INDUSTRY CLUSTERS, KNOWLEDGE SPILLOVERS AND THE PLANNING PROCESS: A COMPARATIVE STUDY OF CREATIVE INDUSTRY CLUSTERS IN SYDNEY

LAURA SCHMAHMANN

A thesis in fulfilment of the requirements for the degree of Master of Philosophy

Australian Graduate School of Urbanism Faculty of the Built Environment

March 2016

Originality Statement

I hereby declare that this submission is my own work and to the best of my knowledge it contains no materials previously published or written by another person, or substantial

proportions of material which have been accepted for the award of any other degree or diploma at UNSW or any other educational institution, except where due acknowledgement is made in

the thesis. Any contribution made to the research by others, with whom I have worked at UNSW or elsewhere, is explicitly acknowledged in the thesis. I also declare that the intellectual content

of this thesis is the product of my own work, except to the extent that assistance from others in the project's design and conception or in style, presentation and linguistic expression is

acknowledged.’

Abstract

Knowledge spillovers are one of the primary drivers of industry clustering. Existing literature assumes that knowledge flows freely between firms within a cluster through non-market interactions and there is no direct compensation for the producer of the knowledge. However, there is limited empirical evidence of how these knowledge spillovers occur.

By comparing two different approaches to planning for employment in Sydney, this thesis seeks to understand the extent to which localised knowledge spillovers drive local industry clustering. Surry Hills contains a cluster of creative industries which evolved organically over the past few decades from a former clothing manufacturing cluster, whereas the Australian Technology Park (ATP) in Redfern is a State-owned and master-planned technology park established to facilitate start-up companies within high-tech industries.

Qualitative interviews with firm representatives based in each precinct were conducted to understand why each firm chose to locate in Surry Hills or the ATP and the geographic extent of their professional networks. Subsequently, creative workers within each firm were interviewed to understand the how knowledge is developed and shared within the cluster and what role the firm’s location plays.

The analysis concludes that, in the context of this research, true localised knowledge spillovers as defined within the literature are not driving the clustering of firms and the role of knowledge spillovers in driving localisation economies is overstated. Drivers of where a firm locates vary at different geographical scales. At the local scale, property market dynamics are a significant driver of firm location and clustering.

This thesis raises important questions about the role of planning in facilitating the development of industry clusters and the scale at which planning for employment occurs.

Acknowledgments

I would like to thank my supervisors Professor Bill Randolph and Dr Marcus Spiller for their support and encouragement over the past 18 months. I particularly want to thank Bill for challenging me (pushing me). I really enjoyed our discussions about the world of planning. Marcus, thank you for your insightful comments and observations which are always well-considered.

I would also like to thank the college of professionals that is SGS Economics and Planning for allowing me to take time off to study over the last 18 months and being actively interested in my research.

Additionally, thank you to UrbanGrowth NSW for supporting me through the UrbanGrowth NSW Top-up Scholarship. I hope that my research is insightful and relevant to its role in coordinating urban renewal across Sydney and NSW.

Finally, I must thank my friends and family for supporting me throughout the last 18 months, and occasionally acting interested in my research topic.

Professional editor, Tara Madden, provided copyediting and proofreading services, according to the guidelines laid out in the university-endorsed national ‘Guidelines for editing research theses’.

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Table of contents

01 INTRODUCTION 12

1.1 Introduction 131.2 Researchcontext 131.3 Planningforspillovers 141.4 Researchquestion 181.5 Researchmethods 181.6 Thesisstructure 20

02 LITERATURE REVIEW 22

2.1 Introduction 232.2 Resurgenceoftheinnercity 232.3 Agglomerationeconomies 272.4 Industryclustering(localisationeconomies) 302.5 Knowledgespillovers 332.6 Industryclustersandknowledgespillovers framework 442.7 Gapswithintheliterature 442.8 Conclusion 45

03 GROWTH OF THE CREATIVE INDUSTRIES IN SURRY HILLS AND THE ATP 46

3.1 Introduction 473.2 EmploymentclustersinSydney 473.3 PlanningforemploymentinSydney 503.4 SurryHills 503.5 AustralianTechnologyPark 593.6 Conclusion 66

04 METHODOLOGY 68

4.1 Introduction 694.2 Researchquestion 694.3 Casestudyapproach 694.4 Networkanalysis 704.5 Overviewofmethod 704.6 Ethicsapproval 794.7 Conclusion 79

05 FIRM LOCATION, NETWORKS AND KNOWLEDGE SHARING 80

5.1 Introduction 815.2 SurryHills 815.3 AustralianTechnologyPark 925.4 Conclusion 102

06 COMPARATIVE ANALYSIS OF CREATIVE CLUSTERS, KNOWLEDGE SPILLOVERS AND THE PLANNING PROCESS 104

6.1 Introduction 1056.2 Analysisofknowledgespillovers 1056.3 Otherdriversoffirmlocation 1106.4 Conclusion 114

07 CONCLUSION 116

7.1 Introduction 1177.2 Researchquestions 1177.3 Recommendations 1187.4 Areasforfurtherresearch 1197.5 Concludingremarks 119

REFERENCES 120

APPENDIX A: OVERVIEW OF METROPOLITAN PLANS FOR SYDNEY 1948-2014 127

APPENDIX B: DATA ANALYSIS 132

APPENDIX C: DETAIL ON DATA ANALYSIS, GEOGRAPHIES AND INDUSTRY CODES 160

APPENDIX D: INTERVIEW QUESTIONS: FIRM INTERVIEWS 164

APPENDIX E: INTERVIEW QUESTIONS: WORKER INTERVIEWS 165

APPENDIX: ETHICS APPROVAL 166

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List of figuresFigure1: GoalsanddirectionswithinAPlanforGrowingSydney 15

Figure2: GlobalEconomicCorridor 16

Figure3: GlobalSydney 17

Figure4: Overviewofmethod 19

Figure5: Employmentbyindustry(shareoftotal)inAustralia1900-2010 24

Figure6: Whatmightcausespecialisation? 27

Figure7: Effectivejobdensity,Sydney 28

Figure8: Creativeindustryclusters:mixofmixes 32

Figure9: Face-to-facecontact 35

Figure10: Thestructureanddynamicsoflocalbuzzandglobalpipelines 36

Figure11: SurryHillsandtheATPinthecontextoftheGlobalEconomicCorridor 48

Figure12: SurryHillsandtheATPinthecontextoftheinnercityofSydney 48

Figure13: PlaceofresidenceofworkersemployedinthecreativeindustriesacrossSydney 49

Figure14: PlaceofworkforworkersemployedinthecreativeindustriesacrossSydney 49

Figure15: SurryHillscontextmap 51

Figure16: SurryHillsdistrictstructureplan 53

Figure17: ClustersofcreativeindustriesandICT(2001) 55

Figure18: Objective7.3–Supportthedevelopmentofcreativeindustries 55

Figure19: PrecinctdirectionsforSurryHills 56

Figure20: IndustryclusterswithintheCityofSydney 57

Figure21: Gentrification 58

Figure22: ATPcontextmap 59

Figure23: MapofATPprecinct 60

Figure24: EveleighrailyardspriortodevelopmentofATP 61

Figure25: EvidenceofcommunitybacklashagainstATP 62

Figure26: OriginalmasterplanforATP 63

Figure27: ArtistsimpressionofoneofthenewbuildingsproposedfortheATP 65

Figure28: LocationsoffirmswithinSurryHills 76

Figure29: LocationsoffirmswithintheATP 77

Figure30: LocationofcreativeindustriesacrossSydney(1dot=100jobs) 87

Figure31: Atlassiancasestudy 100

Figure32: CountyofCumberlandfunctionalplan(1948) 127

Figure33: SydneyRegionOutlinePlan(1968) 127

Figure34: Sydneyintoitsthirdcentury(1988) 127

Figure35: Citiesforthe21stCentury(1995) 128

Figure36: ShapingourCities(1998) 129

Figure37: CityofCities:MetropolitanStrategyforSydneyto2031(2005) 130

Figure38: MetropolitanPlanforSydneyto2036(2010) 131

Figure39: APlanforGrowingSydney(2014) 132

Figure40: Totaljobs1991-2011–SurryHills 133

Figure41: Trendsinkeyindustries–SurryHills 134

Figure42: Trendsinkeyindustries–CityofSydney 134

Figure43: Trendsinkeyindustries–SydneyGMA 135

Figure44: Industriesofemployment(ANZSIC1digit)2011–SurryHills 136

Figure45: Industriesofemployment(ANZSIC1digit)2011withcreativeindustries–SurryHills

137

Figure46: Growth/declineinindustriesofemployment(ANZSIC1digit)between2006and2011inSurryHills(absolute)

137

Figure47: Growth/declineinindustriesofemployment(ANZSIC1digit)between2006and2011inSurryHills(proportionate)

141

Figure48: Occupationsofemployment(ANZSCO1digit)2011–SurryHills 144

Figure49: OriginofworkerstravellingtoSurryHills,2011 145

Figure50: Trendsinmodeshare–SurryHills 146

Figure51: Comparisonofmodeshare–SurryHills 147

Figure52: Totaljobs1991-2011–ATP 148

Figure53: TotaljobsATP2006-2014 149

Figure54: EmploymentbybuildingacrosstheATP 150

Figure55: Trendsinkeyindustries–ATP 150

Figure56: Trendsinkeyindustries–CityofSydney 150

Figure57: Trendsinkeyindustries–SydneyGMA 150

Figure58: Industriesofemployment(ANZSIC1digit)2011–ATP 151

Figure59: Industriesofemployment(ANZSIC1digit)2011–ATP 151

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Figure60: Growth/declineinindustriesofemployment(ANZSIC1digit)between2006and2011intheATP(absolute)

151

Figure61: Growth/declineinindustriesofemployment(ANZSIC1digit)between2006and2011inATP(proportionate)

151

Figure62: Occupationsofemployment(ANZSCO1digit)2011–ATP 154

Figure63: OriginofworkerstravellingtoATP,2011 157

Figure64: Trendsinmodeshare–ATP 158

Figure65: Comparisonofmodeshare–ATP 159

Figure66: ComparisonofboundariesforSurryHills1991-2011 160

Figure67: ComparisonofboundariesforATP1991-2011 161

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List of tables

Table1: Thefifthwave 23

Table2: Reviewofempiricalstudies 37

Table3: Researchquestions,methods,datasourcesandanalysis 71

Table4: Contextinterviews(SurryHills) 72

Table5: Contextinterviews(ATP) 72

Table6: FirmsinSurryHills 73

Table7: FirmswithintheATP 74

Table8: WorkersbasedinSurryHills 78

Table9: WorkersbasedwithintheATP 79

Table10: ReasonsforlocatinginSurryHills 82

Table11: ReasonsforlocatingwithintheATP 93

Table12: Summaryofanalysisofthemechanismsofknowledgespillovers 109

Table13: Top5reasonsforlocatinginSurryHillsandtheATP 110

Table14: ANZSIC4digitindustriesofemployment(≥1%totalemployment),1996,SurryHills 138

Table15: ANZSIC4digitindustriesofemployment(≥1%totalemployment),2011,SurryHills 140

Table16: ANZSCO4digitoccupationsofemployment(≥1%totalemployment),1996,SurryHills 142

Table17: ANZSCO4digitoccupationsofemployment(≥1%totalemployment),2011,SurryHills 143

Table18: ANZSIC4digitindustriesofemployment(≥1%totalemployment),1996,ATP 152

Table19: ANZSIC4digitindustriesofemployment(≥1%totalemployment),2011,ATP 153

Table20: ANZSCO4digitoccupationsofemployment(≥1%totalemployment),1996,ATP 155

Table21: ANZSCO4digitoccupationsofemployment(≥1%totalemployment),2011,ATP 156

Table22: Comparisonofindustrycategories 162

Table23: Creativeindustries(ANZSIC4digitcategories) 163

List of Abbreviations

ABS Australian Bureau of Statistics

ANZSCO Australian and New Zealand Standard Classification of Occupations

ANZSIC Australian and New Zealand Standard Industry Classification

ATP Australian Technology Park

ATPSL Australian Technology Park Sydney Limited

BTS Bureau of Transport Statistics

CBD Central Business District

CEO Chief Executive Officer

EJD effective job density

EOI expression of interest

GMA greater metropolitan area

IBC International Business Centre

ICT information and computer technology

JTW journey to work

KBUD knowledge-based urban development

LGA local government area

LKS localised knowledge spillovers

LQ location quotient

NIC National Innovation Centre

NICTA National ICT Australia

R&D research and development

SH Surry Hills

SHFA Sydney Harbour Foreshore Authority

SREP Sydney Regional Environmental Plan

TZ travel zone

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Introduction

While knowledge and creativity have always been relevant to

industries within the economy, they are now seen as a key driver of

growth.

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CHAPTER 1: INTRODUCTION

1.1 Introduction

Thisthesisconsidershowthespatialplanningprocessinourmajorcitiesdealswithemergingneweconomicdriversofmetropolitaneconomiesinthe21stCentury.Basedaroundindustriesinwhichknowledgeisaprimaryinput,theseNewEconomyindustriesareincreasinglylocatingincentralcityneighbourhoods,reversinglocationaltrendstowardsthesuburbanisationofkeyemploymentsectorsinpreviousdecades.ItisarguedthatakeydriveroftheNewEconomyisthespilloversofknowledgebetweenfirmswhichco-locateinthesenewinnercityclustersofindustries.However,theevidenceforsucheffectsisunclear,despitemanyindustriallocationpoliciesbeingbasedontheconcept.ThisthesisexplorestherolespillovereffectsareplayingintwocontemporaryexamplesofknowledgeeconomyclustersinSydneyandtherolespatialplanninghasplayedtogeneratethe outcome.

1.2 Research context

Overthepasttwodecades,citieshavebecomethefocalpointofanincreasinglyglobaleconomy.Sassen(2001),analysingNewYork,LondonandTokyo,hasdocumentedtheriseoftheglobalcityasakeylocationforspecialisedservicefirms.However,thistrendisnotconfinedtothesethreecities–itisawidespreadphenomenonandSydneyisoftentoutedasAustralia’sownglobalcity.

ItisarguedthatwehaveenteredaneweraofeconomicdevelopmentdescribedastheNewEconomywhichistechnologydrivenandknowledgebased(Hutton,2010).Thesuccessfulcitiesofthenext50yearsareexpectedtobethosewhicharehighlydynamicandfocusedonthedigital,knowledgeandcreativeindustries(Montgomery,2008).

Agrowingemphasisonthecreativeindustries,asasubsetoftheknowledgeindustries,hasbeenobservedwithintheliterature,withFlorida(2002)arguablythemostwell-knowncontributor.Thecreativeindustriesarebroadlydefinedas

“thoseindustrieswhichhavetheirorigininindividualcreativity,skillandtalentandwhichhaveapotentialforwealthandjobcreationthroughthegenerationandexploitationofintellectualproperty”(Bakhshi,Freeman,&Higgs,2012,p.6).

Thecreativeindustriescomprisedigitalandsoftwareindustriesaswellasmoretraditionaldesign-relatedindustriessuchasarchitecture,performanceandvisualarts(Bakhshietal.,2012).Whileknowledgeandcreativityhavealwaysbeenrelevanttoindustrieswithintheeconomy,theyarenowseenasakeydriverofgrowth.

Theevolutionoftheglobalised,knowledge-basedeconomyhasspatialimplications.Theinnercityisincreasinglybecomingthecentreoftheknowledgeeconomy,withamoveawayfromsuburbanbusinessparkstowardsvibrantinnercityemploymentdistricts,identifiedbyKatzandWagner(2014)asinnovationdistricts.Gentrification,thespatialprocesswherebythehighlyskilledlocatethemselvesresidentiallyinrelationtotheirjobs,commonlyconcentratedwithintheCentralBusinessDistrict(CBD),canexplaintheattractivenessoftheinnercitytothehighlyeducatedandskilledworkforce(Storper,2013). However,theresurgenceoftheinnercityhasalsobeendrivenbyanincreasingacknowledgementofthebenefitsofagglomerationeconomiesandtheclusteringofindustries.

