Business Growth Strategy DRAFT S
Business Growth Strategy DRAFT SEPTEMBER 2010 Disclaimer: This is a draft plan which has been prepared for public discussion purposes and does not necessarily indicate the position of Council. Councillors will adopt this plan after careful consideration of all public submissions received and amendments have been affected to address concerns raised in submissions that Council feels are justified. Bega Valley Shire Council Zingel Place PO Box 492 Bega NSW 2550 Phone (02) 6499 2222 Fax (02) 6499 2200 [email protected] www.begavalley.nsw.gov.au Strategic Economic Solutions Client Bega Valley Shire Project Business Growth Strategy Date Contact 12 August 2010 Kim Houghton 02-6262-6234 [email protected] Prepared by Strategic Economic Solutions for Bega Valley Shire Council 1 4.3 4.4 4.5 Contents Executive Summary 3 1 Introduction 4 2 External influences: National and state trends and implications 5 2.1 Employment growth trends 2.2 Business growth and innovation 2.3 Implications 5 5 7 3 Bega Valley Shire perspectives 8 3.1 Current snapshot 3.2 Main concerns and issues 3.3 Implications 8 13 15 4 Ways forward 16 4.1 4.2 4.3 4.4 4.5 16 16 17 18 26 Community feedback sought Council’s role Longer term issues and questions Actions Outcomes Longer term issues and questions 17 Actions 18 Outcomes 26 Contents 2 1 4 Introduction 2 External influences: National and state trends and implications 5 2.1 2.2 2.3 3 3.1 3.2 3.3 4 4.1 4.2 Employment growth trends 5 Business growth and innovation 5 Implications 7 Bega Valley Shire perspectives 8 Current snapshot Main concerns and issues Implications 8 13 15 Ways forward 16 Community feedback sought 16 Council’s role 16 Prepared by Strategic Economic Solutions for Bega Valley Shire Council 2 Executive Summary Bega Valley Shire Council has prepared this draft Business Growth Strategy to guide Council’s economic development initiatives over the next 12 months (Operational Plan), 4 years (Delivery Program) and 20 years (Community Strategic Plan). The Shire has an economy worth in the order of $1,450 million per annum, and is home to some 33,500 residents and 2,800 locally- based businesses – mostly small businesses. The Shire is home to nationally-recognised large businesses including Bega Cheese and Pyramid Power. This draft Strategy is based on external analysis and consultations within the community. The main issue identified is the need for Bega Valley Shire to ensure that it is well-positioned to benefit from the growth expected in knowledgeintensive service sectors (professional services, health, ICT and education). Growth in these sectors will help address the current low wage profile in the Shire, and will stimulate further growth in higher value goods and services. The Shire’s economy is still in transition from the traditional structure based on commodities – forestry products, traditional fishing and agriculture, and family tourism (largely a readily substituted ‘commodity’) – to a more value-based economy. The Shire has a strong retail and service base, which meets the needs of its residents and visitors, but this alone is not enough to raise the income levels of Shire residents, and access the flow-economic benefits that such income growth brings. This draft Strategy is based on eight recommended roles for Bega Valley Shire Council: 1. Prepare an agreed vision for the Shire’s economic future, backed by a 20 year plan, planning and investment guidelines, and processes for fast approval of ‘suitable’ developments. 2. Support and assist businesses in meeting their compliance obligations – especially those for which Council has responsibility. 3. Foster partnerships between the education sector and business. 4. Facilitate business connections and networks, communication (to and between businesses), offering workshops and technologies to help business growth. 5. Supply Shire businesses with valuable business intelligence on developments in the Shire, what the Shire has, who/when/where (ties to networking and market development). 6. Promote an agreed and accepted ‘brand’ for the Shire as a whole – incorporating areas in the Shire that are outside the geography of the Bega Valley itself. 7. Promote the Shire and prepare an ‘investment prospectus’. 8. Lobby for better infrastructure and services. 9. Scope availability of suitable employment lands. Detailed actions to advance these roles are included in the last section of this draft Strategy. Innovation will be hallmark of survival and growth over the coming decade, and this draft Strategy sets out actions for Council which will nurture both the pressure on and willingness of businesses in the Shire to innovate. Prepared by Strategic Economic Solutions for Bega Valley Shire Council 3 1 Introduction Bega Valley Shire is home to some 33,500 people, some 2,800 locally- based businesses, and has an economy worth in the order of $1,450 million per annum. The Shire has a vibrant mix of small businesses (which make up around 96% of locally-based businesses), plus nationallyrecognised large businesses including Bega Cheese and Pyramid Power. This draft Strategy will be released for broader community feedback before being finalised and adopted by Council. This draft Business Growth Strategy has been prepared as a roadmap to guide Council’s economic development initiatives over the next 12 months (Operational Plan), 4 years (Management Plan) and 20 years (Community Strategic Plan). This draft Strategy is one of four prepared by Council – it sits alongside the Youth Strategy, Aging Strategy and Affordable Housing Strategy. Issues common to all four areas have been identified and are part of this draft. The draft Business Growth Strategy has been prepared through a mix of analysis and consultation. A foundation was a Discussion Paper which provided a quantitative assessment of the Shire’s economy, broader economic trends, and the implications of these for the Shire’s economic future. This Discussion Paper was then used in two lively and wellattended discussion forums held to draw community input in the Strategy. A central issue for each forum has been discussion of the most appropriate role for Council in supporting business growth in the Shire, and the recommendations in this draft reflect both community expectations and Council’s capacity. Prepared by Strategic Economic