural production industries was forty-one in 2006, thirty-six in 2011 and nineteen in 2016.

This section is structured to investigate three out of the four types of creative services employees, with the order of the section flowing from ascending to descending in terms of number of employees. In 2016 the creative services subsector in Townsville employed 1,372 people; most of these employees (611) were embedded in non-creative industries (Appendix 1L). There were 452 people employed in support occupations working in the creative services industries and 290 creative services specialists in 2016.

Embedded creatives Of the thirteen creative services occupation codes, four accounted for 88 percent of creative services employees embedded in non-creative industries (see Figure 0.4). These four occupations are: advertising, public relations and sales managers; urban and regional planners; software and applications programmers; and advertising and marketing professionals. The other wedge in the pie chart in Figure 0.4 represents the combined total of six other creative services occupations. Those occupations are: graphic and web designers and illustrators; ICT sales professionals; ICT business and systems analysts; multimedia specialists and web developers; interior designers; and photographers.

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Embedded creative services employees by occupation Other 12%

Software and Applications Programmers 9%

Advertising, Public Relations and Sales Managers Urban and Regional 50% Planners 9%

Advertising and Marketing Professionals 20%

Figure 0.4 Embedded creative services employees by occupation 2016.

In Figure 0.4, two similar occupations related to marketing, advertising, sales and public relations account for 70 percent of the creative services employees embedded in non-creative industries. This does not appear to be unusual, as these jobs operate at the coalface of communication and connection between businesses, consumers and/or audiences, markets and institutions.

There is, however, more value in attempting to understand which non-creative industries employ creative workers and for what reasons do these industries hire these people. Table 0.4 shows the ten industries that had the greatest number of embedded creative services employees in Townsville in 2016. Table 0.4 shows that there were seventy-nine different non-creative industries that hired creative services employees in 2016. There appears to be a great deal of concentration of employees in certain industries. Some of the largest employers include governments and government- related services such as higher education. There are several likely explanations for the high concentration of creative services employees in government administration and government-related services. Bearing in mind that Figure 0.4 showed that a vast majority of the embedded creative services employees are in communication-related functions, it has been established that governments spend a sizable sum of money on communications and advertising (Sinclair, 2014, pp. 214 - 216). The high concentration of creative services employees embedded in government and government related

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services could also reflect Townsville’s apparent role as a services hub for the broader north Queensland and far north Queensland region (AEC).

Number of creative services employees embedded in non-creative industries Non-CI industries No. Manufacturing, nfd 3 Electric Lighting Equipment Manufacturing 3 Pump and Compressor Manufacturing 3 Roofing Services 3 Other Agricultural Product Wholesaling 3 Other Specialised Industrial Machinery and Equipment Wholesaling 3 Professional and Scientific Goods Wholesaling 3 Commercial Vehicle Wholesaling 3 Motor Vehicle New Parts Wholesaling 3 Commission-Based Wholesaling 3 Fuel Retailing 3 Clothing Retailing 3 Cafes and Restaurants 3 Clubs (Hospitality) 3 Port and Water Transport Terminal Operations 3 Other Warehousing and Storage Services 3 Banking 3 Credit Union Operation 3 Employment Placement and Recruitment Services 3 Travel Agency and Tour Arrangement Services 3 Secondary Education 3 Dental Services 3 Hairdressing and Beauty Services 3 Soft Drink, Cordial and Syrup Manufacturing 4 Other Hardware Goods Wholesaling 4 General Line Grocery Wholesaling 4 Liquor and Tobacco Product Wholesaling 4 Other Specialised Food Retailing 4 Sport and Camping Equipment Retailing 4 Rail Freight Transport 4 Other Telecommunications Network Operation 4 Financial Asset Investing 4 Non-Residential Property Operators 4 Architectural, Engineering and Technical Services, nfd 4 Combined Primary and Secondary Education 4 Adult, Community and Other Education nec 4 Other Social Assistance Services 4 Mining, nfd 5 Copper Ore Mining 5 Other Electrical Equipment Manufacturing 5

