Introduction
It may be an old concept, but mega-region is being applied widely and is growing with new vigour today. It is leading edge technology for economic development. It cannot be ignored in Australia where it offers a more successful way forward. It may be challenging to adopt along the east coast, but the benefits vastly outweigh costs. The costs are mainly change in thinking, and policy rather than cash costs, which will be much the same and spent anyway. The benefits are largely derived from greater innovation, productivity and international competitiveness gained by giving priority to concentrating on cooperation, instead of dysfunctional interstate laws, regulation and competition. A mega-region in Australia was proposed by Dr. Julian Bolleter of the Urban Research Centre, University of Western Australia in his book and on ABC Catalyst 4.12.14. He saw a mega-region on the east coast consisting of many regional cities of 800,000 connected by HSR, instead of +8m mega-cities.
Definition
Dr Jean-Paul Rodrigue wrote in his Transport and Mega-urban Regions, 2017, that prior to 1950 there were only two cities of more than 8m in the world: New York and London. After 1950, the expansion of automobiles, highways and air transport systems led to new spatial structures of cities on a global, regional and local scale. He defined a mega-region as a spatial and structural outcome of urban expansion, the exploitation of comparative advantage and increasing regional and global interaction. In the last 50 years, the new technology of High Speed Rail (HSR) has increasingly improved connectivity within mega-regions.
Google defines a mega-region as a large net-work of metropolitan regions that share several or all the following: environmental systems and topography, infrastructure systems, economic linkages, and settlement and land-use patterns.
Betsy Mason in National Geographic 30.11.16 saw mega-regions as clusters of interconnected cities… defined by connections-things like interlocking economies, transport, shared topography or common culture.
Saskia Sassen recorded in Ge lookahead, The Economist 6.6.14, saw the rise of mega-regions as the distribution of a broader range of economic activities across a network of neighbouring cities than any one metropolis could hope to encompass. This allows firms located in a mega-region to capture a larger share of global value chains than in any individual city.
John Karras wrote in Urban Scale, 4 March 2014, that a mega-region is a single economy with a shared workforce but contains two or more distinct areas each with its own strengths and assets. Richard Florida, father of modern mega-region analysis, wrote in CityLab 6.10.16 that a key task is to identify cities’ assets and build on them. John Karra said that connecting the mega-region by HSR and shared identity are the keys. It is necessary to think on a bigger scale than individual cities.
Significance of mega-regions
Florida noted that there are 40 large mega-regions in the world which contribute 2/3 of global economic output, 90% of global innovation, and cover 18% of world population. (This is evidence that superior performance is achievable with cooperation in complex mega-regions.)
He said that seven types of cities driving the world economy:
- Global giants- New York, London, Paris, Tokyo, Osaka-Kobe
- Knowledge capitals- Silicon Valley (1 of 11 in USA), Amsterdam, Stockholm, Zurich
- Asian anchors- Hong Kong, Seoul-Inchon, Beijing, Shanghai, Moscow
- American middleweights- 16 areas including Miami, Cleveland, Pittsburgh, Detroit
- International middleweights- 26 outside USA including Toronto, Vancouver, Brussels, Milan, Berlin, Vienna, Barcelona, Sydney, Melbourne, Perth, Tel Aviv
- Factory China
- Emerging gateways- 28 including Mexico City, Sao Paula, Rio Janeiro, Istanbul, Mumbai, Johannesburg
Type 1,2 and 3 are world leading economic power centres; many are the centre of mega-regions. Many of type 5 are aspiring technology and knowledge cities.
Dimensions of mega-regions
Karra identified 5 key ingredients to create a mega-region:
- Two or more growing metropolitan areas
- A rapidly growing in-between zone
- Multiple transportation connections
- Complimentary growth patterns
- A diversified regional economy
He said it also needs HSR of 350km/h connecting a diversified but shared workforce.
Karra saw 4 benefits of mega-regions:
- More diversified, less prone to downturns; more robust
- Businesses have access to more customers, partners and suppliers
- Workers gain wide range of job opportunities
- Residents gain access to more entertainment, shops and recreation
It may be added that people have a deeper housing market, choice of housing and range of price.
