THROUGHOUT ITS HISTORY, SOUTH AUSTRALIA HAS FACED CHALLENGES as the driest state in the driest continent, with a small population and long distances from markets. The constant challenges have brought out bold innovatives and entrepreneurial solutions that set it apart – and built a $100 billion economy.
In agriculture, South Australia soon became the nation’s granary and the leading wool grower. But it also produced remarkable manufacturers such as car makers Holden and T. J. Richards, and other 19th Century Adelaide companies that grew to national prominence including A.M. Bickford and Sons, cordial makers; F.H. Faulding, pharmaceutical maker and wholesaler; D. and J. Fowler , wholesale grocers; and William Burford and Son, soap makers. This continued in the 20th Century with Pope Products and Hills Industries.
The Elders pastoral company grew into an Australian giant as did Adelaide Steamship Company. Along with another establishment company, the Bank of Adelaide, they suffered at the hands of outside influences and crashed. The 1990s State Bank collapse, that forced premier Tom Playford’s Electricity Trust of South Australia (ETSA) to be privatised, was a major blow to the whole state.
The privatising of ETSA is a factor in another of South Australia’s bold initiatives: the growth of renewables in its energy mix. Other blows such as the scaling back of the huge Olympic Dam mine (now growing again with a new strategy) and the closing of General Motors-Holden plant in 2017 are being absorbed. Unemployment in the five years leading up to 2017 has bounced around the 5-7% band, with youth joblessness higher and a large percentage of part-time work.
Shrugging off an ageing population, the state’s bold initiatives have resumed in high-tech, research and advanced manufacturing, built around creative entrepreneurs and smart universities.
The state also has that base of strength in agriculture, especially grain and premium food and wine. It has a tradition of world-class capabilities in health, education and aged care. With its tourist attractions and major events, South Australia is still being ranked by Lonely Planet, The Economist, and London’s Sunday Times and others on the world lists of best places to live or visit.
BOOM-AND-BUST CYCLE STARTS SOON AFTER 1836 EUROPEAN SETTLEMENT
LARGE-SCALE MANUFACTURING NURTURED BY PREMIER TOM PLAYFORD
During an otherwise economic downturn for the state, South Australia's longest mining-based boom lasted from the late 1890s until 1928 – but the source of the boom was ore in Broken Hill, New South Wales, and gold in Western Australia. South Australians had a tradition of investing in mining such as at Kapunda, Burra, Moonta and Wallaroo from the 1840s. As a further interstate benefit, from 1888, Broken Hill’s ore was transported by railways to be smelted at a new Port Pirie plant.
COLLAPSE OF SOUTH AUSTRALIAN BUSINESS GIANTS COMPOUNDED IN 20th CENTURY
The collapse of the State Bank in 1991 remains one of South Australia’s biggest economic disasters. The bank was created in 1984 from a merger of the government-owned State Bank and the Savings Bank of South Australia that dated back to 1848. Marcus Clarke took it on a major expansion. The State Bank ran up an exposure of more than $500 million in 1989 to the splurge of takeovers by Adelaide Steamship under John Spalvins. The community was left with billions of debt.
DEEP TREASURE OF MINERALS STARTING TO BE UNEARTHED IN 21st CENTURY
BIG NEW PROSPECTS IN DEFENCE INDUSTRY
South Australian-based aerospace companies include Airbus Group Australia Pacific, BAE Systems Australia, Boeing Defence Australia, Cobham Aviation Services, Lockheed Martin Australia, Nova Systems, QinetiQ, Raytheon Australia, RUAG Australia and TAE. To deliver vertical tail fins for the F-35 Joint Strike Fighter program, the state government supported BAE Systems and RUAG to establish the nation’s most advanced titanium manufacturing and processing plants in Adelaide.
UNIVERSITES AND RESEARCH INSTITUTES BECOME VITAL TO NEW FOCUS
The future of two remaining pillars of South Australian heavy industry – the Port Pirie lead smelters and Whyalla steelworks– has been entrenched. With state government help, owners Nystar have invested $660 million to upgrade the smelters while British billionaire Sanjeev Gupta’s GFG Alliance has bought the stricken steelworks with $1 billion plans to transform its operations. At Tonsley Park, an advanced manufacturing and industrial innovation centre has been set up at the former car-making plant.
INTERNATIONAL INTENTIONS INTENSIFIED
Tourism has been a solid growth area for the South Australian economy in recent years. Among its drivers are two added direct international flight services – China Southern Airlines and Qatar – out of the enlarged Adelaide airport. Adelaide’s international reputation was boosted in 2016 by being named in Lonely Planet guide’s top five regions to visit. The new Adelaide Oval and an array of Adelaide international-standard events also maintains a flow of overseas and interstate visitors.
RANGE OF STRATEGIES BEING TRIED TO EMPHASISE STATE'S POINTS OF DIFFERENCE