Living Communities. Resilient towns.

Government designed 'Supertown' recipe for small town pain

When government starts to decide who is going to live where, based on the decisions they make somewhere else, you know it will end in disaster.

The most recent example of this is a proposed policy where 'winning' towns are picked as 'regional' centres, thus depriving small communities of life, opportunities for their residents and the ability for them to successfully compete. Under a new plan from the WA Minister for Regional Development, Brendan Grylls, people should now leave smaller communities and be serviced at new hubs he and his fellow government meddlers have deemed approrpriate. Supertown plan floated to revive bush.

The only real outcome for smaller communities not on Mr Gryll's list of annointed towns is that their businesses will suffer as people leave to access these 'supertown's' services and that means doing their shopping and everything else there when they do. Ask anyone who lives within 150km of a town like Albany or Geraldton now what the effect on their town is from people shopping at a 'regional centre'.

If your town has a supermarket it will die or decline, if it has a butcher you can kiss that goodbye, if it has a half decent mix of retailers...say see ya! The same goes for local sporting clubs and community groups.

This is really old thinking and I wonder what the policy advisors have really learnt over the last few years or indeed, if they have kept abreast of where effective economic development is heading.

I can see the reasons this policy has been flagged. They are trying to decentralise away from the Perth metropolitan area and get people out into the regions. This is a good thing but from what I have seen so far, this is a policy very close to something the Chinese government would do.

This idea, as it stands at present, is just transferring centralisation to regional centres while ignoring the harder, but more effective decentralisation through relocalising.

True decentralisation is relocalisation. This would allow people to spread throughout the large number of small towns across Western Australia based on the community spirit and passion for enterprise that birthed towns like Albany and Geraldton. Instead of artificially placing infrastructure and government money in anointed communities, the government could save themselves money and failure by simply encouraging and supporting communities to build capacity themselves.

An obvious objection from those that develop policies such as this is that it is too expensive to spread government services throughout small communities. However, government is already realising that social enterprise is a better way to deliver many services that bureaucracies currently can't deliver well and are attempting to implement and encourage this. Why then, develop a policy that ignores the benefits that a social enterprise approach could offer small communities and base it on an old model that has stopped working?

Why not fund small communities with start-up capital to develop their own services that can run as sustainable social enterprises? Why not encourage small communities to develop locally owned enterprise opportunities that provide reasons for people to invest and live in a community? Why not allow communities to plug leaks in their local economy so they have more funds to pay for such services?

This plan, from what I can see, is merely another patronising attempt by government at market and social engineering. And that always fails.

In other words, why pick the towns? Let the towns pick themselves. Let the people re-engage themselves in civic life and entrepreneurism. Government intervention rarely works and the Ministers cheering of the government 'success' in towns in the Pilbara is like praising the AFL board for Collingwood Football Club’s premiership success.

The minister makes a good point though, that people won't want to live somewhere that doesn't have a "decent cafe'". However, he then assumes that government intervention by"[showering them] with new facilities and government services" to make sure these cafe's exist in certain communities but not others will benefit entire regions. If that were the case, Mt.Barker wouldn’t be on the list of possible supertowns because it would already be benefitting from being so close to Albany.

My experience is that government interference makes things worse and bureaucrats making the choice on what towns live and what towns die is bad policy. Any town not anointed by some policy think tank or highly decorated academic with no experience of the real world is going to suffer.

"Economic development is a “do-it-yourself” process that cannot be bought, sold, packaged, anticipated or centrally planned. Effective solutions...must not have any preconceived idea of what will work or not. Nothing can be done to help a region that does not have a creative economy of its own" (Jacobs 1984).

 

The Responsibility of Thinking Local - Part 1

People will only shop local if it is in their immediate best interests to do so.

That’s human nature. No amount of guilt, persuasion and appealing to the greater good will convince anyone to spend money with a business that is rude, providing an inferior product or not interested in giving their local customers a great experience. This is especially the case in local retail.

Although local consumers shop in the city and larger regional centres when drawn there by kids sport, education, work etc. (plugging these leaks is another story), in a country town one of the major reasons people leave town to shop is when they don’t get the quality, choice, service and respect they expect and deserve. This is fundamentally in the control of the business owner.

There are numerous examples of country retailers who do well, despite the perceived hindrances that other, less successful businesses, use as excuses for not being successful.

For example, I hear all the time that,  ‘the people in this town just don’t care about supporting local business.’

That’s not true. They do care…but that care will only go so far.

They don’t care enough that they’ll let the business get away with out of date or out of fashion stock. They don’t care enough to continue spending money with a business that does the same things now as they did 30 years ago, or 10 or even 5! They don’t care enough to allow owners and staff to get away with not smiling at them when they walk in the door, or owners berating staff in front of customers or arguing in the main street with another business owner.

How many country consumers reading this are nodding their heads right now?

People in the city can simply go elsewhere when a business they find isn’t up to scratch. Why should country consumers be denied this? Do country businesses have a god given right to local custom, simply because they are local?

If locals aren’t supporting your business ask yourself why. It probably is more than simply that they don’t care. Do you really think if you were offering something amazing word wouldn’t spread in town? We all know how quickly word gets around in our communities!

Then there is the problem of country consumers who aren’t happy with what their local shop is offering but don’t want to see an alternative open up because they don’t want to see the local shop owner (who’s business they complain about all the time) go out of business.

In country towns, business owners who offer respect, something remarkable and of value, don’t fear more local competition, they revel in it because they know it will help their business.

Competition can do a number of things. It can make you improve your offering. It can provide choice for consumers and if they aren’t up to it, yes, it can put under performing businesses out of business.

But think beyond the individual business owner and think of the community. If theirs is an anchor business, that would keep people spending in the rest of town if it was run well, then the whole community is suffering from its lack of performance.*

However, small town businesses that work together to keep spending local and grow the pie do better than businesses that cut each other’s throat to get more of a small pie. After visiting many towns and talking to successful business owners and unsuccessful ones I have concluded that competition encourages active passionate owners to improve their business and jaded, tired owners to complain.