Context
The economic boom experienced since the second world war, the greatest in world history, appears to be over. Lower economic growth has set in since the GFC. Many developed countries are finding their population growth has slowed or numbers are decreasing. The Australian population has grown rapidly. The Chinese population has migrated en mass from rural areas to the cities, causing stresses in urban areas similar to population increase, like Australia.
The main source of Australian population increase is high immigration, which has contributed around 50% of low average 2% pa GDP growth since the GFC. Government is loath to reduce immigration and GDP. The Australian economy is growing faster for the moment. It has almost reached the pre-GFC long-term average GDP growth of 3.5% pa; a mini-boom today. A mega-region offers the benefits of sustained, robust, higher growth averaging 3.5%pa or more, permanent escape from the long-term slower growth rate of 2% pa and maintenance of Australia’s high wages and high welfare. Greater innovation of a mega-region offers a means to speed up growth and gain higher economic resilience.
Australia has many issues, including housing affordability and climate change, that can be tackled by a mega-region.
Old theory
Present urban policy is superseded. Today, Sydney and Melbourne are intended to grow to +8m in the next few decades and develop into poly-centric mega-cities. This is at the great cost of congestion, demolition of single family, single story homes for higher densification and resultant loss of spatial liveability. Further, poor transport connectivity between the many isolated urban centres/clusters causes innovation to fade as businesses relocate to these smaller, dispersed, unconnected centres closer to where employees live instead of congregating for work in larger numbers/critical mass to generate more innovation in the CBD.
Greater innovation and productivity are the driving forces needed to accelerate economic growth and increase international competitiveness to continue to fund high wage and high welfare and sustain prosperity long term. The old theory does not recognise mega-regions and their greater productivity. Sassen calls this “polycentricity insufficiency”.
New theory
China is the leader in new urban development focussed on innovation. The Government found that new high-rise offices in the CBD of Shanghai were only 30% occupied after several years. It turned out that staff were unwilling to make the harrowing commute to the CBD because of congestion, poor public transport, cost and time spent. Business managers relocated their offices to suburban hubs closer to where staff lived. The same trend has appeared in Sydney and Melbourne.
These suburban centres in China were smaller than the CBD and not linked by convenient public transport, so interaction and innovation faded.
The Chinese Government introduced a new policy of capping the population of big cities, building new cities outside the major cities and connecting them by HSR. This brings more people together in the CBDs of new cities than in suburban hubs and connects them with the main cities’ CBDs rapidly and conveniently in mega-regions. It drives greater innovation.
Examples of mega-regions
Richard Florida et al. in The Rise of Mega-regions, 2007, first identified the 40 main mega-regions in the world that each produced over $100b pa.
The Economist (23.6.18) points out that China wants to emulate Britain of the 19th century when it built railways and invested heavily in housing for its rapidly expanding population. It developed a huge comparative advantage over all other countries in the industrial revolution. China intends to gain the same advantage through innovation. China has established 19 super mega-regions connected by HSR.
China’s President Xi has initiated the building of a new city, Xionan, 120km outside Beijing on HSR. It is focussed on high tech industries. Government factories will be established, research centres and high-tech companies will set up there. President Xi is personally pursuing every detail of the plan and regularly visits the construction sites. He envisages a new mega-region triangle of Beijing, Tianjing and Xionan with a population of 150m. He has appointed Xu Kuangdi, a fit 80-year old engineer, who led development of Pudong, the 5m population financial centre of Shanghai, to supervise the Xionan project. Morgan Stanley estimated that China is investing $500b in building innovative Xionan over the next decade. China is serious in leading the way from congested, poly-centric mega-cities to mega-regions to increase innovation. President Xi Jinping seeks to dominate world high-tech industry.
HSR is the nerve system of Chinese mega-regions, together with new roads and airport connecting separate cities into contiguous urban zones. It is the framework to hold mega-regions together. Small cities are like new suburbs of the main cities quickly connected.
McKinsey Global Institute noted that China and India are consciously creating new mega-regions while American and European mega-regions are created by sprawl. Australian cities are sprawling enough. Conscious creation is a more attractive and productive approach.
