Make it big Adelaide Phase 1 / Acknowledge - Deloitte
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Make it big Adelaide Phase 1 / Acknowledge
Make it
Make it big Adelaide P
hase 1|Acknowledge
Adelaide
Australia’s cities have a
bright future. And as a city,
Adelaide has a stake to claim
in unlocking the nation’s
enormous potential for social
and economic prosperity.
The South Australian Government cannot achieve this alone. Business leaders have a
pivotal role to help transform our economy – and the community has a big part to play
in contributions that stimulate the growth and development of our wonderful state.
Deloitte believes this is an opportunity to work collaboratively and to co-create a plan
that delivers a bright and strong future for Adelaide and South Australia.
Let’s shape Adelaide together and build a future where our children – and their children –
can flourish.
This is the first in a series of reports. Deloitte is committed to working with
industry, the community, and government to develop and deliver a set of practical
solutions that help to strengthen the South Australian economy. We welcome
your involvement, encourage you to join in the conversation, and look forward
to working with you on this journey.Make it big Adelaide P
hase 1|Acknowledge Make it big Adelaide P
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Vision 03
Executive summary 04
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1 Why Make it Adelaide? 06
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2 South Australia’s doing it tough 07
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3 But not as tough as what you’d think 09
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4 Our burning platform 12
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5 How do we do it? 16
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Phase 1
Make it big Adelaide > Acknowledge
is the first of a series across the
themes of Acknowledge, Ask,
Answer and Action. The broader
narrative will act to recognise
South Australia's challenge, seed
the impetus for change through
conversation, and develop a plan
that outlines where and how we
can take action to accelerate our
economic and population growth.
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‘It’s just like a big country town’ No small matter.
For too long, too many of us have been telling ourselves a set of truths we
hold as self-evident: That you can’t make it in Adelaide. That we’re from
a small city with a small destiny. That anyone with a good idea will leave,
‘God’s waiting room’ and anyone who doesn’t will be left behind.
What’s worse is that we tell these ‘truths’ to other people.
To our interstate colleagues, who decide not to invest here. To our old
‘Everybody’s inside, sitting in the same friends, now in the east, who choose not to come home. We tell them
to our kids. And worst of all, they listen.
chairs they were sitting in last year’ It’s time to change that.
We know that South Australia isn’t as small as we talk about, that we’re
already a state home to 1.7 million people and a $100 billion economy.
‘Adelaide is small’ We believe in the city that makes the world’s best wine, built the globe’s
best cricket ground, and hosts the best arts festivals on the planet.
We believe in the grand city, that William Light laid out between hills
and ocean in 1836, a radical city where Catherine Helen Spence demanded
the right to run for office, a growing city where Sir Thomas Playford built
industries for workers and brought workers for industry, and the cutting-
edge city where Don Dunstan set the agenda for the rest of the country.
There’s a big future for all of us.
There’s a job ahead to build that future. And big choices to make it happen.
There’s much we need to do as leaders in business, in government, and in
the community to make it the big Adelaide we want.
A big Adelaide in ten years won’t have the same industries as in the
past, or even as what we have now. We won’t do business or run our
governments in the same way.
It’s time to lay out a plan for what a big Adelaide will look like and what
we all need to do to make it there.
The future is what we make it.
And we will make it Adelaide.
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Executive summary
However, the return of strong population In addition to these sectors where we can
growth will be the most robust indicator surf the waves of global growth, we think
of sustainable improvement to our state’s there are four other sectors specifically for
economic health. The reality is that both South Australia to focus on. These sectors
public and private capital chase where build on our existing strengths to grow
people choose to live – as we’ve seen as services sector jobs:
a headwind for Adelaide. Ensuring our
existing jobs continue to be based in •• Defence industries
Adelaide and that we’re able to attract •• Creative industries
the best and brightest will be ever more •• Health and medical industries
reliant on scale in the future. •• Professional and information
technology services.
Our future
Adelaide’s economy has been offices having moved to the eastern The star of our economy will be a new In addition to these eight cylinders,
doing it tough for some time states. Only 5.9 per cent of medium Two things we’re not doing engine of growth firing up, fuelled mainly South Australia needs to continue to
Since the mid-1980s, Adelaide and South and large businesses in Australia are by new private sector investment. In honour develop other sectors. Improvement
Australia’s economy has trailed the rest based in South Australia – well below This isn’t the first time someone of our industrial heritage, like a V8 Monaro, in global markets could spur growth in
of Australia. The manufacturing industry, our population share. has written a report about the we think there’s eight cylinders. None of mining, particularly further developments
which once provided 1 in 5 jobs in South economic future of South Australia. these sectors will come as too much of a in copper and iron ore.
Australia, is now much less important. While these problems have been tough These reports generally take one surprise, but they shouldn’t – we’re most
And while the other big manufacturing for the South Australian economy for of two approaches. likely to succeed in the future by leveraging We think that the time is right to link a plan
state, Victoria, has found new high-powered some time, unless we act now, this is a the competitive advantages that we have now. for population growth to the acceleration of
engines of growth in the services sector, problem which is likely to get worse. On One approach they take is to offer these industries, and further underpinning
we’ve been stuck behind in third gear. current trends, Deloitte Access Economics a silver bullet. Some hero single The third instalment in Deloitte’s Building this transition to a growth economy will
forecasts that natural population growth project or industry which will solve the Lucky Country series looked at industries be the advantages presented by our city.