Let me give you an example. I was told a story, by a young community leader,  about a group of wine industry representatives from several different countries who were visiting India. The size of India’s wine market is only about 9 million litres (as comparison, Australia with a population only 2% that of India’s is about 4.5million litres.)

The Indian high commissioner wondered and asked the delegation from places like France, Australia, New Zealand and the US why it was they were all competiting over 9 million litres of wine? Surely, it made more sense to collaborate and increase the size of the market? If it was increased to 18 million litres or more, there would be more for all, wouldn’t there?

The same applies for country towns. Why be afraid of competition? Embrace it! The consumer is less likely to travel to a regional centre to shop if the standard and choice available at home is of a high quality. This is less likely to be the case if there is only one operator in town.

Don’t believe the numbers would stack up? Let’s look at a real world example.

Toodyay has a green grocer AND an independent locally owned supermarket selling vegetables. Consumers can also choose to travel only 24 km to a larger town with two large chain supermarkets and a fruit and veg market, or they can choose to shop for food in Toodyay.

Not only is the supermarket expanding its operations but the local grocer is very profitable. How can this be?

The answer lies in the ability of the grocer to lift the bar in terms of quality, price, service and shopping experience.

The thriving green grocer outsells the supermarket but in doing so, it actually helps the supermarket. How so?

Because of the choice available to local consumers, they don’t bother driving to the Coles and Woolworths stores in Northam. They can get quality, affordable fruit and veg from the grocer and while in town, their other grocery items from the supermarket.

By plugging the leak of fruit and veg dollars from Toodyay by providing a high quality product, great service at a good price, the grocer increases the total size of potential spend by locals in Toodyay.

Even though the owner of the supermarket may not realise it, the grocer and the butcher and baker help to keep people in Toodyay and not leave to do all their shopping in Northam.

The biggest mistake he could make is to try and kill off his local competition in these areas. It would kill his business too.

So here are some starter principles for a thriving retail sector in your town.

• If locals aren’t supporting local businesses, don’t apportion blame, ask why and see what local businesses can do to improve the local offering before coming up with excuses.
• Don’t be afraid of competitors. They keep you on your toes and help you improve your offering. They can also help to keep more people from leaving town to shop by giving people choice.
• Work with other businesses and especially your competitors, to increase the size of the spend in your town. Co-ordinate a “think local” campaign through your chamber of commerce or your local Living Communities group.
• If any businesses aren’t performing – even competitors, try and help them. Give them some tips on what has worked for you. Bring retail marketing experts to town if there are no locals who can do the job. Workshop with business owners to come up with ideas and offer guidance and help.
• Remember, you can lead a horse to water etc. If underperforming businesses are happier complaining about their situation rather than solving it, move on and focus on what is best for the community.
• You don’t have a god given right to the local consumers spend. You have to earn it too.

As I’ve always said though. Maintaining a healthy economy is a mutual responsibility. My next post will be on the responsibility of local consumers to support local businesses and think local.

*A great example of this is the debacle of the Bridgetown (WA) supermarket that was run so badly just about everyone HAD to shop in the nearby town of Manjimup. There was literally no stock on the shelves in Bridgetown.

The result was other businesses in the main street were going under. The whole retail sector of Bridgetown was under threat. Luckily the problem seems to have been solved with a new supermarket owner.

It's been some time between posts...I guess a reflection of the amount of activity that has been going on. We now are working in 4 communities; Goomalling, Toodyay, Lake Grace and Northampton. We're actively seeking funding for the projects, apart from Goomalling, where we have been operating for some months now.

We've managed to build a new website. Check it out here: www.livingcommunities.com.au

We've also managed to get the support of Rural Press, Radio West and Fairfax Media to help us attract sponsors to fund the projects. I'm posting the radio interviews on our site here if you're interested in listening: http://www.livingcommunities.com.au/guiding-principles/news-and-issues/

Scroll right to the bottom and you'll see the links. There will be 26 radio interviews in all and some 12 major features in about 10 regional newspapers. I'll post links to them all on the website so if you don't live in the regions we are operating in you can read and listen and keep up to date.

We've also managed to recruit three new board members. Steven Stanbrook, Tony Ciallella and Alison Dalziel. You can check out their bio's here; http://www.livingcommunities.com.au/home/our-team/

And most importantly the project in Goomalling is rocking along nicely. The community has launched its very own community cinema. It's still in its infancy but its already proving that doing things locally keeps more money in town and improves everyone's business. After the launch a few weeks back, 60 odd kids and their parents descended on one of the eateries in town, who reported a much busier Saturday afternoon than usual.

We're also developing the business plan for what will be a fantastic Community Garden and Community Supported Agriculture project. I'll write a special post about this in the coming weeks.

Also, we've finished our economic audit of the community and although the data crunching is not complete, we've discovered that the small town loses over half a million dollars each year from lost fruit and vegetable sales. There's a business opportunity the garden can tap into!

So, with Christmas around the corner and perhaps a little more downtime, I might get to post a bit more often and share some stories and learnings from our pilot projects...talk soon!

Turn on the taps or plug the leaks?

A tale of two analogies for local business organisations…

What’s the easiest, simplest and neatest way to fill a bath? 

1. Put a plug in the bath
2. Turn the tap on

It seems obvious doesn’t it? It’s strange though, how we always become obsessed with force. ‘Bigger, stronger, harder…gets the job done’, seems to be the thinking.

In the world of economic development, some argue that you don’t need to use a plug at all to fill up a community’s wealth stocks. All you need to do is turn the taps on as hard as they will go. In fact, if the economic inflow coming via the tap isn’t enough, get a bigger pipe. Force as much inflow down as big a tube as you can possibly find.

