13.06.2019Re-imagining Australia’s East Coast
The Melbourne 4.0 Taskforce formulated nine Strategic Needs to help Melbourne navigate the uncertain economic and geo-strategic environment ahead. One of the Strategic Needs identified was the Eastern seaboard collaboration.
The premise is that effective collaboration between cities, and regions, along Australia’s eastern seaboard will boost our economic productivity and innovative capacity; enabling us to better-compete in international markets. Other key benefits include population dispersion to relieve congested cities, regional activation, housing affordability, economic growth, job creation, and improved liveability.
The Rise of the Mega-Region
The Rise of the Mega-Region was a ground-breaking study published just over a decade ago by three urban economists, Richard Florida, Tim Gulden and Charlotta Mellander.
In their study, they found that the world’s top 40 megaregions made up only 18% of the world’s population, but they were responsible for two-thirds of global economic output and close to 90% of patented innovations.
The world economy, they argued, was organized around a few dozen megaregions – areas like the Boston – New York – Washington corridor, or the Shanghai-Nanjing-Hangzhou triangle, or the span stretching from London through Leeds, Manchester, Liverpool, and into Birmingham – which account for the bulk of the globe’s economic activity and innovation. Megaregions, they argued, are now the central competitive unit.
Their work has helped shaped the thinking of various leaders in politics, urban planning, industry, and academia, the world over.
So, what is a megaregion?
Megaregions are integrated sets of cities and their surrounding suburban hinterlands, across which you can move labour and capital at a very low cost.
While there is no singular definition of a megaregion that is agreed upon, the consensus is that a megaregion is a large network of metropolitan regions that share economic linkages, infrastructure systems, settlement and land-use patterns, environmental systems and topography, as well as culture and history.
Two of the biggest, and most well-known megaregions are:
The Boston – New York – Washington corridor:
- Is the most populous megaregion in the US, with over 50 million residents
- Encompasses the District of Columbia and part or all of 11 states
- Accounts for 20% of the U.S GDP
- Is home to 54 of the Fortune Global 500 companies, and six of the eight Ivy League Universities
The Yangtze River Delta comprises:
- Many of the wealthiest cities in China – 16 in total – including Shanghai and Nanjing
- Just 1% of China’s urban land area, 6% of the population (80 million), yet generates 20% of national GDP
- Is now recognized as a world-class innovation cluster
There are other megaregions that are smaller in scale, including:
- Consists primarily of the four largest Dutch cities; Amsterdam, Rotterdam, The Hague, and Utrecht, and their surrounding areas.
- Possesses a large infrastructure system, including many railways, motorways, trams, and subways in various cities.
- The Port of Rotterdam, and Amsterdam’s Schiphol airport, are both major international transit points. Yet there are various smaller ports and airports in the Randstad.
- A globally engaged Australian East Coast Megaregion
These days, when multinationals are looking to invest, they are increasingly looking at megaregions as opposed to individual countries or cities. The urban sociologist, Saskia Sassen, attributes the reasons to economies of scope and scale.
A greater range of economic activities, distributed across a network of neighbouring cities rather than one metropolis, has allowed firms located in megaregions to capture a larger share of global value chains.
A McKinsey Global Institute study estimates that 62 per cent of economic growth through 2025 will be generated in 600 cities globally, many of which will be “middleweight” cities of several million people in Asia, which are located within much larger megaregions.
McKinsey identified 11 megaregions in China alone, which typically comprise a dozen cities or more. Unlike the US and Europe, whose megaregions largely evolved through sprawl, China is consciously creating its megaregions.
So, where does this leave Australia?
Focusing on the three major cities along our east coast – Melbourne, Sydney, and Brisbane, they do not integrate to form a megaregion. Instead, they remain the isolated capital cities of Victoria, New South Wales, and Queensland respectively, with policy-makers in all states, and city governments, competing against one another for capital, trade, and skilled workers.
This form of competition may no longer serves our interests. In such a rapidly changing world, we must start collaborating with each other more effectively if we are going to remain internationally competitive. One way in which this might be achieved, is via a megaregion.
Geographically, we are located in the most dynamic, robust, and competitive region on the planet. It is a region undergoing an enormous strategic transition, and one in which we are becoming increasingly interconnected. Digitization, the internet, the cloud, mobile devices, and the soon-to-be 5G wireless transmissions will bring us even closer together.
Australia must adjust to this new world, and become further embedded into the flows of knowledge and investment. In a region, and world, experiencing ever-greater connectivity, we too must become more connected.
We must promote inter-regional complementarities, and cultivate an environment that would help create high value-adding businesses and jobs.
Closer integration along our east coast will boost our productivity, our economic output, and our attractiveness. It would help our endeavor to remain a magnet for top talent and jobs.
Another major consideration is Australia’s long-term average real GDP. Prior to the Global Financial Crisis, we averaged 3.5 per cent growth per annum. This has now been cut to a new low long-term average GDP growth of about 2 per cent. The GFC was the disruptor of the historically high underlying economic boom era since World War Two.
