The decision by GMH last week to cease production in South Australia by 2017 is a reminder that bold leadership and new partnerships are needed if we want to transform our economy to a more sustainable platform for innovation and growth.
Much of this transformation will be painful and success is not guaranteed. Our industries are being asked to transform in order to compete in our region. Their success is essential to the wider regional economic development of South Australia.
From the 1850’s to the 1970’s, the Holden story exemplified the growth and globalisation of South Australia from its agricultural origins, to a centre of advanced manufacturing embedded in a global supply chain based on technology, design and industry innovation.
The negative impact of this decision on South Australia’s economy is estimated to include a $900m contribution to Gross State Product, 9,500 jobs and around $53 million per year in state taxation. Experience shows that local policies may be able to slow, but not stop the decline of jobs in manufacturing. Efforts to support local manufacturing are essential, but global forces are strong and we must continue to diversify our economy.
We must choose to create a demand-driven economy in South Australia that builds global networks.
Evidence from cities around the world that have succeded in this transformation share three things in common;
decisive, consistent and reforming leadership across political cycles
an active and engaged private sector working together
open and deep engagement with communities to ‘win support for change’
Most importantly, our political, business and community leaders have to find new forums to work more closely together. The Committee for Adelaide has come together for this purpose.
So what can we do to give ourselves the best chance at making this difficult period of transition productive?
1. Call together national, state and local government, private sector and not for profit groups, professional peak bodies and local communities to jointly develop real options for economic development based on industry innovation, workforce retraining, regional export strategies, and infrastructure renewal.
2. Strengthen initiatives that support businesses to innovate and create new value for export markets. This may include expanding existing industry incentives to partner with researchers and designers to develop new products for market. Foster the transition from research to execution, investment and production.
3. Accelerate the development of partnerships and programs that support the transition of workers from automotive manufacturing to new growth sectors such as pre fabricated housing and smart construction, bio-health, value added mining and assistive technologies for an ageing population.
4. Boost the growth of new firms by making early stage financing more accessible, combined with better measurement and tracking of micro enterprise performance
5. Attract, re-train and retain skilled people already engaged in the digital economy and active in global networks. For more, see here
6. Attract growing public companies, family businesses and micro enterprise by tailoring support to the unique needs of this sector. For more, see here
7. Develop new ways to attract captial in order to finance the enterprise that fuels employment, and the infrastructure for a growing city. For more, see here
Sources
University of Adelaide, Australian Workplace Innovation and Social Research Centre, The Contribution of GMH Elizabeth Operations to the South Australian economy and the Potential Impacts of Closure updated assessment 2013
McKinsey, What makes a city great?