Thenotionofagglomerationisnotnovel.Intheeconomicgeographyliteratureithasevolvedfroma19thCenturyconceptoflocalisationeconomiesbasedonthemetalmanufacturingindustry(Marshall,1920),toa21stCenturyconceptbroadlyconceivedastheNewEconomicGeography(Moretti,2012)ofglobalcitiescontainingdenseurbancoresandclustersofknowledgeindustries.

Moregenerally,agglomerationis“atermusedinspatialeconomicstodescribethebenefitswhichflowtofirmsfromlocatinginareaswhichhaveahigherdensityofeconomicactivity”(SGSEconomicsandPlanning,2012,p.7).Therearetwotypesofagglomerationeconomies:

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― urbanisation economies,whichinvolveeconomicinteractionsbetweenindustriesandarisefromalargenumberofdifferentindustrieslocatedincloseproximitytoeachother(TheWorldBank,2009,p.129)

― localisation economies,whichinvolveeconomicinteractionswithinanindustryandarisefromalargenumberoffirmswithinthesameindustryclusteringinthesamelocation(TheWorldBank,2009,p.129).

ThreekeyforcesofagglomerationwidelydocumentedwithintheliteraturearedrawnfromconceptsidentifiedbyMarshall(1920).Moretti(2012)summarisestheseas:

― Thick labour markets:themoreworkersandjobs,themorelikelythatpeoplewillfindajobthatbettermatchestheirskills.

― The presence of specialised service providers: proximitytoservices,suchasadvertisingandlegalsupport,isbeneficialforinnovativefirmsasitallowsthemtofocusoninnovationwithoutbeingpreoccupiedwithsecondaryfunctions.

― Knowledge spillovers:socialinteractionsamongknowledgeworkersgeneratelearningopportunitiesthroughtheflowanddiffusionofknowledgewhichenhancesinnovationandproductivity.

Localisationeconomiesareoftenreferredtoasindustryclusters.Anindustryclusteris“ageographicallyproximategroupofinterconnectedcompaniesandassociatedinstitutionsinaparticularfield,linkedbycommonalitiesandcomplementarities”(Porter,2000,p.254).Traditionally,industriesclusteredinlocationswherethephysicalconditionswereappropriateforthatparticularindustry.Now,industriesareconsideredtoclusterwherethereiscultureandactivitywithinthemetropolitancore.

Theliteratureidentifiesknowledgespilloversasthekeydriverofindustryclusteringandaredefinedastransfersofknowledgebetweenindividualsandfirms(Kellyetal.,2013,p.3).Knowledgespilloversareimplementedthroughnon-marketinteractionsandknowledgespillsoverbetweenfirmswithoutdirectcompensationfortheproduceroftheknowledge(Huber,2007,p.50).Theexchangeofknowledgeoccursasfirmstrade,asemployeesmovebetweenorganisationsorthroughinformallinks.Recently,theconceptofbuzzhasbeenintroducedwithintheliterature(Storper&Venables,2004)todescribethesocialenvironmentwhereknowledgespilloversoccur.Glaeser(2000)claimsthatcitiesprovidetheclearestexamplesofknowledgespillovers.However,theevidencesuggeststhatknowledgespilloversaremorecomplicatedthanthis,andthiswillbediscussedinmoredetailinChapter2.

Whilecontemporaryliteraturecitestheideaofknowledgespilloversasabenefitoftheclusteringofknowledgeindustries,thereisstilllimitedempiricalevidenceofthemechanismsofknowledgespillovers(Feldman,2000;Huber,2012).ThisthesissetsouttoexaminetheroleofspillovereffectsinSydney’screativeindustryclusters.

1.3 Planning for spillovers

Ifknowledgespilloversarethekeydriverofindustryclusteringitisimportanttounderstandhowtheywork.TheDepartmentofPlanningandEnvironmentistheNSWgovernmentagencyresponsibleforSydney’smetropolitanplanning¹.TheDepartment’smaingoalistofacilitatesustainablegrowthandemployment(NSWDepartmentofPlanningandEnvironment,2015).ItreleasesanewmetropolitanstrategyforSydneyapproximatelyeveryfiveyears.

ThesemetropolitanstrategiesmakeitclearthattheNSWGovernmentisfocusedondrivingindustryclusteringasakeyplanningtask.Metropolitanplanningdocumentsmakethisakeypriorityforstrategicplanningandhaveadoptedtheeconomicgeographylexicon,despitethelackofanunderstandingoftherelationshipbetweentheplanningprocess,industryclusteringandknowledgespillovers.Thus,Sydneypresentsanidealcasestudyinunderstandingthesedynamics.

ThemostrecentmetropolitanstrategyforSydney, A Plan for Growing Sydney,releasedbytheNSWDepartmentofPlanningandEnvironment(2014),containsastrongeconomicfocuswithamajorgoalbeing‘acompetitiveeconomywithworld-classservicesandtransport’(refertogoal1inFigure1).WhilethePlancontainsfourgoals,particularemphasisisplacedontheeconomicgoal,whichisapparentwhencomparingthenumberofdirectionsdedicatedtoachievingit:halftheemphasisisoneconomicissuesanddirections.

¹ThenewGreaterSydneyCommissionwillbeincreasinglyresponsibleforSydney’smetropolitanplanninginthefuture

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GOAL 1: A COMPETITIVE ECONOMY WITH WORLD-CLASS SERVICES AND TRANSPORT

Direction1.1: GrowamoreinternationallycompetitiveSydneyCBD

Direction1.2: GrowGreaterParramatta-Sydney’ssecondCBD

Direction1.3: EstablishanewPriorityGrowthArea-GreaterParramattatotheOlympicPeninsula

Direction1.4: TransformtheproductivityofWesternSydneythroughgrowthandinvestment

Direction1.5: EnhancecapacityatSydney’sgatewaysandfreightnetworks

Direction1.6: ExpandtheGlobalEconomicCorridor

Direction1.7: Growstrategiccentres-providingmorejobsclosertohome

Direction1.8: EnhancelinkagestoregionalNSW

Direction1.9: Supportpriorityeconomicsectors

Direction1.10: PlanforeducationandhealthservicestomeetSydney’sgrowingneeds

Direction1.11: Deliverinfrastructure

GOAL 2: A CITY OF HOUSING CHOICE, WITH HOMES THAT MEET OUR NEEDS AND LIFESTYLES

Direction2.1: AcceleratehousingsupplyacrossSydney

Direction2.2: AccelerateurbanrenewalacrossSydney-providinghomesclosertojobs

Direction2.3: Improvehousingchoicetosuitdifferenceneedsandlifestyles

Direction2.4: Delivertimelyandwellplannedgreenfieldprecinctsandhousing

GOAL 3: A GREAT PLACE TO LIVE WITH COMMUNITIES THAT ARE STRONG, HEALTHY AND WELL CONNECTED

Direction3.1: Revitaliseexistingsuburbs

Direction3.2: Createanetworkofinterlinked,multipurposeopenandgreenspacesacrossSydney

Direction3.3: Createhealthybuiltenvironments

Direction3.4: PromoteSydney’sheritage,artsandculture

GOAL 4: A SUSTAINABLE AND RESILIENT CITY THAT PROTECTS THE NATURAL ENVIRONMENT AND HAS A BALANCED APPROACH TO THE USE OF LAND AND RESOURCES

Direction4.1: Protectournaturalenvironmentandbiodiversity

Direction4.2: BuildSydney’sresiliencetonaturalhazards

Direction4.3: Managetheimpactsofdevelopmentontheenvironment

FIGURE 1: Goals and directions within A Plan for Growing Sydney

Source: (NSW Department of Planning and Environment, 2014, p. 1)

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FIGURE 2: Global Economic Corridor

Source: (NSW Department of Planning and Environment, 2014, p. 45)

ThisproposalappearstobebasedonanunderstandingthattheCorridor’seconomicdominanceisrelatedtothenotionofagglomerationeconomies.ThePlan(NSWDepartmentofPlanningandEnvironment,2014,p.46)suggeststhat“Businessesbenefitfromproximitytootherbusinessesandserviceswhentheyareclusteredinafew,largercentres”.

AccordingtothePlan(NSWDepartmentofPlanningandEnvironment,2014),itisexpectedthatbyextendingtheGlobalEconomicCorridor,additionalcentreswillbeabletohookintothebenefitsassociatedwiththisagglomerationanddriveemploymentandeconomicgrowth.However,itcanbearguedthatthisfailstoappreciatetheCorridor’shistoricalcontext–theCorridor’sidentificationrecognisesanexistingclusterofjobs,ratherthanapolicytocreateacluster.

Additionally,thePlanrecognisesthatthegrowthofpriorityindustries(including,amongothers,thecreativeindustries,digitaleconomyandprofessionalservices)requiresanunderstandingofthelanduseneedsoftheseindustries.Itisexpectedthatbenefitswillflowfrom“theemergenceofindustryclustersincost-effectivelocations”(NSWDepartmentofPlanningandEnvironment,2014,p.52).Similarly,theNSWGovernmentproposestoworkwithlocalgovernmenttoputinplaceenablingplanningcontrolswhichwillencourageandpromoteclustersthatfocusonhighereducationfacilities,healthinfrastructureandresearchinstitutions.However,APlanforGrowingSydneydoesnotdefinewhatanenablingplanningcontrolisorhowitmightpromoteclustering.ThissuggestsasignificantgapinhowtheNSWGovernmentunderstandswhatdrivesindustryclusteringinpractice.

GlobalSydneysitswithintheGlobalEconomicCorridor.ThePlanidentifiesitasatargetforincreasingSydney’sinternationalcompetitivenessasaglobalcity.GlobalSydneyhasbeendividedinto10precincts,includingSydneyCBDandNorthSydneyCBD,aswellasrenewalareassuchastheBaysPrecinct,CentraltoEveleighandsmalleractivitycentressuchasSurryHills(refertoFigure3).ThePlanintendsfortheseprecinctstoprovidecapacityforadditionalmixed-usedevelopmentincludingoffices,retail,tourism,arts,culture,servicesandhousing,whichwillsupporttheCBD.

ThefocusofstrategicplanningoneconomiccompetitivenessinSydneyisnotnew.AreviewofthemetropolitanstrategiesdevelopedforSydneyoverthepast65yearsdemonstratestheevolutionofapproachesofplanningforemploymentfromcentresofemploymenttoeconomicclustersandcorridors.ThisisdiscussedinfurtherdetailinChapter3(andAppendixA).

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FIGURE 3: Global Sydney

Source: (NSW Department of Planning and Environment, 2014, p. 27)

ItisnotjusttheNSWGovernmentthathasjumpedontheagglomerationbandwagon.LocalgovernmentsacrossSydneyincludingtheCityofSydney(2013)andParramattaCouncil(2011),industrygroupsandadvocatessuchastheCommitteeforSydney(2013)andtheprivatesectorincludingDeloitte(2015)andPricewaterhouseCoopers(2015)promoteandendorsethisapproach.Mostrecently,WesternSydneyUniversityreleasedadiscussionpaperthatpromotestheconceptofaninnovationcorridorforWesternSydney(McNeill,2015)modelledontheGlobalEconomicCorridor.

WithasignificantpolicyfocusonfacilitatingindustryclusteringacrossSydney,theneedforabetterappreciationastowhatdrivesindustryclusteringisessential.Ifknowledgespilloversareconsideredakeyfactordrivingindustryclustering,thenunderstandingthisrelationshipwillfacilitatebetterrecognitionofwhetherthereisaroleforplanninginindustryclustering.Thisthesissetsouttodojustthat.

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1.4 Research question

Theprimaryfocusofthisthesisistoanswerthefollowingresearchquestion:

To what extent do localised knowledge spillovers drive local industry clustering?

Thefollowingsub-questionswillalsobeexploredthroughoutthisthesis:

i. Where do workers source their knowledge (informal networks, formal networks or both)?Thisquestionaimstounderstandthemechanismsofknowledgespilloverandwhetherlocationhasanybearingonthis.

ii. Where are connections formed and how do they evolve into a working relationship?Thetargetofthisquestionistounderstandwhetherconnectionsareformedwithinthegeographicboundaryoftheindustryclusterandhowtheseconnectionsevolveintoarelationshipwherevaluableknowledgeiscreatedandtransferred.

iii. Why do firms choose to locate in a local industry cluster? Thisquestionaimstoidentifywhetherfirmschoosetolocateinanindustryclusterduetotheperceivedbenefitsofknowledgespillovers.

iv. What role does planning play in promoting localised knowledge spillovers?Understandingtheroleofplanningwillascertainwhethercurrentpolicyapproachesandzoningmechanismsthatpromoteindustryclusteringalsodirectlyorindirectlypromotelocalisedknowledgespillovers.Thisquestionwillalsoaddresswhetherplanningispotentiallycurtailinglocalisedknowledgespilloversiftheyaremoreprevalentinaclusterwhichhasdevelopedorganicallyratherthanthroughplanning.

Inansweringthesequestions,thisthesiswillprovideabetterunderstandingoftherelationshipbetweenindustryclustering,knowledgespilloversandtheplanningprocess.

1.5 Research methods

Thisthesisstudiesthecreativeindustriesbecauseoftheirincreasingpresencewithintheeconomicgeographyliteratureandgovernmentpolicy.Itadoptsacasestudyapproach,comparingtwocreativeindustryclustersintheinnercityofSydney:SurryHillsandtheAustralianTechnologyPark(ATP)inRedfern.

SURRY HILLSSurryHillscontainsaclusterofcreativeindustrieswhichevolvedorganicallyoverthepastfewdecadesfromaformerclothingandlightmanufacturingcluster.Thereislimitedevidenceofstrategicplanninginitsgenesis,althoughboththestateandlocalgovernmentsinvolvedwouldliketocontinuetofacilitatethefunctionandgrowthofthecentre.Despitethis,thereislimitedrecognitionoftheareaasanemploymentcentrewithinstateorlocalgovernmentplanning,otherthanSurryHillsbeingaprecinctinGlobalSydneyasidentifiedearlier.

AUSTRALIAN TECHNOLOGY PARKTheATPsitsonthesiteofformerheavyindustriescentredonstaterailyards.TheredevelopmentofthisbrownfieldsitewasannouncedaspartoftheBuildingBetterCitiesProgramintheearly1990s.Thevisionwastoprovideanenvironmentforcollaborativeresearchandknowledgesharing.ThesitewasNSWGovernmentplannedandownedandhasremainedinNSWGovernmentownershipuntilrecentlywhenthestateagencyUrbanGrowthNSW,whocurrentlymanagestheATP,soldthesite.TheATPisalsopartofGlobalSydney,asitsitswithintheCentraltoEveleighprecinct,adjacenttoSurryHills.

ThethesisassumesthatSurryHillsandtheATParebonofideclustersandtheresearchquestionwillbeansweredinthiscontext.Thetwocasestudiesarecomparableduetotheir

proximitytoeachotheraswellaslandusehistory,havingbothevolvedfromformermanufacturinguses.Thekeycomparisonistheapproachtoplanninganddevelopmentandthelevelofgovernmentinterventioninthisprocess:SurryHillsformedlargelywithoutexplicitplanningwhiletheATPisafullyplannedentity(organicversusplanned).Contrastingthetwocasestudieswillalsoassistinunderstandingthekeydriversofindustryclustering,whichplanningprocessispotentiallymoresuccessfulandthereforeanylessonsforplanningforemploymentinthefuture.ThecontextandjustificationforthesecasestudiesisfurtherexploredinChapter3.

Asidefromtheapproachtoplanning,comparisonscanalsobemadebetweenthesetwocasestudiesintermsofthebuiltenvironment.SurryHillscanbecharacterisedashavingafinegrain,permeablebuiltenvironment,withaconcentrationofwarehousespacesassociatedwithitsformerlightmanufacturingpast.Thesewarehousespacesareeasilyadaptabletodesignstudios.ThescaleoftheATPismarkedlydifferentwithmuchlargerwarehousespacesthatwereonceusedtomanufacturerailwaycarriages.Thesewarehousesaremuchlessadaptabletomodernemploymentuses.

