Community driven economic change in small rural community local economic zones (2017-2018)

Funding

Federation Council, $50,000

Investigators/researchers

Professor Mark Morrison, Professor John Hicks, Associate Professor Tom Murphy (Western Research Institute)

Research Theme(s)

Rural and Regional Communities

Description

Regional Australia is going through a period of unprecedented industrial change.  Between 2006 and 2011 employment in 44 out of 46 non-urban regions of Australia grew more slowly than their urban counterparts, and often employment growth in regional areas was negative. Sectors that have traditionally provided employment such as manufacturing and agriculture have had declining employment opportunities, due to both closures and increased mechanisation. Declines in the mining sector have not helped. Consequently, unemployment is increasing in many regional centres.

The challenge for those charged with encouraging economic development in regional areas is to (1) have the correct information, (2) to understand it and (3) to be able to make strategic decisions about how to encourage regional economic development.

This project, which was supported by Regional Development Australia – Murray Region, with co-funding from the NSW Government’s Energise Enterprise Fund and CSU, is helping to address this challenge. CSU researchers worked with five Local Government Areas (LGA) in the Murray Region – Federation, Berrigan, Edward River, Greater Hume and Murray – to undertake a regional development study to support the development of operational and strategic plans for improving the regional economy.

Its components were:

• A literature review of the entrepreneurial ecosystem and regional economics literatures to identify the factors relevant for evaluating ecosystems, and the factors influencing regional economies. This review informed the design of the survey questionnaire used.
• An analysis of Australian Bureau of Statistics employment and population data for the five LGAs between 2011 and 2016 which showed declines in employment based on place of work between 15.9% and 22% across the five LGAs, in contrast to a 5.6% growth in employment across the state. Employment based on place of residence declined in all LGSs, except for Murray, which suggests that people are finding work elsewhere. Unemployment is increasing in all areas apart from Murray, from 4.3% to 4.7%. The decline in employment appears to parallel changes in the working age population.
• A regional economic analysis conducted with assistance from the Western Research Institute. This included a shift-share analysis, a critical industries analysis, analysis of changes in specialisation, and identification of location quotients. The analysis found that the most important industries in terms of employment were Agriculture, Forestry and Fishing; Health Care and Social Assistance; Retail Trade; Transport, Postal and Warehousing; Construction; Public Administration and Safety; Accommodation, Food and Beverage Services; and Education. The industry with the greatest decline in employment was Agriculture, Forestry and Fishing.
• An analysis of business innovation based on Regional Australia Institute data produced some positive findings including a moderate to high percentage of owner-managers, moderate to high IP protection, and the proportion of R&D managers in some areas. However, the results highlight several issues, including low to moderate access to knowledge resources to support innovation, low to moderate availability of technical expertise, and significantly low rates of business start-ups.
• A survey of n=148 respondents who are knowledgeable of the ecosystems in each LGA which found the industries that the region is most known for were irrigated agriculture, tourism, engineering and food manufacturing. The main sources of comparative advantage noted by respondents were being a good place to live, the natural environment, irrigated agriculture, and having a secure water supply. Various forms of traditional infrastructure such as schools, medical care and hospitals, professional support services, and the road network were seen to be reasonably adequate or better, and infrastructure was overall not seen to constrain business or innovation. However, the operating environment for businesses overall rated on average as 5.4 out of 10 with a number of factors negatively affecting the business operating environment.

Outputs

A draft operational plan for improving regional development in the region based on the findings of the project’s report Economic Development Study – Murray Region was discussed at two community meetings held in Corowa and Deniliquin with changes to the plan based upon that feedback, as well as separate feedback received from project partners.

The Murray Region Economic Development Study Operational Plan proposes a number of initiatives under the headings – develop regional economic development capacity; address human capital constraints; develop business social capital, networks and entrepreneurial leadership; stimulate local economic activity through support for start-ups and existing businesses;develop links with other economies, networks and knowledge and financial resources; develop clusters; develop missing critical infrastructure; and develop social infrastructure.

Economic Development Study Final Report 2mb

Murray Region Operational Plan 300kb

Outcomes

The project has helped the five local governments involved in the project identify effective options for enhancing economic growth among the industry clusters most likely to increase business development and employment in the future.  These options are region wide, as well as relevant to the specific LGAs involved. These options could then be subjected to cost-benefit analysis and funding through Jobs NSW with the goal of implementation.

Contact

Professor Mark Morrison   email

CSU Bathurst

June 2018