Solutions for Bega Valley Shire Council 4 2 External influences: National and state trends and implications 2.1 These five industries are expected to account for over two-thirds of the new jobs forecast, as shown in Figure 1. Figure 1 National employment growth forecasts Employment growth trends Employment and business growth in Bega Valley Shire over the next 20 years are expected to reflect a mix of national, state and local trends, strengths and weaknesses. Nationally over the last decade Australia has seen growth in employment in tertiary and higher order service sector industries, little growth in manufacturing employment, and a decline in primary production employment as farms diversify and holdings become larger. These broad trends are expected to continue over the next few years. Employment growth in different industries is analysed by the Department of Employment, Education, and Workplace Relations each year in its Australian Jobs publication. The current forecasts (from the 2008 edition) show that the majority of new jobs in Australia through to 2013 will be in just five industries: 1. Health & community service (public and private sector) 2. Property & business services (business services include legal, accounting, design, marketing, exporting services etc) 3. Retail trade 4. Construction 5. Education (public and private sector). Source: Australian Jobs 2008, DEEWR Four of these five industries rely heavily on skilled workers, and for the top two, the profile of skill demand has a strong emphasis on degrees and diplomas. Clearly, for young people in Bega Valley Shire to give themselves the best employment prospects, a high level of education will be a crucial success factor. 2.2 Business growth and innovation The NSW Innovation Council is working on preparing the Business Sector Growth Plan for NSW as one of the commitments in the State Plan. The first step in preparing the Sector Growth Plan is a vision of the NSW economy in 2020 undertaken by Access Economics. This analysis provides a valuable foundation to the changes expected to influence businesses in Bega Valley Shire over the next decade, and the opportunities and challenges these changes represent. The 10-year forecasts recognise four factors as driving economic conditions in NSW: 1. A transition to a carbon constrained future 2. The rapid development of the digital economy Prepared by Strategic Economic Solutions for Bega Valley Shire Council 5 3. Demand and competition from emerging economies – China and India 4. An ageing and growing population. Figure 2 Innovation framework Each of these was identified in the workshops as already being recognised as important influences on the Shire’s economy. The NSW Department of Industry and Investment has prepared its Regional Growth Strategy based on the NSW State Plan with attention to infrastructure, education, health and innovation. Similarly, the South Coast RDA has prepared its Strategic Regional Plan, nominating improvements to zoning and regulations, identification of employment lands, support for infrastructure projects such as Eden Port and Merimbula Airport and nature and heritage tourism as key ingredients to business growth. The main industries expected to experience strong growth in NSW are: Professional services (for private and business clients) Construction – especially new housing, sustainable housing (new and adapted) and infrastructure Health Information and communications technologies. Other industries covered in the analysis which are important to Bega Valley Shire are Transport & logistics, Education & research, Creative industries, Manufacturing, Retail, Tourism and Agriculture. The forecasts for these industries are for lower growth in terms of contributions to their share of gross State value-added, or in some cases declines in the share of State value-added expected. Survival and growth of these businesses in Bega Valley Shire will require innovation and adaptation. The Innovation Council has reviewed the drivers of innovation for businesses in NSW in the Regional Innovation Strategy (Figure 2). Source: NSW Regional Innovation Strategy (p6) The schematic representation highlights four important questions for Council and the business community which relate to innovation environment: Are local businesses feeling pressure to innovate (or are they happily continuing ‘business as usual’)? Are local businesses willing to innovate (or would they rather things returned to the ‘good old days’)? Do local businesses have access to knowledge (including networks) to enable them to innovate? Do local businesses have access to the tools they need to sharpen their business practice and implement innovative approaches in their business? Traditionally, Bega Valley Shire relied on the agriculture sector (farming, fishing, forestry) that ahs since been the subject of industry deregulation. That government led process has altered the industry and employment profile, with all sectors still in decline. That agriculture sector and the emerging tourism sector ‘exported’ product and service respectively, with income and wealth brought into the shire distributed through the retail system. The shift of industry and employment trends between those sectors emphasises the relative value or GDP to the shire. Prepared by Strategic Economic Solutions for Bega Valley Shire Council 6 Opportunities to alter and extend that ‘export’ function could be explored to: o value added agriculture (such as dairy, fish and aquaculture) o tourism o knowledge services Further, the shire may wish to explore how it can establish a point of difference through: o Brand (through relationships with Sapphire Coast Tourism, Australia Coastal Wilderness and Bega Cheese) o niche markets An understanding of the key areas for employment growth needs understanding – the small business sector of less than 9 employees have scope for discernible expansion – subject to business confidence with regulatory frameworks, capital raising and technology (broadband) capacity. Addressing these fundamental questions provides an approach to building economic and business resilience in Bega Valley Shire and underpins the actions in this draft Strategy. This draft Strategy includes actions on these questions to complement the two other important aspects of economic development: the need for improved infrastructure; and services to improve the local business environment. 