Thebuiltenvironmentalsoreflectsthehistoricalownershipstructure.ThefragmentedownershipofSurryHillshasresultinadiversebuiltenvironment,comparedtothesingleownershipoftheATP.Comparingthecharacteristicsofthebuiltenvironmentwillpotentiallyhaveimplicationsforindustryclusteringandknowledgespillovers.

OVERVIEW OF METHODAconsiderationofquantitativeandqualitativeresearchmethodshasbeenadoptedtoensurerobustandvalidresults.TheresearchmethodologyforthisresearchissummarisedwithinFigure4andisfurtherdetailedin Chapter4.

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FIGURE 4: Overview of method

Source: Author

Compara�ve analysis

Tracing knowledge spillovers

Context analysisLiterature review

Resurgence of the inner city

Agglomera�on economies

Industry clustering

Knowledge spillovers

State and local government strategic

plans

Historical documents

Interviews with firms (stated preference

survey)

Interviews with workers

Knowledge spillovers framework

Context interviews

Employment data from Census

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1.6 Thesis structure

Thisthesisisstructuredintosevenchaptersasdetailedbelow.

CHAPTER 2: LITERATURE REVIEWChapter2reviewstheexistingbodyofliteraturerelatingtotheresurgenceoftheinnercityandagglomerationeconomies.Itfocusesonexistingstudiesofknowledgespilloversandthevaryingperspectivesrelatingtothisconcept.Keycharacteristicsofindustryclustersareidentifiedalongwithaframeworkfortheanalysisofknowledgespillovers.

CHAPTER 3: GROWTH OF THE CREATIVE INDUSTRIES IN SURRY HILLS AND THE ATPThroughareviewofgovernmentpolicyandhistoricaldocuments,Chapter3providesthecontextforthetwocasestudies.Thisincludestheirevolutionfrommanufacturingcentreswithintheinnercitytocreativeindustryclusters.Chapter3alsosummarisestheanalysisofsecondaryquantitativedatathattracksthegrowthofthecreativeindustriesinbothSurryHillsandtheATPfrom1991to2011.

CHAPTER 4: METHODOLOGYChapter4furtherdetailsthemethodologicalapproachadoptedforthisthesisincludingbothquantitativeandqualitativemethods.Withafocusonqualitativeinterviews,thechapteridentifiesthetypesoffirmsandworkersinterviewedandtheobjectivesoftheinterviews.

CHAPTER 5: FIRM LOCATION, NETWORKS AND KNOWLEDGE SHARING Chapter5analysesthequalitativedatafromtheinterviewsconductedaspartofthisresearchwithafocusondriversoffirmlocation,networksoffirmsandworkers,definingknowledgeandprocessesofknowledgesharing.ComparisonsaredrawnbetweenSurryHillsandtheATP,andquestionsareraisedregardingthemaindriversoffirmlocation.

CHAPTER 6: COMPARATIVE ANALYSIS OF CREATIVE CLUSTERS, KNOWLEDGE SPILLOVERS AND THE PLANNING PROCESSChapter6containsananalysisofthemechanismsofknowledgespilloverwithinSurryHillsandtheATPdrawingontheresultsfromChapter5.Thechapteralsodiscussesotherdriversoffirmlocationthatarenotnecessarilycapturedwithintheexistingeconomicgeographyliterature,includingthepropertymarket.Finally,thischapterexplorestheroleofplanninginfacilitatinglocalemploymentclusters,includingcreatingnewclustersandmaintainingexistingclusters.

CHAPTER 7: CONCLUSIONTheanalysisconductedwithintheprecedingchaptersissummarisedinChapter7inresponsetothemainresearchquestionandeachofthesub-questionsproposedaspartofthisresearch.Thischapteridentifiesanumberofpolicyrecommendationshavebeenproposedandareasforfurtherresearch.

21

22

Literature review

The evolution of the economy has spatial implications, and

the inner city has increasingly become the focus of the

knowledge economy.

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CHAPTER 2: LITERATURE REVIEW

2.1 Introduction

Thischapteranalysestheexistingbodyofliteraturerelatingtotheresurgenceoftheinnercity,providingasnapshotofhowaNewEconomyhasevolvedandsubsequentlyhowthiseconomicrestructuringisimpactingthespatialstructureofourglobalcities.Thisevolutionissupportedbyanalysisoftheliteratureonagglomerationeconomieswhichhasevolvedfroma19thCenturyconceptbasedonmanufacturing,toa21stCenturyconceptbasedontheknowledgeeconomy.

Theliteraturereviewthendelvesintolocalisationeconomiesasasubsetofagglomerationeconomies,particularlyknowledgeindustryclusters.Theattentionthenturnstoknowledgespilloversasaforce(andbenefit)ofclustering,whichistheprimaryfocusofthisthesis.Withinthebodyofliteratureonknowledgespillovers,somecontributionsseektorationalisethetheory,otherdiscussionsconsidertheconditionsthatfacilitateknowledgespilloversandanumberofempiricalstudiesseektotraceknowledgespilloversthroughvariousmethodsofanalysis.Substantialliteraturechallengestheconceptofknowledgespilloversduetothedifficultyintracingthemovementofknowledge.

Throughanalysisofthisliterature,thischapteridentifiessomeofthekeycharacteristicsofindustryclustersaswellasaframeworkfortheanalysisofknowledgespillovers.Thechapterconcludesbyidentifyinggapswithintheliterature,reinforcingthefocusofthisstudyandtheopportunitytocontributetotheexistingbodyofliterature.

2.2 Resurgence of the inner city

ECONOMIC RESTRUCTURING: RISE OF KNOWLEDGE ECONOMYThe1960smarkedthebeginningofalongperiodofindustrialdeclineandarestructuringoftheeconomy,oftenreferredtoaspost-industrialismorthepost-Fordismera.Thisperiodsawtheriseintheservicesandculturaleconomyaswellastheknowledge-basedeconomyofthecity.

Withdeindustrialisationcameaspatialtransitionandtheriseoftheglobalcity(Sassen,2001).Sassen(2001)identifiesthattheseglobalcitieswillfunctionas:

― highlyconcentratedcommandpointsintheorganisationoftheworldeconomy

― keylocationsforfinanceandforspecialisedservicefirms,whichhavereplacedmanufacturingastheleadingeconomicsector

PRODUCTION MODE ORGANISED BYWave1 EarlyCapitalism Craftandindustrial Merchants

Wave2 IndustrialRevolution Industrial Industrialists

Wave3 Fordism Massproduction Massproducers

Wave4 Post-Fordism Flexiblespecialisation Suppliersofservices

Wave5 NewEconomy Personalisedorbespokeconsumption Designer/Artists/MakersandArbitersofstyle

TABLE 1: The fifth wave

Source: (adapted from Jacobs (1969) by Montgomery, 2008, p. 168)

― sitesofproduction,includingtheproductionofinnovations,intheseleadingindustries

― marketsfortheproductsandinnovationsproduced.

Whilethenotionofaglobalcityremainsrelevant,morerecentliteraturehasfocusedontheNewEconomyofthesecitiesandknowledge-basedindustries.Montgomery(2008,p.368)expectsthat“thesuccessfulcitiesofthenext50yearswillbethosewhichachievehighlydynamiceconomiescentredonthenewdigitalindustries,theknowledgeeconomygenerallyandthecreativeindustries”.AccordingtoMontgomery(2008),theNewEconomyischaracterisedbypersonalorbespokeconsumptionandorganisedbydesigners/artists/makersandarbitersofstyle(refertoTable1),whichhighlightsthepresenceofthecreativeindustries.TheNewEconomyisincreasinglyrecognisingthevalueofhumancapitalandthe“culturaleconomyofthecity”(Hutton,2010,p.3)

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Knowledgehasalwaysbeenrelevanttoindustrieswithintheeconomy;however,itisnowseenasthefocusoftheeconomy:

“ourproductionhasamorecomplicatedknowledgestructure,andthe‘productionchain’ofknowledgeisnowlongerthanever.Anincreasingshareofourworkingpopulationisengagedintheproductionortheuseofknowledge,eitherasproducersofgoodsandservicesorasconsumers”(Lambooy,1997,p.295).

O'Connor,Stimson,andDaly(2001,p.36)highlightthatknowledgeisrecognisedasafactorofproductionalongsidelabourandcapital.

Australiahasalsoexperiencedarestructuringofitseconomysincethe1980s.Theremovalofmanufacturing-relatedprotectionistpoliciesmeantthatAustralianolongerhadacompetitiveadvantageinmanufacturing.Theeconomyhasincreasinglyshiftedfromarelianceonmanufacturingtowardsgreateremploymentwithintheservicesindustries(refertoFigure5).

ThenewAustralianeconomyischaracterisedby:

“deregulatedcapital,labour,andproductionsystems,dismantledtariffbarriersandliberalisedtrade,andisreflectedinashifttoaservice-dominatedeconomyutilisingknowledge-based,information-intensiveprocessesofproduction”(O’Connoretal.,2001,p.13).

Theevolutionoftheeconomyhasspatialimplications,andtheinnercityhasincreasinglybecomethefocusoftheknowledgeeconomy.

FIGURE 5: Employment by industry (share of total) in Australia 1900-2010

Source: (Connolly & Lewis, 2010)

%

80

70

60

50

40

30

20

10

0

%

80

70

60

50

40

30

20

10

01910 1930 1950 1970 1990 2010

Services

Agriculture

Manufacturing

Mining

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SPATIAL RESTRUCTURING: RESURGENCE OF THE INNER CITYTheeconomicrestructuringdescribedabovehasimportantimplicationsforthespatialstructureandimportanceofcities,particularlyinrelationtowherejobsarelocated.KatzandWagner(2014,p.1)highlightthatoverthepast50years,thespatialapproachtoemploymenthasbeendominatedbyplaceslikeSiliconValley(California):“suburbancorridorsofspatiallyisolatedcorporatecampuses,accessibleonlybycar,withlittleemphasisonthequalityoflifeoronintegratingwork,housing,andrecreation”.

SiliconValleyisarguablytheworld’smostfamousbusinesspark.ItshistorycanbetracedbacktothefoundationofHewlett-Packard(HP)in1937(Saxenian,1994,p.20).HewlettandPackardwereengineeringstudentsfromStanfordUniversity.Saxenian(1994,p.20)acknowledgesthat“Asmallclusterofpre-wartechnologyfirms…grewupalongsideHPtoprovideafoundationfortheregion’semergingelectronicsindustry”.TheelectronicsboomduringWWIIandtheclusterofindustrialactivityaroundStanfordUniversitygrewrapidlyduringthe1950s,fuelledinpartbycontinuedmilitaryspending(Saxenian,1994,p.24).ItisimportanttounderstandthatthesuccessofSiliconValleywasduetoarangeoffactorsincluding“Acombinationofuniversityresearch,militaryspending,andentrepreneurialrisk-takingstimulatedaself-reinforcingdynamicoflocalizedindustrialdevelopment”(Saxenian,1994,p.27).

SiliconValley’stransitionfromarelianceonmilitaryfundingtoventurecapitalandinvestmentalsomeantthatitgrewstronglydespiterapidchangestotechnology.Feldman(2000,p.373),inreferencetotheworkofhistoriansLeslieandKargon(1996),considersthatitwouldbedifficulttoduplicateitssuccess.Lambooy(1997,p.298)highlightsthatwhilemanycitieshaveattemptedtoreplicatethesuccessofSiliconValleyanddevelopscienceandtechparks,“wecannotforceapositiveoutcome”.

Lambooy(1997,p.298)considersthat“Largeurbanagglomerationshavebetterconditionsforcreatingthe

‘natural’(unplanned)clusters”.AccordingtoHallandCastells(1994),theagglomerationsofLondonandParisarestillthestrongestexamplesofsuccessfulcombinationsforscienceandcommercialapplicationswherethedevelopmentisbothspontaneousandplanned.Thisreinforcestheprominenceofglobalcities.

Morerecently,therehasbeenanincreasingmovementtowardstheinnercitywithworkersnotonlychasingknowledge-intensivejobs,butalsoabetterqualityoflifeassociatedwithreducedtraveltimeandincreasedamenity.Kellyetal.(2013)reinforcethispoint,emphasisingthattrafficcongestionandrisingfuelpriceshavepromptedaresurgenceofCBDsandinnersuburbsasplacestoliveandwork.Thefocusisnowshiftingfromresearchanddevelopmentcampusesinthesuburbstocentralcitylocations.

Hutton(2004)identifiesfivestagesofindustrialformationoverthepasttwodecades,withafocusontheconcentrationofgrowthintheinnercityparticularlythroughgentrificationofoldinnercityareas,aswellasanemergingfocusonthecreativeindustries:

― developmentofbusinessservicesub-centreslocatedinthemetropolitancorebutbeyondtheconfinesoftheCBD

― growthofartisanalproduction,associatedinpartwithcommunitiesofartistsandcraftsmeninolderinnercitydistrictsexperiencinggentrification

― expansionofcreativeanddesign-basedservicesaspartofthereconstructionofinnercityheritagedistricts

― riseandpartialcollapseofthedot-comsandothertechnologyintensivefirms

― emergenceofhybridcreativefirmswithadvancedtechnologytechniques.

Innercitygentrificationhasoccurredthroughbothplannedurbanrenewalandspontaneousgrowthofindustryclusters.Storper(2013,p.206)suggeststhatgentrificationisa“spatialprocessbywhichthehighlyskilledlocatethemselves

inrelationtotheiragglomeratingjobs,whicharealsooftenlocatedinthecoreofmetropolitancities,andtheytransformtheneighbourhoodsindoingso”.However,whiletheconcentrationofskilledworkersandindustriescreatesamarketforgentrification,thereremainsaquestionastowhatcomesfirstthelocationofjobsandopportunitytoearnincomeortheindividualsandhouseholdswhomakethedecisionsorchoices(Storper,2013).Itisdifficulttodeterminewhetheroneinitiatestheother,butfromtheliteratureitisclearthattheyreinforceeachothertodriveclusteringandagglomerationeconomies.Gentrificationisaparallelprocesswhichcanexplaintheattractivenessoftheinnercitytothehighlyeducatedandskilledworkforce.However,theextensivebodyofliteratureonthistopiclieslargelyoutsidethisthesis.

AsemphasisedbyHutton(2010,p.271),thereturntotheinnercitycorerunsagainstatideofdecentralisationofmanufacturing,retailandotherservices.ThispointisalsoreiteratedbySassen(2000,p.80)whostatesthat“Thegeographyofglobalizationcontainsbothadynamicofdispersalandofcentralization,aconditionthatisonlynowbeginningtoreceiverecognition”.Whilethespatialrestructuringofthecityhasnotbeenconfinedtothecoreofthecity,thishasbeenthefocusofafundamentalchangeinthemetropolis(Hutton,2010,p.1).ThishasbeendescribedbyEhrenhalt(2012)asthegreatinversionwithcitycentres“luringbackbusinessesandaffluentpopulations,whilethesuburbsarebecomingpoorerandtheirrateofgrowthhasslowed”(Florida,Matheson,Adler,&Brydges,2014,p.7).Venables(2006)similarlyobservesthattheeconomicgeographyofcitieshaschangedatallspatialscalesand“Afterdecadesofdeclinecitiesareundergoingarenaissanceasmoreknowledge-basedactivitiesseektobenefitfromclustering”(Venables,2006,p.80).