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Number of creative services employees embedded in non-creative industries Non-CI industries No. Wooden Furniture and Upholstered Seat Manufacturing 5 House Construction 5 Paper Product Wholesaling 5 Freight Forwarding Services 5 Professional, Scientific and Technical Services (except Computer System Design and Related Services), nfd 5 Industrial and Agricultural Chemical Product Wholesaling 6 Takeaway Food Services 6 Health and Fitness Centres and Gymnasia Operation 6 Sugar Cane Growing 7 Wholesale Trade, nfd 7 Surveying and Mapping Services 7 Defence 7 Other Electrical and Electronic Goods Wholesaling 8 Hardware and Building Supplies Retailing 8 Accommodation 8 Telecommunications Services, nfd 8 Engineering Design and Engineering Consulting Services 8 Electrical Services 9 Agricultural and Construction Machinery Wholesaling 9 Market Research and Statistical Services 9 Liquor Retailing 10 Wired Telecommunications Network Operation 11 Real Estate Services 11 Scientific Research Services 11 Management Advice and Related Consulting Services 11 Central Government Administration 11 Education and Training, nfd 11 Technical and Vocational Education and Training 11 Retail Trade, nfd 13 Sports and Physical Recreation Clubs and Sports Professionals 13 Electricity Distribution 14 Electrical, Electronic and Gas Appliance Retailing 15 Investigation and Security Services 15 Car Retailing 16 Printing 17 State Government Administration 19 Inadequately described 32 Higher Education 37 Local Government Administration 55 Total CS employees embedded outside of non-CI 611 Table 0.4 Non-creative industries that employ creative services specialist 2016.

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Creative support employees Of the nine identified creative services industries, only five had support employees in Townsville in 2016. The four creative services industries that featured no creative support employees in 2016 were: software publishing; internet publishing and broadcasting; data processing and web hosting services; and professional photographic services. Figure 0.5 (below) shows the proportion of support employees that each of the five creative services industries recorded employment for in 2016. Computer system design and related services overwhelmingly employed the most creative support employees. This is an indicator that computer system design is a service that is in strong demand in Townsville. Whether the demand for these types of services is unique to Townsville is unclear from the data provided in Figure 0.5 or this broader Appendix section.

Creative services support employees by industry

Other Specialised Design Services 10%

Internet Service Computer System Providers and Web Design and Related Search Portals Services 16% 41%

Advertising Services 15%

Architectural Services 18%

Figure 0.5 Creative services support employees by industry 2016.

Specialist creatives Figure 0.6 shows the proportion of creative services specialists that each of the six industries contain for Townsville in 2016. Three of the nine creative services industries recorded no employment of creative services specialists in 2016. Those industries were: data processing and web hosting services; software publishing; and internet publishing and broadcasting. The advertising services industry contained only five percent of the city’s creative services specialists in 2016. Given the nature of the profession as one that is embedded in-house in other organisations, this is not a surprising finding. The relatively low number of creative services specialists in the internet service providers and web search portals industry could relate to the nature of the industries, which are relatively new. The

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dominance of global web search portals and the consolidation of the ISP market following the first several years of expansion in the post-NBN telecommunications industry are also further explanations.

Creative services specialists by industry

Internet Service Providers and Web Search Portals 4% Computer System Advertising Services Design and Related 5% Services 32% Other Specialised Design Services 19%

Architectural Professional Services Photographic 20% Services 20%

Figure 0.6 Creative services specialists by industry 2016.

The architectural services industry is one of the most important to the creative industries concept. Few nations other than global culture leaders such as the USA and the UK have creative industries that are export positive. Architecture is one industry that generally tends to be export positive for Australia (Cunningham, 2015, p. 165), so it is unsurprising to see that architectural services are well represented among Townsville’s creative services subsector. Professional photographic services also represent a large proportion of the creative specialists in Townsville’s creative services subsector. This is likely due to the effects of digital technology, which has driven down the barriers to entry to the profession. Digital technology has made photography less complex and driven down the cost of cameras. Due to the low barriers to new entrants to the profession, it seems likely that any market, or in this case city, would have a competitive professional photography industry. Therefore, what is observed in Figure 0.6 in relation to photographers does not seem to indicate any unique cluster.

