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.

LISTEN: Greyhound tapes ruled foul play by the court

TWILIGHT MEETING: Thursday racing at Grafton Greyhounds starts at the later time of 4.12pm today.

Court decision throws doubt over animal cruelty cases

Accused tortured woman for days, court told

Court hears details of alleged torture, rape, assault charges

Master Builders admit to "pessimism" as economy struggles

Heat comes out of the Qld building industry

Latest deals and offers

Eunji Ban’s accused killer committed for trial

A former Ipswich man accused of murdering South Korean woman Eunji Ban has appeared in court via video link.

LISTEN: Greyhound tapes ruled foul play by the court

TWILIGHT MEETING: Thursday racing at Grafton Greyhounds starts at the later time of 4.12pm today.

Court decision throws doubt over animal cruelty cases

Accused tortured woman for days, court told

Court hears details of alleged torture, rape, assault charges

Master Builders admit to "pessimism" as economy struggles

Heat comes out of the Qld building industry

Ipswich man's $701,000 mortgage-killing win

Golden Casket

Winning lotto ticket purchased at Ipswich newsagency

Pokémon Go leads to big litter problem

Cigarette butts are a big litter problem at Forest Lake. Hundreds were collected in just one clean up session.

Brisbane Council and locals work hard to rid lake of litter

Die-hard fan's 34 magic Gympie Muster years

STICK AROUND FOR A BEER: Mal Williams has been at every Gympie Muster for 34 years.

Mal Williams has only missed one Muster in 35 years - the first one

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.

Housing market going strong as units face tougher times

One real estate sector looks set for a rocky 2017

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

$100m plan for Curtis Island 'world class' luxury resort

$100 million resort: Top views at Turtle Street at Curtis Island.

"At the moment we think it meets all the town planning approvals.”