Drivingthismovementisanincreasingacknowledgementofthebenefitsofagglomerationeconomiesandtheclusteringofindustries.Moretti(2012)highlightsthatknowledgeandinnovationindustriesbringgoodjobsandhighsalariestothecommunitieswheretheycluster,andtheirimpacton

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thelocaleconomyismuchdeeperthantheirdirecteffect.Attractingahighpaidjobtoacitytriggersamultipliereffect,increasingemploymentandsalariesforthosewhoprovidelocalservices(Moretti,2012,p.13).Withthevalueofknowledgeincreasing,citieshavebecomemoreattractiveplacestoliveandwork(Glaeser,2011,p.38).Theliteraturesuggeststhatdespiteimprovementsininformationtechnology,thevalueofface-to-facecontacthasincreased.

ThistrendhasalsobeenobservedinAustraliancities.AfterWorldWarII,therewasamovementofjobsfromtheinnercitytotheoutersuburbsofAustralia’smajorcitieswherethepopulationwasincreasing(MajorCitiesUnit,2013),reflectingthefocusonmanufacturing.However,asmentionedpreviously,thisindustryofemploymenthasbeendecliningintermsoftheproportionoftotalemployment.Knowledge-intensiveindustrieshavebeendrivingjobandeconomicgrowthandthemovementofjobsbacktowardsthecentreofAustralia’smajorcities(Kellyetal.,2013;MajorCitiesUnit,2013),resultingintheresurgenceoftheinnercity.

Thefuturegrowthofcitieswillbeaccommodatedinanumberofways,likelyinvolvingacombinationofhigherdensitiesininnercitylocations,moremixedusedevelopment,theredevelopmentofformerindustriallandsanddevelopmentalongpublictransportcorridors(Hutton,2010;Montgomery,2008).Thereisnolongeranofficemonoculturewithinthecentreofthecity,althoughcommercialusesremainimportant.Moreprescriptivestrategicspatialplanningwillberequired(Montgomery,2008,p.371)thattakesaccountoftheneedsoftheknowledgeandcreativeeconomyandfacilitatestheirdevelopmentandfunction.

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2.3 Agglomeration economies

Thenotionofagglomerationhasevolvedfroma19thCenturyconceptoflocalisationeconomies,basedonthemetalmanufacturingindustryinSheffield(Marshall,1920),toa21stCenturyconceptfocusedonaNewEconomicGeography(Moretti,2012)ofglobalcitiescontainingdenseurbancoresandclustersofknowledgeindustries.Agglomerationis“atermusedinspatialeconomicstodescribethebenefitswhichflowtofirmsfromlocatinginareaswhichhaveahigherdensityofeconomicactivity”(SGSEconomicsandPlanning,2012,p.7).

Glaeser(2008,p.116)statesthat“agglomerationeconomiesaresaidtoexistwheneveranindividual’sproductivityriseswhenheorsheisneartootherindividuals”.Krugman(2000,p.55)suggeststhatagglomerationisdrivenbytheinteractionofthreekeyfactors:

― increasingreturnsattheplantlevelwhichmotivateindividualproducerstoconcentratetheirproduction

― transportcostswhichmakeitdesirabletolocatenearthelargermarket

― factormobilitywhichmeansthatwhenproducersmovetoalocationtheyincreasethesizeoftheassociatedmarket,makingthatlocationevenmoreattractive.

AccordingtoTheWorldBank(2009,p.129),agglomerationeconomies“dependnotjustonsize(abigcityorindustry)butalsoonurbaninteractions”.Whiletherearevaryingopinionswithinliteratureastohowagglomerationeconomiescanbecategorised,recentliteraturehasfocusedontwomainclassifications:urbanisationeconomiesandlocalisationeconomies(Feldman,2000;SGSEconomicsandPlanning,2012;TheWorldBank,2009).

Urbanisationeconomies“comefromthescaleeffectsthatareexternaltoindustriesbutinternaltogeographicunitssuchascities”(Feldman,2000,p.384).Urbanisationeconomiesinvolveeconomicinteractionsbetweenindustriesandarisefromalargenumberofdifferentindustrieslocatedclosetoeachother(TheWorldBank,2009,p.129).

Localisationeconomies“areknowledgespilloversexternaltofirms,yetinternaltoanindustrywithinacity”(Feldman,2000,p.383).Localisationeconomiesinvolveeconomicinteractionswithinanindustryandarisefromalargenumberoffirmswithinthesameindustryclusterinthesamelocation(TheWorldBank,2009,p.129).Thesefirmsarelinkedbythetechnologytheyuse,themarketstheyservice,theproductsorservicestheyprovideandthelabourandskillstheyrequire(TheWorldBank,2009,pp.130-131).SGSEconomicsandPlanning(2012)suggeststhattheconceptoflocalisationeconomiesresonatescloselywiththeconceptofindustryclustering,discussedfurtherinsection2.4.

Storper(2010b)believesthereisalimitedunderstandingofwhyagglomerationsevolveandtheycouldbeaccidental.Figure6demonstratesthatspecialisationandagglomerationsmaybedrivenbyhumancapital,accidentsorinstitutions.

FIGURE 6: What might cause specialisation?

Source: (Storper, 2010b, p. 2033)

Human capital:Immigra�on, selec�on of labour, reten�on,

skilling, pooling

Accidents:Regional innovators in right place at right �me: capture new ac�vi�es: first movers

win, others lose

Ins�tu�ons: favourable to capture and reten�on of ac�vi�es

specialisa�on: clustering,

reinforcement, weakening

Growth and performance

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FIGURE 7: Effective job density, Sydney

Source: (SGS Economics and Planning, 2014)

Agglomerationcanbemeasuredintermsofjobdensity.AccordingtoRawnsleyandSzafraniec(2010,p.4),jobdensityitselfdoesnoteffectivelydemonstratethephenomenaofagglomeration.Effectivejobdensity(EJD)hasbeendevelopedasausefulmeasureofagglomerationbecauseitincludesnotonlytheproximitycomponentofagglomerationbutalsotraveltime(MajorCitiesUnit,2013;SGSEconomicsandPlanning,2012).EJDtakesintoconsiderationactualtraveltimebyusingatraveltimematrixwhichdetailshowlongittakestotravelfromoneareainacitytoallotherareasbycarandpublictransport(Rawnsley&Szafraniec,2010).AreaswithahighEJDareconsideredtobethemostproductivelocationswiththemostagglomerationbenefits.Figure7illustratesSydney’sEJDhighlightingthatthecentralCBDexperiencesthehighestEJDandagglomerationbenefits.Othercentrestowardsthesouth(SydneyAirport)andnorthwest(MacquariePark)alsohaveahighEJD.Theselocationscontainahighconcentrationofjobsandarehighlyaccessible.

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FORCES OR BENEFITS OF AGGLOMERATION ECONOMIESMoretti(2012)providesaclearexplanationoftheforcesorbenefitsofagglomerationeconomies,drawingontheideasidentifiedbyMarshall(1920):

― Thick labour markets:themoreworkersandjobs,themorelikelythatpeoplewillfindajobthatbettermatchestheirskills.Itiseasiertomatchdemandandsupplyinathicklabourmarket(Moretti,2012).Marshall(1920,p.271)originallystatedthat“Employersareapttoresorttoanyplacewheretheyarelikelytofindagoodchoiceofworkerswiththespecialskillwhichtheyrequire;whilemenseekingemploymentnaturallygotoplaceswheretherearemanyemployerswhoneedsuchaskillastheirsandwherethereforeitislikelytofindagoodmarket”.Therefore,thisisabenefitforbothworkersandforfirms.

― The presence of specialised service providers: proximitytoservicessuchasadvertisingandlegalsupportisbeneficialforinnovativefirmsasitallowsthemtofocusoninnovationwithoutbeingpreoccupiedwithsecondaryfunctions.Asaresult,thesefirmsbecomemoreproductive(Moretti,2012).Marshall(1920,p.271)originallyhighlightedthat“subsidiarytradesgrowupintheneighbourhood,supplyingitwithimplementsandmaterialsorganizingitstraffic,andinmanywaysconducingtotheeconomyofitsmaterial”.

― Knowledge spillovers:socialinteractionsamongknowledgeworkersgeneratelearningopportunitiesthroughtheflowanddiffusionofknowledgewhichenhancesinnovationandproductivity(Moretti,2012).Marshall(1920)referredtothisashereditaryskillandstatedthat“Themysteriesofthetradebecomenomysteries;butareasitwereintheairandchildrenlearnmanyofthemunconsciously”(Marshall,1920,p.271).Moretti(2012,p.124)considersknowledgespilloverstobethemostimportantforceofagglomeration.

Storper(2013)describestheseforcesasmatching,sharingandlearning.Theseforcesdriveclusteringbutarealsoconsideredtobeoutcomesofclusteringandthereforeareoftenreferredtoasbenefits.Whilethesethreeforcesorbenefitsremainconsistentacrossthebodyofliteratureonagglomerationtheory,itisnotclearastowhetherallthreearerequiredforagglomerationeconomiestobeobservedoreventoessentiallyfunction.

CITY SIZE AND DIVERSITYTheWorldBank(2009,p.134)suggeststhereareopportunitycostsassociatedwithlivingincities.Theseincludealackofspace(associatedwithpeoplelivingclosetooneanother),highrents,crimeandcongestion.However,withreducedtransportcostsandalargeworkingpopulation,citiescontinuetoattractalargenumberofindustriesandbusinesses.Thisisidentifiedasa“self-reinforcingprocessofagglomeration”(TheWorldBank,2009,p.134)wheretheexpandinglocalmarketfurtherraisesindustryproductivity.Withincities,“thespatialconcentrationofpeoplereducesthecostofproducingknowledgebecauseinformationtransmission,competition,spying,imitation,learning,innovation,andthecommercializationofnewideasareeasier”(TheWorldBank,2009,p.135).

Largecities,duetotheirsizeandmixofindustries,providefirmsandworkerswithgreaterprotectionagainstrisks.Thereisgreatereconomicefficiencyinlargercitiesduetoareductionintransactioncostsassociatedwithproximityanddensityandbettermatchingbetweenworkerskillsandjobrequirements(Quigley,1998).Smallerspecialisedcities,ontheotherhand,exposeworkersandfirmstogreaterindustry-specificshocks(TheWorldBank,2009,p.134).Somesmallerspecialisedcities(suchasDetroit)areconsideredtoberecoveringwell(Katz&Bradley,2013),howeverthisisoftenassociatedwithastrongeconomicdevelopmentpolicyagendaandpoliticalsupport,particularlyatthelocalgovernmentlevel.

DurantonandPuga(2001,p.1463)highlightthatwherediversifiedandspecialisedcitiescoexist,thediversifiedcitiesactasanurseryforfirmsbyfacilitatingexperimentation,andthespecialisedcitiesprovideanenvironmentwherefirmscantakefulladvantageoflowerproductioncostsduetolocalisationeconomies.Thissupportstheideathatforneworyoungfirms,urbandiversityisimportant(Duranton&Puga,2001;TheWorldBank,2009).Standardisedormaturefirmsbenefitlessfromurbandiversityandflexibilityandinsteadpreferaspecialisedenvironment–forexample,anindustryclusterwherefirmsusingsimilartechnologiescanshareinformation(TheWorldBank,2009,p.139).Nevertheless,diversityisimportant(Duranton&Puga,2001;Quigley,1998):

“A‘balanced’urbansystemmaythusnotbeonewhereallcitiesareequallyspecializedorequallydiversifiedbutonewherebothdiversifiedandspecializedcitiescoexist.Insuchasystem,somecitiesspecializeinchurningnewideasandnewproducts(whichrequiresadiversifiedbase),whereasothercitiesspecializeinmorestandardizedproduction(which,inturn,isbettercarriedoutinamorespecializedenvironment).Formanufacturingandservices,unlikeforagriculture,‘sowing’and‘reaping’cantakeplaceindifferentlocations”(Duranton&Puga,2001,p.1471).

Thisraisestwoimportantquestions.Firstly,candiversifiedcitiescontainlocalisationeconomiesaswellasurbanisationeconomies?Secondly,docitiesneedtobediversifiedinordertobeconsideredglobalorcantheybespecialised?Whilenotnecessarilyafocusofthisthesis,anappreciationofthesedynamicswithinSydneywillbedevelopedthroughthisresearch.

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2.4 Industry clustering (localisation economies)

Anindustryclusteris“ageographicallyproximategroupofinterconnectedcompaniesandassociatedinstitutionsinaparticularfield,linkedbycommonalitiesandcomplementarities”(Porter,2000,p.254).AshighlightedbyMartinandSunley(2003,p.10),thefirmsinaclustermustbelinkedinsomeway.HugginsandIzushi(2011,p.11)suggestthattheconceptofindustryclusterscapturestheimportantnotionoflinkagesbetweenfirmsandspilloversoftechnology,skillsandinformationwhichcutacrossfirmsandindustries.

Variouscausesdrivethelocalisationofindustries.Historically,theprincipalcauseswerephysicalconditionssuchasclimate(forindustriessuchasviticulture),availabilityofresources(formining)oraccessbylandorwater(forimportingandexporting)(Marshall,1920,p.268).Venables(2006,p.65)emphasisesthatproductivityisthemaindriverofindustryclustering:“proximityisgoodforproductivity;denseconfigurationsofeconomicactivityworkbetterthansparseorfragmentedones”.Storper(2010b,p.2029)suggeststhatthelocationofparticularactivitieswithinacityandbetweencitiesislikelytobeinfluencedbylandcosts:

“theremaywellbeacorrelationbetweenlandcostsandwhereanactivitylocateswithinametropolitanregion(expensiveinthecentre,cheaperinthe‘periphery’).Thereisalsoacorrelationbetweenlabourandlandcostsandwhichtypesofactivitiesgotowhichtypesofcities,whichmirrorsinternationalspecialisationpatterns,ataverygenerallevelbetweenhigh-wage/capital-intensiveplacesandlow-wage/labourintensiveplaces”.

Thishighlightsthepotentialinfluenceofthepropertymarketwhichisnotwidelydiscussedwithintheliterature.Thisislikelyassociatedwithalackofcleardirectionwithintheliteratureregardingthescaleatwhichaclustershouldbedefined.Thisraisesanumberofquestions:

“Atwhatlevelofindustrialaggregationshouldaclusterbedefined,andwhatrangeofrelatedorassociatedindustriesandactivitiesshouldbeincluded?Howstrongdothelinkagesbetweenfirmshavetobe?Howeconomicallyspecializeddoesalocalconcentrationoffirmshavetobetoconstituteacluster?...Inaddition,atwhatspatialscale,andoverwhatgeographicalrange,doclusteringprocesses(inter-firmlinkages,knowledgespillovers,rivalry,businessandsocialnetworks,andsoon)operate?Whatspatialdensityofsuchfirmsandtheirinteractionsdefinesacluster?”(Martin&Sunley,2003,p.10).

Clusteringcanbeobservedatanationalscale–forexampletheclusteringoffinancialservicesinNewYorkcomparedtoothercitiesacrosstheUnitedStates–andatalocalscale–forexamplethemediaclusterinLowerManhattan,inNewYork(Martin&Sunley,2003).Empiricalstudies,asdetailedbelow,havebeenconductedatvariousgeographicalscales,applyingthesametheoreticalconcepts.However:

“thereisnothinginherentintheconceptitself,andwithintheliteratureitself,toindicatethespatialrangeorlimitsofclustering,orwhetherandinwhatwaysdifferentclusteringprocessesoperateatdifferentgeographicalscales”(Martin&Sunley,2003,p.12).

Marshall(1920)believesthatfirmsarelikelytoremaininaspecificlocationforanextendedperiodoftimebecauseoftheadvantageswhichareassociatedwithremaininginacluster,particularlyknowledgespillovers.ThispointisalsoreiteratedbyTheWorldBank(2009,p.133),highlightingthat“asaneconomybecomesmoreknowledgebased,knowledgespillovers,whichrequireproximity,becomemoreimportant”.Spatialclusteringissaidtobemorepronouncedinhigh-skillandhigh-technologyindustriescomparedtolightindustriesbecausetheseindustriesaremorelikelytobenefitfromknowledgespillovers(TheWorldBank,2009,p.133).Alternatively,Saxenian(1994,p.161)suggeststhatinternal

organisationalstructure,ratherthantechnologyorfirmsize,isparticularlyimportanttothesuccessofaclusterandindustrialsystem.

