The problem with economic development agencies such as Townsville Enterprise & Brisbane Marketing

It can be very stressful to be responsible for outcomes over which you have very little control. This is the predicament faced by economic development agencies such as Townsville Enterprise and Brisbane Marketing. This predicament was highlighted by the sacking earlier this year of Townsville Enterprise CEO David Kippin, who appears to have been held responsible for Townsville’s relatively poor economic performance in recent years (see this Townsville Bulletin story). But Townsville’s performance hasn’t been that different from other Queensland regional centres that also weren’t major beneficiaries of the resources boom. It seems silly to blame and sack Mr Kippin, particularly given he appears well-regarded in the Townsville business community.

Townsville Enterprise’s Chairman Kevin Gill has committed the organisation to attracting more investment dollars for the Townsville region. Clearly the attraction of Government investment, such as in the proposed Super Stadium, is an important part of this strategy. I’ve often wondered, however, whether agencies such as Townsville Enterprise and Brisbane Marketing are actually focussing on the wrong things. You can spend a lot of time and money chasing after investment dollars that, from a whole economy perspective, aren’t that significant and don’t provide the basis for long-term, sustainable growth. Indeed, one challenge that Townsville now has is that its growth since the War has been dependent, to a large extent, on Government, with Lavarack Barracks, James Cook University and State and Commonwealth agencies all major sources of growth. Townsville doesn’t appear to have developed any important competitive advantages in private sector industries that can provide sustainable growth opportunities into the future.

Rather than waste a lot of time and money chasing investment dollars that may deliver little long-term economic benefit to their regions, bodies such as Townsville Enterprise and Brisbane Marketing should instead focus on lobbying to improve policy settings. These bodies should lobby to remove restrictions on development that are restraining economic growth and also for more efficient local government services (so that people might be attracted by a lower cost of living that other regions). By helping to improve the fundamentals, I expect these agencies would deliver greater value than they do currently.

Regarding how local government policies can restrict economic development, see Bradley Rogers’s post:

Old Queenslanders in a New City

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6 Responses to The problem with economic development agencies such as Townsville Enterprise & Brisbane Marketing

  1. Good post Gene. Of course it will often come down to whether or not the organisation is likely to have any success in changing policy settings. Although chasing the investment dollar may not be the optimal activity, it might still be preferred if there is perceived to be little or no likelihood of actually influencing policy settings. I would suggest that might be more the case for Townsville Enterprise, Advance Cairns and the like than it is for Brisbane Marketing. The regional bodies often find it nigh-on impossible to get a seat at the big table.

    • Gene Tunny says:

      Thanks Pete. Good point. Yes, probably more of an opportunity for Brisbane Marketing to influence things than bodies in Townsville and Cairns. What really worries me about these bodies is that they are seen as the economic development experts at a local government level but they’re not really engaging in serious policy analysis and debate. Brisbane Marketing officers for example seem to spend most of their time flitting from one glittering event to another across town. Partly my negativity is probably related to envy!

  2. Jim says:

    The cynic in me says that perhaps one of the longest lasting legacies from the regional RDAs is that every regional town now seems to have a loss making convention centre (or similar) that perminantly sucks funds out of the community way after the “hard hat” photo opportunity for all involved has passed.

    The economics professions doesn’t really help by happily providing economic impact assessments of new projects (where everyone’s a winner), rather than any serious benefit cost analysis.

    • Gene Tunny says:

      Great point about convention centres, Jim. They are largely a waste of money particularly when you consider the opportunity cost of the space which is vacant a lot of the time. Thanks for the comment.

  3. Mark Beath says:

    My perception is that there are higher expectations in NQ around the local councils and their agencies to be accountable for the regional economy than could ever be reasonable. The CEO of Advance Cairns was similarly ‘crucified’ back in 2011 when things weren’t going so well. In recent years Townsville Enterprise has often been held up as a superior model which Cairns should emulate.

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