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Creative services specialists by occupation

Other Graphic and Web 25% Designers, and Illustrators 23%

Photographers Architects and 20% Landscape Architects 15%

Software and Applications Programmers 17% Figure 0.7 Creative services specialists by occupation 2016.

When the creative services specialists are considered by their occupation code, it becomes apparent that there is a great demand for visual and most likely digital visual content creation. Figure 0.7 (above) shows what proportion of the total 290 creative services specialists each occupation employed. The graphic and web designers and illustrators, photographers, software and applications programmers, architects and landscape architects industries housed the majority of the creative services specialists. The other wedge represents 25 percent of the creative services specialists. It contains eight industries and the percentage share of the creative services specialists that these eight occupations contains ranges from five to two percent. The eight occupations consolidated into this wedge include: ICT Support and Test Engineers; ICT Business and Systems Analysts; Advertising and Marketing Professionals; Interior Designers; Multimedia Specialists and Web Developers; Advertising, Public Relations and Sales Managers; ICT Sales Professionals; and Urban and Regional Planners. Of all of the fourteen identified creative services occupations, only fashion, industrial and jewellery designers had no creative services specialist employees in Townsville in 2016.

Based on the examination of Figures 0.4 – 0.7 and the discussion accompanying Table 0.1, it appears that the growth in the creative services subsector is driven by communication and information technology related occupations and industries and their intersection with the other sectors in the Townsville economy, particularly the government sector.

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Appendix 2F Townsville’s cultural production subsector 2016 This Appendix explores detailed information regarding the different creative and non-creative occupations and industries that are driving the growth of Townsville’s cultural production subsector. A series of pie charts and tables is used in this section to discuss the significance of certain occupations and industries to Townsville’s cultural production industries. One type of creative employee not included in the analysis here is the cultural production employees working the creative services industries. For Townsville’s creative workforce this type of creative employee has the lowest representation in the Trident II results. The number of cultural production employees working in the creative services subsector in 2006 was six in 2006, shrinking to zero in 2011 and 2016.

This section is structured to investigate the three other types of cultural production employees, with the order of the section flowing from ascending to descending in terms of number of employees. In 2016 the cultural production subsector in Townsville employed 567 people; most of these employees (219) were embedded in non-creative industries (Appendix 1L). There were 183 people employed in support occupations working in the cultural production industries and 165 cultural production specialists in 2016.

Embedded creatives Figure 0.8 shows the proportion of embedded cultural production employees by their occupation. In comparison to the embedded locations of creative services employees in Figure 0.4, in Figure 0.8 there is no occupation that has an overwhelming share of the embedded cultural production employees. Of the thirteen cultural production occupation codes, only two had no embedded employee. They were Authors, Book and Script Editors, and Journalists and Other Writers. Figure 0.8 displays seven different wedges, representing the six occupation codes that had the largest share of the embedded cultural production specialists and an amalgamation of the other occupations in the other wedge. The other wedge consists of these five occupations: Film, Television, Radio, and Stage Directors; Artistic Directors and Media Producers and Presenters; Visual Arts and Crafts Professionals; Actors, Dancers, and Other Entertainers; and Jewellers. The proportion of the embedded cultural production employees that these five other occupations housed is equivalent to 20 percent of all embedded cultural production employees. Each of the five industries in the other wedge houses six to two percent of the total embedded cultural production employees in Townsville in 2016.

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Embedded cultural production employees by occupation

Library Assistants, Other 23% 20%

Performing Arts Technician, 9%

Librarians, Gallery, Library, and 18% Museum Technicians, Archivists, Curators, 9% and Records Music Professionals, Managers, 11% 10%

Figure 0.8 Embedded cultural production employees by occupation 2106.