India announced a mega-region policy in 2007 and started building in 2012. It is specialising in corridor mega-regions. The main one is the Delhi-Mumbai Industrial Corridor nearly 1500km long. (Brisbane to Melbourne is about 1760km). It follows a freight railway line. A new HSR is being built over 550km of the corridor from Mumbai. Japan lent 70% of the cost at 0.1% pa interest. There are nine cities on the route. Some $100b is being invested in 3 new ports, 6 airports and 9 mega-industrial zones to attract multi-national manufacturers and investment. India plans 100 new smart cities.
In 2018, Sydney proposed a mini mega-region encompassing the three cities of Sydney plus Newcastle and Wollongong. It would be small and sub-optimal. It would be linked by up-graded tradition railway tracks. Commuter time would be cut marginally. A separate HSR line has been proposed for the area. Melbourne has started to link its main country town by faster rail (Medium Speed Rail, not HSR) which cuts commuter time somewhat. It could become a sub-optimum mini mega-region like Sydney. Neither would be connected by HSR. Nor would distribution of population into the country be of a scale to significantly reduce their intended poly-centric mega-city +8m populations. The two would compete, rather than cooperate in one large mega-region focused on international competitiveness.
An Australian mega-region
It is envisaged that an Australian corridor mega-region would include, in time, Adelaide, Geelong, Melbourne, Hobart (connected by air and sea), Canberra, Wollongong, Sydney, Newcastle, Gold Coast, Brisbane, and Sunshine Coast, together with six new cities of 1-3m, one to the west of Geelong, one to the east of Melbourne in Gippsland, one to the south of Sydney and one to the north of Newcastle, one on the Gold Coast and one on the Sunshine Coast, each connected to the next within an hour by HSR and all connected by Fast Freight Rail (FFR). There would be three growing major cities and a faster-growing in-between zone. They would be connected by diverse HSR, FFR, traditional rail, road and air transport systems. The cities would concentrate on complimentary industries. Working cooperatively and synergistically in the mega-region, they would be more internationally competitive than individually. There would be deep focus on innovation and productivity improvement. (See “Innovation” and “A New Innovative City” on website www.veyfasttrain.com.au). The mega-region would aspire to join the top 10 mega-regions in the world.
The mega-region would enable +10m of the 25m population increase over the next few decades, including many immigrants, to settle in the regions instead of the major cities. This would enhance innovation rather than let it fade in ever expanding poly-centric mega-cities.
Cost of building brand new cities for the same number of people who would have settled in the major cities would be half in the country. The saving would be invested in more R&D for more innovation outcomes. Housing in the country would cost half that of the major cities and attract many settlers.
The mega-region would be more environmentally sustainable as new greenfield cities would be designed to be sustainable from the beginning. Fossil-fuel based transport would be reduced by HSR and FFR which would cut Australian emissions. This would substantially contribute towards meeting the Paris agreement.
A mega-region offers a new, more cooperative, mutually supportive approach to federal/state relations with a common Australian purpose that would bring governments together.
The main issue for Australia’s future now becomes: Can Federal leaders engage with State leaders to take up the opportunity to play for Australia in the highest world league as part of a prosperous mega-region, not just for their own states in less prosperous, competing poly-centric mega-cities?
New cities and innovative precincts
The six new cities envisaged in the mega-region would be designed with the focus on innovation as an integral part. They would be in effect ‘super innovation precincts’, while catering for everyday jobs and business activities of a large city of up to 3m people in the next several decades. The concentration on innovation subjects of each city would be different and complimentary to the others and major cities’ innovation efforts. They would be closely connected by rapid transport services. This would avoid internecine wars and dysfunctional interstate policies. It would promote cooperation and diffusion of ideas in the larger national interest of Australia based on good will and directed at greater international competitiveness. It would justify better funding associated with outcomes, rather than demands for less rewarding extreme local competition. The dissension between the new innovation precinct around Central and the existing precinct at Ryde in Sydney, for example, will be settled down and they will be complementary for the greater good.
