[In]Sights for Competitive Regions: Human Capital – January 2015 1
[In]Sights for Competitive Regions:
Human Capital
[In]Sight: Australia’s regional competitiveness index is the lens regions need
to make the most of their advantages.
This report provides an analysis of Human Capital in [In]Sight: Australia’s regional competitiveness
index. Other analysis reports, a detailed user guide and the online interactive map including 624
regional competitiveness profiles are available at www.regionalaustralia.org.au/insight
[In]Sights for Competitive Regions: Human Capital – January 2015 2
Making the Most of Our Regional Human Capital
The skills, health and education of a region’s workforce are fundamental to its competitiveness. Strong human capital enables communities to be more productive, to innovate and to respond to changes in the economy. [In]Sight: Australia’s regional competitiveness index reveals vast differences between the education and health outcomes for people in regional Australia. The greatest disparities emerge in primary and secondary educational outcomes and in the distribution of people with university qualifications. Poor outcomes in some regions should not be viewed as an inevitable result of location. Many of the most competitive regions for the Human Capital theme are located within regional Australia. The strong outcomes for some rural and remote communities demonstrate that competitive human capital can be developed in all parts of Australia. Australia’s greatest competitive challenge is to achieve more equitable education outcomes across regional Australia. This will ensure that all Australians can find a productive place in the economy and secure the quality of life for themselves and their communities. It will also enable our regions to realise their potential.
[In]Sights for Competitive Regions: Human Capital – January 2015 3
[In]Sights for Competitive Regions: Human Capital – January 2015 4
[In]Sights for Competitive Regions: Human Capital – January 2015 5
Introduction
This report examines the key trends within the Human Capital theme in [In]Sight: Australia’s regional
competitiveness index. Human capital is one of the most crucial factors in a region’s competitiveness. The
skills, health and education of a workforce are fundamental to prosperity.
Competitive Human Capital is important for increasing productivity. Less competitive Human Capital
undermines the ability of a community to fulfil local job and business opportunities. Strong human
capital also allows communities and the individuals within these communities to respond to shifts in the
economy.
Each local government area (LGA) is grouped into a regional type including Regional Cities, Connected
Lifestyle Regions, Industry and Service Hubs and the Heartland Regions. Trends across the regional
areas in each state are also reviewed.
This report is one of a series of 10 examining the trends in each of the themes of [In]Sight.
Measuring Human Capital in [In]Sight
Indicators of basic education:
Early childhood development (sourced from Social Health Atlas of Australia data): The
proportion of children in their first year of school classified as developmentally vulnerable. A
lower percentage of developmentally vulnerable children leads to a better ranking.
Primary school education (sourced from NAPLAN data): The proportion of high test results
achieved out of all completed primary school NAPLAN tests. A higher proportion leads to a
higher ranking.
Secondary school education (sourced from NAPLAN data): The proportion of high test results
achieved out of all completed secondary schools NAPLAN tests. A higher proportion leads to a
higher ranking.
Early school leavers (sourced form ABS data): The proportion of the adult population that did
not complete year 12. A lower proportion of early school leavers leads to a better ranking.
Lifelong learning (sourced from ABS data): The proportion of adults participating in education
and training. A higher proportion of people participating in education or training leads to a
high ranking.
Basic education is the foundation for competitive human capital. This is also the area in which
governments and communities can have the most direct influence on competitiveness in this theme
through improving schooling and other initiatives
[In]Sights for Competitive Regions: Human Capital – January 2015 6
Indicators of post school qualifications:
University qualifications (sourced from ABS data): The proportion of adults who have a degree.
The higher the proportion of the population with a university qualification, the higher the
ranking.
Technical qualifications (sourced from ABS data): The proportion of adults with a certificate or
diploma. The higher the proportion of the population with a technical qualification, the higher
the ranking.
Having a large proportion of the workforce with a technical or university qualification is essential to
competitiveness. Qualification indicators are more difficult to influence as they are reflective of the
local labour market demand for skills as well as the presence and performance of educational
institutions.
Indicators of potential constraints on competitiveness:
Health (derived from Social Health Atlas of Australia data): The proportion of adults with at
least one of the four health risk factors of smoking, harmful use of alcohol, physical inactivity
and obesity. A lower proportion of adults with health risks lead to a better ranking.
