Companies working outside Australia's major cities are uniquely placed to take advantage of new technologies to help them overcome any problems associated with distance from markets.
Those businesses making investments in technology and equipment, and exploring new market opportunities, are positioning themselves to make an even greater contribution to the local and national economies.
These are the findings of a major two-year study of regional industry. Prepared by the Australian Industry Group (Ai Group), in association with the Commonwealth Bank, the study was conducted in two parts.
The first,
Industry in the Regions 2001, investigated the issues impacting on business in regional Australia by analysing the experiences of 630 companies. The result was a comprehensive overview of regional Australian industry.
That study showed the extent to which communities benefit when companies bring financial resources into a region by selling their products outside the local economy. It also identified much untapped potential, with regional businesses exporting less (16% of sales) than the national average for manufacturing (25%).
Voices from the Regions builds on those findings and provides qualitative research on the key issues affecting regional development. This study uses case studies from the
Hunter (NSW),
Ballarat (Vic) and
Mackay (Qld) regions.
Structured interviews, generally more than two hours in duration, were held with 10 businesses in each region. The responses provide valuable insights into regional issues, particularly exports, information technology, investment and finance.
Ai Group deputy CEO Heather Ridout says the purpose of the studies is to provide models for good policy development in other regions.
"There is now substantial information available for government and industry to work together on developing targeted regional programs that support the growth of regional economies," she says.
"The two studies underline the importance of regional industries to the Australian economy."
The Hunter case study focused on export development and import replacement. It found considerable benefits to regional industries and economies arose by focusing on export development and import replacement. Significantly, the businesses participating in the case study see themselves as part of the world manufacturing environment, rather than as a regional industrial base.
The Ballarat case study examined the uptake by regional industry of information technologies and e-commerce. It found much to be gained from regional business adopting these technologies to overcome the problems associated with distance from markets. However, it found a slower take up of new technology by small business.
The Mackay case study looked at capital investment and business finance. The aim was to test a hypothesis from
Industry in the Regions 2001 that access to business finance may be holding back capital investment in the regions.
This hypothesis was proved incorrect. The case study found no strong link between access to finance and a lower rate of capital expenditure in the regions. Instead, it identified the need for a strong and vibrant local economy as well as industries developing exporting and e-business opportunities.
Voices from the Regions provides sound evidence of the tremendous diversity to be found in regional Australia.
While there is clearly no single solution to regional economic development issues, Ridout says it shows that regional assistance needs to be well targeted and customised to meet the specific requirements of each local economy.