2.3 Implications Bega Valley Shire will need to ensure that it is well-positioned to benefit from the growth expected in knowledge-intensive service sectors (professional services, health, ICT and education). As the analysis below shows, however, the Shire is currently deficient in businesses operating in these sectors, indicating that some targeted work to support growth may be warranted. Wages in these sectors are typically higher than average, emphasising the importance to the Shire of securing some of the growth expected (nationally and in NSW). Innovation will be hallmark of survival and growth over the coming decade, and Bega Valley Shire needs to ensure that it nurtures both pressure and willingness to innovate – and actions for Council are set out later in this draft Strategy. It will also be important to ensure that businesses have the implementation tools and access to knowledge to help them build on the desire to innovate – and there is a clear role for Council in facilitating this side of the innovation equation. One area for further attention is the ‘knowledge intensive business services’ sector which consists of businesses providing high quality and high value business building services to other businesses – like advanced e-commerce, design, packaging, food technology, logistics, legal and accounting services. This is an important ‘enabling’ sector currently concentrated in the capital cities. Greater critical mass in these businesses in regional areas is crucial if non-metropolitan businesses (like those in Bega Valley Shire) are to be able to keep up with their metro-based counterparts in an increasingly borderless trading environment. Prepared by Strategic Economic Solutions for Bega Valley Shire Council 7 3 Bega Valley Shire perspectives 3.1 services are supplied from metropolitan Sydney. Figure 3 Value added by industry Current snapshot Various aspects of Bega Valley Shire’s economic profile are discussed in detail below. The three main indicators are: The estimated resident population of Bega Valley Shire as of June 2009 was 33,481 people. The Shire has seen a growth rate of 1.19% per annum over the last 10 years. The Shire’s gross product was estimated at $1,451 million in 2009 (equating to 0.4% of New South Wales’ gross state product) or $46,728 per capita. Unemployment in the Shire in March 2010 was 7.3%, compared to 5.9% for New South Wales as a whole. Main industries by value-added Figure 3 shows the ‘value added’ of each industry sector in the Bega Valley Shire and in NSW. It can be seen that the Manufacturing sector is the largest industry by value added ($153 million or 11% of total) and is a very important contributor to the Shire’s economy. ‘Agriculture, fisheries & forestry’, Construction, Retail trade, ‘Property & business services’ and “Health & community services’ are also important value-added industries for the Bega Valley Shire. Of these five industries, all show higher percentage contributions to valueadding in the Shire than the State average – except for ‘Property & business services’ as most of the higher level business Source: BVSC, REMPLAN economic modelling and analysis system, Compelling Economics ©2009 Retail and hospitality total about 15% and some tourism activity will be included in these two industries, along with ‘Cultural & recreational services’ (another 2%). Tourism Tourism is an important part of the economy of Bega Valley Shire. Based on statistics from Tourism Research Australia 1, for the Bega Valley LGA as at June 2007: - - - - - There were an average 21,000 international visitors, 491,000 domestic overnight visitors and 312,000 domestic daytime visitors to the shire per year. There were 960 tourism businesses in the shire, 903 of which had 19 employees or less. On average, 63% of domestic overnight travellers travelled to the shire for holiday or leisure (State average is 42%). On average, 59% of domestic overnight visitors were from interstate (State average is 32%). On average, 19% of domestic overnight travellers were 65 years 1 Source: Tourism Research Australia International Visitor Survey and National Visitor Survey Prepared by Strategic Economic Solutions for Bega Valley Shire Council 8 - old or older (State average is 13%). On average, 25% of domestic overnight visitors to the shire are from Melbourne (State average is 9%). were sole traders without paid employees. Previous research showed that 10-15% of households in the Shire are likely to host a home-based business, with over half being more than 5 years old, around 30% being part-time businesses, some 10% turning over more than $300,000 per annum and 20% keen to grow. Inclusion in Australia’s Coastal Wilderness provides tourism in the Shire with a major new campaign which will provide additional momentum to marketing the Shire to domestic and international visitors. The campaign will help tourism in the Shire add new opportunities and developments to its foundation as a family holiday beach destination. Business mix The mix of locally-owned businesses by industry (Figure 4) reflects many aspects of the contributions to Gross Shire Product. The differences in the patterns between Figure 4 and Figure 3 relate to the amount of ‘value added’ per employee – which is generally highest for mining, manufacturing and services. Figure 4 shows that of the Shire’s 2,800 locallybased business in mid 2007, most were in agriculture, construction, property & business services or retail. Figure 4 Locally-owned businesses by industry (June 2007) 0 100 200 300 400 500 Agriculture, forestry & fishing Mining Manufacturing Electricity, gas, water & waste services Construction Wholesale trade Retail trade Accommodation, cafes & estaurants Transport & storage Communication services Finance & insurance Property & business services Education Healh & community services Cultural & recreational services Personal & other services The Shire’s strengths in terms of the number of locally-owned businesses are shown in Figure 4. The ‘location quotient’ is a measure of whether the Shire has a higher percentage of businesses in any industry than the nation or not. A location quotient of 1 means it has the same percentage as the nation, while a score of 2 means it has twice the percentage as the nation and a score of 0.5 means it has half the percentage as the nation. The following chart (Figure 5) shows the location quotient on the vertical axis. As an example of deriving the location quotient, the Shire has some 4.4% of locally-owned business in the Health & community services industry. With the national share of these businesses at 4.5% the location quotient is just under 1 at 0.97 (4.4/4.5=0.97) and the industry’s bubble (the purple bubble) is centred just below the horizontal line which marks the location quotient of 1. Furthest above the line is hospitality (Accommodation, cafes & restaurants) with a location quotient of 2.5. 