Regions and Innovation: A Reflection
After reflecting on the worthy contributions in this volume, this chapter poses a challenge to the regional development sector: to create a new theory of sustainable regional prosperity that will explain how to scale up innovative local initiatives and apply their principles nationally, so that effective regional development becomes routine.
In Australia, ‘economic rationalism’ (neoliberalism) is the pre-eminent conceptual framework within which regional policy is crafted. After identifying four inherent shortcomings of this ideology – based upon mainstream economics – four related obstacles to regional prosperity are explained. First, the concentrated sources of energy needed for transport fuel are limited. Second, growth in throughput of energy and materials cannot continue indefinitely in a finite planet. These two limitations can be side-stepped in part by re-localising population and economic activity into regions. However, regional vitality is drained away by two other impediments – free trade in goods, services and investment; and budget cuts that starve the public preconditions for economic activity.
Policy-making in this field is compromised by the shortcomings of gross domestic product, the mainstream headline measure of growth. It is a flow account and is blind to the depletion of natural, manufactured and human capital.
Innovation is simply a label for the creative spirit of a free community. Innovation is intangible. It cannot substitute for the physical energy and materials that drive an industrial economy and it is easily dissipated when its tangible expressions such as intellectual property flow outwards. It is essential to sustain a prosperous community, but it is not sufficient.
KeywordsGross Domestic Product Free Trade Trade Deficit Mainstream Economic Private Debt
I acknowledge intellectual inspiration from Richard Sanders, ecological economist and Hugh Stretton, public intellectual. I thank my father Eric Edwards for raising an awareness of public interest and my wife Wallis for making space for me to write.
This chapter contains a few sentences from three conference papers by the author: Edwards (2011a), Edwards (2011b) and Edwards (2011c). These extracts are used with kind permission of the respective organisers.
- ABARES [Australian Bureau of Agricultural and Resource Economics and Sciences] (2011). Energy in Australia 2011. Report for the Department of Resources, Energy and Tourism, Canberra.Google Scholar
- Arndt, H. (1978). The rise and fall of economic growth. Melbourne: Longman.Google Scholar
- Barnes, P. (2011). Multifactor productivity growth cycles at the industry level. Staff working paper, Productivity Commission, Canberra.Google Scholar
- Batra, R. (1993). The myth of free trade. New York: Touchstone.Google Scholar
- Chang, H.-J. (2003, Apr 18). Kicking away the ladder – The “Real” history of tree trade. Paper presented at the conference on globalization and the myths of free trade, School University, New York.Google Scholar
- Edwards, G. (2004). Political Arithmetick: Problems with GDP as an indicator of economic progress. In J. Goudy (Ed.), Encyclopaedia of life support systems. Paris: UNESCO.Google Scholar
- Edwards, G. (2010). Feasible paths: Connecting visions to results. Paper presented to the healthy cities conference, Brisbane. www.heathycities.com.au
- Edwards, G. (2011a). Sustainable growth: The pathway to prosperity … or an oxxymoron??? Paper presented to the healthy cities conference, Noosa, Queensland. www.heathycities.com.au
- Edwards, G. (2011b). Preconditions for prosperity. Paper delivered to the sustainable economic growth for regional Australia conference, Geelong.Google Scholar
- Edwards, G. (2011c). Decentralisation: Four lost decades. Paper delivered to the sustainable economic growth for regional Australia conference, Geelong.Google Scholar
- Gutteridge, M. (2007a). Peak oil: Implications for rural and remote Australia. Charleville: South West NRM Limited. http://www.southwestnrm.org.au/publications/climate/index.html
- Homer-Dixon, T. (2006). The upside of down. Washington, DC: Island Press.Google Scholar
- Keen, S. (2001). Debunking economics: The naked emperor of the social sciences. Australia: Pluto Press.Google Scholar
- Meadows, D., Meadows, D., Randers, J., & Behrens, W. (1972). The limits to growth: A report for the club of Rome’s project on the predicament of mankind. New York: Universe Books.Google Scholar
- Meadows, D., Randers, J., & Meadows, D. (2005). Limits to growth: The 30-year update. UK: Earthscan.Google Scholar
- Mohr, S. H. (2010). Projection of world fossil fuel production with supply and demand interactions. PhD thesis, University of Newcastle. http://dl.dropbox.com/u/8223301/Steve%20Mohr%20Thesis.pdf
- Riedy, C. (2007). Energy and transport subsidies in Australia. 2007 update. Final report. Sydney: Institute for Sustainable Futures.Google Scholar
- Simmons, M. (2000). Revisiting the limits to growth: Could the club of Rome have been correct, after all? An energy white paper. http://greatchange.org/ov-simmons%2Cclub_of_rome_revisted.html or http://www.energybulletin.net/node/1512
- Stiglitz, J. (2002). Globalization and its discontents. London: Allen Lane.Google Scholar
- Stretton, H. (1999). Economics: A new introduction. London: Pluto Press.Google Scholar
- Warburton, D. (2009, Oct 21). An inconvenient truth leads to lurking doubt. The Australian Financial Review. p.60 http://www.afr.com/p/national/an_inconvenient_truth_leads_to_lurking_cDnDZaQSYMscMJjmAfUUWO
- Wong, P. (2011, April 21). In “Govt raising efficiency dividend: Wong”. http://news.ninemsn.com.au/national/8240019/govt-raising-efficiency-dividend-wong
- Zittel, W., & Schindler, J. (2007). Coal: Resources and future production, Paper No. 1/07, Energy Watch Group. http://www.energywatchgroup.org/fileadmin/global/pdf/EWG_Report_Coal_10-07-2007ms.pdf
- Cobb, C., Halstead, T., & Rowe, J. (1995). If GDP is up, why is America down? The Atlantic Monthly, Volume 276, Issue 4, October 1995 pp. 59–78.Google Scholar
- Daly, H. (2003). The IIIth of nations and the fecklessness of policy: An ecological economist’s perspective. Post-Autistic Economics Review, 22, 1–4.Google Scholar
- Eckersley, R. (Ed.). (1998). Measuring progress: Is life getting better? Australia: CSIRO.Google Scholar
- Fleay, B. (1995). The decline of the age of oil. New South Wales: Pluto.Google Scholar
- Galbraith, J. K. (1987). A history of economics: The past as the present. London: Hamish Hamilton.Google Scholar
- Gutteridge, M. (2007b). Peak oil: An introduction for the average Australian. Charleville: South West NRM Limited. http://www.southwestnrm.org.au/information/carbon/index.html
- Hamilton, C. (2003). Growth fetish. Canberra: The Australia Institute.Google Scholar
- Weiss, Linda, Elizabeth Thurbon and John Mathews. (2004). How to kill a country: Australia’s devastating trade deal with the US. Crows Nest: Allen & Unwin.Google Scholar