TheexaminationofindustryclusteringatamicroscalecanbetracedbacktoWise’s(1949)examinationoftheevolutionandlocalisationofthejewelleryandgunquartersinBirmingham.Pacione(1985)arguesthatWise(1949)isseenasaforerunnerofmodernmicroinvestigationsintoindustriallinkages.However,hisstudywasmuchmorefocusedonthespatialjuxtapositionofthegunandjewelleryquartersratherthanspecificlinksbetweentheindustries.

KNOWLEDGE INDUSTRY CLUSTERSThefocusofmorerecentliteraturehasbeenthespatialconcentrationofknowledgeandhigh-techindustries,includingcreativeindustryclustersandinnovationdistricts.Landry(2008,p.xli)believesclusteringischangingwiththeriseoftechnologythespatialgeographyofcreativity.ThissupportsHutton’s(2004)conceptofaNewEconomyofcreative,knowledge-basedandtechnology-intensiveindustriesclusteringintheinnercity.Asdiscussedpreviously,industrieshavetraditionallyclusteredinlocationswherethephysicalconditionswereappropriateforthatparticularindustry.Now,industriestendtoclusterwherethereiscultureandactivitywithinthemetropolitancore.

KatzandWagner(2014)refertothesenew-ageclustersasinnovationdistricts,“geographicareaswhereleading-edgeanchorinstitutionsandcompaniesclusterandconnectwithstart-ups,businessincubators,andaccelerators”(Katz&Wagner,2014,p.1).Innovationdistrictsarephysicallycompactmixeduseprecinctswithresidential,commercialandretailusesthatcanbeaccessedbypublictransport.Theyaremarkedlydifferentfromthesuburbanbusinessparkdevelopmentsthatpreviouslydominatedthelandscapeofinnovation.Businessparkdevelopmentsaregenerallyonlyaccessiblebycarwithlittleemphasisonthequalityoflifeorsocialenvironmentduetotheseparationofuses(Katz&Wagner,2014,p.1).

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Innovationdistrictsrespondtoanincreasingdesireforabetterqualityoflifewhichisassociatedwithproximitytorestaurants,retail,culturalandeducationinstitutions,andotherurbanamenities,particularlyforyoungprofessionalswithoutchildren.TheseDINKS(doubleincomenokids)andSINKS(singleincomenokids)wanttoliveinthe“amenityrichenclaves”(Katz&Wagner,2014,p.1)characterisedbyavibrantstreetlife,historicneighbourhoods,andpublictransit”(Katz&Bradley,2013,p.120).AccordingtoKatzandBradley(2013,p.120):

“Between2000and2009,theshareofcollege-educatedtwenty-fivetothirty-four-year-oldslivingwithinthreemilesofthecentralbusinessdistrictinthenation’sfifty-onlargestmetropolitanareasincreasedby26percent,doublethegrowthrateofcollegeeducationyoungadultsintherestofthemetropolitanarea”.

KatzandWagner(2014)havedevelopedtheideaofaninnovationecosystemwhichreachesitspotentialwhentheeconomic,physicalandnetworkingassetsarefullydeveloped:

― Economic assetsarethefirms,institutionsandorganisationsthatdrive,cultivateorsupportaninnovation-richenvironment.

― Physical assetsarethepublicandprivately-ownedspaces–buildings,openspaces,streetsandotherinfrastructure–designedandorganisedtostimulatenewandhigherlevelsofconnectivity,collaborationandinnovation.

― Networking assetsaretherelationshipsbetweenactors–suchasbetweenindividuals,firms,andinstitutions–thathavethepotentialtogenerate,sharpen,and/oracceleratetheadvancementofideas.

Thissuggestsaninnovationdistrictevolvesovertimebutwilleventuallyreachitsinnovationpeakoncefullydeveloped.Theideaofnetworkingassetsdrawsupontheconceptofknowledgespilloverswhichhasbeenidentifiedasoneof

thebenefitsofagglomerationeconomiesandthebasisoflocalisationeconomies.

Yigitcanlar(2010,p.1771)classifiestheseprecinctsasknowledge-basedurbandevelopment(KBUD)orknowledgecommunityprecincts,where“knowledge-basedactivitiesclusterinspecificurbanlocalities,suchasvibrantandcreativemetropolitanareas”.ThelayersofasuccessfulKBUDareconsideredbyYigitcanlar,O’Connor,andWesterman(2008)toinclude:

― knowledge base:includingeducationalinstitutionsandresearchanddevelopment(R&D)activities

― industrial structure:affectstheprogressanddevelopmentofaknowledgecity

― quality of life, place and urban amenities:givestheKBUDthenecessaryelementsthatattractknowledgeworkerstoprovideastrongknowledgebase

― urban diversity and cultural mix:useasinstrumentsinencouragingcreativity

― accessibility:encouragesandfacilitatesthetransferandmovementofknowledge,people,goodsandservices

― social equity and inclusion:minimisessocialdisparityandnegativetensions

― scale of a city:largerknowledgecitiestendtoofferagreaterknowledgepool,greaterdiversityandchoiceforknowledgeworkersandbusinesses.

Theriseofinnovationdistricts(orKBUD)hasimplicationsforurbanplanning.AccordingtoKatzandBradley(2013,p.129),thereisaneedfor“afundamentalrethinkingoftraditionallanduseandzoningconventions”withamovementawayfromzoningregulations.Zoningregulationswereoriginallyintroducedtoprotectsunlightaccessandeventuallyledtothesegregationoflanduses,isolatinghousing,office,commercialandmanufacturingactivitiesfromoneanother(Katz&Bradley,2013,p.129)topreventeachlanduseimpactingonthefunctionofeachother.Innovationdistrictsrequire“variancesfromtherigid,antiquatedrulesthatstilldefinetheurbanandsuburbanlandscape”(Katz&Bradley,

2013,p.129).However,thisisnotjustataskforurbanplanning.Economicdevelopmentpoliciesarealsoimportant:

“Beyondzoningandlanduse,innovationdistrictsrequireintegrativethinkingandaction,seeingandmakingconnectionsbetweeneconomicdynamicsandurbanexperiences(forexample,transportation,housing,economicactivity,education,andrecreation),whichareinextricablylinkedinrealitybutseparatedinpractice”(Katz&Bradley,2013,p.130).

Thereremainsalackofanunderstandingoftherolefor(orimpactof)planninginrelationtoindustryclusterswithintheliterature.

CREATIVE INDUSTRY CLUSTERSThecreativeindustriesrepresentasubsetoftheknowledgeindustriesandareincreasinglybeingstudiedwithintheliterature.Florida(2002,2005,2006,2012)isconsideredtobethebest-knowncontributortotheliteratureonthecreativeindustries.Hisworkhasfocusedonthecreativeworkforceratherthanclustersthemselves.However,itremainsrelevantinunderstandingthedynamicsthatdriveclustering.

Jensen(2011)studiedcreativeindustryclustersacrossSydney,specificallyclustersofvisualentertainmentindustrieswithinthelowernorthshoreandSurryHillsandMoorePark,andfoundthevariousfactorsaffectingthepropensityoftheseindustriestoclusterarenotnecessarilylinkedtotheforcesdrivingindustryclusteringdiscussedabove,including:

― infrastructureandtransportavailability ― shiftsintechnologyandgreateruseoftheinternetforcommunications

― creativeambienceofthelocality ― price-sensitivitytolandvalues.

WoodandDovey(2015,p.52),inastudyofurbanmorphologiesofcreativeclustering,acknowledgethatthe“creativeindustriesdonotlocaterandomlywithin

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citiesandaresensitiveto‘characteristicsofplace’attheneighbourhoodscale”.Thisiswidelyrecognisedwithintheliterature,particularlybyFlorida(2002,2005,2006,2012).WoodandDovey(2015,p.52)havesubsequentlyfocusedontheunderstandingthecreativeindustriesatthemicro-spatialscale,wherethe“densityanddiversityofface-to-faceinteractionsareseenascentral”.ByanalysingFitzroyinMelbourneandSurryHillsinSydney,thestudyaimedtounderstandhowandwhycreativeclustersmightbelinkedtoparticularurbanmorphologies,whichprovidesanalternativeunderstandingtothetraditionaleconomicviewofclustering.However,anumberoftheconceptsassociatedwithlocalisationeconomiesareassumedwithinthestudy,includingknowledgespilloversassociatedwithadhocencountersinpublicspace(Wood&Dovey,2015,p.53).

Thebuiltenvironmentisconsideredtobeimportanttothecreativeindustriesincludingaspectssuchaspedestrian-friendlystreetscapes,walkability,havingthefeelofanurbanvillageandbohemiancharacter,aswellastheavailabilityofflexiblepost-industrialwarehousebuildingsthatarehighlyvaluedforcreativeproduction(Wood&Dovey,2015,p.54).Walkabilityisthoughttodriveface-to-faceencounters.Amixofuses(particularlyhospitality,saidtoprovidetheglue),aswellasamixofpeople,isconsideredimportantwithincreativeindustryclusters.

WoodandDovey(2015,p.66)suggestthatcreativeclusteringreliesonconnectionsandspilloversbetweenmorphological,functionalandsocio-economicdiversities. AsillustratedinFigure8:

“thesocio-economicmixincorporatesamixofsocialclasses,culturalvalues,rentalvaluesandprofitability;thefunctionalmixincorporatesamixofproduction,exchange,consumption,residentialandrecreationaluses;themorphologicalmixincorporatesamixoflot-sizes,buildingageandinterfaces.Thearrowsinthisdiagramaretheprimaryconnectionsbetweendifferentformsofmix”(Wood&Dovey,2015,pp.67-68).

FIGURE 8: Creative industry clusters: mix of mixes

Source: (Wood & Dovey, 2015, p. 67)

SOCIO-ECONOMIC MIX

MIX OF BOHEMIAN, GENTRIFIERS, WELFARE

MIXED RENT (AFFORDABILITY)

MIX OF START-UPS & ESTABLISHED

MIX OF BUILDING AGE

MIX OF LOT SIZE & FLOORPLATE

MIX OF INTERFACE TYPES

FUNCTIONAL MIX

MORPHOLOGICAL MIX

MIX OF PRODUCTION EXCHANGE

RECREATIONHOME/WORK

Thestudyclaimsanumberoffactorsdrivetheclusteringofthecreativeindustries,includingthepropertymarket,whilemaintainingthatknowledgespilloversandproximityaredrivers.WoodandDovey(2015)identifyareasforfutureresearchinrelationtocreativeindustryclusters:understandingthewaysinwhicheconomicfactorssuchasrents,locationaldecision-makingprocessesandinnovationspilloversinteractwiththemixofmixes;andcomparingthemorphologicalattributesofplannedcreativeclusterstobecomparedwithattributesforclustersthathavegrownmoreorganicallysuchasSurryHillsandFitzroy.Thishighlightstheopportunityforthisthesistofillthesegaps.

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2.5 Knowledge spillovers

Thediscussionabovehasfocusedonthegeographyoftheeconomyandhowithasevolved.Thefocusofthisliteraturereviewnowturnstohowthisworksinpracticewithaparticularfocusontheprocessofexchangingknowledgeandunderstandingthetheorybehindthisandhowithappensinpractice.Thissectionwillreviewcurrentliteratureinthisarea.

THEORYKnowledgespilloversareidentifiedwithintheliteratureasthekeybasisoflocalisationeconomies.Theconceptisdiscussedwidelywithinthebodiesofliteratureonagglomerationeconomiesandindustryclustering.TheGrattanInstitutedefinesknowledgespilloversas“transfersofknowledgebetweenindividualsandbetweenfirms”(Kellyetal.,2013,p.3).Knowledgespilloversmayoccurasfirmstrade,asemployeesmovebetweenorganisationsorthroughinformallinks.Branstetter(1998,p.521)describesaknowledgespilloverasoccurringwhenfirmAisabletoderiveeconomicbenefitfromR&DactivityundertakenbyfirmBwithoutsharinginthecostfirmBincurredinundertakingitsR&D.

Huber(2007)referstoknowledgespilloversaslocalisedknowledgespillovers(LKS).LKSareknowledgeexternalitiesboundedinspaceandknowledgeflowsfreelybetweenco-locatedfirms(Huber,2007,p.50).TheuniqueaspectofLKSisthattheyare“implementedthroughnon-marketinteractions”;thatis,“knowledgespillsoverwithoutdirectcompensationfortheproduceroftheknowledge”(Huber,2007,p.50).ThetheorybehindLKSissummarisedbyHuber(2007,p.51):

“AnecessaryconditionforLKStoexististhatnewlygeneratedknowledgeisprovedtoflowmoreeasilyamongagentslocatedwithinthesameareaincomparisontomoredistantones.Accordingtothisview,inprinciplenewknowledgeisaccessibletoallmemberswithinalocalcommunityoforganisations.KnowledgespillsoverfromR&D-conductingfirmsorresearchinstitutionstootheractorswithinageographicregion.Therefore,sothestorygoes,geographicclustersoffirmsoffermoreinnovationopportunitiesthanscatteredlocations”.

Moretti(2012,p.99)suggeststhat“sharingknowledgeandskillthroughformalandinformalinteractiongeneratessignificantknowledgespillovers”andthatthesespilloversareadriverofeconomicgrowth.Knowledgespilloversaremorebeneficialfortheyoungorlesseducatedworkerswhoarelocatedinhighlyeducatedcities(Glaeser,2011;Moretti,2012).Thewell-educatedworkersarenotfullycompensatedforthesocialbenefitsthattheireducationgenerates(Moretti,2012,p.101).Essentially,knowledgespilloversarehumancapitalexternalitiesbecausethebenefitsandcostsassociatedwiththetransferofthisknowledgefromonepersontoanotherarenotcaptured.

Inadditiontothis,knowledgespilloversaresuggestedtobemorelikelytooccurbetween“firmswithdifferentbutrelatedtechnologicalcapabilities,suchasoverlappingassets,similartacitknowledgeandcomplementaryorganizationalroutines…incomparisonwithfirmsthatuseunrelatedtechnologies”(Potter&Watts,2014,p.608).However,thisviewisnotconsistentwithintheliterature;Jacobs(1969),forexample,hasanalternateperspectivewhichisfurtherdiscussedbelow.

Glaeser,Kallal,Scheinkman,andShleifer(1992)classifyknowledgespilloversintothreemodels:

― The first modelisMarshall-Arrow-Romer (MAR),namedafterthethreeeconomistswhocontributedtowardsthisconcept(AlfredMarshall,KennethArrow,andPaulRomer).Itisconcernedwithknowledgespilloversbetweenfirmswithinanindustry.Thismodelisbasedontheconceptthattherearetechnologicalexternalitieswithinindustryclustersbecauseinnovationsandimprovementsthatoccurinonefirmleadstoanincreaseintheproductivityofotherfirmswithintheclusterwithoutfullcompensation(Glaeseretal.,1992,p.1127).

― The second modelisbasedontheworkofPorter(1985,1998,2000)whoarguesthatknowledgespilloversinspecialised,geographicallyconcentratedindustriesstimulategrowth.Porter(1998)believesthereremainsanelementofcompetitioninrelationtoclusters,andlocalcompetitionfostersinnovation.The“coexistenceofcompetitionandcooperationrestsontheassumptionthateitherknowledgespilloversdonottakeplaceacrosscompetitors,orthatthecostsofknowledgespilloversacrosscompetitorsareoutweighedbythebenefitsfromotherformsofknowledgespillover”(Huggins&Izushi,2011,p.14).Glaeser(2000,pp.83-84)supportsthisidea,highlightingthatknowledgespilloversareacriticalfeatureofacompetitiveeconomy:

“Knowledgespilloverssolvedthetechnicalproblemineconomictheoryofreconcilingincreasingreturns(whicharegenerallyneededtogenerateendogenousgrowth)withcompetitivemarkets.Thisworksuggeststhatiftheglobaleconomyisendogenouslygrowing(whichishardtodeny)andifwebelieveintrulycompetitivemarkets(whichismorecontroversial),thenitalmostfollowsthatintellectualspilloversareacriticalfeatureoftheeconomiclandscape”.

