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.

Hand-painted in love

INSPIRATION: Jess Fletcher and her hand-painted surfboard.

Cancer Council fundraiser Jess Lambert is raffling off a syrfboard.

Forza Horizon 3 review: Australia's never looked so good

Fancy racing a freight train?

Byron Bay, Gold Coast, Sunshine Coast, Twelve Apostles feature

Margaret wins silver at over-85s world tournament

TENNIS STAR: Byron's Margaret Fisher has won the silver at the women's over-85 world tournament in Croatia.

Byron's Margearet Fisher takes tennis silver in Croatia.

Local Partners

Quick thinking from market organisers may have saved lives

A DECISION from the Mullumbimby markets organisers could have saved people from injury after a tree fell down on the site.

OPINION: The great white shark hype

Great white shark smiling in the blue ocean

If there's a shark sighting, I want to know about it

Hand-painted in love

INSPIRATION: Jess Fletcher and her hand-painted surfboard.

Cancer Council fundraiser Jess Lambert is raffling off a syrfboard.

Forza Horizon 3 review: Australia's never looked so good

Fancy racing a freight train?

Byron Bay, Gold Coast, Sunshine Coast, Twelve Apostles feature

Margaret wins silver at over-85s world tournament

TENNIS STAR: Byron's Margaret Fisher has won the silver at the women's over-85 world tournament in Croatia.

Byron's Margearet Fisher takes tennis silver in Croatia.

WAVE RAVE: Aussies third in Portugal

WAVE RAVE: The Australian Team that went to Portugal. Photo: REZENDES

THE 2016 ISA World Junior Surfing Championship finished in Portugal

Community Calendar

HEARTWORN: It was all smiles from Trent McNamara and Diego Zaragoza last Sunday at the Brunswick Picture House when our community came out to support the musicians with a fundraiser that raised over $3,000. The founders of local band Heartworn Highway lost thousands of dollars of stock for their respective businesses, Little Pocket Vintage and Valiant Music, when Trent's ute caught on fire and was destroyed, along with some extremely rare and treasured musical instruments and equipment, and their personal belongings. Photo: Lyn McCarthy

This week's Byron Shire News Community calendar

Council to request continuation of shark spotting program

Multiple people attended the scene at Lighthouse Beach where a shark attack took place around 9:30 on Monday morning. Photo Marc Stapelberg / The Northern Star

Byron mayor says trial was a fantastic success

The Space Cowboy, our Prince of the Impossible

SPELLBINDING: The Space Cowboy, Byron Bay's Chayne Hultgren, on the microphone.

The Voodoo Review is on this weekend

Brad Pitt and Angelina Jolie 'working on custody agreement'

Brad Pitt and Angelina Jolie are thrashing out a custody agreement

10 of the worst wedding day disasters

Getting hitched without a hitch. That's the aim, right?

Trump's comments make light of statutory rape

Trevor Noah has gone to town on Donald Trump's sexism

Forza Horizon 3 review: Australia's never looked so good

Fancy racing a freight train?

Byron Bay, Gold Coast, Sunshine Coast, Twelve Apostles feature

Tommy goes home in emotional Bachelorette episode

The Bachelorette contestant Tommy Saggus.

BRISBANE bachelor hopes show will give him more confidence.

Beach-side real estate starts at $85k on Fraser Coast

HERVEY BAY REAL ESTATE: You can buy this townhouse in Scarness for under $300k.

Live your beach-living dream locally.

UPDATE: Former rodeo champ's sale rained out, now back on

Larkhill local Ken Consiglio is having an auction of most of the things on his property.

'People kept showing up and we had to turn them away'

Couple build their own 'tiny house' for $45k

Holly Bowen and Oli Bucher built their "tiny house" themselves, only hiring a plumber and an electrician. Photo/supplied

The house, which is built on a trailer and can be towed.

Sunshine Beach property breaks real estate record

The property overlooks Sunshine Beach, as the backyard lawn meets the sand.

Sunshine Beach mansion sale smashes real estate record

SOLD: Historic hotel finds new owner

Post Office Hotel Grafton

Photo Adam Hourigan / The Daily Examiner

Pub in new hands and heading in a brand new direction

Peppers Airlie Beach put on the market

ON THE MARKET: Peppers Airlie Beach is being for recievership sale by CBRE Hotels and PRD Nationwide Airlie Beach.

Peppers Airlie Beach is being offered for sale.