600 Figure 5 shows that Bega Valley Shire has specialisations in hospitality, agriculture and retail. The hospitality industry is particularly well represented in the Shire, as over 7% of the Shire’s businesses are in this industry, compared with 2.8% of businesses nationally – with 7 divided by 2.8 giving the ‘location quotient’ of 2.5 Source: ABS/ATO Australian Business Register 2008 (ABS Cat 8165.0) The Shire is very much a small business economy, with over 96% of locally-based businesses having fewer than 20 staff, including 54% of all businesses which Prepared by Strategic Economic Solutions for Bega Valley Shire Council 9 Figure 5 Bega Valley Shire industry strengths and weaknesses Bega Valley 3.0 Areas of circles are proportional to the number of people employed in each industry at the 2006 Census. Accommodation, cafes & restaurants AGRICULTURE, FORESTRY AND FISHING MINING 2.5 MANUFACTURING ELECTRICITY, GAS AND WATER SUPPLY CONSTRUCTION Agriculture, forestry & fishing Location quotient 2.0 WHOLESALE TRADE RETAIL TRADE Retail trade 1.5 ACCOMMODATION, CAFES AND RESTAURANTS TRANSPORT AND STORAGE Construction Health & community services COMMUNICATION SERVICES 1.0 -20 -10 0 10 20 30 40 50 0.5 60 70 80 PROPERTY AND BUSINESS SERVICES EDUCATION HEALTH AND COMMUNITY SERVICES CULTURAL AND RECREATIONA L SERVICES PERSONAL AND OTHER SERVICES 0.0 % Growth 2004-7 (Industry value added) Source: ABS Census 2006, National accounts, and Australian Business Register, SES calculations Figure 5 adds two other important dimensions to give a concise picture of the Shire’s economic strengths and weaknesses. The size of the bubbles depends on the number of people employed in each industry in the Shire – so hospitality is clearly a large employer, along with retail and construction. The location of the bubbles on the horizontal axis depends on whether the particular industry showed strong economic growth nationally in the 2004-07 period. Continuing the example of Health & community services, it employed over 1,300 people in the Shire in 2006 and was the 3rd largest employing industry – hence it has the third largest bubble diameter after retail and hospitality. Nationally the industry saw growth in value-added of some 34% between 2004 and 2007 (horizontal axis). The best place to be is the top right hand quadrant – where an industry like hospitality is well represented in the Shire, has many employees, and showed growth nationally. Agriculture is also well represented in the Shire, but has fewer employees these days, and nationally saw a fall in its contribution to value-added with the drought. Construction is reasonably well represented in the Shire, is a major employer and was one of the fastest growing industries nationally between 2004 and 2007 with the housing boom. One of the weaknesses in the Shire’s economy is its below-average representation of other growth industries like Property & Business services, Personal services and, to a lesser extent, Health & community services. These three industries all showed very strong growth nationally, but are all under-represented in the Shire at present. As they are also forecast to show strong growth in the next five years, it is vital that the Shire becomes home to more businesses in these industries in coming years. These industries also tend to pay above average wages, and their current underrepresentation in the Shire is partly responsible for the Shire’s below average wage pattern. Prepared by Strategic Economic Solutions for Bega Valley Shire Council 10 Employment The next chart (Figure 6) shows employment patterns by industry in Bega Valley Shire and regionally. It can be seen that the proportion of employment in each industry in Bega Valley Shire mirrors the regional average closely. Retail, Health & community Services and Manufacturing are important industry sectors in the Shire based on employment. Figure 7 Change in employment by industry sector Figure 6 Employment by industry sector Source: BVSC, REMPLAN economic modelling and analysis system, Compelling Economics ©2009 Source: BVSC, REMPLAN economic modelling and analysis system, Compelling Economics ©2009 In terms of the change in employment in each sector (Figure 7), from 2001 to 2006 there has been a decline in the number of jobs in Agriculture, fishing & forestry and in Wholesale trade. Construction, Manufacturing and Health & community services saw solid increases in the number of jobs in the Shire between 2001 and 2006. It is important to compare these employment trends with the pattern for non-metro NSW to see how the change in employment by industry in Bega Valley Shire compares with that in other regional areas. Figure 8 shows that the Shire saw much stronger gains in employment than its regional NSW counterparts in Manufacturing, Mining (off a very low base), Arts & recreational services and Professional, scientific & technical services Figure 8 Employment change - Bega Valley Shire and non-metro NSW ‐50% 0% 50% 100% 150% 200% Agriculture, forestry & fishing Mining Manufacturing Electricity, gas, water & waste services Construction Wholesale trade Retail trade Accommodation & food services Bega Valley Shire Transport, postal & warehousing Information media & telecommunications Financial & insurance services Non‐metro NSW Rental, hiring & real estate services Professional, scientific & technical services Administrative & support services Public administration & safety Education & training Health care & social assistance Arts & recreation services Other services Source: ABS Census, SES calculations This is a positive sign for the evolution of the Shire’s economy as it shows the Shire is moving faster than other regional areas to strengthen its arts/recreation, Prepared by