newcastle business club presentation october 2014

FUTURE PROOFING THE REGION

We need to talk about the Hunter.‐ Creating a Vision for our Region

Dr Brent JenkinsChief Executive Officer ‐ HRF

14 October 2014


We need to talk about the Hunter

• The Hunter’s economyHow can we ensure future economic success?

• Our communityHow are we faring socially, especially young people?

• Change is neededWhere is the leadership, strategy and investment?

• Shared visionHow can we reach consensus on our Region’s future?

• Hunter Research FoundationWhat is HRF doing to start these conversations?


The Hunter is Australia’s largest regional economy and we should be proud of what we have achieved

But…

Hunter – Looking forwardTHE ECONOMY


Short-term Outlook

Unemployment is rising:- above NSW average- further rise likely

Weak business investment and confidence for some time:- employment intentions- capital expenditure

One bright light on the immediate horizon –construction

The Hunter economy rather subdued in the short term

THE ECONOMY


Things likely to get tougher as economic base continues to transition

• Modest overall employment growth expected, with increasing shifts from mining and manufacturing to services

• We need to remain a region that adds-value to our natural resources – manufacturing, wine , equine, clean energy –based on innovation and serving export markets

• Locally focused services are generally low economic-value creating – retail, health care, education, tattoos, coffee – and growth largely dependent on increases in population

• High value or export-oriented service industries will also be needed to maintain the economic value created in the region: industrial design, financial services, logistics, creative industries

Medium-term OutlookTHE ECONOMY


Inter-censual change, 2006 to 2011, population by age groups - Hunter Region

Our health care sector will increasingly be required to cost- effectively manage our ageing population

Government spending by age cohortAustralia, all governments, 000’s per person, 2011 ‐ 12

Medium-term OutlookDEMOGRAPHICS


The Hunter Region will be impacted by a variety of global trends over the coming years

The Asian centuryAgeing PopulationLimited Resources

Key enabling technologiesDigitisation of the economyChanging consumption patterns – “mass customisation”

3D Printing

Long-term OutlookTECHNOLOGY CHANGES


Hunter – Looking forward

Our future will be shaped by becoming globally-competitive in industries where we can sustain competitive advantage through innovation

We know this, but we still seem to be getting nowhere near positioning the region for a sustainable future

WWED Insanity: doing the same thing over and over again and expecting different results.

Albert Einstein

How do we break out of this “cycle of insanity”? How do we design and create change at the regional level that will lead to actions that enhance our future ?


Hunter – Creating Change

Creating change requires leadership, vision, strategy and investment

Eight Stage Process1. Establishing a sense of urgency2. Creating the guiding coalition

3. Developing a vision and strategy

4. Communicating the change vision5. Empowering broad-based action6. Generating short-term wins7. Consolidating gains and producing

more change8. Anchoring new approaches in the culture

Source: “Leading Change” John P Kotter

LEADERSHIP

VISION & STRATEGY

INVESTMENT


Q1. Who is leading the region?

Hunter- We need to changeDIVERSIFICATION VS FRAGMENTATION

Hunter

Government (?)

Business (?)

Community (?)

University (?)

Barry Jones – Knowledge Nation

Who is championing the region for the long term ?


Hunter- We need to changeCOMFORTABLE VS COMPLACENT

Q2. Is there a sense of urgency?

“The International Monetary Fund expects Australia will have the worst jobless rate in the Asia-Pacific region over the next two years, bar the Philippines.” NH 11/10/14

Youth unemployment rates in Newcastle are soaring above the state average, with a key regional welfare organisation blaming a lack of traineeships and other job-creation initiatives for the crisis. (32.6% 15-19, 12.5% 15-24) NH 17/04/2014

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

MAY 11 MAY 12 MAY 13 MAY 14

SOURCE: Australian Bureau of Statistics, Monthly Labour Force Survey

HUNTER BALANCE

NSW

MID AND UPPER HUNTER REGION UNEMPLOYMENT RATE Key Performance Indicators:

No 1. Unemployment Rate

Where will our children gain employment?