This is of course theoretically correct given the parameters of the analogy. If the inflows are greater than the outflows then the bath (capital stocks in the economy) will fill up. And more so than just theory, it is perfectly accurate in the real world to argue that if the outflow is stopped but there is no inflow, you won’t see any action on volume levels (stocks) of water. You will have an empty bath (a dead economy).

But lets expand the parameters of the analogy a bit more to something more variable, something more like an economy. I’ve used the bathtub analogy mostly because it is simple but most bathtubs don’t spring leaks and outflows through a plughole are set at the limits the diameter the hole allows. Economies aren’t that simple.

I think a more accurate analogy may be that of a dam, made with a wall constructed by highly skittish and not very focused engineers.

Imagine your local economy is a dam. Just as with a dam that has inflows from rivers in the catchment area, supplied by rainfall, in a local economy you have inflows from export earnings, tourism, government spending and business investment. And, as in a dam where you have outflows from evaporation and people who use the water in the dam, in a local economy you have outflows when something is purchased by locals outside of their local economy or when the town imports goods it cannot manufacture itself etc.

But like our dam built by skittish and not very focused engineers, a local economy’s wall is also made by people who don’t make purchasing decisions necessarily based on where something comes from, if they can actually afford it or if even if they really need it.

So, imagine you have a huge rainstorm and the inflow to the dam is increased massively. The pressure on the dodgy wall constructed by our fickle engineers, who didn't foresee such an occurrence, means that cracks begin to appear and then water begins to leak out. It leaks out slowly at first but as the water rushes through the cracks it forces open larger cracks and creates a reinforcing feedback loop where the more water that gushes out, the bigger the cracks open up and the bigger the crack the more leaks out until eventually the whole wall gives way.

Likewise, imagine a local economy where suddenly money inflows increase rapidly, to the joy of all the residents, without any thought given to establishing leak plugging businesses. The problem is that none of this money stays in town because although the spending capacity of the townsfolk has increased, they have no way to capture the extra money. In other words, the leaks actually get bigger. Locals eager to spend their windfall leave town to shop in the city. Chain stores, who weren’t there before, can sniff the extra money and arrive in town to help extract more from the local economy. They even put some of the local enterprises out of business causing further leakage.

The same reinforcing feedback loop occurs as in the dam metaphor. The more the inflows increase the more the leaky economy...well, leaks!

“So what? The townsfolk have more money!’ They certainly would have more disposable income as long as the inflow can be maintained and the inflow was owned by locals. However extra inflow is rarely owned locally and therefore not embedded in the local economy. In other words, the inflow is owned by someone who has no loyalty to the community and can remove it at will – for instance, when commodity prices or  global markets change and when inputs like energy and labor are cheaper elsewhere. 

But even more real world than these circumstances is the basic fact that increasing the inflow substantially is sometimes next to impossible as compared to decreasing the outflow.

Here is a real world example from the town I live in, Toodyay, Western Australia.

Murdoch University did a study of Toodyay in 2004 and found there were 91,200 day tourist visits each year.  According to the Wheatbelt Regional Development Commission these day-trippers average $45 expenditure each.

The Murdoch study also found that there are also 27,800 overnight visitors averaging 2.1 nights who spend, on average, $80 per visitor per night stay^[1] 

Overnight spend seems disproportionately lower than it should be because 36% of these people stay free at friends and relatives home. So, day-trippers contribute about $4million pa to Toodyay and overnighters about $4.7 million for a total of approximately $8.7million

Likewise, you could keep a further 10% of household expenditure in Toodyay and add an estimated $7million to the local economy. That's equivalent to an extra 155,000 day visitors a year. That’s right, you’d have to increase day visits from 91,200 to 246,200!

The point is, turning the tap on harder…is harder! You can keep 10% more of the money that is already in Toodyay local, or increase tourists who don’t exist yet by over 150%. Even getting the ones that do exist to spend more will need increases of about 80% to do the trick.  

How would you give this a crack? What would have to be done to Toodyay to make this happen?

The biggest festival in Toodyay each year, the Moondyne Festival, attracts about 10,000 visitors. Another 15 events of that size would have to be organized! Maybe a theme park or an international airport might help? Perhaps tourism isn’t the answer. Maybe a mine or a factory could do it…although perhaps not without affecting the tourism industry and probably not actually increasing the inflow by $8.7 million at all. Even $8.7 million in wages (about 100 employees) wouldn’t totally stay in town if the leaks weren’t plugged.

Plugging just 5% of the leaks of both households AND businesses would probably easily match this and in doing so increase business opportunities for local entrepreneurs. 

More entrepreneurs = more unique shops in town not found anywhere else. Wouldn’t this attract more tourists as well? Perhaps it would help them spend more too?

What’s the easiest, simplest and neatest way to fill an economy?

1.    Put a plug in the leaks

2.    Turn the export/investment tap on

[1] Wheatbelt total dollar spend divided by total visitor nights: July 2006, Wheatbelt Dev Commission Economic Perspectives Report.

Oops, sorry...I think we've invented Living Communism!

I don’t often get angry. But sometimes, sheer ignorance combined with a healthy dose of arrogance will make the blood in my body pump just a little more violently. I’ve been told I hold it well though, so hopefully not too many people detect when I’m feeling a bit irate.

Recently I started to feel my muscles expanding and my skin taking on a green hue while I was told that Living Communities was just socialism and communism because it encouraged co-operative ownership of enterprises (and probably because it had the word ‘community’ in it!).

Immediately I began to sense a conversation coming on with someone who still saw the world as one divided by the old ideologies of the 20th century. Anyone who labels people they disagree with as socialists, communists or fascists are themselves, embedded in a fundamentalist view of the world. So any valuable dialogue with them is just about impossible.

The comfort I take from the accusation of us encouraging socialism was that about 10 months ago I had difficulty with someone from the other end of the old political spectrum who was basically accusing the Living Communities program of being a money obsessed business (I kid you not – this was their thinking, even though we’re a not for profit!).

