Adelaide lost in space as brain pool shrinks

· SA's slice of the national economy has fallen from 7.3 per cent to 6.3 per cent and is falling.

Rising unemployment, migration exits, an ageing population (neither major party had a policy) and flat or falling house prices, are signs that the elephant is stirring.South Australia recovered from the State Bank crisis in the 1990s by privatizing assets. Some suggest we have been paying through the nose for high power bills ever since. The only asset of any size left to sell is SA Water. There was no debate on this either.

Since the mid 1980s, a lack of competitiveness has strangled the state economy like a vine. The decision to close Holden ends the state's longstanding strategy of depending on government intervention to prop up uneconomical industries. The state must now stand on its own feet. But how can it if it's political leaders won't?

I have a theory, which is very unpopular in Adelaide. The brain drain over an entire generation has compromised the city's ability to solve complex problems. How else does one explain why the state government spent built a one-way highway costing $71 million? Realising the mistake, they are now building the other lane at a cost of about $300 million. One can almost hear the faint twang of 'Dueling Banjos'.

Unfortunately, as the Boomers and Gen X have found to their chagrin, when they return to Adelaide to look after ageing parents and hunt for work, young recruiters knock them back in favour fresh-faced candidates. Age prejudice is decidedly not groovy. They stay just long enough to put Mum or Dad in to a rest home and then vamoose, taking their 30 years of work experience and savings with them.

This phenomena is also happening in the USA. Smaller cities in the eastern states which relied on manufacturing or steel production are suffering population drain as workers flee looking for jobs. They leave behind hollowed out, tumbleweed cities with high crime rates.

In 'systems theory' speak, the City of Churches is a closed environment. It has become inward looking, fearful and denialist. I know my theory is based on some dodgy sociobiological speculation but I'm sticking by it. Adelaide is dying. It won't happen over night, but unless there is radical change, it will join the charnel house of once great medium sized cities.

Here comes the nasty bit. The Productivity Commission Research Paper (Nov 2013), 'An Ageing Australia: Preparing for the Future', says labour participation rates are predicted to fall from 65 to 60 per cent from 2012 to 2060, and overall labour supply per capita will contract by 5 per cent.

The research paper says that over the next 50 years, Federal and state governments will have to draw down 6 per cent of national GDP to pay for health, aged care and the Age Pension for the Boomers. This will finish Adelaide off unless new blood is allowed in, the recruitment culture changes and there is significant investment in Croweater land.

So next time you raise that glass of Barossa Valley wine, think of Adelaide with our ageing Boomer population, our bloated public service and our young recruiters, so fiercely patrolling their turf like Rottweiler's.

When the elephant finally awakes, old undiversified economies shake. Housing prices tumble. Young and middle aged people leave in the tens of thousands in search of jobs elsewhere. Retail revenues slide. Crime rates go up. There are mass reneges on debt and utility payments. 'For sale' signs litter the CBD. All that was once solid melts in to the air.

The great failure of the state election was that neither party created a narrative that explained to the voting public why businesses are closing down and what we need to do about it. That's a double failing: a poverty of thought and an absence of leadership.

South Australia's political leaders not only failed to engage the public on compelling economic dangers, they actually ran away from the elephant in the room.