0.00

0.04

0.08

0.12

0.16

0.20

MAR 09 MAR 10 MAR 11 MAR 12 MAR 13 MAR 14

Average for June: 2000 to 2010

SOURCE: Hunter Valley Research Foundation business surveys

Employment Intentions Capital Expenditure


Q2. Is there a sense of urgency?

Key Performance Indicators:No 2. Business confidence

Who will invest to create the jobs of the future ?



Q2. Is there a sense of urgency?Key Performance Indicators:No 3. International competitiveness and innovation

Australia ranks 21 in the World Economic Forum’s Global Competitive Index 2013-2014. We were 20 in 2012-2014 and 20 in 2011-2012.

Competitiveness of Hunter –Innovation30 out of 55 RDAs (1= best, 55 = worst) Regional Australia Institute

37%

26%

New goods and services introduced in previous 12 months - Hunter Region

Are we holding ground or treading water?



Q3. Is there a clear and shared vision for the region’s future?

Characteristics of an effective vision

• Imaginable• Desirable• Feasible• Focused• Flexible• Communicable

“My vision is not what’s important to you. The only vision that motivates you is your vision”

Bill O’Brien – CEO Hanover Insurance


Hunter- We need to changeSTRATEGIC VS EXPEDIENT

Q4. Are there strategies to achieve this vision?Newcastle Urban Renewal Strategy 2013Hunter Strategic Infrastructure PlanDraft NSW Freight and Ports StrategyTransport for NSW November 2012State Infrastructure Strategy 2012-2032 Infrastructure NSW October 2012NSW 2021 – A Plan to Make NSW Number One NSW Premier & Cabinet September 2011Draft NSW Long Term Transport Master Plan Transport NSW September 2012State of Australian Cities Department of Infrastructure and Transport December 2011Hunter Regional Plan 2012-2022 RDA – Hunter September 2012Upper Hunter Draft Strategic Regional Land Use PlanNSW Government March 2012Lower Hunter Regional Strategy NSW Planning October 2006Hunter Investment Prospectus 2012 RDA – Hunter 2012


Hunter- We need to changeSTRATEGIC VS EXPEDIENT

Q5. Do we have investment required to secure this future ?

North West Rail Link - $8.3 Billion

South West Rail Link - $2.0 Billion

West Connect - $14.9 Billion

NorthConnex - $3.0 Billion

Royal North Shore – $1.3 Billion

Bangaroo - $6.0 Billion

International Convention Centre -$1.1 Billion

TOTAL = $36.6 Billion

Infrastructure For The Future

Resources For Regions2013-14 - $118.0 million2013-14 - $116.9 million

Hunter Investment Fund20 Years - $350 million

Newcastle RevitalisationCommitted $340 million ?????

Hunter represents 8% of State’s economy. Are we seeing a level of investment back to sustain/grow this activity into the future?


WWED. We can't solve problems by using the same kind of thinking we used when we created them.

Albert Einstein

New regional conversations


• Created by an independent consultant and community taskforce

• Ideas received from the community fed into a Master Plan

• Vision for a connected city for families, tourists and business

• Living City concept to bring confidence and prosperity to the region

• Generating economic development and population growth

• $200 million in private investment over 5-8 year period

• 1100 ongoing jobs in a Region struggling with high unemployment rates

New regional conversations

Devonport, TAS Newcastle, NSW


New regional conversations - Hunter

Hunter has great potential but our future prosperity is NOT assured

To create a shared vision and secure investment requires Strategic regional conversations

Ground Rules: • Data and Analysis Intensive – Fact not fallacy• Create value for the entire region, not individuals or interest

groups• Include all key stakeholders, including our young people• Open, independent and transparent process• Supported by all levels of government with investment –

hold them to account!


