MEGA TRENDS. Affecting regions. Gary White - Chief Planner NSW Department of Planning and Environment

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1 MEGA TRENDS Affecting regions Gary White - Chief Planner NSW Department of Planning and Environment

2 What is happening in our regions today 2

3 Mega Trends Dramatic city shapers and re-shapers We need to understand MEGA TRENDS and the impacts they have on specific locations and communities Mega trends will drive the World, Australian cities and regions We need to engage in strategic thinking and develop planning which responds to mega trends 3

4 Identified mega trends - CSIRO More from less Going, going... gone? The silk highway Forever young Virtually here Great expectations An imperative to innovate 4

5 More from less Increasing demands for limited natural resources The Global Footprint Network (GFS) estimate that the world s population currently consumes the equivalent of 1.6 planets Based on current trends, this will rise to two planets by 2030 If everyone in the world lived like Australians, we would need 5.5 planets Source: Global Footprint Network

6 Going, going gone? Protection of biodiversity, habitats and the global climate 6

7 The silk highway Rapid economic growth This new silk road represents a big, bold and expensive bet by President Xi Jinping to help revive China s slowing economic growth it has broad implications for global trade as a whole 7

8 Forever young An ageing population and changed retirement patterns 8

9 Virtually here Digital technology reshaping labour markets 9

10 Great expectations Changing consumer expectations 10

11 An imperative to innovate Technological advancement 11

12 MEGA TRENDS The Australian economy is estimated to be the 12th largest in the world in 2015, despite the fact the country is home to only 0.3 per cent of the world s population (Australian Trade Commission, 2016 Benchmark Report) 12

13 MEGA TRENDS Source: Lloyd's Insurance and University of Strath Clyde Engineering, 2013, Global Marine Trends

14 MEGA TRENDS In 2015 the world population was 7.3B, in 2030 it is expected to reach 8.5B, by 2050 it expected to reach 9.7B, and by 2100, 11.2B (UN Department of Economics 2015) Source: Lloyd's Insurance and University of Strath Clyde Engineering, 2013, Global Marine Trends

15 Existing versus future growth in containership Source: Lloyd's Insurance and University of Strath Clyde Engineering, 2013, Global Marine Trends

16 20 years ago 16

17 10 years ago 17

18 5 years ago 18

19 Today FACT: 90 per cent of the digital data in the world today was created in the last 2 years alone 19

20 Transformative technologies Smart devices Remote sensing imagery Robotics Big Data The internet of Advanced things genetics 20

21 Tomorrow Source: Frost & Sullivan, Mega Trends Presentation M82C-MT 21

22 Structural change Structural changes - a prompt to re-examine our planning frameworks Driven by MEGA TRENDS Multiple mega trends means changes are occurring at a faster rate than previously predicted Structural Change 22

23 The new service economy The influence of the new service economy is washing through our cities, but our employment, planning and property development processes are underdeveloped by comparison We are now experiencing a structural shift on the back of an emerging service economy and this requires a new spatial appreciation to plan our towns, cities and regions What worked YESTERDAY will not work for TODAY or TOMORROW 23

24 Front end of a business response 60 percent of all new jobs are created by companies 5 years and younger, 60 per cent of that 60 per cent are by companies younger than 2 years Over 70 per cent of new jobs are being created out of centres Young firms are contributing disproportionally to net job creation As firms age they contribute less to job creation and more to job destruction Although employing only 15 per cent of the Australian workforce, young SMEs generated the largest share of total job creation in the economy (40 per cent) Source: The employment dynamics of Australian entrepreneurship, 2015, Department of Industry and Science, ABS 24

25 The new job creation paradigm 24 August 2016 Australia still lags badly in global innovation surveys, and trails other rich economies Noting that the Australia economy is estimated to be the 12 th largest in the world

26 From a linear to a circular economy It is estimated that in Australia 26 billion can be generated in material savings as we move to adopt a circular economy Industry Intelligence