The non-commercial nature of the cultural production subsector is apparent in Figure 0.8 (above) where, either in-part or in-whole, the financial support of the six occupations can be connected to government-funded activities. Library assistants, librarians and gallery library and museum technicians are largely employed in state and local council-run institutions. Libraries also have strong connections with the education sector through schools and universities, which are heavily reliant on state funding. The number of music professionals and performing arts technicians seems to be an encouraging sign for Townsville’s cultural production subsector, and a further investigation of the relationship between music professionals and Townsville’s defence force industry seems warranted.

The proposition that Townsville’s cultural production subsector has strong links to the government sector is further supported by Table 0.5. Table 0.5 shows which non-creative industries the cultural production employees were embedded in. The embedded cultural production employees were spread across seventeen non-creative industries. Government-funded industries captured the lion’s share of the embedded cultural production employees. The relatively small number of industries in which cultural production employees were embedded in comparison to the seventy-nine industries (see Table 0.4) that the creative services employees were embedded in reconfirms the different nature of the two subsectors. The creative services subsector is a commercial market-driven sector

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and the cultural production subsector is a mix of commercial, pre-commercial and non-commercial activities.

Non-creative industries employing cultural No. employees production workers Glass and Glass Product Manufacturing 5 Amusement and Other Recreational Activities nec 3 Information Media and Telecommunications, nfd 4 Arts and Recreation Services, nfd 4 Religious Services 4 Financial Asset Investing 6 Pubs, Taverns and Bars 7 Other Repair and Maintenance nec 7 Watch and Jewellery Retailing 9 Hospitals (except Psychiatric Hospitals) 9 Hairdressing and Beauty Services 10 Secondary Education 11 Combined Primary and Secondary Education 12 Primary Education 19 Higher Education 32 Defence 35 Local Government Administration 42 Total 219 Table 0.5 Non-creative industries which employee cultural production workers 2016.

Creative support employees When investigating which cultural production industries have the largest number of support employees, a trend emerges which is somewhat incongruous with the previously-mentioned observation that the creative services subsector tends to be more concentrated than the cultural production subsector. Figure 0.9 shows the proportion of cultural production support employees who work in the cultural production industries. Of the nineteen cultural production industries, five appear in Figure 0.9. The other wedge represents 21 percent of the total cultural production support employees, which is shared over five industries. The five industries consolidated in the other category in Figure 0.9 are: Motion Picture and Video Production; Directory and Mailing List Publishing; Magazine and Other Periodical Publishing; Cable and Other Subscription Broadcasting; and Creative Artists, Musicians, Writers, and Performers. The proportion of the total cultural production specialists that the five industries in the other category contained ranged from two to six percent. Nine industries employed no cultural production support employees in Townsville in 2016. Those nine industries were: Reproduction of Recorded Media; Music Publishing; Music & Other Sound Recording Activities; Performing Arts Operation; Post-production Services and other Motion Picture Activates; Book

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Publishing; Other Publishing (except Software, Music and Internet); Libraries and Archives; and Jewellery and Silverware Manufacturing.

Cultural production support employees by industry Other 21%

Newspaper Publishing 40% Radio Broadcasting 8%

Free-to-Air Television Broadcasting 8% Museum Operation 9% Performing Arts Venue Operation 14%

Figure 0.9 Cultural production support employees by industry 2016.

The newspaper publishing industry contains 40 percent of Townsville’s cultural production support employees. Townsville has one newspaper, the Townsville Bulletin, and Figure 0.9 (above) clearly demonstrates the significance of that newspaper for local jobs and employment. Radio Broadcasting and Free-to-air Television Broadcasting also recorded a relatively higher numbers of support employees, which is symbolic of Townsville’s significance as a large regional centre and a services hub for the surrounding areas.

