Old RAH site is the key to Future Adelaide — it just needs a major player, says Business SA

ONE site in the city is the “once-in-a-lifetime” key to reinvigorating Adelaide — and all it needs is a curious major international player.

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ADELAIDE’S burgeoning reputation as one of the world’s most liveable cities should be used to entice investment from global companies, business leaders say.

They say the city should focus on attracting investment in the state’s traditional industries of agriculture and resources, as well opportunities in the emerging defence, space, technology and biomedical sectors.

PwC estimates the $90 billion naval shipbuilding program will provide a $134.4 billion stimulus for the South Australian economy — a game-changer for that industry’s supply chain according to PwC Adelaide managing partner Kim Cheater.

“Defence industries is a no-brainer — that’s a guaranteed starting point,” he said.

“There’s going to be an ecosystem that grows, there’s going to be moths to the flame for those sorts of investments and we’re already seeing examples of that.

“Boeing is a good example, who’ve said actually that’s the place we want to be even though we’re not building submarines or frigates.

“No state is just in a random grab for an organisation to come and set up shop somewhere so it’s going to come back to what are our competitive advantages are in terms of the types of industries and those ecosystems.”

PwC’s CityPulse report identifies the old Royal Adelaide Hospital site and Aboriginal art gallery as a “once-in-a-lifetime” opportunity to create a point of difference to cities interstate and to put Adelaide on the map.

Murals painted at the old Royal Adelaide Hospital site. Picture: Tom Huntley

Business SA chief executive Nigel McBride suggests the site would be the perfect location for Google’s new Australian headquarters, potentially becoming the “beating heart” of the city.

“The old RAH is a once in a multi-generational opportunity to have a multifaceted precinct downtown — there’s the arts element, the entrepreneurial space, the university space, the Michelin star restaurant — make it a place to become the cultural and technology hub of Adelaide along historic North Tce,” he said.

“The gallery and broader development of the old RAH site has to be globally relevant. The Aboriginal collection could be and has to be iconic culturally.

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“It would be the very beating heart of a vibrant CBD and it would have all the ingredients needed to attract a big international player.

“We only need one significant global company — we need one major player to say we’ve arrived.”

Mr McBride says size is no longer a barrier for smaller cities seeking to attract international investment.

“Knowledge workers can pretty much choose to work wherever they want to in the world — in smart cities like Amsterdam, Dublin or Austin — and given our strong arts and culture scene, the fact we’re becoming more highly connected, I think we’ve got all the ingredients to compete,” he said.

An artist impression of the proposed national Aboriginal Art and Culture Gallery on the old RAH site.

“If you take Google for example, they are present in boutique cities like Dublin, Copenhagen, Austin — so if we want to bring one of the biggest technology companies to Adelaide then being small is not a problem — it used to be a negative but it is now a strength.

“You want to be a boutique vibrant city and you want to be in an exciting and politically stable place like Australia or Canada or New Zealand.”

As South Australia continues its transition from traditional to advanced manufacturing, South Australian Centre for Economic Studies executive director Michael O’Neil believes access to skills will become an increasingly important factor for companies seeking to invest in the state.

“We’re seeing a move away from large-scale production and mass labour to more sophisticated manufacturing and South Australia, relative to other places in the world, has a well-educated, competent and capable workforce,” he said.

“In terms of attracting international investment we should be focusing on areas like medical, things related to the ageing and to education.”

PwC people and organisation partner Maria Ravese welcomed the State Government's recent payroll tax changes for small business but said more could be done to attract large and multinational groups.

“They look at the total cost of doing business — this includes tax costs, administrative processes, remuneration levels, housing, ease of movement — so yes the review of costs is definitely right up there,” she said.

“Going out there and talking to Google, that’s brilliant and doing something a little bit different.

“Incentives are one thing however we need to have other ways to show that we’re really eager to attract multinationals and other big businesses to South Australia.

