Youth exodus bedevils Adelaide's economy

Source: ABS Traveller Characteristics Database and ABS Migration Australia (cat. no. 3412.0)

Adelaide is getting a taste of what has been happing in America for 15 years. People are moving from the east coast to the South, Southwest, and Far West in search of jobs. Structural economic change is driving the shift. Intra-national population growth attracts generally midsize firms.

Those cities that have failed to make the transition from a manufacturing-based economy to a service-based economy are in decline. The residents of Flint, Michigan, Cleveland in Ohio and Buffalo and Rochester in New York, are battling brain drain, falling population numbers and contraction or closure of their traditional manufacturing bases. The combination of employment collapse and population drain – even before the GFC - has meant that whole blocks of these cities are now abandoned.

That is why small and medium sized businesses with a highly skilled and educated population to work in them are vital to the future of Adelaide. SME's will drive the new service economy and a key tool will be the new digital network.

Apart from relatively cheap food and housing, Adelaide has a functioning port and an excellent rail link to Darwin. It has a well-educated workforce, although employers could make more use of up-skilling programs. It needs to produce high end manufacturing goods as well as bio fuels, specialist international education (allow the graduates to stay), increase food production to Asia and establish SA TAFE programs in India.

Older Adelaidians have nostalgic memories of Fritz (compressed pork), chocolate frog cakes and sawdust on the butcher-shop floor. These are Circe's enchantments but meanwhile, GST revenues are falling, the construction industry is moribund and young people are heading to the eastern states in droves.

The leaching of some of Adelaide's best brains and entrepreneurial spirit is very dangerous. These people start up companies, they invent new technology and they contribute to the intellectual and culture life of the city. While currency prices and retail trade issues tend to be ephemeral (although the AU$ has remained high for three years), the deep structural problems are a major concern, as they will affect everyone and especially young generations.