The focus of the public debate in the space – births over deaths – will fall to almost all of our problems. That’s not what where global growth is strong and Australia Adelaide’s liveability, cost effectiveness
has often been limited to the decline of the zero in the longer term, further limiting this report will do. The truth is, the has a significant advantage against our and access to the attributes that make
manufacturing sector. But the gap which our opportunities locally. scale of South Australia’s economy competitors. Four out of the ‘Fantastic our nation so attractive to the world are
has opened up is driven by more than that. is surprisingly large – there’s over Five’ sectors offer significant global growth now continually recognised. But let’s not
Big cities are getting even bigger as fast- We have to act now 800,000 jobs and $100 billion in opportunities for South Australia: just pat ourselves on the back for these
growing services industries cluster there. to make a difference product every year. Even the largest accolades, let’s use them to accelerate
This is happening all around the world – This future is not inevitable. Demographics single project will inevitably be just •• International education our growth and attract and retain the
not just in Sydney and Melbourne. are destiny, but there’s still time for one part of a broader story of our •• Energy and gas people we need to ignite these cylinders
us to keep more of our young people state’s prosperity. •• Tourism and ensure Adelaide’s place as a globally
Don’t get us wrong – far from what the and to attract more of the world’s best •• Agribusiness. competitive, mid-sized city at the heart
doomsayers say, Adelaide’s economy and brightest. The other thing they say is that of our state.
isn’t crashing anytime soon. There is still the future comes down to the In fact, South Australia’s performance in
modest growth. But it’s not setting any land We believe that we can turn it around. South Australian Government, each of these sectors is already at least a Let’s be positive about the size and
speed records either. Both our population And we’re willing to put a number on it. either as the saviour or to stop solid ‘not bad’. We’ve grown fairly quickly strength of our economy and make
and economy have, on average, grown Our aspiration is that we increase the messing up. And the Government in each – but there’s still a lot of room for the right investment decisions over the
more slowly than the rest of the country number of people who choose to live has an important role to play, growth. To take one example, our share of medium term to facilitate this growth.
for over 30 years. in South Australia to 2 million by 2027. making sensible investments in tourists and international students is below After all, over the next decade, South
To get there, we need to meet the national infrastructure, industry and our what you would expect from our share of Australia’s gross state product will
The most practical effect of this are the growth rate of 1.4 per cent per year. To cities and towns, educating our kids the national population (which, not to labour cumulatively be worth more than a
choices that people make about their own be clear, this is not a forecast – things will so they have better skills to do the the point, isn’t really what it used to be). trillion dollars – let’s demonstrate that
lives. The number of young people aged need to change to reach a population of best jobs, and creating an economic we can make the right decisions, push
between 15 and 34 in South Australia is 2 million by 2027. environment that supports private In each of these sectors, we believe we through our risk averse culture and
lower now than it was in the mid-1980s, investment. But it’s a supporting must identify opportunities to lead the rebuild our corporate sector.
despite the fact that the population is Why focus on people? After all, these actor – it shouldn’t be seen as the star. nation, not come middle of the pack.
around 340,000 people larger. people will ultimately be attracted to live The sixth Building the Lucky Country Over the balance of this year we aim to
in this state by better jobs and stronger report, What’s over the horizon? Recognising facilitate discussions with the key players
We’ve also seen this effect play out in industries. There’s no point pursuing opportunity in uncertainty finds that South in each of these domains to develop
the make-up of the private sector. The population growth on paper if those Australia is particularly well positioned to a plan that outlines where and how
economy is now heavily reliant on small people don’t have good jobs or their benefit from a third Asian boom, due to we can accelerate our economic and
and medium enterprises and private kids don’t have good futures. our premium food and wine exports, population growth.
companies, with many corporate head as well as success in retail, wholesale
trade and transport.
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1 Why Make
it Adelaide? 2 South Australia’s
doing it tough
Why are we doing this? We see the next five months as an We know our economy Other ‘makers of things’ have
We want
We believe fundamentally that South opportunity to work collaboratively with is in a state of transition disappeared from our minds almost
Australia can have a stronger future, these key stakeholder groups to develop a We’ve all heard the story. The South completely – apparel, whitegoods,
but we need to act now to secure it. plan that creates an Adelaide in which our Australian economy is in a state medicines, to name a few.
to work For Adelaide to compete on a global stage
children can choose to flourish in. This will
help us to form a set of practical solutions
of transition. Our once dominant
manufacturers are shutting up shop – This may be the story we tell about our
together to
we need to accelerate population growth we can all own and deliver to drive our from the recent closures of Holden state, but it’s not just happening here.
in our state and retain talent to support state forward. and Caroma to the now-historical
the growth of our key industries. Mitsubishi plant and the BHP shipyards It’s happening in Victoria, which once
create an We see business and community leaders
Following this consultation process,
we will create a plan which lays out these
in Whyalla. Many more companies have
undergone restructures, leading to job
had a very similar economy to our own.
And it’s happening in cities all over the
Adelaide in
as having a pivotal role to help transform practical solutions and what we need to losses or redeployment interstate. world, like Austin, Portland and Glasgow.
the South Australian economy. With our do to get there.
strong links to the business community
which our in Adelaide, we believe that Deloitte is
best placed to facilitate and become
How can I get involved?