Specialist creatives Figure 0.10 below shows the proportion of cultural production specialists employed in cultural production occupations. The seven occupations shown in Figure 0.10 employ 87 percent of all of the cultural production specialists. The other category, which represents 13 percent of all cultural production specialists, is a consolidation of four cultural production occupations. The four occupations in the other category are: Performing Arts Technician; Artistic Directors and Media Producers and Presenters; Film, Television, Radio, and Stage Directors and Authors; and Book and Script Editors. The number of cultural production specialists these four occupations employed ranged from five to two percent of all cultural production specialists.

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Cultural production specialists by occupation

Other Jewellers 13% 30% Journalists and Other Writers, 7%

Librarians, 7% Archivists, Curators, and Records Gallery, Library, and Managers, Museum 13% Technicians, 8% Visual Arts and Crafts Library Assistants, Professionals, 10% 12%

Figure 0.10 Cultural production specialists by occupation 2016.

Figure 0.10 shows that the Jeweller occupation had significantly more employees (30 percent) than other occupations, with the next highest cultural production occupation being archivists, curators and records mangers (at 13 percent). This could reflect the reality that jewellers, unlike many of the other occupations in the cultural production subsector, are and always have been commercially driven. The pattern of the cultural production subsector being less concentrated than the creative services subsector (see Figure 0.7 for example) is also present Figure 0.10.

Figure 0.11 (below) shows the proportion of cultural production employees working in the cultural production industries. Of the nineteen cultural production industries, seven appear in Figure 0.11. The other wedge represents 14 percent of the total cultural production specialists, which is shared over four industries. The four industries consolidated in the other category on Figure 0.11 are: Free-to-Air Television Broadcasting; Cable and Other Subscription Broadcasting; Newspaper Publishing; and Magazine and Other Periodical Publishing. The proportion of the total cultural production specialists that the four industries in the other category contained ranged from two to five percent. Eight cultural production industries employed no cultural production specialists in Townsville in 2016. Those eight industries are: Reproduction of Recorded Media; Music Publishing; Music & Other Sound Recording Activities; Magazine and Other Periodical Publishing; Book Publishing; Other Publishing (except Software, Music and Internet); and Directory and Mailing List Publishing.

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Cultural production specialists by industry

Directory and Other Mailing List 14% Publishing 23% Book Publishing 7%

Other Publishing Creative Artists, (except software, Musicians, Writers, Music and Internet) and Performers 7% 17% Libraries and Archives 8% Jewellery and Museum Operation Silverware 16% Manufacturing 8%

Figure 0.11 Cultural production specialists by industry 2016.

It is interesting to observe in Figure 0.11 that there is a mix of commercial and non-commercial industries which represent the location of the cultural production specialists. It could be argued that Figure 0.11 (the cultural production specialists by industry) represents the eclectic mix of activities in the cultural production subsector better than Figure 0.10 (the cultural production specialists by occupation). It is also interesting to observe the more dispersed spread of specialist employees across industries in comparison to the creative services subsector (see Figures 0.6 and Figure 0.7).

In contrast to the creative services subsector, the cultural production subsector is an eclectic mix of commercial, pre-commercial and non-commercial activities. The extent of this is made obvious in Figures 0.8 to 0.11 and Table 0.5. While there are some synergies between the cultural production subsector and other sections of Townsville’s economy in 2016, such as the traditional broadcast industries and newspaper publishing, the largest synergies appear to be found with government- related industries like education, government administration and defence.

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Appendix 2G Regional trident analysis cultural production subsector

Figure 0.12 shows the relative growth of the cultural production subsector for each of the nine cities over the two periods 2006–2011 and 2011–2016. The 2006–2011 period is shaded in black while the 2011–2016 period is shaded in grey. As was apparent in the examination of Townsville’s creative economy (Figure 5.1, 5.2. and 5.3) and the LGA workforce tables (Tables 5.1 and 5.2), there are noticeable differences in the cultural production subsector growth rates during the two periods. However, the Gold Coast seems to be the exception to the trend, with its cultural production workforce declining in 2006–2011 during the apparent boom time and then growing in the 2011–2016 bust period.

Figure 0.12 LGA Cultural production workforce for 2006–2011 and 2011–2016.