English proficiency (ABS Census 2011): The proportion of people who self-identify as being
able to speak English well or very well. Regions with higher proportions of people that have a
proficient level of English earn higher rankings.
Further information on this theme and the measurement and construction of the index can be accessed
in the [In]Sight 2014 Users Guide.
[In]Sights for Competitive Regions: Human Capital – January 2015 7
Human Capital and Competitiveness in Regional Australia
Regional Australia shows great diversity in human capital competitiveness as seen in Figure 1. The most
competitive areas are spread across the country.
Queenscliffe and Surf Coast in Victoria, Kiama and Armidale in New South Wales and Denmark in
Western Australia were the best performing regional areas overall, each ranking within the top 50
LGAs in Australia.
Areas in regional Australia occupy some of the highest rankings for secondary school outcomes, health
and English proficiency. On the other hand, all of the lowest ranked areas lie beyond Australia’s major
capital cities. This disparity in outcomes is a challenge for increasing the competitiveness of regional
Australia.
Figure 1: Competitiveness of LGAs in Australia for Human Capital
Source: [In]Sight: Australia’s regional competitive index
[In]Sights for Competitive Regions: Human Capital – January 2015 8
Indicators of Education Across Life Stages
Early childhood and lifelong learning outcomes are quite similar across Australia, however regional
areas do not rank nearly as highly on average compared to metropolitan areas across the primary
and secondary education indicators. The average proportion of high NAPLAN scores on secondary
school tests was 24.3 per cent in regional LGAs compared to 43.8 per cent in metropolitan areas.
Early childhood development in Mansfield near the Alpine areas of Victoria is very successful with only
3.8 per cent of children assessed as developmentally vulnerable. In contrast, 80 per cent of children in
the Central Highlands in Queensland were assessed as developmentally vulnerable. The average
across all regional areas was 26.6 per cent.
The rate of high school completion differs across Australia. Hobart and Darwin were amongst the best
performing regional areas on this indicator, with completion rates of 70 per cent and 61 per cent
respectively. Leonora in Western Australia and Torres in Queensland also showed high completion
rates. However, only 9 per cent of adults in Wujal Wujal in Queensland had completed year 12 which
limits the workforce options for this community.
Overall, the education results for regional Australia remain disappointing and a central challenge for
the future. The potential of many places will only be realised if we can do better in education across
life stages.
Indicators of Qualifications
Regional areas need a knowledgeable and skilled workforce to grow. Higher rates of technical
qualifications are common in regional Australia reflecting the importance of primary industries to many
regional economies. On average, 32.3 per cent of all working age people in regional LGAs have a
technical qualification, compared to only 28.7 per cent in metropolitan areas. Almost half of the
working age population in Great Lakes on the New South Wales north coast has a technical
qualification, making it one of Australia’s most technically proficient areas.
University qualifications are generally less prevalent in regional Australia compared to technical
qualifications. However there are important clusters of expertise. Queenscliffe in Victoria and Hobart
have the highest levels university qualifications with over 40 per cent – figures significantly higher than
the 11.9 per cent average across all regional LGAs. Increasing the demand for university educated
workers should be an important goal for many regional areas to provide greater flexibility and
capacity in the local economy.
Indicators of Health and English Proficiency
On average, regional LGAs have 61.8 per cent of the population exhibiting preventable health risk
factors. Although this is higher than the metro LGA average of 52 per cent, some of the healthiest
areas are also in regional Australia. A healthy population means that there is a healthy and productive
workforce available to industry and business to underpin economic development.
[In]Sights for Competitive Regions: Human Capital – January 2015 9
Four of the top five LGAs for health outcomes were located in regional Australia. Townsville in
Queensland and Boddington in Western Australia were some of the most competitive LGAs with around
37 per cent of adults in those areas having preventable health risks.
Ninety two per cent of the Australian population identifies as being able to speak English ‘well’ or
‘very well’. For many regional areas this level approaches 100 per cent. The lowest rates of English
speakers are in remote areas, such as MacDonnell in the Northern Territory at 66.5 per cent. This low
level of English proficiency makes it more challenging for large parts of the potential workforce in
these remote areas to compete for jobs and engage in education.