The future of South Australia is everyone’s
Chart 2.1: Manufacturing shares of output, 1990–2016
children
the catalyst for action – government responsibility. We want you to join us on 16%
cannot do this alone. this journey.
14%
flourish. What does the process look like?
We are working on practical solutions to
We will speak to key stakeholders
within the business community and 12%
the problems that are before us, and want government, as well as engage the wider
10%
to engage with industry, government and South Australian community, to help us
the community to be part of this journey. formulate a robust plan to grow our state.
8%
6%
4%
2%
0
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
South Australia Victoria Australia
Source: Australian Bureau of Statistics (ABS)1
6 7Make it big Adelaide P
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3 But not as tough
This all comes down to a couple of points: So, what’s the difference between South Our services sectors haven’t grown fast
•• We need other industries to pick up Australia and Victoria? enough to make up for the decreasing
the slack. Manufacturing won’t reach role that manufacturing plays in our state.
as what you’d think
those lofty 1970s heights again, nor will It’s pretty simple: Victoria has a burgeoning
advanced manufacturing create as many services economy, and the fastest growing There’s another story here too: the
jobs as the old factories of the past. population in Australia to boot. story of agglomeration. The economies
•• With so many other cities dealing with of agglomeration are effectively
the same challenges as we are, we can Chart 2.2 shows industry value added clustering effects, where the productivity
look around the world for great ideas per person in South Australia compared to of knowledge workers rises when they
to shape our thinking on what to do – Victoria. We do well just where you’d expect are in close proximity to each other.
and what not to do. us to – agriculture, thanks to our wine and The World Bank suggested in 2009 that
produce; health care, linked to our ageing developing economies are entering a ‘new
But agglomeration and its best friend – population; public administration; realm’ of agglomeration where proximity
services – will have a far greater effect and mining. matters not just for access to markets, We’ve been outpaced by per capita is also lower than all Australian
on our state going forward but for access to ideas.3 the rest of mainland Australia jurisdictions except Tasmania, and it’s well
We might be in a state of transition, but But what’s more interesting are the Our declining manufacturing sector, below the national average.4
that won’t be the case forever. While the areas where Victoria beats us, fair and We see the effects of agglomeration the collapse of the State Bank and the
decline of manufacturing in South Australia square. Financial services, professional playing out in Australia today. Sydney recession we had to have: all contributors This pace has translated through to
has been slow and steady, this specific era services, information media and and Melbourne are getting bigger as the to South Australia’s slowing economic slower employment growth compared
of adjustment is coming to a close. Most of telecommunications, and property faster-growing services industries cluster growth over the last three decades. to the rest of the nation. South Australian
South Australia’s traditional manufacturing and rental services. there. Workers congregate in big office unemployment rates have generally
has already left, and those industries which towers, technology parks and inner-city Over the past few decades, we’ve tracked above the national average
remain – like advanced food manufacturing And that’s consistent with Australia’s universities to collaborate and share ideas – been outpaced by the rest of Australia since the 1990s, with the difference in
and defence – are better adapted to the comparative advantages as a developed, even though technology allows us to (excluding Tasmania) – and the gap is underemployment rates (part-time workers
current economic climate. high wage country. We perform best in communicate more easily than ever before. becoming more pronounced over time. wanting additional hours) even more
areas which are skilled or capital intensive, And this is happening all over the world – Between 1990 and 2016, South Australia stark. Since 1986, South Australia’s trend
But we’re not just experiencing the like services or mining. High labour costs think London, New York, San Francisco grew by an average 2.3 per cent each year unemployment rate has been on average
loss of manufacturing – we’re feeling mean that sectors relying on lower skilled and Shanghai. – compared to 2.7 per cent in Victoria and 0.8 per cent higher than the national
the downsides of living in a smaller city. workers are less competitive globally. 3.1 per cent across Australia. Our income unemployment rate – see Chart 3.1.6
Victoria’s going through the same transition But South Australia hasn’t transitioned
as we are, but they’ve weathered the towards these areas as well as Victoria
change much better as a whole. or the other states.
Chart 2.2: Differences between industry value added per capita – South Australia vs. Victoria, 2016 Table 3.1: Average annual economic growth in Australia, selected years
Agriculture, forestry and fishing
Health care and social assistance Average annual GSP growth 1990–2016 2000–2016 2010–2016
Public administration and safety
Mining New South Wales 2.5% 2.1% 2.5%
Electricity, gas, water and waste services
Victoria 2.7% 2.6% 2.0%
Other services
Administrative and support services
Queensland 4.0% 3.8% 2.6%
Transport, postal and warehousing
Construction South Australia 2.3% 2.3% 1.6%
Arts and recreation services
Accommodation and food services Western Australia 4.7% 4.9% 5.1%
Manufacturing
Retail trade Tasmania 1.9% 1.8% 0.7%
Wholesale trade
Education and training Northern Territory 3.5% 3.6% 4.2%
Rental, hiring and real estate services
Information media and telecommunications
Australian Capital Territory 2.6% 2.7% 2.2%
Professional, scientific and technical services
Australia 3.1% 2.9% 2.7%
Financial and insurance services
-$2500 -$2000 -$1500 -$1000 -$500 $0 $500 $1000 $1500 Source: ABS5
Source: ABS 2
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And our share of the nation Chart 3.1: South Australian and Australian trend unemployment rates Chart 3.3: Employment growth, year to March 2017 over previous year But we’re still growing – just slowly
has declined as a result Despite all the doomsday talk, South
Employment growth (persons)
Slower growth rates and higher Australia is still here – and still growing.