The lesson learnt is that fundamentalist crackpots come in both blue and red and if they’re both firing shots at you, then chances are you’re doing something right.

Energy = Economy

What can secure the future of small rural towns in Western Australia's agricultural regions? It’s a question that has been bothering Wheatbelt residents, farmers, government, community and economic development professionals for years.

The region’s main economic driver is from agricultural commodities and these commodities are affected by the volatility of global weather patterns and global economic tumult. Therefore, the future of the current economic driver in the Wheatbelt is largely beyond the control of the people in the region.

So a catch 22 has developed. The current unpredictable economic driver needs to be replaced or enhanced by a more predictable one. Yet, because the current economic driver is volatile, investing in small towns like Living Communities' pilot town, Goomalling can be seen as risky and therefore investors become hard to attract.

But to find the answer, we may have to disregard the economic textbooks because the fundamental assumptions made in mainstream economic models may be flawed.

Here’s why.

In the 1950s an economist named Robert Solow won the Nobel Peace Prize for arguing that for every 1% of increased labour productivity 0.7% showed up as economic growth in GDP and for every 1% increase in capital investment, 0.3% showed up as growth in GDP.

Despite his Nobel, Solow's model couldn’t account for was the enormous discrepancy between the growth it predicted and actual growth in the real world. It seemed there was much more growth occurring in the real world and so the ‘residual’ of nearly 75% of the total growth couldn’t be sufficiently explained by economists.

Now in the 21^st century, natural scientists have actually worked out what was missing in Solow’s equations. The difference between Solow’s growth and real world growth can be explained by energy. And the cheaper the energy, the better. In fact, one scientist, Professor Robyn Ayres of Carnegie-Mellon University in the United States worked out that a 1% increase in energy actually accounted for 0.7% of economic growth, not labour as Solow had assumed.

So what does that tell us then, if it is cheap energy that makes a more substantial contribution than labour and capital to economic growth.

Could the missing economic driver of the Wheatbelt actually be cheap energy? Cheaper energy, combined with a pre-existing rail network would attract industry to the region and in doing so, would give the Wheatbelt a competitive advantage over other regions.

For example, it’s one thing to have a corporation install 270MW of energy in a wheat field near your town that employs 5-10 people, plus a one off economic benefit during construction. The energy generated from this solution is fed into the grid to the usual centralised retailer who essentially sells it back to the town. In other words, nothing much changes in the long run. There is no competitive advantage for the town derived from having such a facility close by. You cannot use it to attract further business investment. The energy created is owned by outsiders and shipped out for others to use.

However, it is a completely different thing to have 10MW or less of energy owned, in part, by local people who can use the energy produced as leverage to attract longer-term economic benefits.

The community solution could attract further investment by being in control of the pricing of its own energy. It is easy then to see how this would create greater long-term wealth and employment opportunities for the entire community than would the corporate solution.

A corporate energy utility has a business model designed to make a profit and return it to the investors. A community owned energy utility’s business model could be designed to keep prices low for locally owned industry and residents. It could also generate revenue from power sold into the grid.

So the primary purpose of a community energy co-op would be to maintain economic competitiveness for the entire community. It would return benefits to the investors (the community) largely by providing lower priced energy that, as we have seen from the research, will develop the economy.

Such thinking is at the heart of a submission to the Wheatbelt Development Commission’s Wheatbelt Regional Strategy Directions Paper, from Zuraw Investment’s, Leon Surawski.

Mr Surawski’s submission details how Wheatbelt communities can become energy exporters through a distributed network of renewable energy power plants.

A community owned energy model is far superior to a corporate owned model for the Wheatbelt. Community leaders need to understand the benefits of local versus corporate ownership if their towns are to truly benefit from a distributed energy network and if the Wheatbelt is to build a new economic driver.