The situation would be made worse by a world trade war, or an international crisis which dries up finance. Investment in the necessary infrastructure to better-integrate our east coast would not only help lift our growth, it could help shield our economy from the future economic crises, which will happen eventually.
Unlike China, political levers in Australia don’t allow for the top-down construction of an Australian East Coast Megaregion. We would require strong leadership from all tiers of government, combined with a healthy mix of organic growth over many decades.
What would greater collaboration along our east coast look like? It could include:
- Alignment of priorities, and coordination of infrastructure investment across our state boundaries.
- Coordination of planning and the sharing of resources across jurisdictions.
- Ensuring the coordination and efficient movement of freight from, and between, our ports and airports, as well as the coordination of planning the urban environment to incorporate freight activity.
- Better facilitation of economic development across our state jurisdictional boundaries will promote inter-regional complementarities, encourage the creation of high value-adding businesses and jobs, as well as strengthen traditional economic sectors including construction, property development, and retail. The alignment of laws and regulations across jurisdictional boundaries would also boost productivity.
- Greater access to skilled workers, and customers, for businesses operating in the major metropolises and the regions.
- The deployment and adoption of the latest technologies across the region will promote relevant data collection, sharing, and use.
- Improving access to appropriate and affordable housing, which not only reduces congestion in our major metropolises, but helps rejuvenate our regional centres with improved amenity.
- The development and implementation of a population policy to strategically decentralise the population.
- Establishing nationally-consistent guidelines for urban green space creation, or regeneration.
- Coordinating urban water management practices to ensure all cities and regions have enough water at any given time.
- And finally, coordinating our energy resources – increasingly derived from renewable sources – so they can be deployed where they are needed most at any given time.
Unlike some of the major projects discussed in the popular TV series, Utopia, this would be a true “nation building project”. With bi-partisan support, it would provide us with a big, strategic goal to focus on. It would help shape decision-making, and ensure investments on infrastructure are strategic.
There is no detailed playbook which we can draw upon. Some megaregions are simply too large to compare, like my earlier examples in the US and China. Furthermore, and compared to other countries and megaregions around the world, Australia has its own set of unique circumstances – history, culture, politics, geography, population size, and demographics – which it must navigate.
However, there are megaregions which exist that are of similar size, and have similar characteristics, to the Australian East Coast Megaregion that we are proposing.
The Cascadia Megaregion:
- Formed in the US and Canada; two western democracies with whom we share similar values and characteristics.
- The principle cities are Portland and Seattle in the U.S, and Vancouver in Canada, which has a combined population of approximately 8.5 million people.
- These cities share many things, including geography, climate, similar economies, an appreciation of the environment, and a Pacific-oriented international outlook.
- They also face common challenges including increasing urbanization and the movement of people and goods along the corridor.
- Key stakeholders throughout the region recognize that cross-border cooperation is the key to ensuring mobility, economic growth, and a healthy environment in the region.
- There exists The Discovery Institute’s Cascadia Project which works to promote cooperation through the creation of strategic alliances of business, government, and labor across the Cascadia Corridor; something which could be emulated here.
The Western Scandinavia Megaregion:
- Again, Western democracies similar to Australia’s.
- The principle cities are Oslo in Norway, as well as Gothenburg and Malmö in Sweden, which has a combined population of approximately 5 million people.
- Their megaregion represents a bottom-up regional initiative to join forces along approximately 500 kilometers of coast.
- They have focused on reinforcing polycentric regional development through land-use and infrastructure strategies.
- In addition, they have focused on enhancing co-ordination between regional and municipal levels of government.
- Their collective goal is further economic integration by shortening travel times, and expanding transport infrastructure investment to help them better-compete in global markets.
While these two examples are not blueprints for an Australian East Coast Megaregion, they illustrate what can be done, and what could help guide our decision-making.
There are three major areas unique to Australia’s situation that we must consider:
The need for fast, land-based transport connectivity. High-speed rail has been talked about for too long, and at the very least, we must thoroughly review the research that has already been conducted, as well as look at securing the land corridor between Melbourne and Brisbane.
The need for world-class internet speeds. Successful twenty-first century economies will be underpinned by digital business models with global reach. Australia is currently at the bottom of the top 50 in internet speeds, which will simply not cut it, particularly in a country that is geographically isolated.
The need to retain our status as one of the most livable countries on the planet. Our capital cities are projected to double in population by the middle of this century and without a holistic and integrated planning approach, across state boundaries, we will not be seeing a doubling in our liveability.
Ultimately, if we want to remain secure and prosperous over the long term, and to navigate the twenty-first century with confidence and vigor, we must begin to reimagine ourselves, and particularly, begin to reimagine Australia’s east coast.
We will never have the population size or density of some of the globe’s biggest states, and megaregions, but we must do our utmost to ensure we are cultivating an environment which encourages innovation, and which remains attractive to the world’s businesses, investors, thinkers and talent.