March 8, 2014
Source: Sydney Morning Herald
Author: Matt Wade
In many cities across the world high-value, knowledge-intensive firms are clustering close to the centre of town.
The City of Sydney’s new survey of offices and employment shows Sydney is no exception. It revealed the 26 square kilometre City of Sydney accounted for 40 per cent of all the jobs growth that took place across all 43 local council areas in greater Sydney between 2007 and 2012. And they weren’t just any old jobs. Inner-Sydney added 22,000 extra professional and business services workers – mostly highly paid lawyers, accountants and business consultants. The Pyrmont-Ultimo area saw an eye-popping 252 per cent jump in workers servicing the digital economy and the precincts in and around Surry Hills and Glebe enjoyed strong growth in creative-industry workers.
Committee for Sydney chief executive Tim Williams says the pattern is familiar – knowledge jobs are congregating in fewer, more valuable locations in many globally integrated cities like Sydney. “The paradox of the digital economy is that it’s centralising and clustering in even fewer locations,” he says.
These knowledge-intensive industries bunch together because their workers rely heavily on face-to-face communication to exchange information, generate new ideas, and cut deals. Modern communications technology has been unable to replace the one-to-one. Knowledge-intensive businesses thrive on informal meetings, often in restaurants and cafes. So it’s no surprise the number of food and drink businesses in Sydney City jumped 20 per cent between 2007 and 2012. Espresso bars and bistros play a role in the knowledge-intensive industries which are becoming increasingly important in the city’s jobs market. Economists call it the economics of agglomeration.
But the trend for lots of attractive, well-paid jobs to bunch together in a small number of locations around the CBD is a major challenge for a sprawling city with transport problems like Sydney. “The jobs momentum is in very few locations,” says Tim Williams. “The challenge is what about the rest of Sydney? How do you get people to those jobs, or how to get those jobs to where people live.”
That’s a question Sydney’s planners will be grappling with for many years to come.