Fly-In and Fly-out: An opportunity but not the answer

I was contacted yesterday by a journalist wanting to get a Living Communities opinion on the fly-in fly-out potential of rural communities within a 200km radius of Perth.
You can't expect a 15 minute conversation with a journalist to be published as anything more than a few condensed sentences (its just the nature of the media) so I thought this may help clarify my opinion on the matter should there be any clarification needed!
For those of you unfamiliar with fly-in fly-out or FIFO, it is a work roster system for workers employed on remote mines throughout Australia. In Western Australia, it is particularly common given this state’s dependence on the mining sector to fill its economic bucket.
The most recent Wheatbelt Development Commission strategic plan talks about the opportunities of FIFO for rural towns in a 200km arc around Perth.
In a SWOT analysis of the region it lists under opportunities to;
“Capitalise on fly-in fly-out industry associated with the State’s mining industry by offering necessary services and alternative lifestyle options.”, and “Population growth”
One would imagine that the thinking is that the former would feed the latter.
FIFO does indeed offer this region close to Perth the potential for increased population and I certainly wouldn’t begrudge any FIFO worker the opportunity to live in a rural town in this beautiful region and nor should they be discouraged. However, I do believe that the towns in this region need to ensure they can handle the changes that a large FIFO worker population would bring (good and bad) and think carefully about the sustainability of such an approach and the resilience of their community should things change rapidly in the future (increased levels of unemployment in the mining industry for example).
It’s certain that attracting FIFO workers and their families would increase economic activity in a rural town as the population builds and new housing and services are required but it also has the potential to bring with it other issues that may not have been considered. I’ll discuss these a little later.
From a Living Communities viewpoint we would say that, although attracting FIFO workers, or any other particular segment of the population for that matter, to live in your town would indeed help grow the local economy, towns should place their first priority in building a strong community with a clear purpose or vision to attract residents, rather than merely building a population for rapid economic benefit and hope it leads to a better community.
Are we against increased population in rural towns? Certainly not – for many communities it is exactly what they need and want. However, a population doesn’t necessarily need to be larger but it certainly MUST be diverse. Diversity of age, diversity of cultural background, diversity of ideas and diversity of skills are the difference between a flash in the pan development and a long-term resilient community.
Mere growth in size does not in itself deliver an increase in well being for the residents of a community (1). However, diversity delivers the ability to solve complex problems that communities in rural Australia are faced with all the time that inevitably affect the well-being of residents. So naturally we find there are many communities that have very high levels of well being with small populations.
Think about it another way; if the purpose of an increased population is to deliver a stronger economy to these rural towns, what is the purpose of a stronger economy?
I think most of us would assume that it is to provide higher levels of well- being, happiness, contentedness and freedom etc. So, population growth and economic development then, are really the means to the end not the end in itself.  Surely the end really is well-being. That being the case, perhaps there are also other means we can apply too to reach the same end?
Ok, so let’s look more closely at what FIFO could mean for these towns. Would it bring an increase in well-being for the current residents? Would it be good for the FIFO workers and their families?
By all accounts from our economic gurus and policy makers, the mining industry in Western Australia is about to boom again (resource rent tax notwithstanding), after a brief hiatus during the Global Financial Crisis, because of the unending insatiable appetitie for natural resources by our giant northern neighbours, the Peoples Republic of China.
Because of this, we are told, WA will require more workers for these mines and most of these workers are FIFO, on 2 week on 1 week off shifts in general.
On that 1 week they have away from the mine, the workers return to their home to be with their families. The concept is that many of these FIFO workers could choose towns like Gin Gin, Toodyay, Goomalling, Northam, York and Beverley to make a home.
Each of these new settlers will require housing. This alone should increase economic activity. However, if the communities in question do not ensure that the people building these new homes come from the local area, the best the community can hope for in terms of economic benefit will be the odd hardware oversight from a Perth based tradesman or an increase in trade at the local lunch bar(2).
Once the new residents have moved in, school populations will grow and there could be potential for new schools opening as well as health services. New retail businesses can start with increased demand. It’s all pretty easy stuff to imagine.
However, none of this will prevent enormous leakage from these towns in respect to food, energy, housing costs, household items etc. if these towns expand without developing and encouraging local owned businesses to service these people.
There are no studies at hand to determine the level of expenditure that a FIFO worker has outside of their local economy as compared to inside it, so it is impossible to say if a FIFO population would cause more leakage in a local economy or not but it’s a sure bet that it wouldn’t stop it.
However, of more immediate concern is the anecdotal evidence from towns that already have a high commuter base and from studies done measuring the social effects of FIFO, that indicate an inability for commuters such as FIFO workers to participate in community life, so vital in rural towns.  One more favorable study on FIFO, found that FIFO didn’t have a heavy toll on FIFO worker relationships but did find that up to 74% of FIFO workers stated that they find it hard to participate in ongoing community events.(3)
A strong resilient community needs participation, without it, a town stagnates. Ian Plowman’s study on successful innovative towns in rural Queensland recommended that to be successful towns should, “invest heavily in leadership rotation, responsibility sharing and the growth of civic responsibility.’ All these extra civic duties are hard to do when you’re only in town one week in three.
My own personal experience is it is often the newest people in towns that provide the greatest leverage and participation. So, although FIFO workers may want to participate they are saying they can’t.
What of the families of the FIFO worker? The partner left at home? Won’t they be able to take some of that responsibility? I would argue that sort of responsibility is harder when you are a sole parent for 2 weeks in 3.
Finally, how resilient would you make a community populated increasingly by people employed in one industry? Aren’t we just replacing a farming population with a mining one? If the rumblings coming out of economists like Marc Faber(4) (who predicted the Global Financial Crisis) are anything to go by, can we, or should we, rely on the Chinese Government to determine whether rural West Australian towns sink or swim?
A Living Communities believes that the means to the end may be different;
1.    Ensures that the focus is on community building not population building. Focus on what makes your town unique. A ‘build it and they will come approach’, if you like.
2.    A unique, innovative and strong community attracts many different types of people and they provide you with a unique, innovative and strong community! In other words, diversity is a feedback loop that keeps the community system going strong. 
3.    By building diversity in your population you guard against unforeseen shocks such as would be the case if the Chinese economic bubble burst and you had 20% of your population tied to the mining industry as FIFO workers. Resilience means you won’t be scratching your heads in 20 years wondering how to save your town when the mines inevitably slow down!
4.    Make sure that economic leakage is kept to a minimum as par for the course, ensuring that wealth stays within the community no matter the size of the town’s population. You can’t fill a bathtub with the tap turned on full and the plug pulled out. Make local important again.
5.    Understand how your town fit and work within the larger economic, social and environmental systems. This ensures sustainability. If we are about to hit a global peak in oil, does it make sense to rely on a commuting population? If city people are looking for a safe, friendly place to live, not just a wealthy place, what are the social priorities in the rural community that make it attractive to city immigrants? How does a community in a dry land area design its housing developments to ensure the people it attracts understand water conservation?
6.    Encourage entrepreneurs. Risk takers save the rest of us from having to do the hard things that really get things done. Entrepreneurs should be encouraged and rewarded as they really make communities truly resilient. A town of workers is a town at the mercy of someone else’s decisions.
In short, build communities first and the population will sort itself out. FIFO is an opportunity but not the answer.

(1) Plowman, I, Ashkanasy, N M, Gardner, J & Letts, M "Innovation in rural Queensland: Why some towns prosper while others languish". 2003
(2) We’re assuming that tradesmen to build homes in the Wheatbelt will actually be available given the potential for a skills shortage of any new mining boom.
(3) The impacts of Fly-in/Fly-out commuting on employee’s stress, lifestyle, relationships & health. Susan Clifford, School of Anatomy & Human Biology University of Western Australia
(4) China may 'crash' in next 9 to 12 months: Marc Faber – The China Post, May 4, 2010

Guiding Principles for a Living Community

The following principles form key elements of the philosophy behind Living Communities™. These principles have been what has guided us through the first 2 years of our development. I thought it may be interesting for everyone to have a clearer idea of where we are coming from.