The Gold Coast is Queensland’s second-largest tourism destination after Brisbane (Queensland Government, 2014) and the tourism industry is notoriously linked to economic trends beyond the control of most national and provincial governments. International tourism is especially exposed to currency fluctuation, and during the 2006–2011 period the Australian dollar (AUD) appreciated to record levels, which many economists link to Australia’s mining boom (Kent, 2014). It could be the case that Australia’s high dollar during the 2006–2011 period discouraged tourism and the downstream growth of the Gold Coast’s cultural production subsector. Then, when the peak of the mining boom had passed in 2012, the Australian (AUD) dollar started to fall and encouraged tourism

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and the growth of the cultural production subsector? Another possible factor driving the growth of the Gold Coast’s cultural production subsector in the 2011–2016 period could be the massive investments made in the city in advance of the 2018 Gold Coast Commonwealth Games.

In terms of the size of its general LGA workforce, Rockhampton is the second smallest city in this study, followed by Bundaberg. Rockhampton experienced one of the largest increases to its LGA general workforce in 2006, but then suffered the largest decline at 39 percent (Table 5.2) in the 2011 to 2016 period. The extreme and unstable growth of Rockhampton is also apparent in its creative services subsector (see Figure 5.5), having the largest gains in the boom time (154 percent in 2006– 2011) and suffering the largest decline in the bust cycle (49 percent in 2011–2016). It is interesting to observe, then, that in the bust period in Rockhampton the loss of cultural production employees seems to be relatively small compared to the proportion of cultural production employees lost in other LGAs during the same period. The proportion of cultural production employees in Rockhampton who left the city in the 2011–2016 period also appears to be much smaller than the losses experienced by the city’s creative services subsector. This suggests that Rockhampton could be an interesting site for further investigation of the cultural production subsector, as there could be some interesting factors discouraging cultural production workers from leaving the city.

This loss of cultural production employees in Cairns in the 2011–2016 period also suggests that the circumstances affecting the city appear to be worse than those affecting other cities. What these circumstances are is difficult to determine without undertaking a more detailed investigation on Cairns. However, what is known is that Cairns experienced slow workforce growth over 2006–2011 (Table 5.3). The city is also considered a tourism hub (Queensland Government, 2014) and it is possible that it was affected by the high AUD in a similar way to the Gold Coast.

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Appendix 3

Appendix 3A SafetyCulture profile

A profile of Townsville-based startup company SafetyCulture, taken from the Regional Queensland startup ecosystem report (2015) prepared for the Queensland Department of Science Information Technology and Innovation. The profile provides a background on one of Australia’s most successful startups and how it has grown from its base in Townsville.

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Appendix 3B Queensland Regional area technology start up comparison

A table comparing the startup attractiveness of Toowoomba, Ipswich, Bundaberg, Rockhampton, Mackay, Townsville, Cairns and an aggregate state of all seven citiess, taken from the Regional Queensland startup ecosystem report (2015) prepared for the Queensland Department of Science Information Technology and Innovation.

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Appendix 3C Townsville I.C.T. Business Network Directory (TICTBN)

A screenshot of the Townsville Information Communication Technology Business Network (TICTBN) website and directory taken on 18 February 2018, located at http://tictbn.com.au/

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Appendix 3D Townsvillecreative.com

A screenshot of the Townsvillecreative.com website and on 18 February, 2018 located at http://townsvillecreative.com/

Documenting the establishment of Townsvillecreative.com is important, as it is a response to the Growing the creative industries in Townsville report (2015) recommendation that the creative industries collaborate to raise their profile.

