Friday, April 10, 2015

Our capital cities are growing and produce most of our income

In an article from early 2015, economist Ross Gittins picks up a theme he has been following about the growing importance of cities and urban life. It's clear from his comments that we ignore our cities at our peril.

As he notes succinctly ‘We are a nation of city-dwellers. Australia is one of the most urbanised countries in the world. Our capital cities are growing and most of our income is being generated in them, notwithstanding the big expansion in mining, which is more about additional structures and capital equipment than workers.’

Sydney skyline - largest city in Australia

He continues ‘For at least the past 40 years, all the net increase in employment has been in the services sector, and the services sector exists mainly in cities. The arrival of the knowledge economy will only heighten this trend.’

The concentration of wealth and expertise is intense. Most of the economic activity in our capital cities occurs near the centre of the cities. The central business districts of Sydney and Melbourne – between them an area of only 10 square kilometers – are responsible for around a quarter of each city's production.

For all this growth and focused energy there are negative side effects. ‘[As a result] we've been developing a big economic and social problem few economists have noticed: a growing spatial divide between where the jobs are and where people live. It's an economic problem because it increases the economy-wide costs of each day's production of goods and services. It's a social problem because, for the most part, those costs fall on the less-wealthy working families living in outer suburbs. Some of the costs come as dollars paid, some as time wasted and some as opportunities forgone.’

Unfortunately this major issue will not figure in the consideration of political leaders, whose grasp of the factors driving productivity and growth are out of date and narrowly based. For many years serious concern has been expressed about the decrease in Australia's level of productivity. Yet there seems to be little recognition of the central role played by decreases in how efficiently our cities function economically.

The city is a critical place for cultural life and for the diversity that propels it. It's interesting to see the overwhelming significance of cities in an economic sense as well.

This article was originally published elsewhere in my blogosphere and has been revised for this blog.

See also

Venue lockdown – a blunt instrument for a dire problem
‘The issue of venue lockdown to deal with alcohol-fuelled assaults is becoming a major debate. Of course venue owners are concerned and their argument that the policy will affect the hospitality industry may well be valid – but that, by itself, is not enough. It comes down to how effective the approach is at addressing the problem and how badly the hospitality industry is affected. The question is how finely different kinds of venues are distinguished from each other in a strategy to reduce alcohol-related violence. Dealing with it was never going to be simple or easy. However, like all government policy, it’s all too easy to go for the one size fits all approach which might look good but not work’, Venue lockdown – a blunt instrument for a dire problem.

How to run down an essential service – adventures in the crazy world of Centrelink
‘Of late I have been developing a close one-on-many relationship with Centrelink as I fulfill my destiny of sorting out stuff for my elderly relatives. It reminds me of dealing with Australia Post over many years. Everyone at Australia Post used to bend over backwards to help you. The problem was that their systems were so bad that even their own staff couldn’t get them to work. This is what Centrelink is like. In the crazy world of failing public service systems that are being overtaken by reality, the only solution is a work around. The tick the box approach that is being fostered in the new deskilled public service can’t handle complexity. The test of any system – or policy, strategic plan, program – is how well it handles the unexpected, the unforeseen, reality. This looks like failure to me’, How to run down an essential service – adventures in the crazy world of Centrelink.

Diversity underpins the innovation we desperately need
‘I keep writing that cultural diversity is crucial to innovation because where cultures intersect, innovation happens. In a world where change is fast and widespread can anyone afford not to mobilise all they have going for them – to survive, let alone to succeed? Cultural diversity is a big part of that picture’, Diversity underpins the innovation we desperately need.

The power of good policy – historical tax distortions waiting for a fix
‘The heated response to the tax debate around negative gearing debate and capital gains tax shows that if political parties adopt a clear policy, in line with their core values and aligned with popular concerns, then get behind it and explain it, people will respond. For decades negative gearing has been distorting the shape of our cities, our suburbs and our communities. It is an inefficient way to achieve the desired result. These are historical tax distortions waiting for a fix’, The power of good policy – historical tax distortions waiting for a fix.

Unamerican Activities Committee
‘Reading reviews of the new film about the Hollywood screenwriter, Trumbo, I’ve been reminded of the legendary House UnAmerican Activities Committee, set up to hunt reds under the bed – especially screenwriters – in the US in the late 1940s and 50s. Only in America could I imagine something with such a bizarre name. What exactly were ‘unAmerican’ activities – did it include picking your nose in public or forgetting Mother’s Day?’, Unamerican Activities Committee.