[In]Sights for Competitive Regions: Human Capital – January 2015 10
Human Capital in Different Types of Regions
Overall trends and the best and worst performers are important but it is also important to consider
different groups of regions with similar foundations in regional Australia. The RAI identifies four distinct
and important groups of regions that have different development pathways (Figure 2).
Figure 2: Four types of regional communities Source: RAI Talking Point: The Foundations of Regional Australia
Educational indicators show a divide between the regional elements (Table 1). Regional Cities and Connected Lifestyle Regions are consistently more competitive while Industry and Service Hubs and the Heartland Regions are less competitive on average. The exception to this is in early childhood where Regional Cities, Industry and Service Hubs and the Heartland Regions are less competitive compared to Connected Lifestyle Areas. Overall, the divide between different geographical areas is less prominent before school age. Smaller rural and remote heartlands areas are the least competitive regional element with many regions struggling to achieve the basic education levels every region and every Australian needs to compete in today’s economy. However, some of Australia’s smallest Heartland Regions are achieving very strong education outcomes. Weipa in Queensland is the highest ranking regional LGA for secondary education: it ranks 19th nationally.
[In]Sights for Competitive Regions: Human Capital – January 2015 11
Table 1: Summary of average results for each type of region within each education indicator
Group Regional Cities Connected Lifestyle
Regions
Industry and Service
Hubs Heartland Regions
Lifelong learning Most competitive
(46.3%)
Highly competitive
(46%)
Less competitive
(43.8%)
Least competitive
(43%)
Early school
leavers
Most competitive
(56.2%)
Competitive
(58.7%)
Competitive
(60.7%)
Least competitive
(62.7%)
Early childhood
development
Less competitive
(27.1%)
Most competitive
(23.1%)
Highly competitive
(28.3%)
Least competitive
(27%)
Primary education Most competitive
(57.8%)
Highly competitive
(56.8%)
Competitive
(54%)
Least competitive
(46%)
Secondary
education
Most competitive
(31.1%)
Highly competitive
(27.7%)
Highly competitive
(28.2%)
Least competitive
(21.9%)
Different competitive capacity is also evident within the qualifications indicators. Regional Cities are again the most competitive for both university and technical qualifications (see Table 2) emphasising these areas as important hubs of skilled workforce capacity in regional Australia. Table 2: Summary of average results for each type of region within each qualification indicator
Group Regional Cities Connected Lifestyle
Regions
Industry and Service
Hubs Heartland Regions
University
qualifications
Most competitive
(15.9%)
Highly competitive
(15.2%)
Less competitive
(13%)
Least competitive
(10.4%)
Technical
qualifications
Most competitive
(36.2%)
Highly competitive
(36%)
Highly competitive
(35.7%)
Least competitive
(30.5%)
Industry and Service Hubs are an exception to this trend for technical qualifications. Industry and Service Hubs are highly competitive for this indicator with the average of the LGAs only 0.5 per cent lower than that of the average for the Regional Cities LGAs. Technical qualifications are essential for Industry and Service Hubs as they play a central role in ensuring the competitiveness of the Australia’s resources industry and agriculture sector. Levels of health and English proficiency are similar across different regional areas (see Table 3).
Table 3: Summary of average results for each type of region within the health and English proficiency indicators
Group Regional Cities Connected Lifestyle
Regions
Industry and Service
Hubs Heartland Regions
Health Competitive
(59%)
Most competitive
(57.3%)
Competitive
(61.2%)
Least competitive
(63.3%)
English proficiency Competitive
(94%)
Competitive
(94.9%)
Competitive
(93.7%)
Competitive
(93.3%)
[In]Sights for Competitive Regions: Human Capital – January 2015 12
Human Capital in Regional Australia: A State Perspective
The regional areas of the southern states (including Tasmania) and Western Australia on average are
most competitive in the Human Capital theme. In comparison, regional northern Australia ranks poorly
across most of the indicators in Human Capital, especially in school education. The RAI’s work on the
future of northern Australia has previously identified that human capital is one of the most serious
bottlenecks for growth in northern Australiai.