14% 120,000
unemployment year after year all add
up in the end. The combined effect of Our economy grew by 1.9 per cent last
12% 100,000
industrial decline and fiscal turmoil in year, matching Western Australia, almost
the 1990s drove a population exodus meeting Queensland and far exceeding
10% 80,000
from South Australia. Those who left were Tasmania to boot.10 South Australia came
predominantly young people and young 8%
third in jobs created in the year up to
60,000
families who did not return. Remarkably, March 2017, trailing only Victoria and
even today, there are fewer individuals 6% New South Wales.
40,000
aged between 15 and 34 living in South
Australia than there were in the mid-1980s. 4% And it’s important to remember that in
20,000
our discussions at home, interstate and
As a result, our share of the nation has 2% 0
abroad. We haven’t crashed the car –
declined dramatically. South Australia’s we’re just stuck in third gear.
share of Australian gross domestic 0
-20,000
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
product (GDP) was 7.5 per cent in 1990.8 VIC NSW SA ACT NT TAS QLD WA
Today, we only represent 6.1 per cent –
coupled with a similar decline in our share
of the national population. This trend is Australia South Australia Source: ABS7 Source: ABS11
forecast to continue into the future.
Chart 3.2: South Australia’s share of national output and population
9%
8.5% South Australia came third
8%
in jobs created in the year
up to March 2017.
7.5%
7%
6.5%
6%
5.5%
1987-88
1990-91
1993-94
1996-97
1999-00
2002-03
2005-06
2008-09
2011-12
2014-15
2017-18
2020-21
Output Population Source: ABS9 and Deloitte Access Economics
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4 Our burning
platform
An extra 290,000 people
will need to choose to call
South Australia home by 2027.
2 million people by 2027 That’s why we need 2 million people by 2027. Chart 4.1: Baseline and target population growth
Our aspiration is that we increase the
number of people who choose to live The future is what we make it. And we will Population (millions)
in South Australia to 2 million by 2027. make it Adelaide. 2.2
The current population of South Australia What needs to happen? 2.1
is 1.71 million. We’ve chosen population as our key
metric because the return of strong
2.0
We’re not as far off as you might think. population growth will be the most
But we have a long way to go, and it won’t robust indicator of our state’s growing
be an easy path. and sustainable economic health. To be 1.9
clear, this is not a forecast – things will
Why people? need to change to reach a population 1.8
Without people, economies just don’t of 2 million by 2027.
work. We need people to produce things,
1.7
consume things and to organise things in So what needs to happen to get there?
ways that robots just can’t do.
We need to double our population 1.6
More than that, we need enough people growth from now to 2027
so that Adelaide remains a significant city To reach a population of 2 million, an 1.5
in Australia’s economic life. There will always extra 290,000 people will need to choose
be places that are bigger than Adelaide, but to call South Australia home by 2027.
1.4
this is a matter of critical mass. Economies
of agglomeration will work in our favour This represents an additional 142,000
if enough people with the right skills and people over and above baseline 1.3
ambition live here and share ideas from government forecasts. To put it another
one side of the city to another and beyond. way: nearly 13,000 extra people will 1.2
Our services industries will cluster and grow need to live in South Australia each year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
here – not in Sydney or Melbourne – if we compared to what the middle of the
give knowledge workers and businesses range forecasts suggest.
a reason to do so. Baseline Target
This translates to nearly doubling our
The reality is that both public and private population growth compared to what we
capital chase where people choose to live. see in the baseline. Our population would
Ensuring our existing jobs continue to be need to grow at 1.4 per cent each year –
based in Adelaide and that we’re able to equivalent to the Australian growth rate –
attract the best and brightest will be ever compared to 0.8 per cent under the
more reliant on scale in the future. Without baseline scenario. The baseline is built
scale, we won’t develop our services on the same assumed parameters as the
sectors. And without services, we miss Department of Planning, Transport and
our opportunity to fill the hole left by Infrastructure (DPTI) medium series and
traditional manufacturing and decades ABS’ series B population forecasts, but
of slower growth. updated to reflect South Australia’s most
recent population performance. Source: Deloitte Access Economics, Department of Planning, Transport and Infrastructure12, ABS13
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Chart 4.2: Natural population growth, Australia and South Australia
There are fewer individuals 8,000 176,000
aged between 15 and 34 7,000 154,000
living in South Australia than 6,000 132,000
there were in the mid-1980s. 5,000 110,000
Hitting 2 million by 2027 requires South We need to make a compelling case to
4,000 88,000
Australia to grow well above its best results young South Australians that you can have
in history. That may seem unachievable a successful future in Adelaide. That we’re
at the outset. Deloitte Access Economics a small city with big opportunities. That
3,000 66,000
modelling shows that the South Australian people who stay can make it big, and that
population will reach 2 million in early people who leave are missing out.