“The incentives need to be more compelling for a large multinational — we need to start thinking bigger and bolder.”

The 10 best cities to work in — PwC’s Cities of Opportunity report

1 — London

2 — Singapore

3 — Toronto

4 — Paris

5 — New York

6 — Amsterdam

7 — Stockholm

8 — San Francisco

9 — Hong Kong

10 — Berlin

Rankings based on economic factors such as job opportunities, ease of doing business and labour costs, and quality of life indicators including transport, public safety and environmental sustainability.

Playing to our strengths

Agriculture — the food, wine and agriculture sectors are booming, and with agricultural production contributing more than $6 billion to the economy it remains one of the state’s bedrock industries.

Mining and resources — a more upbeat outlook on commodity prices has resulted in renewed spending from major local players including BHP, OZ Minerals and Beach Energy.

Defence — the $90 billion naval shipbuilding program is expected to deliver a $134.4 billion stimulus to the state’s economy in the coming years.

Biomedical — with plans well underway on construction of SAHMRI 2, Adelaide is home to a world-class biomedical precinct, which is attracting investment from around the world.

Space — South Australia remains in the running to host the national space agency and is already home to innovative start-up companies including Fleet Space Technologies and Myriota.

Technology — the Ten Gigabit Adelaide initiative is supporting improved connectivity for the city’s emerging tech sector.

Micro-X executive assistant to the Managing Director Hannah Cox, Managing Director Peter Rowland and Chief Financial Officer Georgina Carpendale in the gardens near their Tonsley headquarters. Picture: Calum Robertson

What makes Adelaide a better option than bigger cities

SOUTH Australia’s burgeoning reputation as a global hub for biomedical innovation inspired Micro-X to choose Adelaide instead of Melbourne as the place to establish and grow its workforce.

The manufacturer of lightweight x-ray imaging systems has more than doubled its employment since setting up shop at Tonsley after relocating from Victoria in 2015.

A $3 million loan from the former State Government supported the company’s move, but managing director Peter Rowland said the decision was driven by strategy rather than financial incentive.

“Money is a big enabler but I’ve seen businesses follow a bribe to invest somewhere fundamentally unattractive and long after the money’s gone the place is still unattractive to the business,” he said.

“There was no way we were going to make that mistake.

“The South Australian government had identified a cogent and coherent strategy for the medical device sector.

“It was a well articulated strategy and because of all the money we’ve been spending here - SAHMRI, the biomedical precinct, Tonsley and the new facilities at the RAH - the board and myself were gobsmacked. These were people we could do business with.”

After listing on the Australian Stock Exchange in 2015, Micro-X has grown its workforce to 27 staff - developing, assembling, and exporting its x-ray products around the world.

Access to skills has been critical for the company, which took on nine former Holden workers as the Elizabeth plant was winding down its operations.

“I wanted that attention to costs, efficiency and quality,” Mr Rowland said.

“Medical devices are made by hand but I wanted a culture that was similar to building a car - you need that attention to detail and discipline.”

PwC’s CityPulse Adelaide report identifies Port Adelaide and the surrounding suburbs as a key growth area on the back of an expanding defence industry, but warns that industry support must be extended to Adelaide’s southern suburbs to ensure a balance of economic benefits across the city.

That’s where Tonsley can be a game-changer, according to Mr Rowland.

“Putting all of these fantastic and innovative businesses under one roof here is brilliant,” he said.

“Part of the Tonsley spirit is that openness and collaboration - we’ve had visitors from all over the world and they all come in and say this place is amazing.”

Mr Rowland is confident the state’s “can do attitude” will attract more investment from companies interstate and overseas.

“What’s important is transport infrastructure - you need to remain globally connected,” he said.

“If you're in New York and you’re looking at Australia you can’t really tell the difference between Adelaide and Melbourne.

“Adelaide is easier to do business, cheaper, faster and more efficient, so why wouldn’t you do business here?”