A focus on new technologies such as driverless vehicles has become part of the 21st Century South Australian economy.

SOUTH AUSTRALIA RIDES THROUGH BOOMS,
BUSTS AND DISADVANTAGES with bursts of
innovation/drive building $100 billion econony

 

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 PlanetThe 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

AFTER A RISKY START, SETTLEMENT IDEAL GOES BANKRUPT;  copper creates wealthy elite; gold rush exit turned into advantage

Kangaroo Island first settlement in 1836 amid uncertainty over colony's resources

South Australia was founded amid uncertainty about its economic resources. Its first official settlers arrived on Kangaroo Island in August 1836. The choice of the island was influenced by a report to the South Australian Company from a ship’s captain George Sutherland, who described Kangaroo Island as “containing the finest pastures, with timber suited for ship and house building”. The company wasn't convinced by Sutherland but he had to be considered due to lack of firm evidence.

Colony bankrupt by 1840s; land speculation crash dashes Dissenters' settlement ideal

The first of 19th Century South Australia’s boom-and-bust phases ended in the 1840s when the colony was bankrupt. The idealism behind Edward Gibbon Wakefield’s land sale system was warped by wealthy individuals who bought large parcels of land. Because the Dissenter capitalists behind the South Australian Company were wary of the British establishment, the colony was founded with little money from the British government. This soon led to the colony going bankrupt.

Copper boom a saviour and South Australian initiative makes most of 1850s gold rush exit

After its bankruptcy and the land speculation bust, South Australia was saved in 1843 by a boom after the discovery of copper at Burra Burra and Kapunda. This would create a wealth colonial establishment. This boom was interrupted dramatically in 1851 by the gold discovery in Victoria, leading to an exodus of one third of South Australia’s men, taking a huge amount of gold coins. South Australia took on a bold and imaginative initiative to recover gold for its treasury and banks.

1870s farming boom busted by droughts; another land sale crisis, banks hit in 1890s

In the second half of the 1870s, Adelaide was the growth city of Australia, benefiting from repeated abundant harvests. Drought returned and the good times ended again. In the 1880s, the building trade in Adelaide went into a downturn over speculation of suburban land after too rapid expansion. The Commercial Bank (linked to rural interests) collapsed and other Adelaide banks also felt the global effect of the failure in the early 1890s of British banks’ investments in Argentina.

LARGE-SCALE MANUFACTURING NURTURED BY PREMIER TOM PLAYFORD

MINING, PASTORAL WEALTH CARRIES BUSINESS INVESTMENT 
into 20th Century; Playford pro-state pragmatism builds industry

Adelaide investors cash in on West's gold and Broken Hill's ore plus Port Pirie smelters

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.


 

Elders and Adelaide Steamship lead 19th Century companies onto national scene

South Australia went into 20th Century keeping alive the legacy of companies making their mark nationally and internationally. Two giants, Elder Smith & Co and Adelaide Steamship, built on the work of Thomas Elder and Robert Barr Smith, among those who benefitted from the 1840s copper boom. Other 19th Century Adelaide companies that grew to national prominence included: A.M. Bickford and Sons, F.H. Faulding, D. and J. Fowler, and William Burford and Son,
 

Pragmatic socialism of Tom Playford creates Whyalla industry and nationalised ETSA

Premier Tom Playford’s state-first pragmatic socialism made Whyalla a heavy industry centre in the 1940s. Playford instigated pipes that took water from the River Murray to 90% of the state, making possible industries such as the Whyalla steelworks. Coal mining at Leigh Creek started in 1942. When Adelaide Electric Supply Company resisted extending service to country districts and wouldn't use brown coal, Playford nationalised it and created the Electricity Trust of South Australia.
 

End to tariffs in 1980s dims success of change from agrarian to manufacturing state

South Australia completed the move in the 1950s/60s under the Thomas Playford from a largely agrarian economy to having manufacturing as its base, led by car making, shipbuilding, oil refining, plastic and other manufacturing. The main car makers were Holden and Chrysler/later Mitsubishi. South Australia was challenged from 1988 with the Hawke-Keating federal government’s cuts to tariffs. But the state maintained growth until the $3 billion blow of the State Bank collapse in 1991.
 

COLLAPSE OF SOUTH AUSTRALIAN BUSINESS GIANTS COMPOUNDED IN 20th CENTURY

ESTABLISHMENT BANK OF ADELAIDE, ELDERS AND ADSTEAM
gutted before State Bank's collapse and end to state's car making 

'Financial royal family's' Bank of Adelaide, with origins in 1865, forced into selloff in 1979

In the 1970s, South Australian premier Don Dunstan claimed a “financial royal family” ran the state. That “family” was the directors of the Bank of Adelaide, SA Brewing and The Advertiser newspaper. By 1979, the Bank of Adelaide, dating back to 1865, had collapsed. It was brought down by the debts of Finance Corporation of Australia, a subsiduary bought in 1969. At a meeting of angry shareholders, chairman Arthur Rymill urged them to accept a takeover by the ANZ Bank.