Figure 3: Schooling and qualifications in the regional areas of each state
The southern states are currently more competitive in primary and secondary education as well as in
both qualifications indicators. Regional Victoria performs particularly well across all educational
indicators increasing the capacity for the region to respond to future changes in its industry base.
Table 4: Scores on basic educational indicators by state (regional areas only)
Group NSW Victoria QLD WA SA Tasmania NT
Lifelong
learners
Highly
competitive
(47.2%)
Competitive
(44.4%)
Less
competitive
(42%)
Least
competitive
(40.1%)
Less
competitive
(41.6%)
Less
competitive
(40.9%)
Most
competitive
(48.4%)
Early school
leavers
Less
competitive
(62.6%)
Competitive
(60.9%)
Less
competitive
(61.8%)
Most
competitive
(56.3%)
Less
competitive
(64.9%)
Least
competitive
(65.5%)
Less
competitive
(64.8%)
Early
childhood
development
Highly
competitive
(22.2%)
Most
competitive
(20.6%)
Least
competitive
(33.6%)
Less
competitive
(30.4%)
Highly
competitive
(24.2%)
Highly
competitive
(24%)
Less
competitive
(33.3%)
Primary
education
Highly
competitive
(55.7%)
Most
competitive
(61.9%)
Less
competitive
(35%)
Highly
competitive
(47.8%)
Highly
competitive
(51.1%)
Highly
competitive
(54.7%)
Least
competitive
(20.1%)
Secondary
education
Highly
competitive
(26.5%)
Most
competitive
(34.8%)
Less
competitive
(20.2%)
Highly
competitive
(28.4%)
Highly
competitive
(29.7%)
Competitive
(24.1%)
Least
competitive
(11.8%)
0%
10%
20%
30%
40%
50%
60%
70%
NSW Vic Qld SA WA Tas NT
Pro
port
ion
of
popul
ation/
stud
ent
s te
sted
Primary schoolpeformance
Secondary schoolperformance
Technicalqualifications
Universityqualifications
[In]Sights for Competitive Regions: Human Capital – January 2015 13
Regional New South Wales, regional Victoria and Tasmania are also outperforming the other states in
the presence of qualifications overall. These three states are ranked as more or highly competitive for
both technical and university qualifications (see Table 3).
The averages of the states are, however, more consistent for the technical qualifications indicator. The
exception to this is the Northern Territory which averages 14.4 per cent less than the most competitive
state (regional Victoria). This is exacerbating the need for the Northern Territory to attract labour from
outside its regions to realise the benefits of resources and other developments. Building a stronger
qualifications base is an important challenge for the Northern Territory overall.
Table 5: Average scores on qualifications indicators by state (regional areas only)
Group NSW Victoria QLD WA SA Tasmania NT
University
qualifications
Highly
competitive
(13.3%)
Most
competitive
(15.4%)
Least
competitive
(9.4%)
Less
competitive
(11%)
Less
competitive
(10.4%)
Highly
competitive
(13.5%)
Less
competitive
(10.5%)
Technical
qualifications
Highly
competitive
(35.1%)
Most
competitive
(36.4%)
Competitive
(28.8%)
Highly
competitive
(30.1%)
Highly
competitive
(32.6%)
Highly
competitive
(34.6%)
Least
competitive
(22%)
Health and English proficiency are similar across the states. Regional Victoria and Tasmania both
perform well across these indicators. The Northern Territory has low levels of English speaking
proficiency in many areas. Many of the more remote areas in the Northern Territory lack adequate
data on Health to make an accurate assessment.
Table 6: Average values on the health and English proficiency indicators by state (regional areas only)
Group NSW Victoria QLD WA SA Tasmania NT
Health
Less
competitiv
e
(64.3%)
Most
competitive
(56.3%)
Less
competitive
(61.8%)
Competitive
(60.7%)
Least
competitive
(64.5%)
Competitive
(60.6%)
(Inadequate
data)
English
language
proficienc
y
Highly
competitiv
e
(94.8%)
Competitive
(92.5%)
Competitive
(92.5%)
Competitive
(92.8%)
Highly
competitive
(94.9%)
Most
competitive
(96%)
Least
competitive
(84.3%)
[In]Sights for Competitive Regions: Human Capital – January 2015 14
Making the Most of [In]Sight
The indicators measuring Human Capital in [In]Sight allow regions to better understand their workforce
capacity now and in the future and how people in the region are contributing to competitiveness.