Look after pedestrians and the economy will look after itself
‘Public transport is such a central element in a modern city. It has fundamental implications for how productive a city is, how culturally active and just how personally pleasant it is to live and work in’, Look after pedestrians and the economy will look after itself.

Travelling together through the city
‘Public transport is such a central element in a modern city. It has fundamental implications for how productive a city is, how culturally active and just how personally pleasant it is to live and work in’, Travelling together through the city.

Sydney - Australia's most valuable location but public transport its greatest weakness
‘A massive weakness only too familiar to anyone who lives in or has lived in Sydney could derail the whole positive effect of economic growth within different mega regions inside Greater Sydney and hold back innovation and economic productivity. This has serious implications not just for Sydney or New South Wales but for the national economy. Cities have always been serious business but this just got a lot more so’, Sydney is Australia's most valuable location but public transport is its greatest weakness.

Our capital cities are growing and produce most of our income
‘The city is a critical place for cultural life and for the diversity that propels it. It's interesting to see the overwhelming significance of cities in an economic sense as well’, Our capital cities are growing and produce most of our income.

Creating cities by reinventing them – ‘Creating Cities’ reviewed
‘At first glance Marcus Westbury’s ‘Creating Cities’ book looks small, but it’s far bigger than it looks. The book is about re-energising cities by reinventing them but it’s starting point is a deep appreciation of the particular regional city of Newcastle. The revival of Newcastle is a reflection of the more general trend towards the revival of regional centres in Australia. Cities are crucial to the innovation and creativity that interaction and partnerships based on physical proximity can produce – whether major capital cities or regional cities. The efforts at revival all reflected the critical importance of cities. Each in its own way draws upon creativity and innovation and the cultural diversity which underpins it to create places which are pleasant and interesting to live in and to drive economic prosperity’, Creating cities by reinventing them – ‘Creating Cities’ reviewed.

The clever business of creativity: the experience of supporting Australia's industries of the future
‘The swan song of the Creative Industries Innovation Centre, ‘Creative Business in Australia’, outlines the experience of five years supporting Australia’s creative industries. Case studies and wide-ranging analysis explain the critical importance of these industries to Australia’s future. The knowledge economy of the future, with its core of creative industries and its links to our cultural landscape is both clever and clean. Where the creative industries differ completely from other knowledge economy sectors is that, because they are based on content, they draw on, intersect with and contribute to Australia’s national and local culture’, The clever business of creativity: the experience of supporting Australia's industries of the future.

My nephew just got a job with Weta – the long road of the interconnected world
‘My nephew just got a job in Wellington New Zealand with Weta Digital, which makes the digital effects for Peter Jackson’s epics. Expertise, specialist skills and industry pockets can occur just about anywhere, as long as you have connectivity, talent and a framework of support that makes it possible. This is part of the new knowledge economy of the future, with its core of creative industries and its links to our cultural landscape. Increasingly the industries of the future are both clever and clean. At their heart are the developing creative industries which are based on the power of creativity and are a critical part of Australia’s future – innovative, in most cases centred on small business and closely linked to the profile of Australia as a clever country, both domestically and internationally. This is transforming the political landscape of Australia, challenging old political franchises and upping the stakes in the offerings department’, My nephew just got a job with Weta – the long road of the interconnected world.

Eating out in a cold, funky city – Canberra comes of age in the Asian Century
‘On a day and night which was bitterly cold – as cold as Canberra has been this year, with the hint of snow clouds overhead – I was reminded why I live here. As we wandered along after a full day of cultural institutions and design events, looking for somewhere to eat we impetuously popped into Restaurant Eightysix and even more impetuously were able to get a table. I had forgotten reading somewhere that famed long-former Adelaide chef, Christine Manfield was here for the month, cooking up an Asian-inspired menu. How much better could it get?’, Eating out in a cold, funky city – Canberra comes of age in the Asian Century.

Creative industries critical to vitality of Australian culture
‘The developing creative industries are a critical part of Australia’s future – clean, innovative, at their core based on small business and closely linked to the profile of Australia as a clever country, both domestically and internationally.’ Creative industries critical to vitality of Australian culture.

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