Youth exodus bedevils Adelaide's economy

Legend has it that the great blues guitarist Robert Johnson sold his soul to the devil at a county crossroads for fortune and fame. Adelaide is at a crossroads too but its blues are debt and recession.

Adelaide faces the type of problems that confront many mid-sized cities across the western world. There's tension between those who fear development will rob their city of its charm and life style and those who embrace globalization.

But the real fight is for jobs – to create them and hold on to them. Global economic forces, like a mastiff's jaws, are shaking large sections of the Australian labour market and South Australians are feeling the maul. Adelaide is at a historic crossroads.

From the very beginning South Australia was unlike other states. South Australians were descended from middle class free settlers from the UK who began arriving in the 1830s. Edward Wakefield planned Adelaide from Newgate Prison, having copped a three-year sentence for abducting a schoolgirl heiress. From its very conception, the City of Churches was mired in contradiction and eccentricity.

Wakefield's plan was to invite only those people who could afford to buy land - and the laboring classes could follow later. It was 'Upstairs, Downstairs' writ large. Wakefield wanted a civilized city – not a new Sydney where rum and prostitution ruled.

South Australia has a relatively undiversified economy. The state government places much importance on winning mining and defence contracts as income and employment generators. But these are not long-term investments nor are they driven by private investment or entrepreneurial thinking.

When BHP pulled out of the $30B further development of the Olympic Dam last year, it killed off 5000 potential jobs. Yet The Advertiser ran 'don't worry' stories and showed happy people celebrating local icons such as Farmers Union iced coffee, Coopers Ale, etc. This was very odd.

A week later, Alexander Downer claimed in the same newspaper that South Australia had plenty going for it but he had reservations.

"The trouble with South Australia is it has become frighteningly complacent. There isn't a battle of visions and ideas, just a bunch of Jeremiahs telling anyone with a commitment to progress why it can't be done … The sad Olympic Dam decision may, at last, wake us up and remind us that societies without progress just wither and die," Downer said.

You know you're in trouble when the voice of Tory privilege starts complaining.

SA has the highest debt in its history at round $5.6 billion and is expected to grow to $9 billion by 2015-16. The Government deficit is $867 million and is projected to drop to $776 million next year. GST revenues dropped in 2011 by $2.8 billion. Money is too tight to mention.

Many of the economic problems such as the decline of parts of the manufacturing sector, unemployment and underemployment, are structural. While the state government cops a pasting in the daily newspaper, it is not totally its fault. Sector decline and unemployment is part of a global trend as new and cheaper labour is sourced offshore. Other local business owners prevaricate about whether to upgrade plant to manufacture higher priced products for export.