Strategic Economic Solutions for Bega Valley Shire Council 11 manufacturing, and professional services base. Figure 10 Unemployment rate trends Incomes Figure 9 shows the income of Shire residents in 2006 compared to the NSW average. It can be seen that the distribution of income in NSW is more evenly spread than in Bega Valley Shire, with a higher proportion of residents earning over $800 per week. The Shire has a larger proportion of residents in middle to low income brackets than NSW as a whole, with a high proportion of residents in the bracket between $250 and $799 per week. Figure 9 Bega Valley Shire income distribution 2006 Source: BVSC, Australian Bureau of Statistics, Labour force survey catalogue number 6202.0, and DEEWR, Small Area Labour Markets - Australia Source: BVSC, Australian Bureau of Statistics, Census of Population and Housing 2006 Unemployment Figure 10 shows the unemployment rate in Bega Valley Shire, compared to Australia and NSW, from 1996 to 2009. The chart shows that while unemployment has been much higher than the national and state averages in the past, it has more recently mirrored the national average and is presently below 8% of the labour force. Prepared by Strategic Economic Solutions for Bega Valley Shire Council 12 3.2 Main concerns and issues The economic context analysis above and the workshop discussions summarised below highlight the main issue facing the Shire’s economy as the shift from the traditional economy based on commodities – forestry products, traditional fishing and agriculture, and family tourism (largely a readily substituted ‘commodity’) – to a more value-based economy. The Shire has a strong retail and service base, which meets the needs of its residents and visitors, but this alone is not enough to raise the income levels of Shire residents, and access the flow-economic benefits that such income growth brings. Business community views were highlighted at a lively workshop on 7 June which was attended by over 30 people from a wide range of industries in the Shire. The workshop reviewed the Shire’s main economic assets, opportunities for growth, impediments to growth, and suggested roles for Council in supporting growth. A second equally lively workshop was held on 29 July to review issues and recommended responses. Readers are invited to contribute their views to add to these reviews of economic assets, opportunities and impediments. Main Economic Assets Tourism Tourism is the mainstay of the Shire’s economy, based on its reputation as a family beach destination, and has performed well through recent market fluctuations. Still strongly seasonal, there is an opportunity to grow the shoulder season. While its foundations are strong, the sector needs more depth and diversity to capture more spending from higher value visitors for more of the year, and for capturing a share of the growth market of experiential tourism. Some current initiatives will help build this depth and diversity: 1. Being part Australia’s Coastal Wilderness and the associated promotion; and 2. Indigenous communities offering to share culture and stories – supported by recent funding for the Eden Local Aboriginal Land Council to work on surveying the Bundian Way. 3. Heritage Tourism Strategy signposting and packaging around iconic stories of Whales, Mountains and Waters Merimbula Airport is an important asset as it enables fly-in fly-out tourism and business travel (40% of passengers). Airport activity is on a growth path – an airport strategy is underway.. Agriculture The Bega Cheese factory is a major asset, providing national recognition for the Bega name and its dairy products. The Shire has had a strong agricultural base – especially in dairy – and while restructuring has affected the area, along with many other parts of Australia, traditional strengths are being complimented by the emergence of growers of a new range of products. Forestry Forests have been a traditional strength and forestry still employs some 250-300 jobs in management, processing, harvesting and hauling. Woodchip processing is the main value-adding and this market is looking weak. There is little value adding of hardwood sawlogs, though this may improve with harvesting of the regrowth resource in 10-20 years. Fishing The fishing industry is changing from family owned trawling to more commercial pelagic fishing. Value-adding through the processing facility in Eden employs some 250-300 people at the largest seafood processor in NSW. Fishing and processing Prepared by Strategic Economic Solutions for Bega Valley Shire Council 13 of pelagic species is on a growth trend. The refrigerated truck transporting processed fish to Sydney is also transporting other local products. Ports Eden Port is a major infrastructure facility in the Shire, with 100+ big ships stopping per year. The port is on a growth trend. The port has Customs, tugs, support industries for welding, wharf services and crew changes and the next step up in servicing infrastructure will come from investment tied to a shipping line selecting Eden as its preferred Port for vessel servicing. Culture Cultural assets include well known festivals like the Four Winds, Cobargo Folk, Merimbula Jazz. There is scope to see more cultural activity by linking arts, economic development and tourism as Eden TAFE has a strong arts training capacity, and there are many wellestablished artists practising in the region. The region has artists with national and global reputations in fields like painting, writing, music, art glass, and ceramics. Cultural entrepreneurs are needed to build up this asset. Opportunities The workshops proposed ten main opportunities for business and economic development in the Shire: Australia’s Coastal Wilderness, ‘experiential’ tourism, links with NPWS and indigenous communities Food value adding, including preparation of an active grower/supplier directory, supply chain review, networking, links to tourism and increased exporting based on sustainable practices and the reputation of the Bega Cheese brand Aged care Regional hospital and the ‘well being’ industries Building on strong social networks and good health and education infrastructure to attract ‘sea change’ home-based businesses in a range of services Maritime servicing Green jobs including green energy, local food clusters, forestry, waste/recycling and