The aim of this phase of the study was to "...address questions that an investor might have about relocating an IT operation to the area". This was intended to provide:
A clear indication as to what the proponent needs to negotiate and information regarding the sources of this next level of information that might be required.
However, this approach of attracting IT operations to the area was not found to be the most appropriate for a region located away from Australia's east coast population. It is suggested that the region needs to organically grow local IT businesses to create factors which will then attract IT enterprises and outside investment to the region. This is developed further in part four of the report. One source of outside investment requiring special attention is Government. Political factors, not economic, are most important for deciding government call centre location and need to be addressed.
The resident population of the Great Southern region was 51,400 or 2.8 per cent of the State’s population in June 1998 (RDC 1998). Primary industries dominate, with broad-acre cropping, wool, livestock, horticulture - including viticulture - and fishing. Timber growing and tourism are growing industry sectors.
Linking IT to popular new developments in primary production would also have benefits in promoting the lifestyle benefits of the region and making a virtue of its remoteness. As an example IT support for Viticulture could be promoted through on-line wine publications, such as Nine MSN's The Wine Magazine, which has featured the Great Southern Region:
This powerful symbol reminded me that the Great Southern is primarily Australian bush: and it is the traditional rural way of life that dominates here. Viticulture, winemaking and wine tourism are of only peripheral importance. Its isolation and the part-time nature of the wine industry in the region have been factors which have restrained the growth of wine tourism. While this is changing, such change will be a long, slow process. (Forrestal 1997)
Segal Quince & Partners (Segal 1985) report a statistical analysis of high technology industries around Cambridge. Most firms were independent, with only 25% subsidiaries of larger companies. The companies were small, with 30% having at most five employees and 75% having at most 30 people. There was significant movement of people between companies, the University and research laboratories, providing high quality technology transfer. Only 17% of new companies were by people straight from the University, more were from later spin-offs. The major reason for locating the firm in Cambridge was that the principles already lived there. Local contacts, market opportunities and a prestigious address were also factors. It is suggested that a modest version of this approach could be applied in the region and is described in part four.
As noted in part one of the report, Government incentives and benefits were not found by research to be widely considered by organisations in their location decisions. While this research was specifically on call centre locational determinants, the author's experience suggests it would be generally applicable to IT businesses. Where such organisations locate in regional areas, outside Australia's major capital cities, it will most likely be to a major population centres of the east coast of Australia. Under this analysis, there is a significant challenge for the Great Southern Region. Even in the Western Australian context, the region is at a disadvantage to regional areas closer to Perth.
There are also disadvantages for the region with direct and indirect government assistance. An example of such government assistance was in the development of a call centre in the Cooma Region, which then attracted a major Defence Department contract (DoD 2000). There are also closer examples, such as at Bunbury (pop 37,000) , 350kms away from Albany with a 150 seat CentreLink Call-centre. According to Patrick Cox, currently undertaking research at the Australian National University on the interaction between regional call centres and regional/rural culture (personal communication 2000):
In a partial response to your query why CentreLink established a call-centre at Bunbury: 16 of CentreLink's 25 call-centres are in regional areas. The reasons given are that each centre employs 50 local staff and provides a government presence in the region. The selection of each region is probably politically motivated however, call-centres in regional areas experience little staff turnover, enjoy comparatively low leasing and staffing costs. Bunbury has high unemployment and a tertiary institution and therefore provides a good source of staff. It is reported at http://www.multiline.com.au/~johnm/sharepri.htm that Bunbury CentreLink Call-centre has 150 seats. As this is 10 times the size of the normal CentreLink Call-centre, this figure should be further investigated.
Technological developments have lessened the relevance of telecommunications and other infrastructure requirements in the location of IT businesses. The major costs for call centres, web and software development is staff, not telecommunications or equipment. A major new businesses can justify the installation of the required telecommunications infrastructure, a micro or small business needs little more than a standard telephone line. There are therefore few technical issues to be addressed for the region.
A major investment in upgrading of the telecommunications of the region would be unlikely to attract significant investment. However, it may be worthwhile to lobby Tesltra for installation of the General Packet Radio Service (GPRS) upgrade to the existing GSM mobile telephone cells and its CDMA equivalent in the region. This would allow use of specially fitted mobile telephones for Internet access at speeds comparable to the Public Switched Telephone Network (PSTN) in city areas. This would allow micro-businesses to use wireless internet access in place of installing a second telephone line.
One potential area for the expansion of network access is in Katanning. Web servers, call centres and other services requiring network access could be co-located in the existing Telstra Call Centre, or nearby, such as at the telecenter.
A conventional approach to IT development would have printed brochures and videos, with high production standards, targeted to senior staff of major companies. Organic growth requires a different approach, with on-line information providing a directory of current businesses and support services. These can be used by local people considering setting up or expanding a business, as well as creating a sense of a healthy IT culture to attract outside investment. Any proposals received for major investments can be handled on a case-by-case basis by development authorities.
Forrestal 1997 THE REMOTE GREAT SOUTHERN IN WESTERN AUSTRALIA, by Peter Forrestal, The Wine Magazine, 1997-2000, URL: http://www.lifestyle.ninemsn.com.au/winemagazine/region/region3.asp
RDC 1998 A Regional Development Policy for Western Australia, Regional Development Council of Western Australia 1998-2000, URL: http://www.regional.wa.gov.au/policy/greatsouthern.asp
TUG 1999 "ACR Net Sold", CLYDE TUG NEWS Newsletter, March, 1999 No.1, URL: http://www.ozemail.com.au/~clydetug/tugnews.htm
DTRS 2000: Regional Solutions Programme, The Department of Transport and Regional Services, URL: http://www.dotrs.gov.au/regional/solutions