27 The sharing economy The sharing economy, also known as collaborative consumption, is a global trend moving at fast pace Global shared businesses range from shared accommodation such as Airbnb, to shared vehicles such as Uber to shared entertainment such as Netflix to shared work spaces and shared tools The shared economy has three key underlying practices in common o Use of technology to facilitate peer to peer transactions o Relies on user ratings this ensures a level of trust between users o Workers use their own product i.e. car, and are given a large degree of flexibility i.e. working hours 27

28 How will mega trends play out in regional areas 28

29 Connectivity and functionality Global Region National State 29

30 Population growth Population projections show that NSW will grow to 9.9 million people by 2036 Our booming economy and the great lifestyle offered by Sydney and Regional NSW are reasons we're seeing the NSW population continue to grow More people move from Sydney to regional NSW each year than move from the regions to Sydney 30

31 A growing demand for agriculture Population growth means changing food consumption rates and patterns nationally and globally This growth demand creates opportunities for NSW s regions around supplying new and emerging markets Understanding the nuances of global and regional growth and their particular market requirements will help target export growth areas QUESTION are other states or countries better positioned to respond to growing global demands, in terms of products, price and supply? How do we better position ourselves to best respond to these trends? Cathay Pacific Boeing F departing Toowoomba s West Wellcamp Airport for Hong Kong carrying a range of products from the Darling Downs region including frozen and chilled beef, nuts, mangoes, organic chicken, and lettuce 31

32 Exporting food to China With a population of over 1.3 billion, China has emerged as the world s largest consumer market for food and beverage Food consumption patterns in China have changed significantly as living standards have risen and more consumers are exposed to a greater diversity of choice Australia is recognised by local consumers as having a clean and green environment with good quality products and brands China is a major Australian beef export destination, 97 per cent of which is exported in the form of frozen and chilled cuts opportunities exit to increase the percentage of chilled packaged beef 32

33 Future of exporting Mechanisation the future of farming China consumes the equivalent of the entire Australian apple crop in 22 hours (Ed Fagan Mulyan Farmers) There is a growing desire for increased quality Australian products Australian supermarkets could become price takers if international demand is strong (Ed Fagan Mulyan Farmers) Mulyan Farmers Cowra NSW 33

34 Rise of the middle class and agriculture In relation to Australia s regional areas, this mega trend relates to the production of food demanded by a wealthier population The westernisation of Asian diets have changed significantly with growth in protein consumption (animal agriculture) There are growing demands for healthier food The benefits of improving diets world wide extend environmentally, socially and economically New state-of-the-art South East Livestock Exchange at Yass ACT 34

35 The rise of the middle class By 2020 the global middle class is expected to reach 3.2 billion people, and 4.9 billion by 2030 (OECD Development Centre 2010) North America % % 322 7% Europe % % % Central and South America % 251 8% 313 6% Asia Pacific % % % Sub-Saharan Africa 32 2% 57 2% 107 2% Middle East and North Africa 105 6% 165 5% 234 5% World % % % 1.8 Billion 3.2 Billion 4.8 Billion 35

36 Tourism in regional areas Mega trends are altering the social, economic and environmental circumstances that affect peoples travel choices tourism is dependant on wealth and increasing affluence There has been significant growth in tourists seeking an experience with an increase in visits to wineries (28%), farms (14%), botanical gardens (14%), national parks (13%) and beaches (12%) these figures will continue to rise (Tourism Research Australia 2016) Global connectivity data allows Australia to identify tourism hot spots to capitalise on the characteristics and assets of regional areas Rural areas that show the most favourable growth and economic strength have their economies based on tourism Australia and Happy recreation Farm tour Gold Coast Airport upgrade on the back of the Commonwealth Games Blue Mountains Singapore Airlines first direct international flight between Canberra and Singapore 36

37 Knowledge and information services Transformative technologies are presenting a new employment geography across Australia For instance advanced digital, genetic and materials science technologies will enable farmers to improve how they produce food and fibre products, while innovative sensory systems and data analytics will create highly integrated farm to fork supply chains (RIRDC) The internet is already providing opportunities for suppliers to bypass former marketing channels by creating new avenues for producers to producers to connect directly with consumers i.e. via Facebook, Twitter and Instagram 37