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― The thirdmodelidentifiedbyGlaeseretal.(1992)isbasedontheoriesdevelopedbyJacobs(1969).Usingtheexampleofthedevelopmentofthebrasserie,Jacobs(1969)“believesthatthemostimportantknowledgetransferscomefromoutsidethecoreindustry.Asaresult,varietyanddiversityofgeographicallyproximateindustriesratherthangeographicalspecializationpromoteinnovationandgrowth”(Glaeseretal.,1992,p.1128).Feldman(1999,p.15)suggeststhatwiththisconceptsearchcostsmayreduceandopportunitiesofserendipitouseventsincrease.Thisconceptdrawsontherealitythatindustryclusterswillcontainmorethanoneindustrytype.Whetheritisaspecialisedserviceproviderorasupportindustry,thisraisesthequestionastowhethertheseindustriesalsocontributetoknowledgespillovers.

Huber(2007),however,onlyreferstotwodifferenttypesofknowledgespilloversthefirstandthirdmodels,excludingthesecondmodel,whichmaysuggestthatcompetitionisabarriertoknowledgespillover.

Glaeser(2000,p.84)claimsthatcitiespresenttheclearestexamplesofknowledgespillovers.Knowledgespilloversmayoccurthroughbothformalandinformalinteractionsbetweenworkers,however“theexactchannelofinteractionwherebyincreasedlevelsofeducationflowsthroughtoincreaseproductivityacrossanindustrysectorispoorlyunderstood”(SGSEconomicsandPlanning,2012,p.18).ThisissueisalsoraisedbyDahlandPedersen(2004)whohighlightthatitisimportanttodevelopanunderstandingofhowknowledgeisactuallytransferredbetweenindividualsandfirmsinthesamegeographicalareaorindustrycluster.Thishighlightsapotentialgapwithintheexistingbodyofliterature.However,Huber(2007)hasidentifiedfourpotentialmechanismsofknowledgespillovers:

― Knowledgeflowsvia mobility of the labour force:whenlabourmovesbetweenfirmsorresearchinstitutions,theytransferpersonalknow-howandknowledgeaboutthepreviousfirmorresearchinstitution.Inaddition,itislikelythatpersonalnetworksbetweenformeremployeeswillsubsequentlyremainactive(Huber,2007,p.89).

― Knowledgeflowsvia entrepreneurship and spin-offs: whenindividualssetupnewenterprises,theyexploittheknowledgeandpersonalcontactstheydevelopedintheirpreviousposition.Inthiscontext,venturecapitalistsareconsideredtoprovidenotonlyfinancialsupportbutalsoaccesstoawideinformalandformalnetwork(Castilla,2003;Zook,2004bothcitedinHuber,2007,p.89).

― Knowledgeflowsvia relationships with customers and suppliers:customersorclients,andsuppliersmayhaveinsightsintorivalfirmsorresearchinstitutionswhichtheycommunicatetoothers,howeverthequalityofthisknowledgemightnotbehighasthecustomer,clientorsupplierisindirectlyinvolvedintheknowledgeactivities(Huber,2007,pp.89-90).

― Knowledgeflowsvianetworksofpersonalrelationships.Thisoverarchingconceptconsidersthatnetworksofpersonalacquaintancesfacilitateknowledgeflows,witharangeofdifferentsub-mechanismsandprinciples(Huber,2007,p.90)includinginformationtradingandsocialobligations.

Itisimportanttoconsidertheroleofgeographicalproximity,aslocalisedknowledgespilloversexisttotheextentthatthemechanismsofknowledgespillovers(describedabove)showalocaliseddimension(Huber,2007,p.91).Thisisanimportantdistinctionandhighlightstheimportanceofdefiningtheregionoflocalisationappropriately.

Relatedtothis,Giuliani(2005,p.269)suggeststheliteraturerarelyconsiderstheprocessofabsorbingextra-clusterknowledgeandtheinterplaybetweenintraandextra-clusterknowledgesystems.Giuliani(2005)definesintra-clusterknowledgeastheflowsofknowledgelinkingfirmswithinthecluster,whereasextra-clusterknowledgeisexternalknowledgefromoutsidetheclusterwhichisabsorbedintothecluster.Theconceptfurthercomplicatestheissuesofdefiningageographicboundaryforclustersintermsofidentifyingwhatisconsideredtobeinternalandexternaltothecluster.

CONDITIONS WHICH FACILITATE KNOWLEDGE SPILLOVERSAnumberofconsistentthemesrunthroughtheliteraturerelatingtothetheoryofknowledgespillovers,particularlyaroundtheenvironmentandconditionsthatfacilitateknowledgespilloversincluding:

― facetofacecontact ― geographicalproximity ― socialenvironmentandbuzz ― thenetworkperspective.

FACE TO FACE CONTACTDespitedevelopmentsininformationtechnology,face-to-facecontactremainscentraltotheconceptofknowledgespilloversandindustryclustering,astacitknowledgeisunabletobecodifiedandrequiresface-to-facecontactforknowledgetobeexchanged(Feldman,1999;Gertler,2003;Huber,2012;Storper&Venables,2004).Figure9detailstheadvantagesofface-to-facecontactinfacilitatingknowledgespillovers.

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FIGURE 9: Face-to-face contact

Source: (Storper & Venables, 2004, p. 354)

Function AdvantageofF2F Context

Communicationtechnology HighfrequencyRapidfeedbackVisualandbodylanguagecues

Non-codifiableinformationR&DTeaching

Trustandincentivesinrelationships DetectionoflyingCo-presenceacommitmentoftime

Meetings

Screeningandsocializing LossofanonymityJudgingandbeingjudgedAcquisitionofshredvalues

ProfessionalgroupsBeing‘intheloop’

Rushandmotivation Performanceasdisplay Presentations

Gertler(2003)emphasisestwokeyissuesassociatedwithface-to-facecontact:awarenessorconsciousnessofknowledgeandcommunicationdifficultiessuchaslanguagebarriers.Theissueofawarenessposesdifficultieswhentracingknowledgespilloversasresearchsubjectsareoftenunawareofwhentheyexchangeknowledgeandthereforeareunabletoexplainhowspilloversoccur.

GEOGRAPHICAL PROXIMITYGlaeser(2011,p.36)believes“innovatorsclusterinplaceslikeSiliconValleybecauseideascrosscorridorsandstreetsmoreeasilythancontinentsandseas”,suggestingthatgeographicproximityisimportant.ThispointisalsoreinforcedbyDahlandPedersen(2004,p.1674)whostatethat“knowledgeandinformationflowmoreeasilybetweenactorslocatedinaclusterthanoverlongdistances”.Geographicalproximityisconsideredtopromotecooperationbetweenlocalplayers(BenLetaifa&Rabeau,2013)andenableahigherfrequencyofexchangeofideasthatmaynotoccurthroughtelecommunications(Venables,2006).

Inseekingtounderstandwhysomeclustersfail,BenLetaifaandRabeau(2013)hypothesisethatgeographicproximitymayhaveanegativeimpactoncollaboration.Thestudyfoundthatgeographicproximityneedstobecomplementedwithsocialproximitytogenerateinnovation,highlightingtheimportanceofthesocialenvironmentandculture.

SOCIAL ENVIRONMENT AND BUZZ Thebodyofliteraturerelatingtoknowledgespillovershasmorerecentlyemphasisedtheroleofthesocialenvironmentinfacilitatingknowledgespillovers.AshighlightedbySearleandPritchard(2005,p.150)“EveninSiliconValley…thereis‘moregoingon’thanjustMarshallianlocaleconomies”.AsappropriatelysummarisedbyKatzandWagner(2014,p.13)“whileproximity…contributestothedevelopmentofdensenetworks,acollaborativecultureappearstoplayamoresignificantrole”.Gertler(2003,p.78)suggeststhat“tacitknowledgecanonlybesharedeffectivelybetweentwoormorepeoplewhentheyalsoshareacommonsocialcontext:sharedvalues,language,andculture”.

StorperandVenables(2004)coinedthetermbuzztodescribethesocialenvironmentwhereknowledgespilloversoccur.DrawingontheworkofStorperandVenables(2004),Bathelt,Malmberg,andMaskell(2004,p.38)considerthatlocalbuzz:

“consistsofspecificinformationandcontinuousupdatesofthisinformation,intendedandunanticipatedlearningprocessesinorganizedandaccidentalmeetings,theapplicationofthesameinterpretativeschemesandmutualunderstandingofnewknowledgeandtechnologies,aswellassharedculturaltraditionsandhabitswithinaparticulartechnologyfield,whichstimulatetheestablishmentofconventionsandotherinstitutionalarrangements”.

Citieswithbuzzcomprisearangeofindustriessuchascreativeandcultural,financeandbusiness,scienceandtechnology(andresearch)andpowerandinfluence(Storper&Venables,2004),implyingthatbuzzcitiesarediversecitiesratherthanspecialisedcities.

Batheltetal.(2004)identifydifferentmodesofcommunicationwithinabuzzcity(refertoFigure10).Gossipisidentifiedasatypeoflocalinformationflowhoweverthenegativeconnotationsassociatedwiththistermsuggestthatthistypeofinformationflowisnotnecessarilyvaluable,particularlytotheproductivityoffirmsandworkers.Batheltetal.(2004)considerlocalisedknowledgespilloverstobeestablishedandfunctionalduetolocalbuzzwhichisspontaneousandfluid,andaremoreconcernedwithestablishingglobalpipelinesforknowledgespillovers.

Huber(2007,p.93)recommendscautionshouldbetakenwhenobservinglocalbuzz,aslocalinspirationdrawnfromlocalbuzzdoesnotnecessarilyindicateaspilloverofvaluableknowledgeproducedbyotherfirms.

Ascontemporaryconcepts,thesocialenvironmentandlocalbuzzwerenotidentifiedbyMarshall(1920),likelyduetotheevolutionoftheeconomyandthetypeofknowledgebeingexchanged.

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THE NETWORK PERSPECTIVENetworkshavebecomeimportantforknowledgespilloversandare“increasinglyvaluableandprolificwithininnovation-driveneconomicclusters”(Katz&Wagner,2014,p.13).Saxenian(1996)emphasisesthatunderstandingregionaleconomiesasnetworksofrelationshipsallowsustobettercompareregionalclustersandunderstandhowrelationshipshavehistoricallyevolved.

Themajorityofthethemesdiscussedaboverelatetothesocialcontext.Whilesocialcontexthasbecomeafocusoftheliteratureonknowledgespillovers,asidefromafewstudies(Jensen,2011;Wood&Dovey,2015),theurbancontexthasnotbeenamajorconsiderationindevelopinganunderstandingofhowknowledgespilloversoccurandwhyitvariesbetweenclustersandlocations.

EMPIRICAL STUDIESBranstetter(1998)recommendsthatthesetheoriesshouldbetestedusingempiricalevidence.Anumberofempiricalstudiesofknowledgespillovershavebeenreviewedaspartofthisthesis(refertoTable2).Thesestudieshavebeenconductedatvariousgeographicscalesandusingquantitativeandqualitativemethods.Theresultsofthesestudiesvaryindicatinganinconsistentunderstandingoftheconceptofknowledgespillovers.Further,anumberofcontributorschallengetheconcept,asdiscussedbelow.

FIGURE 10: The structure and dynamic of local buzz and global pipelines

Source: (Bathelt et al., 2004)

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TABLE 2: Review of empirical studies

STUDY LOCATION/SCALE FOCUS/METHOD/DATA RESULTS COMMENTSJaffe,Trajtenberg,andHenderson(1993)

USAStatescale

― Comparesthegeographiclocationofpatentcitationswiththeoriginatingpatenttounderstandtheflowofknowledge.

― Patentdata(for1975and1980)whichcontainsgeographicinformationaboutinventorsandcitationsofrelevantresearch.

― Intheearlyyearsafterapatentisapproved,citationsarethreetofourtimesmorelikelytocomefromthesamestateastheoriginatingpatenthighlightingalocalisationeffect,howevergeographiclocalisationfadesovertime.

― Studyacknowledgesthatusingpatentdatadoesnottakeaccountofspilloversthatoccurwithoutgeneratingacitation.

― Studydoesnotlookatmethodsofknowledgetransfer.

― Adoptionofstatescaleisdifferentfrommostotherstudies.

Saxenian (1994,1996)

SiliconValley(California)andRoute128(Massachusetts)Regionscale

― ComparesorganisationalstructurestounderstandwhySiliconValleywasmoreresilientfollowinganeconomicdownturninthe1980s,comparedtoRoute128,despitesimilarindustryconcentrations.

― Over100qualitativeinterviews.

― Route128characterisedbyinternallyfocusedcorporations.

― SiliconValleyisanetwork-basedsystemwithdensesocialnetworksandopenlabourmarketswhichencouragedcollaboration,experimentationandinformalcommunication.

― HighturnoverofstaffinSiliconValley. ― Thenetworksystemlikelyfosterslocalisedknowledgespilloversandseenasmoreresilientintiesofmarketuncertainty.

― Turnoverofstaffconsideredamechanismofknowledgespillover.

― Notclearifanylinksbetweenthesuccessofclusterandknowledgespillovers.

AudretschandFeldman(1996)

USAStatescale

― Studyutilisessurveydatatounderstandtheunderlyingpropensityforindustrialactivitytoclusterspatially.

― Industriesinwhichknowledgespilloversaremoreprevalenthaveagreaterpropensitytoclusterthanindustrieswhereknowledgeexternalitiesarelessimportant.

― Ifknowledgespilloversarethekeyreasonforclustering,dofirmsstillbenefitfromclusteringifknowledgespilloversarenotobserved?

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STUDY LOCATION/SCALE FOCUS/METHOD/DATA RESULTS COMMENTSDahland Pedersen(2004)

NorthernDenmarkRegionalscale

― Surveyedengineersinaregionalclusterofwirelesscommunicationfirms.

― Informalcontactsareanimportantchannelofknowledgediffusion.However,thereisaneedtobetterunderstandthevalueofthisknowledgecomparedtoothersourcesofinformationandhowknowledgeisactuallyexchanged.

― Studyhighlightsalackofunderstandingofthemechanismsofknowledgespillover.

McCannandSimonen

FinlandRegionalscale

― Studyteststheextenttowhichthevarietyandnatureofface-to-facecontactaffectstheinnovationperformanceofthefirm

― Useddatafromsurveysoninnovationandperformance.

― Afirm’sinnovationperformanceisdirectlyrelatedtoface-to-facecontactandknowledgeexchangewithotherfirmsandorganisations.

― Innovationwaspositivelyassociatedwithalargerproportionofnewlabouracquiredfromoutsideofthesub-region,andnegativelyassociatedwithbothpopulationdensityandtheproportionofnewlabouracquiredlocally.

― Aftercontrollingforlabourmobility,theevidencefordirectuniversity-industryknowledgespilloverswaslimited.

― Studysuggeststhatlabourmobilityisthekeydriverofknowledgespillover.

― Highlightstheimportanceofgeographicscaleandthedefinitionofanindustryclustertodetermineinternalandexternalsourcesoflabourandknowledge.

Swat(2006) ATPLocalscale

― StudyoftacitknowledgeexchangebetweenfirmswithintheATPbasedoninterviewswithmanagersoffirmsbasedintheATP.

― Studyfindsalackofexchangebetweenfirmsandverylittle,ifany,evidenceofcollaboration.

― Reasonsprovidedincludedresearchnotbeingaligned,firmswerenotawareofopportunities,thefirmdidnothavearesearchfocusortherewasnotenoughtime.

― Resultsalsoattributedtoalackoftrustbetweenfirmsandalackofcriticalmass.