2039 in the baseline scenario.
2,000 44,000
And attracting the best
But if the population stars align – international and brightest to our state
migration, interstate migration and natural We don’t just want to keep our young 1,000 22,000
increase – we can get there. International people here – we want to attract more
migration was particularly strong in 2009 than our fair share of the world’s best
and 2010, net interstate outflow was and brightest. 0 0
relatively minor (and even positive) in 1990 2002 2006 2011 2016 2020 2025 2030 2034 2039 2044 2048 2053 2058 2062 2067
and 1991, and natural increase was more International migrants are great for
positive in the 1980s. the economy and our community. They
South Australia (LHS) Australia (RHS) Source: Deloitte Access Economics
can boost the working-age population,
The required level of growth is broadly contribute to taxes and bring necessary
in line with each component matching its skills to our shores.14 Researchers at the
best performance – all at the same time. University of New England found that What if nothing changes? There are also flow on effects. While At the same time, the baby boomers
the social benefits of migration far exceed There are fewer young people in some young people do return in their 30s, are ageing. While we are currently facing
And that means keeping our the costs, especially in the long term.15 South Australia today than there many remain interstate when they have the challenges of an ageing population,
young people here were in the mid-1980s children. This affects our birth rates down those baby boomers will one day reach
For many years, too many young South There are also broader benefits of the track, and further accelerates our the end of their natural life.
Australians have left seeking better futures attracting migrants to South Australia. It’s a harsh truth. ageing population.
interstate and overseas. Migrants retain important connections These two factors combine to mean that
with their home country, which can be Fewer people aged between 15 and 34 And demographics mean our natural natural population growth will slow and
They leave with degrees from some of the important for trade links. Studies have live in South Australia today than in the growth is slower than ever before eventually fall to almost zero. On current
world’s top universities. They take with shown that for some countries – including mid-1980s, despite the fact that the Fertility rates have been declining for forecasts, the number of deaths will
them their skills, their innovative ideas and our neighbour New Zealand – a greater population has increased by around many years in developed countries. Since nearly equal the number of births in South
their passion. They leave our festivals, our stock of migrants from a particular country 340,000 people in that time.17 1976, the total fertility rate in Australia has Australia. Without any other intervention –
wine regions and our affordable living – and leads to more trade with that country.16 been below ‘replacement level’ – meaning people leaving or people arriving – South
most importantly, their family and friends. The continued exodus of young people that the average number of babies born Australia’s population would stagnate.
A targeted migration scheme could is having an effect on our population to a woman is insufficient to replace herself
And yet they still go. also impact those sectors of the South and on our economy. The median age and her partner. Despite an increase in
Australian economy where we have in South Australia is 40, the oldest of any the late 2000s, fertility rates are once again
This needs to change. a comparative advantage, like energy mainland state.18 Young people taking on the decline. The current total fertility
and gas or tourism. their productive capacity with them is rate is 1.8 babies per woman in South
bad for our economy. Australia, above only Victoria and the ACT.19
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5 How do
These international students would bring Tourists spent $6.3 billion in the state in Our agricultural producers face pressure
vibrancy to the city and beyond, as well 2016, with 432,048 international visitors to serve an ever-growing market with
as innovative ideas and entrepreneurial and 6.2 million interstate overnight visitors limited resources. Retaining our natural
we do it?
businesses to support our economy. – representing growth of around 6 per cent advantages of clean air and high-quality
compared to 2015.27 But only 4 per cent of soil in this environment requires expertise
How can we attract new international Australia’s international visitor nights were and innovation. If we fail to make the most
students to South Australia? How do we spent in South Australia in 2016 – far below of this opportunity for both our education
ensure students currently studying in South our population share, and nowhere near and agribusiness sectors, this bounty may
Australia share their experiences back doing justice to our beautiful state.28 We instead accrue to our competitors.
home and beyond? How do we encourage need to do more to leverage the assets
more students to remain in South Australia that we have – Kangaroo Island, our What actions can we take to attract the
beyond their studies? festivals, world class wine and our regions. necessary workforce to further enhance
our leading position in this sector? What
The star of our economy will be new engines of growth firing Energy and gas What additional infrastructure projects activities or policies will drive rapid export
At a time when energy security is a will assist us to accelerate the growth we growth of our quality food and wine?
up, fuelled by new private sector investment. In honour of our
crucial issue in Australia, South Australia have seen? International hotels? More eco-
industrial heritage, like a V8 Monaro, we think the engine has plays a critical role in continuing production tourist developments in our wine regions? Our industries: the important
eight cylinders – competitive advantages and those strategic in Australia and across the world. While Additional international airlines or routes? ones where we still need to grow
industries where we have lots of room to grow. We also need to a lot of the focus of the public debate has In addition to those sectors where we can
been on energy supply, in the medium Agribusiness surf the waves of global growth, we think
use our city’s advantages to accelerate our growth and attract
to long term, the focus will shift to the Agriculture, food, wine and forestry there’s four other sectors specifically for
and retain the people we need to ignite our cylinders and secure resources opportunity of South Australia’s accounted for $5.3 billion in exports for South Australia to focus on. These sectors
Adelaide’s place as a globally competitive, mid-sized city. gas and renewables. South Australia in 2016, and made up build on our existing strengths to grow
around half of our merchandise exports.29 our economy.
