Developing Economic Complexity in Western Australia’s remote, sparsely populated regional centres

Guest blog by Giles Tuffin

This is a blog series written by the alumni of the Leading Economic Growth Executive Education Program at the Harvard Kennedy School. 65 Participants successfully completed this 10-week online course in May 2021. These are their learning journey stories.

1. Some of the key insights I have learnt include:

Just because your region produces raw goods (like iron ore) doesn’t mean that you should be making downstream goods from it (like steel). The raw goods are available on the open market, and can be easily shipped to your nearest port. On the other hand, cost of transporting manufactured goods is far higher. So you must have a very strong competitive advantage to make it worth producing downstream goods from your raw products.

PDIA is an excellent approach to solving complex problems. Some key insights are: stay focused on the problem, and use it to keep others focused; break down bigger problems into smaller, solvable problems; and start addressing these problems to gain momentum and create authority.

Binding constraints act as a handbrake to development in your region. They should be identified (particularly by looking for the high prices and workarounds they create) and addressed as directly as possible (including via the PDIA approach).

Understanding a region’s ‘sense of us’ is hugely importance to creating buy‑in for policy you create. Without this understanding, you will end up pushing against a people’s culture and get nowhere.

2. Some of the key insights about my growth challenge included:

  • I initially was targeting creating EC in the regions. As the course progressed, I realized this was not feasible, and focused on creating EC in regional centres (ie. towns with populations over 10,000 people).
  • Some of the binding constraints I considered included: limited access to export markets; high overheads; limited government support to help businesses become globally competitive; limited ecosystems; and difficulty accessing export markets.
  • Confirmation that my preferences for doing things informally and quickly, at the middle‑management level, can yield good results (noting that you do need to get proper authority at some point).

3. One of the key things I will use from this course is the creation of Black Belt Teams and high‑bandwidth organisations. Too many bureaucrats in WA only talk to other bureaucrats. Getting out into the field and talking directly with industry is crucial. While we have Regional Development Commissions who do this (particularly with existing industry), there is a lack of focus on engaging with emerging industry.

4. I have a suggestion rather than a question.

PDIA is an excellent approach that can be used in both developed and developing countries. However, I feel that much of the approaches of EC and binding constraints are less useful in developed countries that already have more ‘letters’ and well developed institutions for things like credit, education, public transport etc. This may be because the majority of case studies and deep dives are focused on developing countries (which in fairness is where the majority of the Growth Lab’s work has taken place).

With this in mind, I’d suggest some materials that specifically cover developed countries, including:

  • How the product space and employment space are likely to look very different for developed countries, because of the higher proportion of people in the services sector (including professional workers) – see diagrams below.
  • How best to use the product and employment space to look not just for new ‘letters’, but for new innovations that aren’t yet listed in both spaces.
  • What sort of binding constraints are most likely to apply to developed countries (noting that the approach to finding them remains the same as for developing countries).
  • Other approaches for fostering global competitiveness.
  • Any insights from the Growth Lab team that came to WA regarding the differences between developed and developing countries.

5. Thank you for a wonderful course! I’ve learned lots – now to apply it!

To learn more about Leading Economic Growth (LEG) watch the faculty video, and visit the course website.

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