Perth must learn to build on potential

"We're really excited. There is so much on offer in Melbourne. You've got the spring racing carnival, F1 racing, the Australian Open, not to mention all the bands and live music. I think it's a great place to live while you're young, compared to Perth where it would be great to settle down and have a family." (Perth Now, 2007)

And so Rebecca Twigley was off - with words that break the heart of every Perth mother, and every Perth CEO.

The best new economic thinking tells us that future growth will come from people. But the distinctive anxiety in the west is that the best people aren't staying in Perth.

How do we fix that? The challenge is to build a virtuous cycle of economic and social outcomes.

Take the benefits of the present good times. Invest them in ways that generate a connected, social, creative, innovative city. That means the best people come, and stay. And in turn, that means we lock in wealth for the future.

The missing link is to decide what will work. Why do young and talented people come? Why do they stay - and why do they go? And how do we get the most out of those who move back and forth?

First, consider the facts.

The data [in Form's recent Comparative Capitals report] tells us that in some ways, Perth is quite different from the other Australian capitals; and that in some ways Perth is very much like them.

So yes, it is no surprise that on any measure of recent economic change, Perth stands apart. It leads the country in population, employment rates and economic growth.

At the same time, on many social and cultural indicators, Perth is lagging behind.

If Perth's population and economic growth are not balanced by social, creative and cultural development, can they be sustained?

Perth shares these challenges with other Australian cities. Young people are leaving home to work outside their home cities in all the Australian capitals. Educated young people are more likely to move. And the young people who move from smaller cities typically go to larger ones.

But while the absolute numbers of young people moving into the big cities are greater, the smaller cities gain more young people as a proportion of their populations.

Put another way, with all the challenges of social and economic development, Perth already attracts proportionately many more new people than Melbourne or Sydney.

The reason Perth falls behind with young and talented people is that an even higher proportion leaves. Why?

First, it's crucial to understand that, in large part, young and talented people are moving for jobs.

Compared to their populations, the cities that gain the most workers are not those with the stereotypical big-city lifestyle. They're Canberra and Darwin.

Second, along with work, relationships are a key factor.

Mobility is overwhelmingly driven by the combined structure of personal relationships and work. People move to work and to be with people they love.

Think back to Ms Twigley. Don't discount the siren song of Chapel Street, but be aware it was her partner's job that caused the move to Melbourne.

So if people are really moving for jobs and relationships, how can we beat that? Can we fight the pull, not only of lifestyle, but love and money?

One answer is, don't fight it at all. Mobility can be a solution, not a problem.

A city with citizens around the country and the world will be a connected city. If a life in Perth is a connected, mobile life with time overseas and interstate, that can make a life in Perth all the more attractive.

And all those bright people - out there building Perth's brand interstate and overseas, all the while growing and learning, building their skills and knowledge - can be a great asset. An asset right now, even while they are away.

So make mobility work for us, not against us. Harness the connections.

So how do we do that? How do we make the most of Perth's people, and through them, make the good times last?

We need to think about economics, specifically human capital.

When we build the skills and knowledge of a person, for instance by improving their education, we can call this investing in human capital.

When a person's skills and knowledge generate a higher income as a result of that improved education, we can consider this a return on investment in human capital.

So the key is to get investment flowing into human capital - into people. And then, to be really economically rigorous about the investment priorities, by measuring the returns, and doing what works best.

In one sense, anything that helps people earn more and create more in the future is an investment in their human capital. But we want to get the best out of our investment in people, not just find a new language to justify spending. In that case, the higher the returns, the more investment should flow through a host of new approaches.

That means private and public investment, it means early childhood development and mature age retraining, it means everything from teaching reading in schools to teaching healthy lifestyles in the workplace.

And it means a practical, empirical approach to measuring the benefits of those investments and reinforcing success.

The way to bring all that investment effort together under a single banner is clear. Perth must become a learning city.

What does a learning city look like? A learning city will specialise, specialise, specialise.

The city has to become more like itself, not more like others.

While incrementally growing its quality of life, and of lifestyle, the city also needs to nurture and grow the key attractions people point to when returning.

Time - not being rushed, not being too busy - is a big attraction of living in cities of this population and spatial distribution. And a city where there is time to live is also a city where there is time to learn. So retaining a dispersed, suburban lifestyle with private transport and private space may well be the most appropriate model for Perth's future.

A learning city will offer middle careers - and second jobs.

For the short term, a learning city will attract the bright and educated people who the resource-rich statewide economy needs.

For the long term, a learning city will also generate government, academic and third sector jobs for engineers, scientists, professional managers, and leading tradesmen. When these creative workers, and their families, want to live in suburbs not mining camps, the learning city will have work for them. Middle careers for people settling down and raising families.

A learning city will take advantage of its diaspora as an economic and social asset.

The diaspora is a huge network of people who love the city. Smart policy will use them as an asset while they are away, not only when they are home.

People travelling for work are investing in their own human capital. A learning city will capture the value of that investment into the future.

The bottom line?

The traditional idea of a 'brain drain', especially when linked to the inevitable public language of 'crisis', doesn't capture the reality of Perth's engagement in the global labour market.

The truth is that economic dynamism, labour mobility and new forms of social and industrial organisation have served Perth, and WA, very well.

The challenge now is to lock in the benefits of good economic times, and to build a society and economy which has real resilience for the future.

And the way to meet the challenge is to become more connected and social - more creative and innovative. To become a learning city.

- Michael Cooney is a research fellow at independent think tank Per Capita and contributed to Form's Comparative Capitals report