The principles of developing an effective innovation precinct for start-ups, along with strong R&D centres, apply to designing a new city. Bede Moore of TechSydney talked of the Start-up Genome Report in the AFR 2.8.18 and the factors for vitality. They are first, local connections: a combination of a sense of community, strength of local relationships and the number of “collisions” in the precinct. He noted that 1 innovation job had the potential to create 5 more jobs. He pointed to the $300m Paris Station F as an aspiration. Second, global reach is an important factor in driving growth. He instanced the Visiting Entrepreneurs Program, start-up conferences, Founders for Founders and TechSydney as examples. Third is access to talent. This means attracting more high-tech companies and talented people to Australia by encouraging them to locate or relocate here. Clearly, it is essential that Australia remains an attractive destination for immigrants and companies.
Moore asked, “what is success?” He said it is not comparison with other Australian precincts. It is international competitiveness, or the percentage of GDP created by ventures backed by high growth tech companies. In the USA it is estimated to be 21%. In Australia it is only 0.1%, as yet.
Stuart Penklis of Mirvak in Boss Magazine, August 2018, suggested that by 2050 there would be many 20-minute neighbourhoods in the main cities. There would be much less CBD orientation and much more on neighbourhoods with greater distant working, joined either to nearby offices or by HSR to workplaces. There would be no more long commutes. He gave the example of the Green Square development in Sydney. It is based on a live-work-enjoy formula. This may be acceptable in small pockets, but if it were common, it would damage, if not destroy, large scale opportunities for the constant getting together of people with ideas for innovation, the many desirable face-to-face beneficial “collisions”.
Amantha Imber in The AFR 31.8.18, outlined the findings of Investium’s “Innovation Benchmark Survey”. She said that innovation drives organisations. They focus on making innovation sustainable and repeatable. The top 10 innovative organisations make money available to staff to develop their ideas and give them time to explore creative solutions; they encourage staff to seek views outside the organisation; and middle management are part of the team driving innovations. The bottom 10 organisations were more restrictive on availability of money and time; relied only on staff knowledge; and found middle management were blockers rather than drivers of innovation.
Scott Farquhar, co-founder of Atlasian in the AFR 8.8.18, said that technical professionals, like the 1200 in his company in Australia, value strong connections to multiple forms of public transport and walkable proximity to other innovative businesses, as well as food and entertainment: as open access as possible. Innovation precincts should be designed for serendipity (i.e. good “collisions”). He noted that presence of established tech firms acts as an attraction to innovation precincts.
These factors apply to design of innovative precincts and new innovative cities that encourage sustainable, repeatable innovative behaviour.
It should be noted that the new cities concept provides a design for large innovative precincts close to their CBDs, many offices and the magnets for social life that increase the chance and opportunity for “collisions”. (See “New Innovative Cities in an Australian Mega-region” on website www.veryfasttrain.com.au)
Other dimensions
Unfortunately, innovation has not been explained adequately to the Australian community. “Innovation” is anathema to many people as it is interpreted as loss of everyday jobs. In fact, it increases jobs overall. “Productivity improvement” is only slightly less alarming. Productivity improvement can be actively encouraged: CEOs of companies should explain it, introduce a campaign for it and sprinkle “holy water” on it by giving their permission to seek productivity improvement by all their workers. People on the shop floor and in offices know many ways to increase value added in their areas of work. CEOs should inform their workforce that productivity improvement increases the company’s competitiveness, particularly international, and so increases their job security. Companies should introduce a process for assessing good ideas, rewarding them for good ideas, provide time and money to develop good ideas by the proponent: a culture of innovation and productivity improvement.
Companies should have a system for retraining their people and reskilling them for new contributions, which would reassure people of job security and encourage more good ideas for productivity improvement. Gaining certified qualifications from authorities recognises their new skills and would enhance peoples’ sense of job security, which gives them confidence to contribute good ideas. Governments should promote personal productivity improvement endeavours economy-wide, including in the public service, as it would reduce the amount of unemployed benefits needing to be paid, increase net tax revenue and increase Australia’s international competitiveness.
