Ross Honeywill

The Tasmanian economy is running out of steam. Ross Honeywill explores the opportunities to move out of the steam age and reinvigorate the state.

 

A new economy is emerging across the globe with weighty implications for Tasmania. Known as the neo-economy it is characterized by design, beauty, aesthetics, creativity and imagination ahead of function, features, price, deals and discounts.

Consumers known as the new economic order or NEOs – the 4 million Australians and 59 million Americans who value experiences that directly touch the human mind and feed the human spirit – fuel this new economy.

NEOs spend more, earn more, read more, know more, and are better educated.

Their spending springs from a passion for more beauty in an increasingly ugly world, and so it is that Tasmania has an opportunity to assume a dominant place in the hearts and minds of this influential band. And to take a leap into the neo-economy.

Typically, when politicians talk about population policy or economic development, they use the traditional economy as a reference point. Discussion revolves around factory closures and employment in the timber industry. And in Tasmania the traditional economy is looking sick.

Manufacturing and extraction industries like timber and mining reflect Tasmania’s traditional economy. However with manufacturing looking unwell and the timber industry in a steep decline, the questions must be asked…is the traditional economy relevant in 21^st century Tasmania? Or should our political and business leaders be looking to the new or neo-economy for answers?

NEOs have been social influencers for much of the past century, but they emerged as a commercial, social and political force in 1991 when, for the first time in history, more was spent on machines to gather, process and distribute information than was spent on machines to make and move physical objects. The Information Age was born in 1991 and neo-economy started its global spread.

Around the same time manufacturing in the US faltered and the biggest traditional economy in the world began to rust. Paradoxically there was a silver lining to the inexorable decline of manufacturing in the US and Britain – a cleaner environment. And the economic benefit of pollution reduction was enormous.

Tasmania has pure air and with notable exceptions, pristine water. And yet still the champions of the traditional economy push forward with plans to pollute our air and water in the name of progress and jobs. They want their wild and wonderful state to become Australia’s woodlot or quarry. Well it’s certainly not progress to go back to the industrial age, and as for jobs? It’s too late. The new jobs are in the neo-economy.

But how does this play out in everyday life, in a Tasmanian context?

High-spending NEOs are four times more likely to have a university qualification, six times more likely to earn over $100,000 a year, and six times more likely to volunteer. Essentially what we are talking about is high earners with a well-evolved social conscience.

They vote for economic leadership while insisting on progressive social views, they like sport but love the arts, they dominate the Internet and believe food is a celebration of life. As consumers they crave authenticity, change, smart technology and revel in the world of rich information in the neo-economy.

But Tasmania is currently under-represented. The national average of NEOs is 24 per cent of the population. Hobart has 26 per cent or 60,000 NEOs, but overall only 18 per cent of Tasmanians fit the NEO category, so to reach the national average Tasmania needs to attract another 20,000 NEOs.

Cultural capital, a pillar of the neo-economy, is one way to attract them – both as residents and visitors. Events such as the Venice Biennale and the Basel Art Fair, or closer to home, Mona Foma, Ten Days on the Island, the Wooden Boat Festival and the Festival of Voices all attract high-spending NEOs as cultural explorers. And when they come, they book accommodation, hire cars, hail taxis, eat in restaurants and generally spend their hard-earned cash – they spend three times more than non-NEOs on visits of three nights or more. And some decide to stay.

They come to see icons like David Walsh’s extraordinary MONA (Museum of Old & New Art) in Hobart. In the neo-economy beacons like MONA put cities on the global map, are economically robust and generate tourism, population increases and civic pride. As author and academic Peter Hill says, they brand a city or a state in relation to its neighbours. ‘Get these things right and you create jobs, and people want to move to your city to fill those jobs and support your housing market.’

A good example is the Guggenheim Museum at Bilbao in Spain. It is hailed as one of the most significant cultural buildings in the world, delivering commercial and economic value without losing its integrity. Approximately one million people visit the Guggenheim Bilbao every year, only 17 per cent of whom are locals. This neo-economy connection with cultural capital yields more than $300 million to the local Bilbao economy, representing the equivalent of almost 5000 jobs. That’s not generated by a new manufacturing plant or huge software office park. That’s all the work of an art museum.

Check who’s having lunch at Pigeon Hole in West Hobart, dinner at Garagistes in Murray Street, buying Mount Gnomon pork or Cape Grim beef, taking a class at the Agrarian Kitchen. Look who’s attending Tasmania’s festivals and visiting MONA. And you’ll see the beginnings of Tasmania’s neo-economy at work.

Tasmania is not the rust-belt of Australia. It is the lungs and the spirit – a spirit of exploration and adventure. Isn’t it time to better understand who we should be attracting to Tasmania, to enter the neo-economy and reap the benefits?