Business

Regional areas are in trouble, revival lies in ‘brain hubs’

OPINION: On the road while taking a little leave, I have been able to observe how some of our regions are faring.

No rocket science is required to recognise that regional Australia is doing it tough.

In places like Byron Bay and Port Macquarie, businesses are doing it tough.

Retail especially is suffering, from seasonal factors certainly but also from the fragile economy generally.

Businesses that have been around for decades are closing.

There are empty shops. Consumers are super cautious. Tourists are staying away.

A friend who owns a bookstore in Sydney also filled me in on the impact of the revolution that is shopping online.

She said this really reached a tipping point in 2011 and that the bulk of those switching to online shopping, often purchasing overseas, had only ever known a high dollar.

People probably assume low priced overseas goods are the new normal.

She also told me about the great new consumer activity, "showrooming".

That is, many people just visit shops to find what they want then go home and buy it online.

People are in the shops but not buying.

Online shopping is not new.

But if it has reached a tipping point, when combined with the GFC that some are saying is only now hitting Australia as our China driven mining boom fades, and all the other difficulties we face (high costs, skills gaps, falling commodity prices), it makes for sobering reflection, about how we revive our regional economies and create more good jobs.

With these things in mind, while on the road I have also been dipping into a recent book by the Californian economist Enrico Moretti, The New Geography of Jobs.

This is the best book I have read on economic development for quite some time, and every economic developer worth his or her salt should have a copy on the bedside table. (And yes, I bought mine online!)

Moretti's focus is the USA but the lessons apply equally here.

He finds the answer in the story of the emergence of a couple of dozen "brain hubs".

These are the regions at the cutting edge of what we all know as the knowledge economy.

They are the places where the highly educated congregate, where innovation occurs, where productivity is highest, and where incomes are greatest.

Places need educated workers but also innovators that are highly interconnected.

The places doing best are those which invest in the innovation sector and which build the ecosystem.

Innovative firms create kick-on local jobs that are far better paying than those created by non-innovative firms in mature industries, and at a far higher rate.

They create indirect service industry jobs at far higher rates.

People will want to locate there because that is where the good jobs are.

Low-paying jobs are now done overseas.

The USA's brain hubs are doing the high-end stuff.

Designing the ipods and ipads whereas the Chinese now are assembling them.

And places like Cupertino where Apple is located is one of those brain hubs.

There the wages are high and high wage indirect jobs are also in abundance.

We need, then, to be an ideas factory if we too want to be a place of highly paid, plentiful jobs.

Certainly, let's reduce our costs and make doing business easier.

Cut red and green tape. Kill jobs destroying taxes.

We can try to attract "the right people" to our region till we are blue in the face.

But they will only come if there are plenty of good jobs in high-paying firms.

High-paying firms will be those in the business of innovation.

Moretti also says a lot about my old hobby horse, mobility.

He wants to encourage regional mobility.

Paul Collits is an associate professor at USQ Fraser Coast.

Topics:  opinion, paul collits, regional, university of southern queensland, usq


Stay Connected

Update your news preferences and get the latest news delivered to your inbox.

What price would you put on a kid's 'miracle'?

At nine years of age, Quiń had an accident that caused a cataract to one of his eyes. In an instant; this little boy with his whole life ahead of him faced a future of blindness.

Thousands of Aussies joining campaign to restore sight to kids

Mayor's plan to bring Son of Lismore's cabinet home

TALENTED: Geoff Hannah with Minister For The Arts Mitch Fifield, Jenny Dowell, Kevin Hogan, Thomas George and Brett Adlington at the opening and unveiling of his work at Lismore Regional Gallery.

Mayor Dowell wants famous cabinet for regional gallery

Latest deals and offers

The perils of play: How kids are most likely to be hurt

THE thought of your child suffering a life-threatening accident is the stuff of parents’ nightmares.

What price would you put on a kid's 'miracle'?

At nine years of age, Quiń had an accident that caused a cataract to one of his eyes. In an instant; this little boy with his whole life ahead of him faced a future of blindness.

Thousands of Aussies joining campaign to restore sight to kids

Mayor's plan to bring Son of Lismore's cabinet home

TALENTED: Geoff Hannah with Minister For The Arts Mitch Fifield, Jenny Dowell, Kevin Hogan, Thomas George and Brett Adlington at the opening and unveiling of his work at Lismore Regional Gallery.

Mayor Dowell wants famous cabinet for regional gallery

Flood watch issued for Qld, NSW

NSW State Emergency Service warns of heavy rain

Blood-stained clothes seized after axe attack

Lismore Court House.

A landlord has been charged over an axe attack on her tenant

School girl porn ring site goes offline

The Federal Government is yet to confirm if the site has been taken down or simply moved to different offshore servers.

Controversial Australian nude school girl rating site disappears.

John Williamson winding up for another Gympie Muster

John Williamson is bringing some new songs and artists to this year's Muster.

John Williamson is back and ready to put on his best show ever

Diva's sister on soliciting charge

FILE - In this May 14, 2016 file photo, Mariah Carey attends the 27th Annual GLAAD Media Awards, in New York. Carey will appear on the Oct. 5 episode of the Fox series, \"Empire,\" the network confirmed Monday at a TV critics bi-annual press tour. (Photo by Charles Sykes/Invision/AP, File)

Mariah Carey's sister has been arrested on charges of prostitution.

Tom Cruise private jets his gym kit around the world

Tom Cruise

Tom Cruise charters private to take his gym kit around the world

Movie behind Depp and Heard split to be released

Soon you'll be able to see the movie that ended the marriage

Bindi's boyfriend helps release huge croc

Chandler (far right) helped the jump team.

Chandler Powell helps catch Duncan the croc

Mick Jagger to pay £2.5m to the woman carrying his baby

Mick Jagger is reportedly paying millions to pregnant ballerina

Navy man Keller ready to marry a perfect stranger

Former Navy engineer Keller is a participant in season three of Married At First Sight.

Tattoos are just the surface of Married At First Sight groom.

REVEALED: Pat Rafter's $18m Coast house on the market

Check out the photos of the Coast's most expensive property for sale

The "correction we had to have" in Gladstone's rentals

UPWARD MARCH: The rental vacancy rate in Gladstone has improved for the first time in more than a year, providing a confidence boost in the market.

Vacancy rates improve with signs that things are getting betterF

ISLAND FOR SALE: Cheap Fraser Coast island drops price again

Suna Island in the Great Sandy Strait will be auctioned by Ray White Hervey Bay on Saturday morning.

This is the cheapest island you will find for sale in Australia

How a family home can fit on a 250sq m block

This is what you can build on 250m2.

Here's the floor plan of a home built on 250sq m

Investors eye Gladstone's $4m island with resort approval

UP FOR SALE: Turtle Island is on the market.

CHINESE and Sydney investors flag interest in Gladstone island.

Take a sneak peek at this $19m Whitsunday mansion

Mandalay House features a private helipad.

Mandalay is currently on the market with an asking price of $19m