OPINION: PRIOR to the industrial revolution, cities were generally awful places, dangerous and full of disease. With industrialisation came productivity, factories agglomerated in cities and jobs and greater wealth could be accessed. Over the last 150 years megacities have evolved – cities with populations greater than 10 million people.
We may come to think of these places as huge economic engines and an integral part of the future when, in fact we can equally come to think of them as dying relics of the first part of the industrial age.
None of them are particularly attractive places to live – violence in the form of murder, terrorism, riots; a lack of civil and human rights; pollution; corruption – these are problems that visit all these cities all too frequently. Nice places to holiday, but you wouldn’t want to live there!
What matters in the future is not the largest population but the greatest number of skilled workers. This is currently dividing the world, dividing countries, and dividing cities. A division can be along the lines of low paid service work and high paid professional work. Geeks vs grunts, if you like.
However, it may be more instructive to think not so much of ‘cities’ in the future but ‘economic regions’ or ‘zones’.
The area surrounding and encompassing Brussels, Antwerp, Rotterdam, and Amsterdam is one example; not just New York but an area encompassing Boston, Philadelphia, and Washington. No longer just Hong Kong but an area encompassing Guangzhou and Shanghai with over 50 million people.
In Australia, it is Brisbane, Sydney, Melbourne, and everything in-between with a potential population of 30 million people that have to compete in this new, connected world.
In Australia we look to Adelaide as an example of a city where the youth has left for opportunities in Melbourne and Sydney.
From 1976 to 2014 between 18,000 and 30,000 South Australians left the state each year. Many were professional couples. This to the benefit of Sydney and Melbourne.
How do we prevent Australia from becoming the ‘Adelaide’ of the world?
What happens if Australia is no longer competitive in a world that competes for creative, talented, knowledge workers?
Australia will probably have to make changes to its tax system, benefits, entitlements and protect and enhance its significant lifestyle benefits in order to attract and retain talented people in the future.
OFFICE/RETAIL/INDUSTRIAL: Tax system changes present significant risks and opportunities for owners of commercial property.
By Tony Crabb, national director, research, Cushman & Wakefield*
