Regional economic divergence – podcast chat w/ Rob Sobyra, Construction Skills Qld

I’ve reported on how the economic recovery has seen large falls in unemployment rates across Queensland, including in most regions (see Remarkable turnarounds for Townsville, Mackay, and Cairns). But I need to acknowledge that employment growth is still overwhelmingly in the South East* as it has been for several decades now (Figure 1). Jobs and people are becoming more concentrated in the South East, and the pandemic doesn’t appear to have stopped that trend. Robert Sobyra of Construction Skills Queensland CSQ) has done some great research on this phenomena (see Why Regions Are Falling Behind – And What To Do About It), and I spoke with him about his research, which covers the whole of Australia, on the latest episode of my Economics Explored podcast. You can listen on major podcasting apps including Apple Podcasts and Google Podcasts. A lightly edited AI-generated transcript of the conversation is available on the Economics Explored website.

Rob presents evidence that the long-run regional divergence is largely a reflection of our post-industrial economy, in which knowledge economy jobs tend to concentrate in big cities. Here’s how Rob explains the divergence:

My research suggests the single biggest cause of regional divergence is that our economy is creating a lot more high-skilled than middle-skill jobs these days, and the vast majority of them are located in big cities.

For example, mining giants like Rio Tinto and BHP are rolling out fleets of autonomous trucks that are run out of cutting-edge remote operations centres. Whereas old-fashioned truck drivers would be located in towns near mines, these new centres are invariably set-up in major cities.

What does this mean for the regions in the long-term, particularly if we shift away from coal and lose all those tens of thousands of jobs supported by coal mining in the regions? Are the regions doomed to fall ever further behind SEQ? Or will the huge level of capital investment in renewables and storage (e.g. pumped hydro) required to decarbonise the economy generate a lot of regional jobs? Check out the conversation for Rob’s thoughts on this issue, and let me know what you think.

Consider that CSIRO research for CSQ (see Queensland’s Renewable Future), which Rob alerted me to in our conversation, suggests Queensland needs a 50X increase in renewable energy assets by 2050. Whether this is feasible, both technically and economically, is an open question. Incidentally, I’ll aim to cover the state government’s energy plan in the future, as there is much skepticism regarding just how achievable it is (e.g. see Graham Young’s comments).

*i.e. Brisbane metro, hinterland, Gold Coast and Sunshine Coast but excluding Toowoomba.

Please feel free to comment below. Alternatively, you can email comments, questions, suggestions, or hot tips to Also please check out my Economics Explored podcast, which has a new episode each week.  

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