A Townsville-based economics business founded during COVID-19 is changing the market for strategic insights to support regional investment and funding decisions.
Regional Economic Advisory (REA) was created to meet the need for independent economic development advice delivered by people in the region, for the region, at an affordable price point that was within the reach of smaller businesses, councils, not-for-profits, and households.
The advisory market has been dominated by two extremes, particularly in the economics space: off-the-shelf subscription models that offer raw data with basic numeric analysis, and traditional consulting that is expensive and time-consuming from the client’s perspective, says REA’s Principal Economist, Matt Kelly.
“We’ve always seen our place in the market being in the middle ground,” says Matt.
“We have invested in the databases and benchmarking to be able to turn around analysis quickly, but we also have the industry experience and relationships on the ground to make sure that our recommendations are robust and stand up to scrutiny. We stand behind our analysis and dig deeper than can be done with an off-the-shelf product, but we keep our overheads lean to meet the budget needs of a regional client base. Everybody needs to be ‘on the tools’ so to speak (especially me!), it’s important that the people that make the decisions are on the ground and in touch with the community.
“I think our results over the past three years have spoken to that approach, be that in needs assessment to support a development application with a local council, a market analysis to support a private investment commitment, an economic development strategy or masterplan needing buy-in from elected members and the local business community, or an economic impact and cost benefit assessment to apply for a major State or Federal funding round.”
Matt sees ongoing growth in the need for focused regional economic insights, despite disruption in the macroeconomy and broader consulting industry. He believes the outsourcing of public service functions has gotten out of hand at a national level, and that core public work and strategy shouldn’t be shifted to the private sector, particularly at a net cost to the taxpayer.
“I think a lot of what we are seeing in terms of the over-use of consultants and conflicts of interest has been coming for a while and we are overdue for a rebalancing,” he says.
“The rapid advances in generative AI will also undoubtedly disrupt the industry, but it’s important to separate the hype from reality.
“There will always be a role for quality independent advice from subject matter experts. We’ve always targeted our services at rural and regional clients that often won’t have the scale to secure these services in-house.”
The market is changing with really valuable niche opportunities in areas such as renewable energy and critical minerals, particularly across northern Australia. However, the broader global growth story of rising emerging markets and population-led growth generating demand for bulk agricultural and mining resources that has driven so much interest in the region is also coming into question.
“The global growth we’ve seen over the past 20 years has been so rapid that a lot of Asian and South American economies have matured much faster than many people realise,” he says.
“A key by-product of this is much lower fertility rates, as higher living standards and access to economic opportunity mean that larger families are no longer required. Over half of the world’s countries are now at or below replacement fertility levels.
“In time this is going to mean lower consumption growth, if not a fall from current levels. China’s demographics are of particular concern, with decades of one-child policy leading towards a rapidly aging and shrinking population base.
“There are great opportunities across northern Australia and within the North Queensland region specifically, but the macro-outlook means the future is likely to be much more nuanced. Infrastructure and investment need to be planned and targeted. Independent, regional economic insights have a key role to play in making sure that happens.”
Main image: Matthew Kelly, Alyssa Oliveri and Sean Kelly of Regional Economic Advisory (REA).
Image credits: All images supplied.
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