Better Suburbs = Better Cities: Employment and the Importance of the Suburban Economy

Australia’s inner city areas and CBDs are a focus of media and public policy attention, with good reason. But it’s also true that the real engines of employment are outside the inner city areas and that the dominant role of our suburban economy as an economic engine is grossly understated, even ignored. This is not good public policy. It’s not even common sense. 

I have a view that the focus on urban renewal and inner urban economic development has become a policy obsession of late. It’s the trendy thing to quote Richard Florida’s ‘creative class’ theories which become the excuse to increasingly spoil inner city workers with transport, cultural and other forms of taxpayer funded infrastructure. There was a time when inner city areas, if not recapitalised, risked pockets of blight. But those days have passed. Today, it is the suburban landscape – much derided in fashionable inner city policy circles – that risks pockets of blight if not brought back to the attention of policy makers and strategically recapitalised.

The imperative is simple: the suburban economy is so much larger than inner city areas. As a rule of thumb, between 8 and 9 out of ten jobs in our major metro regions of Brisbane, Sydney and Melbourne are suburban. Only one in ten or at most two in ten, are found in the inner city areas. Achieving a 10% improvement in the suburban economic engine is hypothetically equivalent to achieving an 80% improvement in the economic performance of the inner cities. 

So why this preoccupation with the inner cities to the detriment of the suburbs?

First, a quick review of the evidence as provided in the Census. 

In Brisbane, the CBD itself accounts for 12.5% of the Brisbane region’s employment numbers – one in eight. The combined CBD and inner city areas – including the CBD - account for around 170,000 jobs.  That’s not a very big number.  As a proportion of state-wide jobs, it’s less than 9%. As a proportion of the 925,000 jobs across the metro region of Brisbane, it’s less than one in five – and that’s with including the near city areas like South Brisbane, Fortitude Valley and Spring Hill. 

In Sydney in 2011, the CBD accounted for only 8.3% of all jobs in New South Wales, and for only 13.4% of all jobs in wider metropolitan Sydney. Including the surrounding areas of Pyrmont, Ultimo, Potts Point, and Woolloomooloo raises this share to just 9.7% of all jobs in the state and 15.6% of jobs in metropolitan Sydney. So one in ten state-wide jobs and one in every six or seven metro wide jobs. 

In Melbourne, the CBD is home to just 7.6% of the state’s total employment, and to just 10.6% of all jobs in greater Melbourne. Including the ‘fringe’ locations of Docklands and Southbank sees this share rise to only 10.3% of the state and 14.3% of greater Melbourne, which is one in ten of all jobs in the state and one in seven metro wide jobs.

In none of these centres is the concentration of inner city jobs close to one in four metro wide jobs. Yet if you asked a room full of people – industry and planning experts included –a significant proportion will think the figures are much higher. I’ve done this several times at workshops and presentations and there are a worrying proportion of people who seem to think the figure is more than 50%. A wider survey of the general public might even put the figure higher – it would be an interesting exercise to find out.

Suburban employment centres are by nature much more widely dispersed. Teachers, doctors, dentists, tradies, factory workers, shop workers and so on do not rely on close proximity to each other to perform their work, as do CBD employment markets. In the suburban business districts of our metro regions, workforce concentrations typically fall into a band somewhere between 3,000 and 5,000 jobs per square kilometre. Places with super-regional shopping centres will tend to be at the upper end of that scale while industrial areas at the lower end. CBDs, by contrast, can easily have pockets where the employment density sails past 10,000 or 20,000 jobs per square kilometre.

But however dispersed these suburban jobs may be, it doesn’t make them any less important to the economy – particularly given their dominant role as employment and economic engines.

So why then the preoccupation with the inner cities and why the dearth of policy interest in the suburbs? 

Perhaps the inner cities are seen as more glamorous? There are more higher paying jobs and more CEOs to the square mile than anywhere else. It’s where cultural facilities and seats of government are found. It’s where the most expensive real estate is. Basically, any concentration of money plus power is always going to grab attention. It’s an age when celebrity tweets capture more media and public attention than important issues of economic policy. The CBDs and inner city areas are widely seen as ‘where it’s at’ and where the cool people are. ‘Nuff said?

Sadly, even policy makers seem to have fallen for the inner city bling over suburban substance. The importance of transport workers, freight workers, teachers, doctors, tradies or suburban white collar employment to the economy receives next to no policy comment. The performance of suburban transport systems, the need to promote higher employment density in key centres, the pathways by which property owners could be encouraged to partner with public sector agencies for suburban centre improvement – none of these seem to appear as workshop or forum topics promoted by any of the leading industry groups. 

I suspect there’s also a strong element of cultural cringe as it applies to our suburban heritage. Frequently mocked as a cultural wasteland or ‘home of the bogan’, there’s an almost desperate desire to prove we’re an advanced society by focussing on the lifestyles and achievements of our inner city areas and the people who live and work there, to the exclusion of all else. ‘Urbanists’ grab headlines and appear as keynotes at any number of planning conferences. Sub urbanists (and there are plenty of them) are evidently persona non grata.

It’s as if a prosperous, successful and highly efficient suburban economy simply doesn’t cut it in the global race for attention and status amongst cities, which seems almost exclusively focussed on the how much like downtown New York or downtown Paris every other city can pretend to be. 

The reality is that the inner city economy is reliant on – not divorced from – the performance of the suburban economy. In the same way that there can be no public sector without a profitable private sector, I suggest that a strong and prosperous inner city economy relies heavily on a strong and prosperous suburban economy. And in the same way that strategic infrastructure and policy decisions are needed for the inner city to operate at optimum efficiency, the exact same applies to suburban economies.  

The question is whether this balance is being achieved.

Ross Elliott has more than 20 years experience in property and public policy. His past roles have included stints in urban economics, national and state roles with the Property Council, and in destination marketing. He has written extensively on a range of public policy issues centering around urban issues, and continues to maintain his recreational interest in public policy through ongoing contributions such as this or via his monthly blog The Pulse.