South Australia has the country’s largest We have a diverse agricultural base – from
Our industries: focusing on Each extra international student enrolment onshore oil and gas reserves: the Cooper wheat to livestock and seafood. Adelaide Defence industries
our competitive advantages in higher education contributes $43,700 and Eromanga Basins in the state’s was recognised as a Great Wine Capital South Australia is the home of the
The third instalment in Deloitte’s Building in total value added and 0.33 FTE jobs to north-east, which also straddle south- in 2016, as a gateway to 18 wine regions only state-based defence agency in the
the Lucky Country series looked at industries South Australia.21 west Queensland.24 In 2016, we spent and a producer of almost 80 per cent of country, Defence SA. World leaders like
where global growth is strong and Australia $122 million on oil and gas exploration, Australia’s premium wine. South Australia’s BAE Systems, Lockheed Martin and
has a significant advantage against our 34,200 international students were representing nearly 9 per cent of food processing industry has also emerged Raytheon all form part of a state-based
competitors.20 Four out of the ‘Fantastic enrolled in South Australian educational expenditure across Australia in seasonally as our largest manufacturing industry, defence cluster in Adelaide’s north. This
Five’ sectors offer significant global growth institutions in 2016 – and not just in adjusted terms.25 Unconventional oil bolstered by increasing demand in south- cluster allows small-and-medium-sized
opportunities for South Australia. universities. Around half of students were and gas exploration has also expanded east Asia. From boutique producers like local employers, like Levett Engineering,
enrolled in English language intensive in the state – requiring specialist Beerenberg and Maggie Beer, to large to play key roles in supplying large
These industries are things we’re already courses, vocational education and training, technology and expertise to extract. South players like Thomas Foods International, defence procurements. In the city’s west
good at. There’s a lot of room for growth, school and non-award courses.22 Australia also has high potential in the South Australia has developed a reputation at Techport, ASC is developing South
but there are also challenges ahead. renewable energy sector: if South Australia for high-quality produce. Australia’s engineering and manufacturing
We believe we must – and can – identify South Australia has natural advantages were a nation, it would rank second only to expertise, building 12 new submarines in
opportunities to lead the nation. in attracting students: a relatively Denmark in terms of installed wind power In the sixth instalment in Deloitte’s partnership with French company DCNS.
affordable, high standard of living and on a per capita basis.26 Building the Lucky Country series, we By 2020, work will commence on nine new
None of them stand alone. In fact, it’s a large stock of student accommodation. recognised that South Australia would Future Frigates at Techport.
the synergies between each sector where But significant opportunities remain Given our natural advantages in gas, as be one of the greatest beneficiaries of
many of the most exciting opportunities lie. across the sector – we make up well as clean and renewable energies, how renewed booms in Asia, partly due to the How do we ensure that we develop a
7.1 per cent of Australia’s population, do we become global leaders in the energy growth potential for our niche food and sustainable services industry in South
International education but captured only 4.8 per cent of the networks of the future? How can we do more wine exports.30 Australia with a life beyond these
International education is South Australia’s international student market in 2016. to translate our strengths in these sectors construction projects?
largest services export. Deloitte Access If South Australia’s international education into knowledge jobs servicing the world? However, agribusiness faces an
Economics found that international market grew by 15,200 enrolments by unexpected problem: a shortage of
education and training contributed 2026, we would match our population Tourism skilled graduates. Less than 1.5 per cent
$954 million to the South Australian share – and if we grew a little faster than Adelaide and South Australia are great of Australian university students pursue
economy in 2015, and provided over the rest of the country, we could ‘punch tourism destinations – and we’ve been agriculture and environmental courses.31
7,500 full-time equivalent (FTE) jobs. above our weight’ and capture 10 per cent recognised for it. Adelaide made the top
of the national market.23 ten cities in Lonely Planet’s Best in Travel
2014 list, while South Australia was listed
in the top ten regions in 2017.
16 17Make it big Adelaide P
hase 1|Acknowledge Make it big Adelaide P
hase 1|Acknowledge
Creative industries Our people: making Adelaide a Older generations are also sceptical of what
What features make cities
South Australia is already known as the place where people want to live, Adelaide has to offer. Entrepreneurs who’ve
Festival State – with the largest Fringe work and grow had to move away from Adelaide note that
festival in the southern hemisphere, the The other half of the equation is our investors are risk averse and that it’s hard
well-recognised Adelaide Festival and
Adelaide Writers’ Week, and Australia’s only attractive to young and people. We need to retain people who
grow up in South Australia and attract
to secure funding – meaning that we lose
entrepreneurs to chase capital elsewhere.
experienced workers?
