Two reports recently hit our desks at EGM, both from Deloitte.
The first, ‘Make it Adelaide’ outlines the case for the future economic development of the city and the opportunities and challenges this brings.
The second, ‘What’s over the horizon? Building the lucky country,’ outlines future economic scenarios for Australia and discusses their impacts on the individual states, including South Australia.
As an Adelaide-based business the reports have created interest and debate among the EGM team - mainly that, as a state, we need to embrace change and create an environment where businesses and people thrive.
We all agree that Adelaide is a fantastic city. This is constantly highlighted by numerous polls - one recently found by Director Yasmine in ‘Vogue’ magazine where Adelaide was named as one of the ’10 unexpected places to travel this Summer.’
However, while tourism has continued to increase (5.8% in 2016 – South Australia Tourism Commission’), other sectors haven’t seen the same levels of growth.
It’s manufacturing where the biggest problems lie. Holden, for example, will finish manufacturing cars at its Adelaide plant in October. The company, which is owned by US-based General Motors, will then import cars from overseas leaving some design and marketing functions in Australia. Sadly, this is line with trends across the world – nowadays manufacturing provides less jobs than previously.
States such as Victoria have been hit by similar developments but job losses in manufacturing haven’t had the same impact on the local economy. Victoria has compensated, for example, by bringing jobs to the services sector but this hasn’t happened in Adelaide; leaving the city dependent on agriculture, tourism, energy and education.
Another problem, given the growth in the digital world, is that Sydney and Melbourne are attracting technology start-ups and tech hubs. Younger people are drawn to these locations a result. The longer this goes on, the harder it will be to stop the trend.
It’s not all bad news. South Australia is still growing at a rate of 1.9% and, in the last twelve months, has created more jobs than any other state apart from Victoria and New South Wales. It’s also interesting that in the two main scenarios analysed in ‘What’s over the horizon? Building the lucky country,’ South Australia does relatively well:
In the scenario where Asia continues to grow strongly over the next few years, South Australia benefits by increased demand for energy and agribusiness
In the alternative scenario, where China slows dramatically due to high levels of debt, tourism to South Australia continues to grow due to a weaker dollar.
However, all of this cannot hide the fact that the pace of economic growth in Adelaide and South Australia hasn’t been strong enough over the last decade. Indeed, there are now fewer young people under the age of 34 living in South Australia than there were in the mid-1980s.
Clearly retaining our brightest young people is one part to the success of the city – it’s also about attracting the new people that will accelerate growth.
Deloitte believe that the key to the success of Adelaide is to attract students and workers to drive a growth in population over the next 10-years. This can be achieved by playing to the city’s strengths, namely:
International Education – given the attractions of Adelaide, the lower cost of living and lifestyle, how can more international students be attracted?
Energy – the areas surrounding Adelaide have huge potential for gas production and renewable energy. What needs to be done to capitalise on the potential?
Agribusiness – South Australia produces some of the world’s greatest wines and also has an expanding food sector. How can this position be strengthened so that exports can be further increased?
Tourism – Adelaide is regularly recognised as a brilliant tourist city with a large number of attractions. What can be done to make the city even more accessible to domestic and international visitors?
We are confident that Adelaide can rise to these challenges and grow in importance as an internationally recognised city.
At EGM we have had a really busy start to 2017 from our Adelaide base. We are seeing strong demand in the not for profit, energy and manufacturing sectors and we are confident that companies are siezing the opportunity to up skill their talent...and improve the way they aquire the best talent.
We are participatng in Adelaide’s highly acclaimed Thinkers in Residence Program which is now under the auspices of the Don Dunstan Foundation - most recently Allyson Hewitt's discussion on Social Capital.
We are also showing our commitment to the city by opening our newer, larger office next month (still in the CBD) with more experienced and highly ethical recruitment leaders.
We look forward to playing our part in the future success of our great city.