report is about the Pilbara but could equally be about any regional area."/>

Pilbara 2050: Long-term economic viability?


Pilbara 2050: Long-term economic viability?



How does an area get beyond its iconic mono thematic industrial output? What choices and selections does it have to make? This report is about the Pilbara but could equally be about any regional area.

We investigated everything from housing, to electricity and economic diversity growth and concluded that there are fundamental preconditions missing to allow the Pilbara to Diversity. We propose a Long-term Economic Viability (LEV) strategy to allow the Pilbara to continue to be a powerhouse beyond natural resource extraction.

Good transport servicing the core, stops a rot in a city. It’s the difference between a city that falls into a recession and one that falls into a regeneration.

The long-term economic viability of the Pilbara depends on economic diversification and the co-location of related economies together.

Using Michael Porter’s theory on cluster economies, and Nobel Laureate Paul Krugman’s theory of spatial economics and agglomeration benefits, we look a what the economies of the Pilbara and Western Australia could look like. Porter and Krugman’s analysis explains how productive towns become a collection of industries around a theme.

For example: Motown; cars, London; finance, Hollywood; movies, Silicon Valley; technology, Washington & Brussels; politics.

Their theories also show how places like California and Dubai were able to diversify due to the provision of the right infrastructure and low transportation costs.

So why is infrastructure so vital? When a boom dries up, what’s often left are the secondary and tertiary industries. These can be enough to sustain a city, but only if the right infrastructure has been created to support it.

In using their models, we analyse the Pilbara’s infrastructure as critical to efficient and organic growth, as well as the provider of continued resilience, efficiency, and therefore price advantage.

Presently, the Pilbara is an iconic monoculture economy derived from natural resources. The obvious project for the Pilbara is to facilitate the growth of related industries, which could include, diversified industrial activities, an interconnected electricity grid including solar and algae energy, electrification of rail and rail sharing, a supply base and tourism.

Critical for the Pilbara’s success in the long term is the implementation of shared essential service, such as power infrastructure and rail, as well as electrification of the rail. Non-resource based industries can then build off the infrastructure provided by the mining industry.

Further, policy initiatives can then be put in place so that base or driver industries can be established and built to scale and grow at a pace that supports economic diversification as natural resource extraction declines. Examples of these include creating a one stop shop to deal with planning rules and avoid silos and sequential approvals, tweaking the tax code for industries that are currently too expensive in the Pilbara due to the high cost of doing business. Also provision of accommodation and commercial space exclusively for non-natural resource businesses.

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