― Studydoesnotlookatrelationshipbetweenknowledgespilloversandindustryclustering.

― Oneoffewstudiesatalocalscale.

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STUDY LOCATION/SCALE FOCUS/METHOD/DATA RESULTS COMMENTSSonnandStorper(2008)

UnitedstatesMetropolitanlevel

― Analysespatentcitationsfrom1975to1997tounderstandflowsofknowledge.

― ThemethodadoptedandprocessofgroupingcitationsvariedtothatofJaffeetal.(1993).

― Aftercontrollingfortheexistingdistributionofknowledge-productionactivities,thestudyfindsthattheproportionoflocalcitationshasincreasedovertimecontrarytothefindingsofJaffeetal.(1993).

― Thefindingsreinforcethenotionthatincontemporaryknowledgeproductionandinnovation,theroleforgeographicalproximityisincreasing.

― Studyacknowledgesthelimitationsofcitations,buttheauthorsstillbelievethattheyareusefulindicatorsofinteractionswhichleadtoinventionandinnovation.

― Mechanismsofknowledgetransferarenotconsideredwithinthestudy.

― Further research on the extent and causesofincreasingproximityeffectsisneeded.

Østergaard(2009) Aalborg,DenmarkRegionalscale

― Studyexaminestheextentofinformalcontactsbetweenengineersinfirmsandlocaluniversityresearchersinawirelesscommunicationcluster.

― Engineersdonotautomaticallyhaveinformalcontactswithinthecluster.

― Socialnetworksareexclusiveandcreatedovertimebyindividuals,particularlyviaprojects.Theselong-termrelationshipsweremorelikelytoprovideopportunitiesforknowledgesharing.

― Inter-industryrelationshipsaremorelikelythanindustry-universityrelationships,consistentwiththeJacobs(1969)model.

― Industry-universityrelationshipsareonlylikelyiftheengineerhadastrongexistingaffiliationwiththeuniversity.

― Respondentswereanonymoussolimitedopportunitytousesocialnetworkanalysis.

― Therewasnotimedimensiontodemonstratehownetworksevolveovertime.

― Thereispotentialforfuturestudiestoaddresstheselimitationsandalsodevelopanunderstandingofconnectionsoutsideofthecluster(extra-clusterknowledge).

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STUDY LOCATION/SCALE FOCUS/METHOD/DATA RESULTS COMMENTSGreenand Hughes(2009)

NorthernSydney’sglobaltechnologycorridorRegionalscale

― Exploresthelocationaldrivers,activitiesandlinkagesofbusinessesandresearchandeducationalinstitutionsintheinformationandcommunicationstechnologiesandbio-medicalsectors.

― Conductedasurveyoffirms.

― Thehighestprioritydrivinglocationisaccesstoclients/customers.

― Internalknowledgetransferwasthepredominantsourceofknowledgeforfirms,ratherthanexternalsources.

― Thecorridorisanexampleofanascentclusterandwasconsideredbytheauthorstolackthehigherlevelandmorecomplexinteractionsamongfirmsandresearchandeducationinstitutionsthatarethehallmarkofinnovativeclusteractivityinternationally.

― FindingsreiteratetheoutcomesofastudybyFreestone(1996,p.27)whichfoundthatlimitedevidenceinNorthRydeofanysortoftechnologicalorpersonnellinksbetweencompanies.

― SearleandPritchard(2005)highlightsthatjointtenanciesinbusinessparksoftensuggestsharedinterestsandthepotentialforknowledgespillovers,yetinrealitythisisoftennotthecase.

Searle(2010) SydneyandMelbourneRegionalscale

― Aimedtounderstandthedegreetowhichsoftwarefirmsarespatiallyembeddedandtheroleofknowledgeproductionandexchangeinthis.

― Conductedphoneinterviewswithastratifiedrandomsampleof50softwarefirms.

― Proximitytothefirmowner’shomeandcheaperrentaredriversoffirmlocationwhichdoesnotsupporttheexistenceoflocalembeddedness.

― Observedopportunitiesfortheexchangeoftacitknowledgethroughcustomers,collaborationandnewandex-employeesisfundamentaltotheindustry’sembeddednessatthemetropolitanscaleandatthelocalscale.

― Thestudyfindsthaturbanisationeconomiesappeartohaveamoresignificantembeddingeffect,comparedtolocalisationeconomies,thatis,urbanisationeconomiesaredrivingclustering,moresothaninter-firmclusterlinks.

― Studyisnotfocusedonknowledgespilloversperse.

― Authordidnotapproachthestudyfromageographicalperspectivebutratheranindustryperspective.

― Theextenttowhichtheknowledgespilloversobservedinthisstudyarelocalisedisnotclear.

― FindingsrelatecloselytoanearlierstudybySearleandDeValence(2005)ofthemediaindustry.

― Authorsuggeststhatqualityoflifeandplaceconsiderationsshouldbeincorporatedintofuturestudies.

Potterand Watts(2011)

Sheffield(UK)Regionalscale

― Authorssurveyedrespondentsinametalmanufacturingclustertofindoutwhethertheirmanufacturingplanthadreceivedknowledgefromanylocalorganisationwithinthepastthreeyears.

― Allsurveyedmanufacturingplantshadformedlocallinkswithinatleastoneotherorganisationwithinthelocalmanufacturingindustryand32%ofmanufacturingplantshadreceivedalocalknowledgespilloverinthepastthreeyears

― Thestudyfoundthatknowledgespilloversactuallydecreasedeconomicperformanceandhadprovidednostatisticallysignificantbenefitforthemanufacturingplants.

― Traditionalmanufacturingiscurrentlyindecline.However,whenMarshall(1920)studiedthisindustrycluster,manufacturingwasasignificantindustryofgrowth.Thishighlightsthatknowledgespilloversmayonlybebeneficialtoanindustrywhenitisexperiencingrapidgrowth.

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STUDY LOCATION/SCALE FOCUS/METHOD/DATA RESULTS COMMENTSHuber(2012) Cambridge(UK)

Regionalscale ― AstudyofR&DworkersinanITcluster,whowereinterviewedtounderstandwhethertheyseeknowledgespilloversasabenefitfortheirworkintheircurrentcompany.

― Two-thirdsoftheR&DworkersinITcompaniesdonotseeknowledgespilloversasabenefit.

― Workersseenoneedtointeractwithothercompaniesandfoundinternalsourcesmoreuseful.

― ComparedtoSiliconValley,thelabourmarketinCambridgeislessdynamicbecauseR&Dworkersdochangejobsfrequently.

― Authorconcludesthattheroleofknowledgenetworksandtechnologicalspilloversininnovativeclustersisoverrated.

― Studyacknowledgesthatsubtleknowledgeflowsmighttakeplacewithoutintervieweesknowing,reinforcingtheissueofconsciousness.

― Studyidentifiesthreeareasforfurtherresearch:

― whetherclustersaremoreimportantforseniormanagersthandevelopersforsourcingtechnicalknowledge

― whetherthereisavariationinnationalorregionalculture

― changingroleofagglomerationeconomiesthroughoutthehistoryofacluster.

― Questionremainsastohowtoidentifyknowledgeflows.

― Huber(2012,p.123)notesthatinnovationpoliciesshouldbecautiousinassumingthatspatialclusteringquasi-automaticallyleadstoknowledgespillovershighlightinganimplicationforplannersinrelationtoplanningforemployment.

― Studyhighlightspotentialforcharacteristicsofworkerstoinfluencetheirlikelihoodofinteractingwithotherworkers.ForexampleworkersinITmayrelyontheinternetforknowledgewhereasworkersinthecreativeindustriesmightdesiretoworkinamoresocialenvironment.Thereisanopportunitytoexplorethisfurtherthroughthisresearch.

BakhtiariandBreunig(2015)

AustraliaNationalscale

― EconometricmodellingofR&Ddata ― R&DdatabasedonasurveyofbusinesseswhichhaveappliedfortheR&DtaxconcessionprogramthroughtheAustralianTaxOffice.

― Studyconcludesthatfirmsareinfluencedbypeerandclientfirmsincloseproximitythroughknowledgespillovers.

― TheauthorsassumethatinteractionsbetweenR&Dworkersarethemainchannelforknowledgespillovers.However,thereisnocleardetailwithinthestudyonhowspilloversoccur,butratherthestudyjustassumesthattheydo.Thishighlightsthat,inthiscase,quantitativemodellingisnotnecessarilyausefulsourceofempiricalevidence.

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CHALLENGING THE CONCEPT OF KNOWLEDGE SPILLOVERSWhiletheideaofknowledgespillovershasbeencitedwidelywithincontemporaryliteratureasabenefitoftheclusteringofknowledgeindustries,anumberofquestionsremainunanswered.MartinandSunley(2003,p.17)note“anincreasingtendencytoexplainclusterformationanddevelopmentintermsoflocalknowledgeand‘collectivelearning’”and“theassumedlinkbetweenlocalizationandtacitorinformal,uncodifiedknowledgeisnowalmostacceptedaxiomatically”.Thekeyreasonforthisisthatknowledgespilloversareessentiallyinvisible(Krugman,1991,p.53)andcanseldombetracedthroughtransactions(TheWorldBank,2009,p.134).Feldman(2000,p.389)emphasisesthat“westillhavealimitedunderstandingofthewayinwhichknowledgespilloversoccurandbenefitinnovativeactivity”,asdemonstratedabove,andweremainfarfromunderstandingthisconcept(Storper,2010a).

Huber(2012,p.110)claimsthatthetraditionalmethodsusedtocalculateoridentifyknowledgespillovers(suchaspatentcitationsandco-authorship)are“crudeproxies”forwhataremuchmorecomplexanddiverserelationshipsandprocesses.Hebelievespreviousstudiesintoknowledgespillovershavefailedtouncovertheprocessesoflearningandknowledgespillovers;thatis,themechanismsofknowledgetransfer(Huber,2007,2012).Thisisissueiscitedwidelyacrosstheliterature.

Storper(2010a,p.322)statesthat“inaninnovation-drivenconceptionofeconomicgeography,itisessentialtobeabletoexplainlearning”.Thisemphasisestheneedtobetterunderstandhowknowledgespilloverstakeplaceandisreiteratedbyanumberofotherauthors.Huber(2007,p.49)suggeststhattheconceptoflocalisedknowledgespillovershashighpolicyrelevanceforfirmsbecause“itiscrucialhow,whereandtowhatextent(proprietary)knowledgeistransferredamongfirmsandresearchinstitutions;industrialandregionalpoliciesareoftenbasedontheassumptionthatspatialclusteringofindustriesinvolvestheadvantageofknowledgespillovers”.

SiliconValleyiscontinuallyreferencedastherolemodelforknowledgespillovers(Glaeser,2011;Katz&Wagner,2014;Moretti,2012).However,denseCBDmodelswouldlikelybemoretransferrabletomanyEuropeanandAsiancities(BasultoinFlorida,2012,p.324).DahlandPedersen(2004)suggestSiliconValleymaybeananomalyandtheextentofinformalactivityoccurringwithintheclusterisunusual.ThisissueisfurtherhighlightedbySearleandPritchard(2005,p.148)whoquestiontherelevanceofSiliconValleyin“understandingthespatialdynamicsofITT(informationtechnology)inotherplaces”.Feldman(2000,p.389)acknowledgesaneedtoincorporatethebodyof

knowledgeinthisareathatwascompletedoutsidetheUSAto“gainanappreciationofhowtheeffectsoflocationvaryacrossnationalbordersandtherolethattheinstitutionsandsystemsofinnovationplay”.AsemphasisedbyHuber(2012,p.122)“institutionalandculturaldifferencesindifferentregionscanaffectknowledgeinteractionsandspillovers”;howeverthisneedstobeexploredfurther.Thishighlightstheneedtobetterunderstandtheurbancontextinfluencingknowledgespilloversaswellashowknowledgespilloverstakeplace.

Importantly,Huber(2007,p.94)suggeststhatknowledgespilloverscannotberegardedaslocalisedas“alawofnature,butultimatelyonehastoregarditasanempiricalquestionwhethersuchstatementsaretrueforthespecificcontextunderinvestigation”.Thissuggeststheimportanceofexploringlocalisedknowledgespilloversthroughempiricalresearch,ratherthanacceptingitoccursasabasecaseinanycontext,priortoimplementingpolicythatpromotesindustryclustering.

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Thesecharacteristicshelptodefineaclusterandhavebeenusedtoshapetheresearchquestionsandmethodologyadoptedinthisresearch.

Inordertounderstandifandhowlocalisedknowledgespilloversoccur,theframeworkdevelopedbyHuber(2007)isconsideredappropriateforthisstudy.Theframeworkincludesfourpotentialmechanismsofknowledgespillover:

― knowledgeflowsviamobilityofthelabourforce ― knowledgeflowsviaentrepreneurshipandspin-offs ― knowledgeflowsviarelationshipswithcustomersandsuppliers

― knowledgeflowsvianetworksofpersonalrelationships.

Thisframeworkfocusesononespecificelementwithinanindustrycluster,theflowofknowledge,whichisexpectedtobeinfluencedbythesevenconditionsidentifiedabove.

2.7 Gaps within the literature

Thereviewhashighlightedgapswithintheexistingbodyofliteratureparticularlyaroundtheconceptofknowledgespillovers.Ingeneral,thereremainsalimitedunderstandingofhowknowledgeisexchangedwithinindustryclusters.Theopinionswithintheliteraturearemixedandadditionalresearchremainsimportant.TherecentfocuswithintheempiricalstudiesofknowledgespillovershasbeenITindustryclustersratherthantheemerging(andbroader)creativeindustryclustersandthisrepresentsagapforfurtherexploration.

Existingstudiesgenerallyfocusontracingknowledgespilloverswithinanindustryclusterasameansofunderstandingiftheyoccur(Audretsch&Feldman,1996;Bakhtiari&Breunig,2015;Dahl&Pedersen,2004;Huber,2012;Jaffeetal.,1993;McCann&Simonen,2005;Østergaard,2009;Potter&Watts,2011;Saxenian,1994,1996;Sonn&Storper,2008).However,limitedstudiesfocusontheextenttowhichknowledgespilloversdriveindustryclusteringandwhetherthereareotherdrivers.Contributionstothebodyofliteratureonagglomerationeconomiesandindustryclustersgenerallycomefromeconomists.Therearelimitedcontributionstothebodyofliteraturefromanurbanplanningperspectivewhichhighlightsanareaforresearchdevelopmentintermsofhowthesetwofieldsinteract.SearleandPritchard(2008)identifytheneedfor

2.6 Industry clusters and knowledge spillovers framework

Thisliteraturereviewidentifiesanumberofconditionsorfactorsthatinfluenceknowledgespillovers,particularlywithinindustryclusters.Thefollowingsevenconditionshavebeensynthesisedfromthisliteratureinordertoprovideaframeworkforunderstandingthevariouscharacteristicsofanindustrycluster:

― firm level dynamicsincludinginternalprocesseswithinafirmanddynamicsbetweenfirms

― competition versus collaborationandhowthisfacilitatesorprohibitsknowledgespillovers

― labour market dynamicsparticularlythelevelofturnoverandwhetherworkersmovebetweenfirmswithintheclusterorto/fromotherclusterswithinthecity

― types of industrieslocatedwithinaclusterandtheinfluenceontheknowledgespillovers,forexampleworkerswithinthecreativeindustriesmightbemoreactiveandsocialcomparedwithITworkers

― relationshipsbetweenthespecialised industries, service providers and support workers and how these relationshipsfacilitateknowledgespillovers

― the social environmentandnetworksincludingbuzzandthelevelofsocialinteractionbetweenfirmsandworkers

― planning and governanceintermsofcontroloverlandusesandthedevelopmentofclusters.