accessing the potential of the Fenner Institute. Sustainability – architects, buildings and the Bega BEND development Creative use of the (soon to be) old Bega Hospital site Education is an attractor in strengths like marine technology training (both in education and via service businesses) Renewable energy – building on capacities and activities already in the Shire like “Clean Energy for Eternity”, wave power trial, proximity of grid to coast, biomass trial (woodchips), degasification technology (exported), renewable energy cluster centring on Eden plus wind and solar activities elsewhere The shire has a mix of natural resources beyond those traditionally relied upon (fishing and forests) – those include sand, gravel and rock resources, as well as being blessed with reliable water (in normal seasons). Those resources may be attractive to construction activities and capable of export. Due to topography of the shire, suitable employment (industrial) lands are scarce, with their development often difficult due to high costs of construction and servicing. Impediments The workshop identified eight impediments to economic growth in the Shire: Availability of fast reasonably priced broadband Access to capital for expanding businesses – especially for medium sized businesses looking for expansion capital Prepared by Strategic Economic Solutions for Bega Valley Shire Council 14 3.3 Limited capacity for growth in some specialist ‘businesses’ including arts and professions Shire not particularly unified – not all of it is in the Bega Valley – and communication across the Shire as a whole is hampered by three parochial newspapers Demographics – churn in population, high non-resident population in summer with less attachment to the Shire and its economic development Ageing workforce and age profile of business owners presents challenges for economic development as well as opportunities for entrepreneurial new businesses Poor transport links and high car dependency Narrow base of post-school education options growing slowly, improving the retail experience for residents and visitors alike. Implications Greater depth and breadth in these higher value service sectors will then have a further positive multiplier effect through added appeal to another market niche for visitors with high disposable incomes – whether they be wealthy baby boomers, pre retirees, well-off professionals or successful entrepreneurs. Bega Valley Shire’s economy is still transitioning from its traditional strengths in primary production and associated export of commodities (agricultural products including dairy, timber products and seafood). The services components of the Shire’s economy are growing, with the associated mix of local consumption of services and export of tourism and specialist services. So the Shire’s economy is maintaining the all-important export element – even while the nature of those exports is changing. The main issues for the Shire’s economy are the need for further diversification in the business mix, strengthening of the value-adding to primary production, and strengthening of higher value service sector business activities. Diversification in these areas will help lift the underlying low wage levels in the Shire. Growth in wages (through valueadding rather than wage inflation) will have strong multiplier effects through the economy over time. For example income growth will catalyse another round of higher level service sector growth in the Shire – as local suppliers evolve to meet the needs of residents with higher disposable incomes. Examples include arts and crafts, personal services, communication services, recreational services and financial services. Exports are essential for regional economies if they are to grow to a scale beyond simply servicing the needs of local residents. Bega Valley Shire has a very solid foundation in a range of existing and emerging export markets, and its export profile is moving beyond the traditional commodities. The Shire’s retail sector is Prepared by Strategic Economic Solutions for Bega Valley Shire Council 15 4 Ways forward 4.1 Community feedback sought This draft Business Growth Strategy is the outcome of quantitative analysis and community consultation. It will be placed on public exhibition, with further community feedback sought, before it is finalised and adopted by Council. 4.2 Council’s role This draft Strategy is based on eight roles for Bega Valley Shire Council that were identified during the consultation process: 1. An agreed vision for the Shire’s economic future, backed by a 20 year plan, planning and investment guidelines, and processes for fast approval of ‘suitable’ developments. 2. Support and assist businesses in meeting their compliance obligations – especially those for which Council has responsibility. 3. Fostering partnerships between the education sector and business 4. Facilitation of businesses through connections and networks, communication (to and between businesses), offering workshops and technologies to help business growth. 5. Supplying Shire businesses with valuable business intelligence on developments in the Shire, what the Shire has, who/when/where (ties to networking and market development). 6. Promotion of an agreed and accepted ‘brand’ for the Shire as a whole – incorporating areas in the Shire that are outside the geography of the Bega Valley itself. 7. Promotion of the Shire and preparation of an ‘investment prospectus’. 