Competing motivations
One of the concepts underlying plans for 8m populations for Melbourne and Sydney is “smart cities”. This employs digital means of managing cities. It is aimed primarily at combating climate change by introducing greater sustainability in the highly densified cities; at what cost?
Another approach is “20-minute neighbourhoods”. In essence, this encourages densification on the grounds that community health is improved by more walking rather than driving, which saves huge government expenditure on health in highly densified cities; at what cost?
These two motivations are compatible in plans to densify through costly demolition of 1.5 million single family, single story homes with large private gardens and garages on ¼ acre blocks; and replace them over three decades by rebuilding four dwellings in two double story units with minimal non-private backyards, no pools and no garages on almost all ¼ acre blocks in Melbourne, Sydney and Brisbane to settle 10m more people there. It would cause a disastrous loss of spatial liveability for the population.
Densification is seen as a way of curtailing sprawl, congestion and dealing with the lack of public transport. It is highly unlikely that Melbourne and Sydney at 8m each, the size of London and New York, will ever equal their excellent, extensive public transport systems built over the previous 100-150 years. It is likely Melbourne and Sydney will equal their low world liveability ranking of around 50, declining from the top 10 in the world. Melbourne and Sydney would grow to equal the population density of London and New York and thereby lose their cherished spatial liveability.
The third consideration is innovation. It is highly likely to fade in Melbourne and Sydney as they densify without extensive public transport as jobs are pushed out to where people live in many small clusters around the suburbs instead of in the CBDs where maximum “beneficial collisions” occur. One commentator said of the Melbourne suburban underground ring railway proposal that it would create 15 more mini-CBDs at the stations it served. It would be another disastrous cost of lower innovation.
The urge to innovate has been around since the caves. Smart cities and health spending are recent concerns. They should not dominate innovation to the community’s detriment, especially as innovation may lead to better climate action and health cost control.
A mega-region in Australia would generate a better combination of sustainability, health, and innovation in new cities in the country for +10m more population, rather than in highly densified major cities. Government expenditure on infrastructure for population increase in the country would be materially less, about half the cost in the capital cities. At the same time, spatial liveability would be retained in new and old cities. Health and safety of children outside in fresh air in large back yards and the social experience of barbecues is greater than in smaller, squashed, higher rise dwellings. As well as a better quality of life, the creation of innovation, productivity and international competitiveness would be greater in an Australian mega-region leading to more prosperity without loss of spatial liveability.
Aspirations
Adrian Turner, CEO of Data61, in the AFR 1.8.18, said that Australia stands to benefit from a $315b windfall to GDP in the next 10 years, if it can boost its ability to use technology for productivity gains. Australia needed to invest in more digital business and create new, globally relevant scalable export industries. Opportunity for tech is accessible and global markets are accessible. Australia has a strong Stock Exchange. He said that 11% of global GDP was attributable to digital technology, but Australia is falling behind. There should be more investment by business.
Data61 has identified several areas of endeavour for Australia: precision health-care, digital agriculture, data driven urban management, cyber-physical security, supply chain integration, proactive government, legal informatics, smart exploration and production, where Australia has an “unfair competitive advantage”. In the AFR 8-9.9.18, Turner made the case for large Australian investment in the “big data” thrust.
On another theme, Australia has many significant, successful dominant global niche companies. Their competitive advantage and example should be built upon. They should be present at innovation precincts, improve their innovations and mentor other budding dominant global niche players. They have the advantage of high prices for quality specialised products that pay for Australian high wages and welfare. They are the base for a major competitive Australian industry.
Larry Marshall, CEO of CSIRO, in the AFR 31.8.18 called for “Moon-shots”: ambitious, exploratory, ground-breaking projects. They draw on a wide array of expertise and partnerships. Bill Ferris, Chairman of Innovation and Science Australia, proposed an Australian mission: “Become the healthiest country in the world”. He said that Australia needs a wellspring of ideas and talent and build everything around it to get innovation.
Another mission may be to “Become the healthiest, wealthiest and wisest country in the world”. Australia is well on the way in these directions. It is strong in medical research and health services. It is already one of the wealthiest countries per capita in the world. Its universities punch well above their weight internationally. A mega-region would draw the talent, expertise and partnerships together to cooperate in their achievement, benefit and international competitive advantage.