World of Music, Arts and Dance (WOMAD) more people to live here too. This will
festival. These events attract world-class only occur when Adelaide is considered If we can change our mindset – from risk
musicians, artists, and performers. Year- a more attractive place to live and work. averse to risk taking, from encouraging
round, the city sees over 1,100 live music We need to offer something more. more of the same to encouraging innovation,
gigs per month in 200 venues, and we’ve from scaring our entrepreneurs away to
raised artists as diverse as Sia Furler, Living smarter and more densely giving them a place to stay – who knows
Jimmy Barnes and the Hilltop Hoods. Adelaide is a mid-size city in terms of what Adelaide might achieve?
population, but it’s spread out over a
But our creative potential goes beyond relatively large area by world standards. How can we better use Tonsley to encourage
Mad March – with arts and recreation Some people want a traditional house on an Adelaide culture which takes more risks?
services contributing a total of $853 a quarter-acre block, but others don’t. Plus, How can we support entrepreneurs and
million to our economy in 2015-16.32 continuing to grow out without growing up start-ups? How can we encourage university
Adelaide is developing its reputation – will stretch public infrastructure thin. The graduates to incubate their business ideas
but, as in some of our other key South Australian Government’s 30-Year in Adelaide?
industries, we face a shortage of Plan for Greater Adelaide recognises this
locally-grown talent. reality, with policies to increase population With better connections to the
The challenge now is how we can establish The cost advantages for middle and back density while minimising congestion.35 world, not just to the east coast
Aligned to the magnificent cultural and grow health and biomedical businesses office support, the liveability of our state Adelaide needs to have a global outlook
boulevard of North Terrace, this often which are driven by both the research and high skill levels give South Australia Adelaide also needs to get smart. Smart if it’s to thrive in a globalised world. We
undersold aspect of Adelaide’s character undertaken by, and the talents of, our local plenty of room to grow its base of white- cities use existing and new technologies often find ourselves focused on what
and economy presents significant researchers. The innovative research collar workers. to better meet people’s needs – like the the eastern states are doing and how
opportunities for investment to sustain undertaken at our universities is well internet, real-time data collection and we can better connect with Sydney and
our leadership and enhance this critical placed to be exported across the world, Information technology services are analysis, software and sensors. Adelaide Melbourne. But our future customers
component of our liveability. with collaborations between businesses, also well placed to become a strength is already on this path, with the opening aren’t based in Sydney – they’re located
hospitals and other research institutes for Adelaide. Adelaide is set to become of the Smart City Studio, a collaborative across the world. New technologies,
Do we really understand the intersection set to benefit the broader community. Australia’s first Gig City, with 14 locations project between the Department of State cheaper international shipping and free
between our creative and cultural assets in Adelaide to receive internet speeds Development, Adelaide City Council and trade have created new opportunities
and the impact on tourism, international How can we further support health research of up to 10 gigabits per second – which Cisco. The studio ran a trial for smart street for South Australians. We’ve seen this
education and the attraction of service and commercialisation in South Australia? is set to benefit start-ups and other lights which use smart LED technology to already in the wine industry – with thanks
industries? What investments would How can we leverage the investment in our businesses. And growth in our higher save energy and maintenance.36 to innovative production techniques and
provide acceleration of this dynamic? universities and SAHMRI? education and research sectors, alongside the popularity of South Australian shiraz.
collaborations between government, What else can we do to become a ‘smart
Health and medical industries Professional and information universities and businesses are helping to city’? What features make cities attractive The opportunities of the future are on
The South Australian Health and technology services develop an ecosystem where innovations to young and experienced workers? our doorstep. Innovative South Australian
Biomedical Precinct on North Terrace Adelaide might not be a national hub for can be shared and commercialised. companies are already integrated into
is set to become one of the largest health professional services, but it’s impossible A culture that takes more risks the world economy from their Adelaide
and life sciences precincts in the southern to ignore the value of the sector. Together, As the global professional services industry Australia often places highly in world headquarters. We must look beyond
hemisphere. The new Royal Adelaide professional, financial, and real estate evolves through the use of technology, which rankings for ease of opening a business,37 the east coast to target export markets
Hospital, the South Australian Health and hiring services contributed over components can we attract to Adelaide to as well as showing a high level of business and attract investment and confidence
and Medical Research Institute (SAHMRI), $14.5 billion to South Australia’s economy leverage our economic advantages? What start-up activity by world standards.38 from abroad.
the University of Adelaide’s Medical and in 2015-16.33 In 2016, Deloitte Access else can we do to develop and attract However, the exodus of young people
Nursing School and the University of South Economics identified in the BankSA Trends global technology firms to Adelaide? chasing opportunity elsewhere indicates How can we better connect to Asia? How
Australia’s Centre for Cancer Biology will economic bulletin that employment in How can we enhance collaborations a widespread belief that you can only can we support South Australian businesses
form the cluster. SAHMRI 2 is also on the professional services – from scientists between government, universities and make it outside Adelaide. to market overseas?
cards following the Federal Government and veterinarians to lawyers and computer the private sector?
announcement in the 2017 budget for programmers – had grown by 62 per
a proton beam therapy facility. cent over the past 20 years, compared
to 24 per cent growth across the board.34
18 19Make it big Adelaide P
hase 1|Acknowledge Make it big Adelaide P
hase 1|Acknowledge
1. Australian Bureau of Statistics, Australian National Accounts: State Accounts, 2015-16, cat. no. 5220.0 21. Deloitte Access Economics, International education in South Australia (July 2016, commissioned by the South
(18 November 2016). Australian Department of State Development) < https://www2.deloitte.com/content/dam/Deloitte/au/Documents/
Economics/deloitte-au-economics-international-education-in-south-australia-060916.pdf>.
2. Australian Bureau of Statistics, Australian National Accounts: State Accounts, 2015-16, cat. no. 5220.0
(18 November 2016). 22. Department of Education and Training, International Student Data 2016 – Pivot tables
.