Spectacular crashes by Elders and Adelaide Steamship from the corporate heights

The spectacular crash of two establishment companies, Elders and Adelaide Steamship, in the 1980s/early 1990s severely dented the state’s place in the Australian corporate world. As chief executive from 1977, John Spalvins made Adelaide Steamship into Australia's fourth highest capitalised company with a spree of deadly debt-laden takeovers. Elders had most of its shares secretly bought by Robert Holmes a Court who sold them to John Elliott, whose takeovers had the same result.




 

State Bank disaster in 1991 leaves South Australian community with billions of debt

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.

End of car making and Olympic Dam pullback among blows to hopes for the 21st Century

South Australia’s took more big hits in the early 21st Century from its part in the global economy. Tonsley Park car-making plant, started by Chrysler and passed on to Mitsubishi, shut down in 2008. General Motors-Holden closed its Elizabeth plant in 2017. Another blow came in 2012 when BHP Billiton shelved the $38 billion open-pit expansion of Olympic Dam in 2012. Chinese competition saw Arrium, owners of Whyalla OneSteel steelworks, go into administration in 2016 with a $4 billon debt. 

 

DEEP TREASURE OF MINERALS STARTING TO BE UNEARTHED IN 21st CENTURY

COPPER, URANUM, GOLD WAITING IN WORLD-SCALE VOLUME to be wholly exploited to back established iron ore and gas assets

Copper, uranium, gold, iron ore, rare earths, mineral sands assets among world's biggest

South Australia is a world leader in the scale of its copper, gold, iron ore, uranium, rare earths and mineral sands. The state has around 25% of the world’s (80% of Australia’s) uranium resources and produces 9% of the world’s mined uranium. South Australia is the world’s sixth biggest and Australia’s third biggest copper producer. Iron ore is the state's second most produced mineral. South Australia is Australia’s second highest mineral sands producer and largest magnetite deposit. 

Olympic Dam world's largest uranium deposit and fourth largest copper and gold

Olympic Dam, 560 km north of Adelaide, is a colossal mine waiting for new technology to unleash its full assets a zone 600km long and 150km wide. It has the world's largest uranium deposit, fourth largest copper deposit, fourth largest gold deposit with silver and iron among this mix. Olympic Dam is already the site of Australia's largest underground mine. BHP Billiton  shelved plans for a $38 billion open-pit expansion in 2012 to look at a less costly approach. 

Prominent Hill and Olympic Dam mines dominate 70% of Australia's copper

South Australia has 68% of Australia’s copper – a key element in a more energy-efficient world. Major South Australian copper mines are at Olympic Dam (BHP) and Prominent Hill (OZ Minerals). These are part of the huge, but deep, amounts of copper in Gawler Craton region. A major advance in making South Australian copper the world’s best and cleanest copper came with $18 million research funded in 2015 by OZ Minerals and the state government.

Santos builds global company from Reg Spriggs' gas discovery in the Cooper Basin

Santos (South Australia Northern Territory Oil Search), headquartered in Adelaide, is one of Australia's largest domestic gas producer. It supplies sales gas to all mainland Australian states and territories, ethane to Sydney, and oil and liquids to domestic and international customers. Its core business was built on Cooper Basin gas and oil discoveries in the 1960s with the help of legendary geologist Reg Sprigg. Santos is primary partner and operator of gas plants at Moomba and Ballera. 

BIG NEW PROSPECTS IN DEFENCE INDUSTRY

$50b SUBMARINES CONTRACT ADDING TO DEFENCE SECTOR'S strength in ship building, land vehicles, cyber systems, aerospace

$50 billion submarines, $35 billion frigates, $3 billion patrol boats work for Osborne

South Australia was confirmed as the national centre of naval shipbuilding in 2016 when it was granted the $50 billion federal government contract – the nation’s biggest – to build 12 future submarines for the Australian navy from 2022. Before the submarines project, expected to generate nearly 3000 jobs, the $3 billion construction of Navy offshore patrol vessels will start at Techport, Osborne, in 2018. This will lead to the $35 billion work on nine future frigates, due to start in 2020. 

 

From Woomera rocket tests and Salisbury WRE, state's defence work employs 28,500

Post World War II use of Woomera for rocket testing led to the Weapons Research Establishment (WRE) at Salisbury in 1955. The South Australian defence industry now employs 28,500 directly or indirectly and contributes about $2 billion a year to the state's economy. A large cluster of defence industries has grown in Adelaide around what is now the Defence Science and Technology Group, with divisions such as ISREW (intelligence, surveillance, reconnaissance and electronic warfare).

Key companies making, maintaining and upgrading tanks and other military vehicles

South Australia is home to many systems engineering, automotive and heavy engineering companies with success in developing, integrating and sustaining land-related defence equipment. Key local companies supporting the Australian Defence Force's land capabilities include BAE Systems, General Dynamics Land Systems–Australia, Raytheon Australia, Rheinmetall Simulation Australia and Saab Systems. They have made the two most significant armoured fighting vehicles in the past two decades.

