Cities and Urban Renewal

The way we live and do business is changing. The one certainty we face as a community is that how we live, work and play will continue to change and evolve.

With an ongoing focus on global integration, cities are increasingly the engines for growth.

New wealth opportunities for Australian cities will require an urban system that is competitive in both the global and national knowledge-intense economy. To facilitate these new opportunities our cities need to change and Urban renewal and revitalisation projects are critical to facilitating these opportunities.

Urbanisation-A Global Trend with Local Implications

A key global trend influencing Australia’s tradable economic future is urbanisation, with rural populations migrating to urban areas in search of higher living standards and employment opportunities. Understanding urbanisation is important for two factors. One, the global trend towards urbanisation, particularly in the developing world will be a major driver of global productivity growth. Secondly, higher rates of urbanisation and its growth in economic development and wealth mean increased demand for goods and materials as well as services such as education, tourism and health.

The rapid urbanisation of the developing world will facilitate its economic convergence with the developed world. In response, developed economies will be forced to pursue productivity growth through technology and innovation, and this will require seeking tradable solutions in the global marketplace.

A major implication of urbanisation is rising living standards and a growing global middle class. Over the next ten years, the global middle class is expected to almost double and the geographic balance of the global middle class will shift from Europe and North America to the Asia Pacific.

Dense and Knowledge-Intense City Economies

Post-industrial cities, regions and nations are dependent on their international competitiveness, which in the future will need to be anchored in knowledge-intense production and services.

Industries based solely on a single region or country are no longer the reality in today’s trade dependent global economy, and, overwhelmingly, tradeable products of the future, be they goods or services, will be made up of a series of intermediate products delivered by a multitude of suppliers based across several regions.

Diverse and complex supply chains will be interwoven across industries, regions and locations. With an already increasingly specialised supply of goods that are originating from locations with specific competitive or comparative advantage, sustainable economic development of our cities will be dependent on increasing the share of knowledge intense tradeable goods and services across regions and internationally.

The capacity to reach global markets has been driven over the last 100 years by the massive transport and ICT technological improvements and rapid decline in transport and ICT costs. This has fundamentally changed the nature of modern industry and economies.

As the image below illustrates, 80% of Australian gross domestic product (GDP) is concentrated in and around major cities. Moreover, economic activity within cities is highly concentrated in a few areas. For example, 19% of Brisbane’s GDP is generated in its CBD, considerably more than any secondary employment centres (Kelly et al, 2014). Cities represent the apex of the national economy and represent locations where value channels converge.

Kelly, J-F., Donegan, P. Chisholm, C. and Oberklaid, M., 2014. Mapping Australia's economy. Cities as engines of productivity. Grattan Institute.

Evolution of Knowledge Intense City Economies

Knowledge-intense economic activity requires high levels of specialisation, skills and wages to be competitive. Growth in knowledge-intense industries increases competition for limited resources (generally land and labour), exerting inflationary pressure in the set of locations enabled by the transport infrastructure. Where there is capacity (land, skills and population) in the surrounding metropolitan region and efficiency in transport systems then the inflationary pressure results not in inflationary outcomes but in outward movement (to locations of lower costs) of more standardised economic activity and affordable housing opportunities. This provides a bonus for surrounding metropolitan areas that can grow their economic activity, employment and populations. This outward spread of benefit will in part depend on the capacity in the outlying areas for skilled and knowledge intense labour, well located and affordable housing supply, and transport infrastructure to provide accessibility.

Policy Context and Response

Globally, policy makers are recognising the need for urban consolidation and renewal to accommodate denser urban communities instead of allowing a continuation of urban sprawl. Greenfield development is recognised as a part of the urban growth mix, but its share of future growth is decreasing. Inappropriate urban sprawl imposes a significant infrastructure burden on the community and governments, undermining the social, economic and environmental sustainability of our cities.

Urban consolidation increases utilisation of existing infrastructure networks, including water, sewer, energy and transport networks. However, urban consolidation and renewal cannot be sustainably achieved without the creation of communities. Place making and mixed use precincts sit at the heart of successful urban renewal initiatives and projects, along with high levels of physical and virtual connectivity to employment, services and amenity.

Throughout Australia policymakers have emphasised a focus on urban consolidation and renewal from local and neighborhood plans through to regional and metropolitan plans to deliver a diverse and sustainable supply of housing, employment and recreation opportunities.

The global trend towards urbanisation is driving historically high levels of population growth and demographic change within our cities, creating the need for new socially and economically diverse and connected communities. In addition to better utilisation of infrastructure, urban consolidation and renewal generates significant benefits, such as increased productivity through greater effective employment density.

Environmental sustainability is also a key driver of urban renewal and consolidation. The utilisation of brownfield and greyfield sites for new communities preserves our environment and reduces the carbon footprint of our cities.

Delivering urban consolidation and renewal is challenging and requires coordinated planning, sometimes across multiple levels of government and most certainly across agencies. Master planning and structure planning provide avenues to provide coordinated responses. Such master plans and structure plans need to be informed by understanding local neighbourhoods, infrastructure and site constraints, such as site contamination.

At a city or regional scale, City Deals provide for a coordinated funding response across all levels of government to deliver infrastructure and facilities for large scale urban renewal and community building. CDM Smith has a comprehensive understanding of City Deals, having recently prepared a health and knowledge strategy for Townsville as part of Australia’s first City Deal.

CDM Smith Delivers

CDM Smith can deliver services across all aspects of urban renewal and consolidation from understanding site contamination and its implications for development through to infrastructure and structure planning and onto community, economic development strategy and implementation drawing on our experience across several jurisdictions and contexts.

We assist all levels of government and the private sector to deliver sustainable urban outcomes.

Related Capability