Transitioning Australia’s Left Behind Places into Advanced Manufacturing Hub

Australian government’s new industrial policy – Future Made in Australia aims to take advantage of the available critical natural resources to improve supply chain resilience for advanced technology products (Bathgate, 2024). While Australian advanced manufacturing sector is concentrated in and around five capital cities, based on our calculation of sub-state level economic complexity using employment data from the 2021 Census, Australian government aims to transform resource-industry dependent regions into net-zero manufacturing regions by giving incentives to critical minerals and energy sector (Budget, 2024-25). Due to the “circular causality”, new economic geography concepts suggest that core regions (regions with high economic complexity) to be more feasible for the advanced manufacturing sector to grow (Potter, 2009), raising questions if the new industrial policy will be successful to attract skilled workforce to the periphery regions. This study evaluates government policies using economic geography concepts whether they successfully improve competitive advantages of Australia’s periphery regions. While there is a lack of consensus how to define regional competitiveness (Kitson et al., 2004), we define regional competitiveness as a region’s relative capacity to attract moveable factors of production such as labour and capital for related economic activities (Potter, 2009). This study has significant policy implications for the Australian government to consider certain factors to make the policy works to transform the left behind place into a more competitive and environmentally sustainable regions.