Airbus, Boeing, BAE and Lockheed Martin among players in South Australian aerospace

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

CHANGING ECONOMY BRINGS SWING TO HIGH TECHNOLOGY, research, advanced manufacturing and the focus on innovation

Biomedical precinct on North Terrace melds three universities' research with SAMRI

The biomedical research precinct on western North Terrace integrates health knowledge from hospitals, South Australian Health and Medical Research Institute (SAHMRI) and the three universities. The $3 billion worth of buildings include the $2.3 billion new Royal Adelaide Hospital, the $200 million SAHMRI building, the $231 million University of Adelaide Health and Medical Sciences building and The University of South Australia’s $230m Innovation and Collaboration Centre

Govt funding pours into new phase of state's long history of research and innovation

South Australia has built powerhouses in research, especially agriculture, starting with Roseworthy college in 1882. Monoliths such as the University of Adelaide's Waite Institute and Institute of Medical and Veterinary Science (1938) followed. In a new phase of pushing research and innovation, the 2016 state budget gave $50 million for an SA Venture Capital Fund, $10 million for an Early Commercialisation Fund and $7.5 million for University of South Australia’s Future Industries Institute.

AdelaideFree WiFi and SABRENet leads to Gig City, Smart City and Lighthouse City status

Adelaide is the first GigCity outside the USA and one of the world's most-internet-connected. Adelaide Gig City uses the superfast South Australian Research and Education Broadband Network (SABRENet) optical fibre network, owned by the state government and South Australia’s universities, and connecting the state’s research and educational sites. AdelaideFree WiFi network in 2014 has created a smart city that's been adopted by high-tech giant Cisco as a Lighthouse City.


 

Whyalla steelworks and Port Pirie smelters saved while Tonsley looks to innovation

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

OVERSEAS INCOME TARGETED VIA EXPORTS AND EDUCATION
plus tourism, agriculture and other natural/established assets

More direct overseas flights, new Adelaide Oval and big events maintain tourist flow

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.
 

Record revenue from wine, horticulture, livestock, seafood boosted by direct flights

South Australia's food and wine revenue has hit a record $18.64 billion with 3400 jobs created in 2015-16. Gross revenue increased by $443 million, largely through demand for wine, livestock, horticulture and seafood. One in five working South Australians works in the agribusiness sector. These records were helped by China Southern Airlines taking on freight from Adelaide in 2017. Live lobsters, wine, dairy and fresh meat are sent straight to Guangzhou directly from Adelaide.

 

Trade missions and sister-city links backing up concentrated push to increase exports

Trade missions and partnerships are part of a concentrated push that's seen rapid growth in South Australian exports. South Australia’s wheat, wine, fruit and vegetable and copper exports combined to support a solid lift against the national trend in 2016. The 30th anniversary of South Australia’s sister-state relationship with the Chinese province of Shandong province was reached in 2015. South Australia has also signed a sister-state agreement with Rajasthanin in India.
 

Education the state's largest service export with 35,000 students from overseas

Education is South Australia’s largest service export, and fourth largest export overall, worth more than a billion dollars. The state government’s $5.7 million Destination Adelaide campaign grew the international education sector to 35,000 students in 2017. This is 4.7% of Australia's 800,000 international students. South Australia hosts students from about 125 countries with China as No.1 market, with 40% of the students. StudyAdelaide was set up in 1998 to market Adelaide as a centre of education excellence.



 

RANGE OF STRATEGIES BEING TRIED TO EMPHASISE STATE'S POINTS OF DIFFERENCE

PROMOTING RENEWABLE ENERGY, COST COMPETITIVENESS small business and buying local, to meet prices/jobs challenge

Renewable energy grabs limelight in economic debate on electricity prices and supply

Renewable energy in 2017-18 became central to South Australia’s economic structure and debate with a spurt of world’s-biggest projects set up and announced in the backlash to several power blackouts. Also in 2016, closure of the Northern coal power station at Port Augusta left South Australia’s power supply to renewables (wind, solar), gas-fired power stations and the national power network. Its totally privatised power supply and network with electricity prices depending on trading in the national market.
 

Stamp duty cuts and buy-local among strategies to keep the state competitive

South Australia is building on its cost competitiveness with other states. It will abolish stamp duty on commercial property in 2018. A 2017 report, comparing South Australia with Victoria, Queensland, New South Wales and Western Australia, rated it first  in wage costs, quality of life, cost of living, house prices and rental rates, cost of business; payroll tax, salaries, levels of industrial disputes, logistics and procurement. Buy-local strategies have also benefitted the South Australian economy.

 

Technicolor special FX firm among outside investment attracted by government agency

Global entertainment giant Technicolor is among outside companies that have received state government investment to encourage them to set up or expand in South Australia. Other examples are Becker Helicopters, the largest civilian helicopter flight training company in Australia, and Belgian-based brewing company Anheuser-Busch InBev that bought local craft Pirate Life Brewing, adding to its 500-plus beer brands.
 

Small business, 97% of state's enterprises, getting special attention from the government

Small business, with 97% of the 143,000 enterprises in South Australia have become a strong state government focus. Small business, employing less than 20 people, made up about a third of the workforce employing around 249,000 people and contributing $34 billion to the economy in 2016. The state government has a small business commissioner working with ventures across the state. A shopfront for all the office's services has been set up at 99 Gawler Place, Adelaide.

 

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