38 Education and technology Over the past decade Australian governments have invested extensively in digital education, highlighting the growing link between technology and economic prosperity The rollout of the National Broadband Network (NBN), combined with a new generation of mobile and personal computing devices, is opening new frontiers in digital education The digital revolution provides flexible options for learning, reducing participation barriers for student who live in regional or remote areas i.e. online education making study accessible anywhere at anytime 38

39 International Education Universities are an increasingly powerful economic engine room for regional Australia, delivering jobs and driving new innovations Education institutions in regional Australia provide considerable research strengths, especially in agriculture, marine science and medicine International education is one of Australia s top service exports, valued at over $19 billion in 2015 (including fees and associated expenditure) this sector currently supports more than 130,000 jobs in Australia (Study NSW International Education Strategy 2016) As of June 2016, 448,411 international students were enrolled in Australia - 11% more than June 2015 (Department of Education and Training, international student data 2016) International education could double in size by

40 A changing climate Australia as an arid continent is particularly vulnerable to climate change risks such as bushfires and drought. The effects of climate change on food production will vary geographically but overall there will be more negative effects than positive impacts By 2030, the estimated global gap between water supply and demand will be 40 per cent (United Nations Environment Programme, 2016) By 2050, the costs of extreme weather could reach up to one per cent of world GDP per annum New levels of resilience will need to be developed to withstand the increasing effects climate change will bring 40

41 How can we respond to mega trends 41

42 Geographical boundaries 42

43 Functionality and connectivity To Toowoomba Functionality is based on how we use space e.g. infrastructure, technology, supply chains, activity nodes; where as connectivity allows us to optimise the distribution of people and goods in and out of spaces To Broken Hill & Adelaide To Brisbane To Newcastle To Melbourne To Canberra To Sydney 43

44 Connectivity and freight and logistics Patrick Port Botany state-of-the-art automated port terminal Patrick is a major competitor in the Australia market providing container services in the four largest ports - Sydney, Melbourne, Brisbane and Perth 44

45 Opportunities brought about by mega trends Regional industries have an opportunity to increase market share by communicating via new information technology their products and livestock's reducing the middle player Consumers are becoming empowered and have more choice and control over their purchases with selective access to information about production and the health benefits New technologies are allowing companies to gain significant increases in efficiency and productivity Increased connectivity will bring more people together from multiple disciplines to solve some of the worlds biggest challenges i.e. climate change and cancer The rise of entrepreneurism will create new opportunities for individuals, businesses and communities. Self-employment has been identified as a vital economic tool for rural people and communities supported by new technology 45

46 A regional planning agenda 46

47 A vision Dream it in detail. Put it into your own hands. See an outcome clearly. Mix it with a little effort and add generous portions of self-discipline. Flavour with a wholesome pinch of ambition. Stir briskly with confidence until the mixture becomes clear, the doubts separated from the opportunities. Then bake it in a moderate mind and the dreams rises. Decorate with individuality. Cut into generous portions and serve with justifiable pride. Approched in this manner life is a piece of cake Bryce Courtenay 47

48 A strategic framework should tell the story about a particular place or key holed area What it is What it wants to be How it will get there Themed Principles: 48

49 Strategic place based planning Nationally, we are pre-occupied with development assessment the statutory part of planning as being the planning system as opposed to it being a correctly calibrated delivery platform alongside its infrastructure cousin good at regulating, not very good at facilitating 49

50 What needs to happen now within the planning system? A common vision is essential to recognise how mega trends will affect different regions and communities, and the opportunities and challenges they will bring Understanding regional needs around the new economy Planning needs to enable and support strategically identified areas for growth Planning needs to act as a catalyst and facilitator to attract and retain emerging entrepreneurs and the resources they need Effective and timely planning can limit the adverse impacts that mega trends will bring, i.e. limit the adverse impacts and risks of climate change A paradigm shift towards strategic led planning will identify where a region is currently place, where they want to go and what they must do to get there 50

51 Move on and enjoy! If enthusiasm can be generated around the achievement of strategic outcomes, this has the potential to become a precursor for creating a planning culture that has the ability and capacity to respond to mega trends 51

52 Gary White 52