Conclusion
Australia has a great opportunity to establish a young, vigorous mega-region that would achieve all the benefits available. Investment in a mega-region would mean people pulling together to create more innovation, productivity improvement, international competitiveness and prosperity than possible without it. Australia would stand in company with world leading, innovative mega-regions.
A mega-region along the east coast would include most of the growth of the Australian population. Immigration would continue at a high level without swamping the major cities and causing further distress. There is plenty of space in the regions for more cities on the HSR line as new cities reach 3m. High immigration would continue concentrated on skills and regional settlement founded on new city building jobs, education and innovation precincts. It would add to endeavours for more population engagement in productivity improvement and job security to add to Australia’s comparative advantage.
There is a third possibility besides drastically cutting immigration or highly densifying cities. It is building new regional cities in a mega-region. (See “New Innovative Cities in an Australian Mega-region”) The balance between sustainability, health and innovation would be better in the mega-region applying the new theory than in +8m, densified poly-centric mega-cities.
New cities would be cheaper to build in the country. Lower cost housing would attract new settlers. The government funds released from lower cost infrastructure would turbocharge R&D. The resulting greater innovation and productivity improvement would raise job security, prosperity and wellbeing.
Lower cost housing in the country would end the problem of housing affordability and at the same time stem the increase in congestion in major cities. Liveability would rise all round.
More sustainable new cities, and HSR/FFR would significantly reduce green-house gases towards meeting the Paris agreement. These railways would have low demand for electricity from renewable sources. HSR is a means to the end of connecting people in the mega-region rapidly and effectively.
A mega-region would build on major city assets and what they are known for internationally. Melbourne is the mining capital of the world. Sydney is the financial capital of the southern hemisphere.
Australia must retain its world-leading liveability ranking to attract skilled immigrants, expertise and high-tech businesses in competition with other countries, not lose it through high spatial densification.
Australia should build on its assets: its strong representation by dominant global niche companies. It cannot compete with the leading countries in global mass markets where low cost is the key, but it can where uniqueness and quality are key in small, specialised niche markets with high prices, which can pay for its high wages and welfare. Much of the R&D and innovation spending and endeavour should be concentrated in the direction of expanding the reach and increasing the dominance of existing Australian global niche players. It should create more new ones where Australia has a comparative advantage that can be enlarged outside the mass market arenas where Australia cannot compete, and China seeks to dominate. Australia too should consciously choose a mega-region, not give in to sprawl.
This strategy would complement Australia’s advantages in mining and agriculture. It would employ many people in new cities in the mega-region. There would be many more complimentary business opportunities in the new and ‘old’ cities pulling together in the mega-region to capture more value chains and value added from global niches than individual Australian cities. Australia should become a world-leading dominant player in global niche markets. It can emulate China’s endeavour to gain huge world comparative advantage in high tech industries, but in the smaller, rewarding field of global niches that are below the radar. This does not preclude innovation in high tech industries where advantage can be gained. Australia would recover its higher average GDP growth of 3.5% pa by building a mega-region.
The people should be informed that it is not a choice between high immigration plus poly-centric mega-cities and low immigration leading to loss of prosperity. There is a another, more viable option: a mega-region with high immigration, mainly to the country, and achievable high growth prosperity.
The mega-cities will not stop growing suddenly when they reach 8m each. They may keep growing to +16m each this century. They may become third world in size, densification, lack of public transport, congestion, performance, prosperity and quality of life.
Australians should act on aspiration, not rely on complacency and simply allow the country to fade in growing poly-centric mega-cities employing old concepts of development. The mega-region would generate cooperation in international competitiveness and increased prosperity more than possible by two separate mega-cities engaged in counter-productive local competition.
Australia should think bigger than mega-cities and their loss of wellbeing. Australia will lose wellbeing with such cities, or it will raise wellbeing by adopting a mega-region for a better future.
The Federal Government should engage with the States in improving federal/state relations by pulling together in the mega-region and joining the world-leading mega-regions in greater international competitiveness and prosperity.
PJK©14.9.18