 

1. Re-Localisation

Relocalisation is the principal that if a community is capable of providing a good or service locally it should do so. It is called ‘re’ localisation because in many cases, these services may have once been provided locally.

 

Generally, assessment of relocalisation of goods/services is based on; the inherent need for the service from within the community, the level of the benefit to the community rather than the enterprise providing the service and the capacity of the community to support it.

 

In relation to the last of the points above; because a product/service may not always be capable of providing a profit for a private owner/s it may need to be provided on a non-profit basis by the community.

 

An example: A hypothetical regional community of 15,000 needs transportation at a cost of $32 million a year and food at a cost of  $30 million a year, to function. It is highly likely that in an Australian rural economy neither of these goods would be provided locally to any great level. However, only one is capable of being highly localised.

 

The community probably has water, soil and the capital, labour, knowledge and expertise to run its own food system to provide a great majority of its food. However it is most probably unlikely it would be capable of manufacturing vehicles or trains without outside ownership and investment.

 

If the population was too small for private operator/s to produce the food required at a profit, then the community may be able to produce it together collaboratively on a non-profit basis.

 

In this example, the community has an inherent need for food, would gain an enormous benefit from producing it (keeping a percentage of the $30 million it usually sends out of the community when it imports food into the local economy) and has the capacity to do so with ample land, knowledge etc.

 

However manufacturing vehicles is not possible because, although the community needs vehicles and one could argue the community would benefit by retaining some of the $32 million it spends on transport it may not necessarily have the capacity to do so. Therefore vehicles are probably best imported.

 

However, as the community and technology changes and develops, it may, in theory, become possible to manufacture transport vehicles or develop a locally owned transport system at some time in the future.

 

Living Communities believes that relocalisation is the foundation of a truly resilient (see resilience below) local economy. Relocalisation increases capital available for ongoing community development of the social, environmental and economic systems within the community. All communities should attempt to relocalise their economy as much as possible in order to increase this resilience.

 

2. Entrepreneurship

Definition: The common definition of an entrepreneur is one of a person who organises, operates, and assumes the risk for a business venture for a profit. In the context of Living Communities™ the definition of an entrepreneur can be expanded to; a person who organises, operates, and assumes the risk for a new for profit business venture, non profit social enterprise, for profit social enterprise or one such entity currently in existence that is capable of change, enhancement or development.

 

Context: Living Communities simply do not exist without the organisational effort, implementation and risk taking of local entrepreneurs as defined above.

 

A town made up entirely of employees of non-local companies (or even one with low levels of local entrepreneurial activity) can only survive as long as the non-local companies that employs the population remains in the town.

 

A town with a good quantity of entrepreneurs can adapt and make opportunity out of changing circumstances, both good and bad.

 

Living Communities aims to promote and encourage entrepreneurship in order to facilitate this element of resilience and to plug the leaks in the local economy.

 

3. Resilience

Definition: Jamais Cascio, fellow at the Institute for Ethics and Emerging Technologies, defines resilience thus;

 

“Resilience, accepts that change is inevitable and in many cases out of our hands, focusing instead on the need to be able to withstand the unexpected. Greed, accident, or malice may have harmful results, but, barring something truly apocalyptic, a resilient system can absorb such results without its overall health being threatened.

Like sustainability, resilience encompasses both strategy and design, guiding how choices are made and how systems are created. Stripped to its essence, it comes down to avoiding being trapped or trapping oneself on a losing path. Principles of resilience include:

• Diversity: Not relying on a single kind of solution means not suffering from a single point of failure.
• Redundancy: Backup, backup, backup. Never leave yourself with just one path of escape or rescue.
• Decentralization: Centralized systems look strong, but when they fail, they fail catastrophically.
• Collaboration: We’re all in this together. Take advantage of collaborative technologies, especially those offering shared communication and information.
• Transparency: Don’t hide. Your systems transparency makes it easier to figure out where a problem may lie. Share your plans and preparations, and listen when people point out flaws.
• Fail gracefully: Failure happens, so make sure that a failure state won’t make things worse than they are already.
• Flexibility: Be ready to change your plans when they’re not working the way you expected; don’t count on things remaining stable.
• Foresight: You can’t predict the future, but you can hear its footsteps approaching. Think and prepare. “

 

Context: Living Communities™ aims to build resilient communities. The principle of resilience enables a community to ensure that they can create strategies that enable their community to thrive.

 

4. Sustainability

Definition: “Sustainability, in a broad sense, is the capacity to endure. In ecology, the word describes how biological systems remain diverse and productive over time. For humans it is the potential for long-term maintenance of wellbeing, which in turn depends on the wellbeing of the natural world and the responsible use of natural resources.” - Wikipedia

Context: Sustainable communities must take into account their environment as much as their economy as it is the economy that survives based on the viability of the local environment. This is even more pronounced in rural communities where economic fortunes are even more obviously linked to environmental events such as drought and salinity. Living Communities™ introduces principles of sustainability into local economic thinking by ensuring that natural resources are taken into account.

 

5. Community

Definition: Generally, a community has been defined as a group of interacting people living in a common location.

 

Context: In recent years centralised governments, both state and federal, have responded to the problems generated by their implementation of economic rationalist policy by establishing bodies to manage the needs of rural and regional Australia. However, due to the centralised nature of the overseeing department or organisation, this response has focused on ‘regions’.

 

While appropriate at one scale, the regional approach has not accounted for a ‘group of interacting people living in a common location’.

 

Living Communities™ believes that communities are a real physical thing that can be described by location, interacting people and their common interests (although the ways of responding to those interests may be diverse).

 

As people identify with their community (the people they interact with and the land they live on) and not regions, Living Communities™ believes that focusing on working inside a community and making communities resilient is vitally important to the success of any larger system such as a region.