Hunter Research Foundation (HRF) – Today

HRF is a regionally-based organisation with national reach

COMMUNITY BASED• Not-for-profit research organisation established in 1956• Governed by a voluntary Board of Directors representing

the Hunter Region community• 24 Staff – 80 CasualsREGIONAL RESEARCH• 125 Sponsors generating $300,000 per annum that

has been focused on regional data gathering• Supported by all Hunter LGAs, major corporates,

local businesses and the communityFEE-FOR-SERVICE RESEARCH• Conducts fee-for-service research work in areas of:

Transport planning, Health, Community attitudes


Information is NOT knowledge Albert Einsteinwww.brainyquote.com

The HRF is re-building its regional research agenda

We will address key strategic issues that will impact the region

HRF – Looking forward

Our focus will be on providing: Insights that move the Hunter forward towards becoming an internationally-competitive and resilient Region


For the Hunter to be internationally competitive, it must grow into a global knowledge-based economy

HRF – Looking forwardREGIONAL COMPETITIVENESS

Regional competitiveness is the capability of an economy to attract and maintain firms with a stable or rising market share in an activity while maintaining stable or increasing standards of living.

In order to be competitive in the globalising knowledge economy, the OECD countries need to invest in their innovation systems at the national and regional levels.

As countries are turning their production towards value-added segments and knowledge-intensive products and services, there is greater dependency on access to new technologies, knowledge and skills.



Social resilience sees community adapt and change through difficult times without leaving anyone behind

REGIONAL RESILIENCE

The HVRF Wellbeing index points to the current state of a social community.

• Happiness with their life • Satisfaction with what they have

achieved to date • Satisfaction with their current

standard of living • Satisfaction with their life as a

whole • Feeling of being valued by those

who know them• Optimism about their future

The ability to maintain a high state of Wellbeing during times of change (Resilience) is impacted by.

• Education levels that provide employment options

• An income that can sustain an acceptable quality of life

• Affordable and secure housing• Strong and supportive

relationships – community and private

• A high level of physical and mental health


EducationEmployment

IncomeHealth

InnovationInvestment

CollaborationInfrastructure

Skills

ConnectednessHousing and NeighbourhoodsRelationshipsCrime and SafetyCivics and Environment

ResilientInternationally Competitive


Our unique regional research programs will look holistically at the key areas that will ensure the region’s future

Project 1. Manufacturing Sector

Project 1. Youth Connectedness



HRF is identifying evidence to inform real solutions to help a key Hunter industry sector to become more competitive

HRF Research question: What are barriers and enablers to expanding manufacturing markets?

• 600 research hours – 45 in-depth interviews

• Working with key stakeholders: HunterNet, Australian Industry Group and Hunter Business Chamber, University of Newcastle, TAFE

Results presented at 28 November Economic Breakfast

REGIONAL COMPETITIVENESS – MANUFACTURING

Find out more at www.hrf.com.au


HRF – Looking Forward

Regional Resilience – Young people in the Hunter

Australia vs OECD15-19 year olds still in education (79%) place Australia 27th out of 29 OECD nations

Australia’s NEET (not in education, employment or training) percentage of 8.3 per cent places us 24th amongst 29 OECD nations

Hunter vs Rest of Australia (1=Best 55 = Worst)28th for youth unemployment 35th for welfare dependence 37th in terms of the proportion of early school leavers

No shortage of programs not changing outcomes

The FACTS



Regional Resilience – Young people in the Hunter

HRF research question:What are barriers to young people in the Hunter transitioning effectively from education to employment?

5 Stage Research Project – YOUniteFocused on listening to young people in the Hunter and influential stakeholders to deliver new insights that lift the horizon for our young people

Results Youth Summit February 2015

Find out more at www.hrf.com.auHRF Response



“…you better start swimmin’ or you'll sink like a stone…”

Hunter Research Foundation Born out of crisis – to gather regional data and identify solutions

Our region is facing new economic, social, environmental and political challenges …..

… we must adapt or face decline

If we collaborate under a shared vision we will be successful

Trust HRF research, data and information ….…. work with us to future-proof our Region for generations to come

HRF – FUTURE-PROOFING THE HUNTER


Future‐proofing our Region for generations to come

Stay connected with HRF news & join us in conversation

www.hrf.com.au

newcastle business club presentation october 2014

Presentations & Public Speaking

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