Regional towns often lack the economic ‘buffers’ required to help them withstand major shocks or cyclical downturns in local and global markets. Market shocks and downturns are becoming more common as we move toward an increasingly globalised economy. The pattern of regional towns rising to boom towns and falling to subsidised towns (Figure 1) occurs throughout the world.
Figure 1 – Changes in Regional Economies
Source: Jason McFarlane (Pracsys) 2012
As Figure 1 shows, there is often little security for regional economies if there is a downturn in the market for a major commodity. This can then result in a ‘subsidised town’ where the only major investment in basic infrastructure and services comes from political intervention. The worst case scenario is becoming an ‘unviable town’ in which there is no sustainable economic driver.
When considering economic development we should focus on introducing the buffers into local and regional economies which can increase their resilience, improve their ‘quality of life’ characteristics, and ultimately reduce their exposure to global market fluctuations.