 

6. Thinking in Systems

Definition: We believe a community is a system and is part of a series of larger systems – economic, social and environmental. Like all systems, a community has elements, interconnections and a purpose. The purpose can be found by observing the behaviour of the system.

 

Context: Acknowledging that your community is a system allows you observe how the parts work with each other to achieve its purpose. It also allows you to see how your community is a vital part of the larger economic, social and environmental system too and make adjustments accordingly.

 

We re-label community visioning in a systems thinking context, as a ‘community purpose’, as it can help to highlight the behaviour of the community and connect it to the greater system it influences and that influence it.

 

So, if the current behaviour of a community system is part of a redundant purpose (e.g. a town builds catches and exports fish but the fishery has been depleted) then a new or additional purpose may be required to provide resilience in the system.

When you think about the real reasons humans live in communities it is much more than just an economic one. We come together to be safe (groups provide a level of protection), happy (by having relationships with others, a certain type of lifestyle and sense of place) and wealthy (communities provide better ability to trade). All three are equally important.

However, because our thinking is skewed toward the ‘wealth’ reason, we tend to define our community’s purpose purely from a single economic viewpoint. We start to describe ourselves this way; ‘we’re a mining town’, ‘a farming community’, ‘a tourist town’, a ‘fishing village’, a ‘tree-change’ or ‘sea-change’ community etc.

While these may be entirely accurate, they reduce the capacity of a community to think about itself in any other way, stifling creative solutions and limiting possibilities. Communities are encouraged, by traditional economic developers, to build ‘clusters’ around what they already do (or what they are good at) when they should be able to think about building locally owned clusters of anything they can put their mind to so as to diversify(1).
To remain a single purpose community (and a cluster of farming related industries in a ‘farming community’ is still a single purpose) is to invite brittleness and collapse as opposed to resilience and strength.

 

What's Your Community's Purpose?

Systems Thinking is a way of understanding how our world works, and unlike standard analytical thinking that examines the parts, Systems Thinking looks at the whole system, its elements, interconnections and purpose and where it sits in relation to other systems.
It’s being used extensively in computing, engineering, epidemiology, information science, health, manufacture, management, and the environment but surprisingly, it hasn’t really taken off in the field of economics.
I should’ve said, ‘not surprisingly’ because the economic system is one system that has continually confused, befuddled and surprised people for centuries.
At a time of economic crisis, there are plenty of economic experts who can tell you why something happened after the fact, yet were unable to detect that it was going to happen.
Is this because of an analytical approach rather than a system approach?
I can imagine mainstream economists reading this saying, “This guy has no idea what he’s talking about. We take a systems approach. We look at how all the parts interact.”
All the parts of the economy maybe.

The problem with mainstream economics (yes another one)
The problem, I believe, is that the mainstream economics approach actually puts the economy at the top of all other systems (usually by ignoring all others), rather than seeing the economy as a part of a greater system. It’s a part of society and a part of the greater ecological system.
Another problem is that the behaviour of the economic system gives it a purpose that does not allow it to function properly within those greater systems and so causes seemingly intractable social and environmental problems.
For me to discuss this any further I need to return to Systems Thinking 101 and there is no better material for systems basics than that produced by Donnella H Meadows. In her book Systems Thinking: A Primer.
Meadows describes a system as a group of elements that have interconnections between them. All systems also have a purpose or function and observing the behaviour of the system reveals the purpose of the system.
For example, a car is made up of engine, radiator, battery, drive shaft, wheels, etc. They are interconnected by the energy in the system, the instructions from the driver to steer, accelerate, brake and generally make the vehicle move in the desired direction. Observing the behaviour of a car, would lead us to conclude that the purpose of this system is for transportation.
But a car is also an element of the transport system and only works by fitting into that larger system by using the fuel available at the petrol pump, or the roads that are designed for wheels. If all cars had fuel or wheels incompatible with the greater transportation system, cars couldn’t drive anywhere and the transport system wouldn’t work either.
So what does this tell us about economics?

The Economic System
The economy is made up of lots of elements including; businesses, people, capital, products, resources etc. These elements would be interconnected by money, marketing, maybe some would include ‘rational self interest’.
Observing the behaviour of the economic system we can see that it is considered to be working at maximum efficiency when it is growing. When there is more of everything – more credit, more businesses, more resources available etc. So the purpose of an economy based on its behaviour must be for it to grow.
However, how does this purpose of exponential growth position the economy in relation to the greater social system and environmental system?
Like a body builder who feeds increasingly large muscles with steroids at high risk of deleterious health outcomes to the major organs of his body, mainstream economists focus on only one part and ignore all implications that perpetual growth has for the systems it is contained within.
How does mainstream economic thinking then, affect communities and how can communities not fall for the same mistakes of thinking too narrowly about their own system?
Traditional economic development has for various reasons, been focused on the larger economic ‘body building’ projects but has failed to acknowledge the importance of all its smaller parts.
Like the body builder, it has focused on the muscles only and assumed big muscles mean a healthier body.
Like body builders, size matters for traditional economic development and growing the size of the community and its economy seems more important than the quality of that community and its economy.
For example, mainstream economists get very excited about the prospect of growing West Australian wheatbelt communities’ populations with fly-in/fly-out mine workers.
This is put forward on the basis of the general population benefits it brings without discussion as to the quality of the community that will come from large proportions of a population being totally absent for significant periods of time. In other words, there is no thought to the negative social implications of FIFO on the community.
When a coal ship runs aground, potentially destroying a large part of the Great Barrier Reef, mainstream economists complain that a $10,000 pilot to guide ships through the channels make it uneconomic. However, the cost to the environment can be many times more with just one disaster and feeds back into the greater economy as the tourist industry suffers.
With growth as its purpose, and little acknowledgement of interacting systems, mainstream economic thinking seems largely incompatible with the greater social and environmental systems and thereby causes many of the problems found in each of them.
It’s important that small community systems do not make the same mistakes.