8. Lobbying for better infrastructure and services. A unique asset for Council is the sister city relationship with Littleton Colorado, as that city has over 20 years experience in ‘growing its economy from the inside’ using active interventions to stimulate entrepreneurialism and business performance. Over time this has evolved into a refined framework under the name of ‘economic gardening’. There are valuable lessons from the Littleton experience which can accelerate Bega Valley Council’s ability to support homegrown growth oriented businesses. This link is supported by Council’s connections with the Australian and NSW Governments’ innovation programs, and the Illawarra Regional Information Service at Wollongong University. These connections provide a good foundation for the Shire to become a pilot site for testing the principles of Economic Gardening in Australia. Council recognises that it has limited ability to directly assist businesses to establish in industries that have been identified as gaps or opportunity areas. But Council can link existing and prospective businesses to priorities in its Community Strategic Plan and Comprehensive Local Environment Plan (CLEP) to smooth the pathway for any planning approvals that may be required. The Council initiatives set out in the last part of this draft strategy have an emphasis on ‘growth from within’ by helping existing and new local businesses with innovation, adaptation, support facilities and connections with services to address their growth needs. Prepared by Strategic Economic Solutions for Bega Valley Shire Council 16 4.3 Longer term issues and questions The consultations for this draft Strategy identified a series of longer term issues and questions for Council and the community to address, which will form part of the deliberations around the 20 year Community Strategic Plan. These include: Anticipating change: What change in economic circumstances will the Shire need to be addressing in 1, 4 and 20 years time? Are businesses in the Shire aware of the changes in their (local) customer base? And are they servicing the ageing population and workforce effectively? Is there a role for Council in maximising the economic spin-offs of the ageing population? How should the Shire deal with population growth that is concentrated in certain areas and not others? Can forestry play a greater role in sustainability, tourism and valueadding? Is there further scope to exploit public and private forestry resources into the future – across the spectrum from sawlogs to woodchips to by-products? What is the future of the Shire’s icon business, the Bega Cheese factory? What is the most effective role for Council in helping the Shire tap into the ‘green’ economy? How can further value adding be incorporated into agricultural operations in the region? How can agricultural/fishery production, value-adding, food production and tourism be better linked? Is there a role for Council in relation to fostering greater depth and breadth in the tourism sector, alongside its traditional role in promoting the Shire? Prepared by Strategic Economic Solutions for Bega Valley Shire Council 17 4.4 Issue Actions What Council is already doing 1. Set the vision for the Community Strategic Plan Shire’s economy Comprehensive Local Environment Plan LEP process Involvement in Australia’s Coastal Wilderness Liaison with BVS Business Forum and operational support Recommended role for Council Role for others Vision Contributions from chambers, business community, general community, main economic asset owners Set an economic vision for the Shire in 2030. This should set broad aims for the retail mix, tourism, manufacturing and services. The vision should be linked to Australia’s Coastal Wilderness as the key differentiator of business in the Shire, reflecting business and community values. The vision should be backed by a 20 year plan, planning and investment guidelines, and processes for fast approval of ‘suitable’ developments. Ensure the vision is linked closely into the Community Strategic Plan’s aspirations for the Shire and is also reflected in the LEP and respective DCPs Prepared by Strategic Economic Solutions for Bega Valley Shire Council 18 Issue 2. Foster innovation in the Shire What Council is already doing Recommended role for Council Role for others Support for alternative energy generation Compliance and partnerships Business community and Chambers to show support for innovation in business in the Shire Support for Clean Energy for Eternity movement, and “50:50 by 2020” campaign Support innovation within businesses, by helping address constraints such as: Red tape and compliance (those for which Council has responsibility) Business costs (one size) regulations which treat small business like big Restrictions on signs/advertising, where council has responsibility Educators and young people to join with business people Support innovation across the Shire’s economy by assisting sectors which are future-focused and reflect common Shire values like renewable energy, food value adding, specialised manufacturers, marine technologies, Port of Eden, links between creative arts/sustainability and festivals. Ensure these sectors are priorities in the Council actions below: Economic Gardening support; networking; research, information and analysis; promotion; and lobbying. Convene a youth entrepreneurship working group involving young people, educators and business leaders to look at ways of stimulating Prepared by Strategic Economic Solutions for Bega Valley Shire Council 19 and recognising youth entrepreneurship. Prepared by Strategic Economic Solutions for Bega Valley Shire Council 20 Issue 3. Grow the Shire’s economy from within What Council is already doing Recommended role for Council Role for others Established the Bega Valley Business Club in conjunction with NSW DII Facilitation Support from business community and Chambers Compiled and maintains the Business Growth email network Run an Economic Gardening program in the Shire – possibly in collaboration with the Economic Gardening group in the Illawarra and under a federally-funded pilot. Support business networks (targeted for results) in the Shire to facilitate connections, communication (to and between businesses) Arrange (with funding partners) workshops and demonstration technologies to help business growth – including ‘next generation’ business approaches and technologies (like electronic market research and marketing, and cloud computing). Support from University of Wollongong and others running the Economic Gardening program in the Illawarra. Support from State and Federal Governments in bringing workshops and business skills learning opportunities to the Shire. Supply Shire businesses with valuable business intelligence on developments in the Shire, what the Shire has, who/when/where (ties to activity 4). Help tourism operators model operational changes to benefit from and contribute to the experiences that ACW will bring. Leverage Sister City relationships – in particular with emerging economies (Ordos). Prepared by Strategic Economic Solutions for Bega Valley Shire Council 21 Issue What Council is already doing Recommended role for Council Role for others 4. Understand the Shire’s