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Appendix 4

Appendix 4A NBN technology available in Townsville Townsville suburb and NBN technology available Greater Townsville NBN tech Rural Townsville NBN tech Urban Thuringowa NBN tech Townsville City FTTP and FTTB Alligator Creek Fixed wireless Alice River FTTN Aitkenvale FTTP Barringha Fixed wireless Bluewater (beach) Fixed wireless Annandale FTTN Beach Fixed wireless Bohle FTTP Holm (beach) Belgian Gardens FTTP Bluehills Satellite Bohle Plains FTTN and FTTP Castle Hill FTTP Brookhill Fixed wireless Bushland FTTN, FTTP and Beach (beach) Satellite Cluden Satellite Calcium Satellite Condon FTTN Cosgrove FTTP CapeCleveland Satellite Deeragun (beach) FTTN Cranbrook FTTP Clemant Satellite Kelso FTTN Currajong FTTP Crimea Satellite Kirwan FTTN Douglas FTTN Crystal Creek Satellite Pinnacles Fixed wireless Garbutt FTTP Cungulla Fixed wireless Rasmussen FTTN and FTTP Gulliver FTTP Granite Vale Fixed wireless Thuringowa Central FTTN and FTTP Heatley FTTP Gumlow Fixed wireless Rural NBN tech Thuringowa Hermit Park FTTP Hervey Range Satellite Balgal Beach Satellite Hyde Park FTTP Hidden Valley Fixed wireless Black River (beach) Fixed wireless Idalia FTTN Julago Fixed wireless Bluewater Park Fixed wireless Mount Louisa FTTP Lynam Satellite Burdell (beach) FTTP Mount St John FTTP Majors Creek Satellite Jensen (beach) FTTN

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Townsville suburb and NBN technology available Mount Stuart NA Mount Elliot Fixed wireless Mount Low (beach) FTTN Mundingburra FTTP Nome Fixed wireless Mutarnee Satellite Murray FTTN Oak Valley Fixed wireless Paluma Satellite Mysterton FTTP Orpheus Island Satellite Rollingstone Satellite North Ward FTTP Palm Island Satellite Saunders Fixed wireless Beach (beach) Oonoonba FTTN Partington NA Shaw NA Pallarenda FTTP Purono Fixed wireless Toolakea (beach) Fixed wireless Park (beach) Pimlico FTTP Roseneath Fixed wireless Toomulla Satellite Railway Estate FTTP Ross River Satellite Yabulu (beach) Fixed wireless Rosslea FTTP Rupertswood NA Magnetic Island NBN tech Rowes Bay FTTP Stuart FTTN and fixed Arcadia Satellite wireless South Townsville FTTP Toonpan Satellite Florence Bay Satellite Stuart FTTN and fixed Woodstock Fixed wireless Horseshoe Bay Satellite wireless Town Common FTTB Nelly Bay Satellite Townsville West FTTP Picnic Bay Satellite Vincent FTTP West End FTTP Wulguru FTTN

Townsville suburbs adapted from https://en.wikipedia.org/wiki/List_of_Townsville_suburbs

Townsville NBN technology available by suburb according to NBN rollout map 14 January 2019 https://www.nbnco.com.au/residential/learn/rollout- map

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Fibre-to-the-premises (FTTP)

Fibre-to-the-node (FTTN)

Fibre-to-the-building (FTTB)

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Appendix 4B Service delivery chain

Diagram is adapted from NBN Co. (2019).

The section of the diagram which is taken from the NBN Co. website illustrates the NBN network delivery chain. The two diagrams underneath the NBN Co. published section illustrate the two different service provider delivery chains that exist in the current NBN market. In both service provider delivery chain models a and b the network wholesaler is shaded in grey to represent that it is outside the service provider network, generally the NBN does not have any contact with normal residential and business customers. In service delivery model a the carriage service provider (CSP) buys access to the network from the NBN Co. and sells services to the consumer directly. In service provider delivery chain model b a data wholesaler buys access to the NBN network to resell data to another RSP, usually an RSP that does not have its own backhaul networks. The RSP, SpinTel in our example above then sells retail phone and broadband services to end users.

NBN Co. (2019). What is a POI?: How and where your provider connects to the nbn network. Retrieved January 23, 2019, from https://www.nbnco.com.au/blog/the-nbn-project/what-is-a-poi-how-and- where-your-provider-connects-to-the-nbn-network

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Appendix 4C TIO NBN contractor complaint case example

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