3. World Bank, ‘Scale Economies and Agglomeration’ in World Development Report 2009: Reshaping 23. Deloitte Access Economics, International education in South Australia (July 2016, commissioned by the South
Economic Geography (World Bank, 2009) .
4. Australian Bureau of Statistics, Australian National Accounts: State Accounts, 2015-16, cat. no. 5220.0 24. South Australian Chamber of Mines and Energy, Oil & Gas Production .
5. Ibid. 25. Australian Bureau of Statistics, Mineral and Petroleum Exploration, Australia, Dec 2016, cat. no. 8412.0
(27 February 2017).
6. Australian Bureau of Statistics, Labour Force, Australia, Mar 2017, cat. no. 6202.0 (13 April 2017).
26. Department of State Development, South Australia’s renewable energy future (2016) .
7. Ibid.
27. Tourism Research Australia, Travel By Australians: December 2016 Results of the National Visitor Survey
8. Australian Bureau of Statistics, Australian National Accounts: State Accounts, 2015-16, cat. no. 5220.0
(29 March 2017) .
9. Australian Bureau of Statistics, Australian National Accounts: National Income, Expenditure and Product,
Tourism Research Australia, International Visitors in Australia: December 2016 Quarterly Results of the
Dec 2016, cat. no. 5206.0 (1 March 2017).
International Visitor Survey (15 March 2017) .
Australian Bureau of Statistics, Australian Demographic Statistics, Sep 2016, cat. no. 3101.0 (23 March 2017).
28. Ibid.
Australian Bureau of Statistics, Australian National Accounts: State Accounts, 2015-16, cat. no. 5220.0
(18 November 2016).
29. Australian Bureau of Statistics, International Trade in Goods and Services, Australia, Mar 2017, cat. no. 5368.0
(4 May 2017).
10. Australian Bureau of Statistics, Australian National Accounts: State Accounts, 2015-16, cat. no. 5220.0
(18 November 2016).
30. Deloitte, Building the Lucky Country #6 – What’s over the horizon? Recognising opportunity in uncertainty (2017)
.
11. Australian Bureau of Statistics, Labour Force, Australia, Mar 2017, cat. no. 6202.0 (13 April 2017).
31. Department of Education and Training, Higher Education Statistics – 2015
12. Department of Planning, Transport and Infrastructure, Population Projections and Demographics
.
.
32. Australian Bureau of Statistics, Australian National Accounts: State Accounts, 2015-16, cat. no. 5220.0
13. Australian Bureau of Statistics, Population Projections, Australia, 2012 (base) to 2101, cat. no. 3222.0
(18 November 2016).
(26 November 2013).
33. Ibid. Figure comprises professional, scientific and technical services; financial and insurance services; and rental,
14. OECD, Migration Policy Debates – Is migration good for the economy? (May 2014)
hiring and real estate services.
.
34. Deloitte Access Economics, Trends – Blue skies for ‘white collar’ professions (November 2016)
15. Kerry Carrington, Alison McIntosh and Jim Walmsley, The Social Costs and Benefits of Migration into Australia (2007)
.
The University of New England, .
35. Government of South Australia, Department of Planning Transport and Infrastructure,
30-Year Plan for Greater Adelaide (2016) .
16. John Bryant, Murat Genc and David Law, Trade and Migration to New Zealand (2004) New Zealand Treasury
.
36. Invest Adelaide, Smart Lighting Trial Project .
17. Australian Bureau of Statistics, Australian Demographic Statistics, Sep 2016, cat. no. 3101.0 (23 March 2017).
37. World Bank, Ease of doing business index < http://data.worldbank.org/indicator/IC.BUS.EASE.XQ>.
18. Australian Bureau of Statistics, Australian Demographic Statistics, Jun 2016, cat. no. 3101.0 (15 December 2016).
38. O ffice of the Chief Economist, Department of Industry, Innovation and Science, Australian Innovation System
19. Australian Bureau of Statistics, Births, Australia, 2015, cat. no. 3301.0 (8 November 2016).
Report 2015 (2015) < https://www.industry.gov.au/Office-of-the-Chief-Economist/Publications/Documents/
Australian-Innovation-System/Australian-Innovation-System-Report-2015.pdf>.
20. Deloitte, Building the Lucky Country #3 – Positioning for prosperity? Catching the next wave (2014)
.
20 21Make it big Adelaide P
hase 1|Acknowledge
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Phase 2
Make it your Adelaide > Ask
is set to engage South Australian
business, government and
community leaders. Together
we will engage in workshops and
summits to develop sector based
interim findings and shape a vision
for the South Australian economy.
Our final report will synthesise the
refined ideas and diverse insights
collected throughout this journey.For more information visit
www.deloitte.com.au/makeitadelaide
www.shapingfuturecities.com.au
Inspired by
Building the
Lucky Country
This publication contains general information only, and none of Deloitte Touche Tohmatsu Limited, its member firms, or their related entities (collectively the
“Deloitte Network”) is, by means of this publication, rendering professional advice or services. Before making any decision or taking any action that may affect
your finances or your business, you should consult a qualified professional adviser. No entity in the Deloitte Network shall be responsible for any loss whatsoever
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