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By Neil Lazarow, Tom Measham, David Fleming, Paul Bertsch Neil Lazarow, Tom Measham, David Fleming, Paul Bertsch Neil Lazarow, Tom Measham, David Fleming, Paul Bertsch Neil Lazarow, Tom Measham, David Fleming, Paul Bertsch 22 February 2021 6 min read

Newcastle, NSW was a popular regional destination for millennials moving between 2011-2016. Image by Flickr

How will regional Australia become key to Australia’s future economic prosperity?

Strong regional economic growth centres with world-class liveability, seamlessly connected physically, digitally and economically to cities and other regional centres will emerge through deliberately growing small and medium-sized enterprises (SMEs) and high value-added advanced manufacturing capacity, accompanied by modern and agile agricultural systems.

Australia is currently at a critical crossroad, challenged with transitioning to a carbon neutral future with population growth forecast to increase by around 65% by mid-century, all while maintaining its world-class health, wellbeing, and liveability standards.

CSIRO, through its new missions program focussed on bolstering Australia’s COVID-19 recovery and building long term resilience of our natural, managed, and built environments, is well-placed to work with business, communities and government to create positive impact, new jobs and economic growth that supports a vibrant and dynamic regional Australia.

Growing pains

Australia’s largest two cities, Sydney and Melbourne, are experiencing unprecedented growing pains from congestion and an increasing demand for, and unequal access to, services and amenities. Infrastructure Australia predicts the cost of lost productivity due to gridlock in Sydney and Melbourne will almost double by 2031, costing the economies close $40 billion a year.

Forward-looking strategies for these cities struggle with the practicalities of urban infill, servicing multiple centres, and improving infrastructure and connectivity, all at the scale required. Despite these challenges, there have also been significant advances and lessons learned from Sydney and Melbourne about building resilient cities that can be translated to growing our regional centres.

Living the dream?

Commuting can take hours in major cities. Pictured is traffic congestion in Sydney. Image Flickr

One in four Australian parents spend more time commuting per week than with their children. Although we perform better than many other countries in terms of urban congestion, our continuous urban sprawl is negatively influencing our health and well-being.

Australian’s debt-to-household income is relatively high by global standards, but has been buffered by high incomes and a buoyant property market. However, the current economic contraction due to the COVID-19 pandemic risks household debt becoming a real weakness for the economy. The combination of unaffordable housing and unbearable transit times means the prospect of living and working close together will remain a dream for most Australians living in many capital cities.

Additionally, because a sizeable fraction of household income is used to service mortgages, there are increasing risks of reduced investment in SMEs, which account for almost a third of Australia’s GDP and employ almost 45 per cent of the workforce.

Knowledge nation

With about 63 per cent of GDP and 79 per cent of working Australians employed in the services sector, we are well-placed to realise our potential as a creative, vibrant knowledge nation.

Housing costs in regional Australia are around half of those in our two largest cities. Combined with work and lifestyle opportunities, regions are attractive areas for relocation and provide opportunities to unleash the knowledge and skills of the workforce by growing SMEs, high value-added advanced manufacturing (link) and next generation agriculture and food enterprises.

Regional centres like Narrabri, NSW offer lower housing costs than major cities.

The regional challenge

Regional Australia’s migration patterns are complex. The Regional Australia Institute has shown that overall, more people moved from capital cities to regions than vice versa in recent years. But younger people tend to leave regions to work or study in larger regional centres or in capital cities. Evidence on the impact of COVID-19 on migration to regional Australia is also now emerging.

Employment trends in regional Australia are also evolving, with some regional areas experiencing increased unemployment while other regions are experiencing reduced unemployment to levels equal or lower than capital cities. Economic contraction in areas such as Northern NSW and the Sunshine Coast resulting from the Covid-19 pandemic has strengthened calls for economic diversification in regional Australia.

Service delivery has been a key issue for regional Australia, particularly in more remote regions, where access to GPs and specialists is more difficult than in regional centres and capital cities (Australian Institute of Health and Welfare 2019).

Socially and economically diversified regions are more resilient to shocks and are also able to recover more quickly. This is increasingly vital with decarbonisation pressures and the need for an economic transition to low emissions activities.

The devastating bushfires over summer 19-20 were a striking expression of the drying climate in the south east and south west of Australia, which is projected to continue in at higher frequency in the future. Lower rainfall and higher water supply costs are adding additional stress to industries, communities and natural systems still not recovered from the Millennium Drought. Managing long-term water security is a high priority for government and a key aspect of ensuring a sustainable and prosperous regional Australia.

Governments at all levels have invested in regions through a multitude of policies and strategies, such as large-scale infrastructure, jobs and skills training, and have provided incentives to encourage migration and economic growth. A recent CSIRO report looks at how we might collectively re-imagine living, working and investing in regional Australia.


We need an evidence-based approach to guide strategic investment in critical infrastructure and services to ensure a sustainable, cost-effective trajectory which doesn’t disadvantage regional areas.

We have a unique opportunity to catalyse and accelerate the growth of a new industry 4.0 across all sectors, transforming our energy, agriculture and food, healthcare, and manufacturing sectors. Known as the fourth industrial revolution, industry 4.0 is the next wave of digital innovation creating a connected virtual world. Characterised by platform technologies such as Artificial Intelligence (AI), this is expected to create $10–15 trillion of global opportunity.

But for many communities and individuals whose economic vitality and livelihoods are directly tied to existing industries, such change is seen as a threat to current jobs and community vitality.

To formulate settlement and re-settlement strategies, we must imagine a future that is more resilient to risks from climate change, energy security, water security, and biosecurity. We need to be better prepared for emerging and future market demands.

Australians are more mobile than any other developed nation. Almost half of Australia’s future housing stock (to 2050) is currently unbuilt and many of the jobs of these future householders are yet to be created.

A ‘build it and they’ll come’ approach will not serve Australia and especially the regions well. Working with partners and stakeholders across government, business and community, CSIRO is well-placed to evaluate and trial new technologies and attract climate-resilient investment to build resilient regional futures – a Regional Futures Laboratory.

Investing in our future

CSIRO’s strategic research on regional prosperity can be enhanced by a Regional Futures Laboratory to support partnerships with regions to evaluate and trial new technologies and support the growth of knowledge-based industries.

The CSIRO missions program offers a way for science to work with partners and stakeholders to: identify how to increase our resilience and preparedness towards disasters such as drought, bushfires, floods and pandemics and the risks they pose to communities, industry and natural systems - and develop sustainable economic growth solutions like alternative protein production from advanced biomanufacturing and digitally enabled climate smart vertical agriculture, all powered by zero emissions renewable energy.

The critical element to progressing towards this future is being clear about the importance of place, purpose, and community to support resilient regional futures in the face of disruption.

We along with key partners and regional stakeholders will identify the greatest challenges arising from future climate, demographic, economic or technological disruptions, and collectively develop solutions which will provide the pathway to a prosperous future.

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