economy Council provides free access on its website to detailed and interactive web-based economic profile information via ID.economy (regularly updated) Business intelligence Wollongong University Hosting workshops and seminars, often in collaboration with partners like the former Southeast Area Consultative committee, the new RDA Far South Coast, the Department of Industry and Investment Monitor and analyse key economic data including population trends, characteristics of in-migrants, visitor trends. Plug into businessrelevant research undertaken by other organisations, and disseminate relevant findings to local business. Conduct or commission research as specific needs are identified and as resources allow. Communicate business-relevant research to local businesses – eg the ‘Over 55 and overlooked’ package designed to help business owners understands how to best service (and profit from) the over 55s market. Host workshops and seminars from innovative experts. Workshops could include a series of presentations by innovative and/or successful home-grown businesses, as well as presentations from outside experts. Partner with DI&I, RDA Far South Coast, Enterprise Connect and universities. Understand the scale, role and economic impact of Creative Economy industries – arts/festivals. Prepared by Strategic Economic Solutions for Bega Valley Shire Council CEFE Community College U3A Willingness of owners of existing innovative local businesses to share their experiences with peers. Four Winds longitudinal analysis project Links to assessment and priorities for region done by Far South Coast RDA Links to Department of Industry and Investment regional jobs and infrastructure programs 22 Issue What Council is already doing Recommended role for Council Role for others 5. Promote the Shire and its business opportunities Council’s agreed role in tourism is the provision of infrastructure, with the industry itself driving marketing and promotion Brand development and Shire promotion Partnerships with South Coast Tourism groups, and State regional tourism programs Council is contributing $250,000 for Sapphire Coast Tourism in 2010-11 based on special levy on business properties Council hosts the film liaison officer Council’s website promotes the Shire and provides useful economic background to potential investors Participation in Country Week Promote the Shire as a place to visit – with tourism promotion funding subject to ongoing and rigorous evaluation to understand how to get the highest return from Council’s investments. Promote an agreed and accepted ‘brand’ for the Shire as a whole – incorporating areas in the Shire that are outside the geography of the Bega Valley. Test the concept flagged in this draft of basing promotion around the powerful ‘Australia’s Coastal Wilderness’ brand. Prepare an investment prospectus highlighting economic strengths and opportunities identified through the research. The prospectus should be web-based and in printed form, and should provide ‘hot spot’ investment prospects identified through research and consultations with industry in addition to the more usual economic snapshot. A specific prospectus is already being developed for Eden Port. Willingness to get involved by tourism businesses, and by other ‘iconic’ businesses in the Shire Partnerships with University of Wollongong and other research bodies to ensure a focus on research on the Shire Review the Shire’s current ‘rate incentives’ for new businesses to ensure they are effective, competitive and affordable. Prepared by Strategic Economic Solutions for Bega Valley Shire Council 23 Promote further investment in aged accommodation to capitalise on many benefits including Consequent reduced need for public housing (saving rates) Increases density which also help improve affordability Prepared by Strategic Economic Solutions for Bega Valley Shire Council 24 Issue What Council is already doing Recommended role for Council Role for others 6. Improve infrastructure Council is both lobbying and driving activities to strengthen infrastructure Lobbying Support from elected representatives, State Government agencies, Federal government agencies and neighbouring Councils Council funding of transport study for Eden Involvement in Southern Councils Group Engagement with State Government Regional Coordination Group Identification and expansion of tourism-related infrastructure like trails, tracks, signage Council will actively lobby for infrastructure identified as being of critical value to the Shire’s economic future: Faster, affordable, accessible broadband Port infrastructure at Eden Health facilities Partnerships between the education sector and business Upgrade Princes Highway Investment in Merimbula Airport Prepared by Strategic Economic Solutions for Bega Valley Shire Council 25 4.5 Outcomes Council’s proposed actions on business growth reflect the measures of: Accessibility Affordability Liveability Sustainability. To make these measures of success tangible Council has set targets for each of the six action areas in the table above. 1. Set the vision for the Shire’s economy Target: Community satisfaction with input into the economic vision. High levels of input from stakeholders. 2. Foster innovation in the Shire 5. Promote the Shire and its business opportunities Targets: Agreement reached on central role of ACW in Shire’s economic future Investment prospectus completed by mid 2011 Rate incentive review completed 6. Improve infrastructure Target: Broadband access improved Target Accessibility: 1. Infrastructure 2. Communications Affordability: 1. Liveability 2. Sustainability: 3. Indicator Airport passenger growth HS Broadband per capita Insert Targets: Higher rates of business satisfaction in dealings with Council Increased rate of new business formation in the Shire increases Youth entrepreneurship activity in place by mid 2011 3. Grow the Shire’s economy from within Targets: Quarterly ‘business intelligence’ updates emailed to Business Growth email list Economic Gardening programs run through 2011 with 40 participants 4. Understand the Shire’s economy Targets: 2 specialist seminars hosted in 2011 Over 55 and overlooked research disseminated across business community Prepared by Strategic Economic Solutions for Bega Valley Shire Council 26
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