Local Action With An Eye On The Larger System
Community visioning and strategic planning must take into account how the community’s system interacts with the systems of which it is a part.
There is no point coming up with a vision that doesn’t take into account the realities of the greater regional or global economy, the lifestyle needs of people you would like to live in your town or the limits and sensitivities of your natural environment.
It may be better to re-label community visioning in a Systems Thinking context, as a ‘community purpose’, as it can help to highlight the behaviour of the community and connect it to the greater system it influences and that influence it. So, if the current behaviour of a community system is part of a redundant purpose (e.g. a town builds fishing boats to catch and export fish but the fishery has been depleted) then a new or additional purpose may be required to provide resilience in the system.
When you think about the real reasons humans live in communities it is much more than just an economic one. We come together to be safe (groups provide a level of protection), happy (by having relationships with others, a certain type of lifestyle and sense of place) and wealthy (communities provide better ability to trade). All three are equally important.
However, because our thinking is skewed toward the ‘wealth’ reason, we tend to define our communities purpose purely from a single economic viewpoint. We start to describe ourselves this way; ‘we’re a mining town’, ‘a farming community’, ‘a tourist town’, a ‘fishing village’, a ‘tree-change’ or ‘sea-change’ community etc.
While these may be entirely accurate, they reduce the capacity of a community to think about itself in any other way, stifling creative solutions and limiting possibilities. Communities are encouraged to build ‘clusters’ around what they already do (are good at) when they should be able to think about building locally owned clusters of anything they can put their mind to so as to diversify(1).
To remain a single purpose community (and a cluster of farming related industries in a ‘farming community’ is still a single purpose) is to invite brittleness and collapse as opposed to resilience and strength.
So, what if your community’s purpose was not just to be a ‘tourist town’ but a place that provides safety, happiness and wealth for all its citizens? How would this affect the way the town behaved?
It would certainly mean broadening its focus and being open to different opportunities.  It might mean acknowledging that not everyone in town chooses to live there because of tourism. It might be because of the quiet country lifestyle, a chance to operate a small farm or basic affordability. Do we really need to build that 10-storey hotel, owned by international investors?
Maybe it means that other locally owned enterprises not related to tourism deserve to get some attention from local authorities that will reflect the diverse reasons why people live in this ‘tourist town’?
Thinking like this may end up helping the tourist industry anyway. It may mean more business bookings and not just holidaymakers. Importantly it would mean less seasonality and more continuous money flow throughout the year for all business operators in town.
Question the behavior of your town. It may lead to a new or additional purpose.
What happens to our fishing village when the season is over?
Why doesn’t anyone want to bring their family to live in our mining town?
Does our farming community need to be so quiet when the harvest is done?
Who will generate the new ideas in our town of retirees?
Why is an overseas owned international hotel allowed to be developed in my town but residents can’t have a community garden?

The Power of Community

A community of people, brought together by common location and common experience has a power big business and government cannot match. It’s a strength forged like that from the blood ties of a family and something people in the country understand very well.  
However, it’s a power that in many cases has been hibernating for 30 years only appearing at times of extreme hardship and adversity, such as in a bushfire, flood or drought.
Our society has been increasingly caught up in busier lives, focused on consumption and somewhat neglectful of the inherent potential of our communities.  
This has led to a high level of dependence on government and big business to solve problems that we just don’t seem to have time for anymore. For the most part, government and big business have benefitted from this trend to dependence, so it wouldn’t make sense from their viewpoint, to want to encourage communities to be more independent.  
A few nights ago in Goomalling, over 120 local people and some outsiders, demonstrated that this 3 decade trend is changing. They attended the modest Living Communities™ launch event celebrating Goomalling’s small businesses, community groups and its community spirit.  
The turnout represented about 10 percent of the Shire’s population and included; seniors, baby boomers, Gen X, Y and Z, parents, local dignitaries, business people, farmers, teachers and artists, just to name a few.  
Strange, because Living Communities is an economic development program not a rock star! Something’s is afoot, if ten per cent of a Shire turnout for an event championing local economic development.  
Perhaps it was the free food, perhaps it was the band or perhaps it was something deeper than that. Although the food and band were brilliant I’m guessing it was something else.  
Personally I believe the turnout was indicative of citizens deciding that maybe, just maybe, all these well meaning bureaucrats with university degrees in economics don’t really know anything about the real world after all…all the ‘rational’ solutions and programs they have offered haven’t delivered on the promises over the years and like true country people, communities in places like the Wheatbelt are saying ‘thanks, but it’s our turn now, you’ve had a good go.’  
Perhaps is just a return to the natural order of things - local people generating local solutions.  
Goomalling residents realize that they are actually the people in charge. They proved that to themselves in 10 years ago when they lost their banks and became one of the first places in Western Australia to obtain a community bank. 
They did it again with their medical services.  
Now they are about to attempt to build resilience into their whole economy by first deciding what sort of community they want to be in 5 or 10 years, then discovering where the money is leaking out of town and what enterprises are missing that could keep that money in for longer so more businesses and more people get to benefit from it.  
The process of discovery and the decisions to plug certain financial leaks will all be down to Goomalling residents, not Living Town’s consultants, not the shire or even state and federal government bureaucrats.  
The work and actions required to turn ideas from discovery and decision into reality will be challenging but fulfilling and not every idea will work, but that is the nature of entrepreneurial activity.  
This enjoyable, challenging and lengthy task must be the responsibility of the residents of Goomalling because only their blood, sweat and tears will ensure they have full control and full ownership of their future. Of course it’s not easy and it takes maturity, dedication and a degree of risk. But as Loretta Johnston, the Goomalling telecentre manager said in a speech on Thursday night, “This community was founded by pioneers and we’ve always been pioneers. We’re pioneering again, it’s something we’re bloody good at.”