The RAI’s report Rethinking the future of northern Australia's regions: more than mines, dams and
development dreams found that human capital is one of the most serious bottlenecks for growth in
northern Australia.
To learn more about how people are being engaged in regional Australia support our nations
competitiveness please also check out two other papers in the [In]Sights for Competitive Regions series:
Demography: find out more about how a regions population size and dynamics provide sources
of competitive advantage.
Labour Market Efficiency: find out how we are engaging the potential workforce in different
parts of regional Australia and where are the best opportunities to maximise people’s
contribution.
Technological Readiness: find out whether regions have the infrastructure and resources they
need to develop in the digital age.
These publications and the 624 [In]Sight competitiveness profiles are available for review at
www.regionalaustralia.org.au/insight
Regional comparisons, data downloads and expert advice from the RAI are also available for anyone
interested in putting [In]Sight to work.
[In]Sights for Competitive Regions: Human Capital – January 2015 15
Appendix: Human Capital, Top Performers in Regional Australia Top Performing Regional City LGAs
LGA Rank State
Hobart 44 Tasmania
Capel 75 Western Australia
Newcastle 82 New South Wales
Greater Geelong 95 Victoria
Wollongong 96 New South Wales
Bathurst Regional 99 New South Wales
Ballarat 103 Victoria
Ballina 106 New South Wales
Wagga Wagga 109 New South Wales
Orange 110 New South Wales
Top Performing Connected Lifestyle Regions
LGA Rank State
Queenscliffe 13 Victoria
Kiama 50 New South Wales
Kingborough 54 Tasmania
Surf Coast 59 Victoria
Wingecarribee 67 New South Wales
Macedon Ranges 71 Victoria
Yass Valley 74 New South Wales
Palerang 81 New South Wales
Byron 90 New South Wales
Golden Plains 91 Victoria
Top Performing Industry and Service Hubs
LGA Rank State
Armidale Dumaresq 58 New South Wales
Busselton 112 Western Australia
Horsham 131 Victoria
Warrnambool 133 Victoria
Bega Valley 144 New South Wales
Eurobodalla 150 New South Wales
Wangaratta 153 Victoria
Albany 164 Western Australia
South Gippsland 166 Victoria
Great Lakes 191 New South Wales
[In]Sights for Competitive Regions: Human Capital – January 2015 16
Top Performing Heartland Regions LGAs
LGA Rank State
Denmark 83 Western Australia
Mansfield 89 Victoria
Conargo 97 New South Wales
Augusta-Margaret River 98 Western Australia
Snowy River 119 New South Wales
Woodanilling 126 Western Australia
Southern Grampians 134 Victoria
Alpine 142 Victoria
Cooma-Monaro 143 New South Wales
Moyne 145 Victoria
[In]Sights for Competitive Regions: Human Capital – January 2015 17
About Us
Independent and informed by both research and ongoing dialogue with the community, the Regional
Australia Institute (RAI) develops policy and advocates for change to build a stronger economy and
better quality of life in regional Australia – for the benefit of all Australians.
To find out more about the RAI contact us at [email protected] or visit
www.regionalaustralia.org.au
Disclaimer and copyright This report translates and analyses findings of research to enable an informed public discussion of
regional issues in Australia. It is intended to assist people to think about their perspectives, assumptions
and understanding of regional issues.
No responsibility is accepted by the RAI, its Board or its funders for the quality of advice or decisions
made by others based on the information presented in this publication.
Unless otherwise specified, the contents of this report remain the property of the RAI. Reproduction for
non-commercial purposes with attribution of authorship is permitted.
Contacts and Further Information To discuss [In]Sights for Competitive Regions: Human Capital further please contact:
Jack Archer
Deputy Chief Executive Officer
(02) 6260 3733
[In]Sights for Competitive Regions: Human Capital – January 2015 18
End Notes
i Rethinking the future of northern Australia's regions: more than mines, dams and development dreams (Regional Australia Institute November, 2013)