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researchthatinvestigateswhatspatialplanningcandotopromoteknowledgeindustries,andacknowledgethatitisimportanttofirstlyunderstandmoreaboutclusterspriortoansweringthisquestion.TheextenttowhichlocalisationeconomieshaveevolvedinSydneytoreinforceplace-basedadvantagesisidentifiedasanareaoffurtherresearchbySearleandPritchard(2008),highlightingthepotentialroleofthepropertymarket.Approachingthisstudyfromaplanningperspectivemayrevealmoreaboutwhatdrivesfirmsandindustriestoclusterandwhetherthereareadditionalbenefitsorforcesdrivingclustering(suchasthepropertymarketandeconomicdevelopmentpolicies)alongsidethethreebenefitsidentifiedbyMarshall(1920).

ThereisalsoasignificantgapwithintheexistingbodyofliteratureintermsofAustraliancontributions.WhileanumberofrecentstudiesfocusedontheAustralianexperience(Bakhtiari&Breunig,2015;Jensen,2011;Searle,2010;Searle&DeValence,2005;Searle&Pritchard,2005,2008;SGSEconomicsandPlanning,2012;Yigitcanlar,2010;Yigitcanlar&Dur,2013;Yigitcanlar,O’Connor,etal.,2008;Yigitcanlar,Velibeyoglu,&Baum,2008),thisonlyrepresentsasmallproportionofthewiderbodyofliterature.Morespecifically,thesestudiescontainlimitedanalysisofknowledgespillovers,ifany,andtherecontinuestobealackofanunderstandingofhoworifknowledgeistransferredwithinindustryclustersinAustralia.

2.8 Conclusion

Theresurgenceoftheinnercityoverthepasttwodecadeshasbeendrivenbyeconomicrestructuring,withthedeclineofmanufacturingandgrowthoftheservicesector,particularlyknowledgejobs.Thiseconomicrestructuringhasimplicationsforspatialstructureofthecity,includingbothresidentialandemploymentlanduses.Knowledgejobsareprimarilyclusteredwithintheinnercityoflargeglobalcities(chieflywithinthedevelopedworld)andAustraliaisnotexemptfromthistrend.Theresurgenceoftheinnercityhasbeendrivenbyworkersnotonlychasingknowledge-intensivejobs,butalsoabetterqualityoflifeassociatedwithreducedtraveltimeandincreasedamenity.Inrelationtothis,theliteratureobservesamovementawayfromisolatedsuburbancorporatebusinessparkstowardsmorevibrantinnercityinnovationdistrictsthatcontainamixofresidential,employmentandrecreationaluses.Whethertheseinnovationdistrictsevolveorganically(unplanned),oraredrivenbyeconomicdevelopmentpolicy(planned)remainsunclearwithintheliterature.

Theconceptofjobclusteringisnotnew.Theliteratureonagglomerationeconomieshasevolvedfroma19thCenturyconceptbasedonmanufacturingindustriestoa21stCenturyconceptbasedontheknowledgeeconomy.ThisraisesthequestionastowhethertheforcesandbenefitsofagglomerationeconomiesidentifiedbyMarshall(1920)arestillrelevant,particularlyconsideringthegrowthoftechnologyandtheincreasedabilitytoaccessworkers,suppliers,clientsandinformationglobally.Thebodyofliteraturesomewhatautomaticallyconcludesthatknowledgespilloversdriveindustryclusteringbecauseclusteringisincreasinglybeingobserveddespitetherapiddevelopmentoftechnology.Itisgenerallyacceptedthatitiseasiertocommunicateandshareknowledgeinperson,particularlytacitknowledgethatcannotbeeasilycodified.However,anumberofgapsrelatingtotheconceptofknowledgespilloversareyettobeaddressedwithintheliterature.

Arangeofquantitativeandqualitativestudiesseektotraceknowledgespillovers,particularlywithinprominentindustryclusterssuchasSiliconValley.Tracingpatentcitationsisconsideredtobeacrudeproxyforknowledgespillovers,particularlywhenconsideringthegrowingcreativeindustrieswithinwhichknowledgeisnotalwayspatentedorevenpatentable.Socialproximityisincreasinglydiscussedwithinrecentliteratureasafacilitatorofknowledgespilloverandthisraisesquestionsastotheimportanceofgeographicproximity.Theliteratureremainsinconclusiveastowhetherknowledgespilloversoccuranditsvaluetoknowledgeworkers.Further,littleempiricalresearchrelatestothemechanismsofknowledgetransfer.

Therolethatknowledgespilloversplayindrivingindustryclusteringthereforeremainsunclear.Thereisaneedtofurtherquestiontheforcesoflocalisationeconomies,particularlyinlightoftheincreasingpushbymetropolitan(andstate)governmentstopromotetheclusteringofknowledgejobsinparticularlocationsacrosstheircities.Whetherornotlanduseplanningcansupportthecreationofinnovationorcreativeindustryclustersremainsakeyquestion.Giventhepredominantfocusonthemarketdeliveringinplanningpolicy,thenhowpropertymarketsworkinthisregardisalsoofsignificance.Anunderstandingoftheroleofthepropertymarketwillbeimportantduetotheassociatedlinksbetweenthegentrificationofformerindustrialareaswithintheinnercityandthegrowthofinnovationdistricts,withafocusonthecreativeindustries.Theseissueswillbeexploredintheremainderofthisthesis.

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Growth of the creative industries in Surry Hills and the ATP

Innovation and knowledge jobs have become a focus for strategic plans over the past

decade.

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CHAPTER 3: GROWTH OF THE CREATIVE INDUSTRIES IN SURRY HILLS AND THE ATP

3.1 Introduction

Thischapterprovidesthecontextforthetwocasestudieswhicharethefocusofthisthesis.AnoverviewofplanningforemploymentacrossSydneyoverthepast65yearsprovidesthebroaderpolicycontext.Itdocumentstheevolutionofthetwocasestudiesfrommanufacturingcentreswithintheinnercitytocreativeindustryclusters.ThischaptersummarisesthekeytrendsobservedthroughananalysisofquantitativedatafromtheAustralianBureauofStatistics(ABS)andtheBureauofTransportStatistics(BTS),whichtracksthegrowthofthecreativeindustriesinSurryHillsandtheATPfrom1991to2011.Thischapterprovidesjustificationfortheuseofthesetwocasestudieswithinthisthesis.

3.2 Employment clusters in Sydney

Sydneyisconsideredtobeanationallyandglobalsignificantcitythatcontainsbothurbanisationandlocalisationeconomies(Searle&Pritchard,2005).EmploymentisconcentratedaroundcentralSydneywithstrongaccessibilitytoasignificantproportionofthepopulation,andthisreflectsurbanisationeconomies.However,localisationeconomiesarealsopresent,particularlywithinindustrieswhichrequirelocalsupplylinksandlocalcustomers(Searle&Pritchard,2005,p.164).

SydneycontainsanumberofindustryclustersthatfosterinnovationincludingSurryHillsandtheATPinEveleigh.ThesetwoprecinctsarelocatedclosetoeachotherwithintheGlobalEconomicCorridor(refertoFigure11)andrepresenttwodifferentapproachestoplanningforemployment:unplannedandtheplanned.

TheprecinctsarebothlocatedclosetotheCBD,thecreativeandtechnologyclusterinUltimo,aswellassignificantindustrialandrecreationassets,SydneyAirportandthreemajoruniversitiesinSydney(refertoFigure12).

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FIGURE 11: Surry Hills and the ATP in the context of the Global Economic Corridor

FIGURE 12: Surry Hills and the ATP in the context of the inner city of Sydney

Source: Author Source: Author

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FIGURE 13: Place of residence of workers employed in the creative industries across Sydney

FIGURE 14: Place of work for workers employed in the creative industries across Sydney

Source: Author using data from Australian Bureau of Statistics (2011) Source: Author using data from Australian Bureau of Statistics (2011)

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CreativeworkersaremorelikelytoliveintheeasternhalfofSydneyparticularlyaroundtheinnercityincludingtheinnerwest,easternsuburbsandlowernorthshore(refertoFigure13).

ThisconcentrationofcreativeworkersreinforcestheconcentrationofemploymentwithintheGlobalEconomicCorridoringeneral,aswellastheconcentrationofthecreativeindustrieswithinthisareaofSydney(refertoFigure14).Thisreflectsthenotionthatthelocationaldecisionsofknowledgeworkers(includingcreativeworkers)arebasedonwheretheywork(Storper,2013).Inthiscase,theseworkersagglomerateintheinner-cityofSydney.

ThesemapshighlightthatthegrowthofthecreativeindustriesinSurryHillsandtheATPmayreflectawidertrendacrossSydney.Acomparativeanalysisofthesetwolocations,whichevolvedthroughdifferentways,willhaveimplicationsforunderstandingotheremploymentlocationsinSydney.

ThesemapshighlightthatthegrowthofthecreativeindustriesinSurryHillsandtheATPmayreflectawidertrendacrossSydney.Acomparativeanalysisofthesetwolocations,whichevolvedthroughdifferentways,willhaveimplicationsforunderstandingotheremploymentlocationsinSydney.

3.3 Planning for employment in Sydney

TheevolutionofplanningforemploymentisevidentinSydney’smetropolitanstrategiesoverthepast65years(refertoAppendixAformoredetail).Since1948,strategicplanningforemploymenthasevolvedfromafocusoncentrestoafocusonclusters,whileretainingsomeelementofacentrespolicy.ThefocusforSydney’semploymentisGlobalSydneyandtheGlobalEconomicCorridorwhichhascontinuedtoexpandandmovewestwards(asdiscussedinChapter1).Innovationandknowledgejobshavebecomeafocusforstrategicplansoverthepastdecade.However,thisfocushasdiminishedsincethespecialisedcentrescategorywasremovedandthecentrehierarchymorebroadlywasreduced.Thereseemstobelackofanunderstandingabouttheroleofplanninginpromotingindustryclustering,particularlywhatitcanorshouldachieveandhow.

3.4 Surry Hills

SurryHillsisamixeduseemploymentandresidentialprecinctlocatedwithintheCityofSydneylocalgovernmentarea(LGA).TheprecinctislocatedadjacenttoCentralStationandtheCBDandisprimarilyzonedB4MixedUseandR1GeneralResidential(refertoFigure15).Themixedusezonedoesnothaveapercentagerequirementforemployment;thatis,nominimumamountofemploymentuseisrequiredindevelopmentswithinthemixedusezone.Therefore,developmentgenerallyreflectsmarketpreferences(Thomas2015).

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FIGURE 15: Surry Hills context map

Source: Author

RISE OF INDUSTRIAL AND DECLINE OF RESIDENTIALSurryHillshasexperiencedsignificantchangeoverthepast20years.Duringthe1930s,thevalueoflandinSurryHillswasgovernedbythepricesobtainableforindustrialratherthanresidentialuses(Keating,1991).SydneyCityCouncilbeganaddressingthehousingshortageinthelate1930sassociatedwiththelackofdevelopmentduringWorldWarI(Keating,1991)bydeclaringlargeprecinctswithinSurryHillsasresidentialdistricts.Thisprohibitedthebuildingofnewfactoriesorconversionofresidentialusestoindustrialorcommercialuses.AccordingtoKeating(1991,p.94),atthattime“Giventhehighpriceofnon-residentiallanditwasnaïvetohopethathouseswouldeverreplacetheshopsandfactoriesthatwerealreadythere”.ThishighlightsthatthepropertymarkethadastrongpresenceinguidinglandusesinSurryHillsatthattime.

AfterWorldWarII,aninfluxofEuropeanmigrantsbreathedlifeintothearea(Keating,1991),bymaintainingandupgradingoftheirhomesandestablishinglocalshopsandrestaurantsthatreflectedtheirculture.Thiswasaccompaniedbyasimultaneousmovementofmiddle-incomehouseholdsouttowardsthesuburbschasingthe‘AustraliaDream’(Burnley,1972;Kendig,1979).Thispost-warsuburbanisationlikely“ledtoadeepeningoftheinner-cityrentgap,thuscreatingtheconditionsforsubsequentreinvestment,i.e.gentrification”(Ley,1996,p.42).Thiswasacommonlyobservedtrendduringthe1960sand1970swithinlargecitiesinCanadaandAustralia.

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THE ROLE OF GENTRIFICATIONKeating(1991)notesthatitislikelythatgentrificationbeganduringthelate1960sandearly1970s.TheresidentsmovingintoSurryHillswerelookingforacosmopolitanalternativetothesuburbanlifewhichwasoncesoughtafter.

Gibson(2006,p.192)suggeststhat“thecreativeclassinSydneyisthegroupmostresponsibleforinner-citygentrification”.Grassrootscreativeproducersincludingvisualartists,musiciansandwriters,arethefirsttoinhabittheinnercity(Gibson,2006).Thesegroupsrequirerelativelycheaprentforbothhousingandstudiospacebutarealsoattractedtodiversityandtheedgyinnercity(Gibson,2006).Duringthe1980s,grassrootscreativeproducersgeneratedareputationforSurryHills,evidencedthroughtheestablishmentoftheBrettWhitelyStudio,RayHughesGalleryandBelvoirStreetTheatreduringthisperiod(d'Arcy&Zamberlan,2014).Thisattractedstudents,gentrifiers,residentialdevelopersandotherbetter-paidworkerswithinthecreativeeconomy(mediaandadvertisingexecutives)“whodesiredthelifestyle,bohemianandculturalactivitiesthatearliercreativeclass‘colonisers’established”(Gibson,2006,p.192).Theartistsareconsideredtheadvancingorcolonisingarmofthemiddleclass(Ley,1996,p.191).Withthenewpopulationcamereinvestmentinbothresidentialandcommercialdevelopment,withupmarketeateriesandshopsandtheconversionofoldfactoriesintotheatres,studiospacesandcompanyoffices(Keating,1991,p.105).

ThisperiodofgentrificationwasaccompaniedbyamovementtowardscomprehensivestrategicplanningbytheSydneyCityCouncilwiththereleaseofitsfirststrategicplanin1971.ThePlanwasupdatedeverythreeyearsuntil1983.UndertheseStrategicPlans,SurryHillscomprisedtwomainprecincts:theWestSurryHillsprecinctandtheSurryHillsresidentialvillageprecinct(CounciloftheCityofSydney,1971).Duringtheearly1970s,theWestSurryHillsprecinctsupportedtheCBDwithindustrialusesandcommercialofficedevelopmentandCouncilsupportedthecontinuationofthisrole.

The1974StrategicPlanmakesitclearthatCouncilwasconcernedabouttheimpactofemploymentonresidentialdevelopmentandremainedfocusedonchangestosupportresidentialusesincludingstreetscapeupgradestoimproveamenityforresidents.Councilacknowledgedthecontributionoflowervalueusestothefunctionofthecityandindicateditsintenttoprotectandencouragetheseusesincludingtheragtrade,newspaperpublishingandprintingworks,computercentresandothersmallerindustriesbecauseofcloselinkstotheCBD(CounciloftheCityofSydney,1974).

TheroleofSurryHillsasaresidentialandemploymentprecinctwasreiteratedinthe1980StrategicPlan.ThewesternsectionofSurryHillswas“predominantlyasupportareaforthemajorcommercialandretailactivitiesoftheCentralBusinessDistrict”(CounciloftheCityofSydney,1980,p.219).Itincludedlightindustry,printing,warehousing,publishingandtheclothingtrade.Therewerealsosubstantialpocketsofterracehousing,andalargecomponentofhighrisepublichousinginthesouthernsectionofWestSurryHills.Theeasternsectionwasaworkingclassresidentialneighbourhood.However,the1980Planreportedthattheescalationofresidentialpropertyvaluesduringthe1970sledtoasubstantialchangeinthepopulation,withlow-incometenantsandmigrantsdisplaced,andresidentialprecinctsrehabilitated(CounciloftheCityofSydney,1980,p.219),reflectingthegentrificationprocess.

ThePlanidentifiedanumberoffuturedirectionsforSurryHillswhichsoughttoconsolidatecommercialandlightindustrialactivitiesonthewestofSurryHillsclosetotheCBDandCentralStation,andprotectresidentialusesagainstincompatibledevelopment.

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ThesefuturedirectionsarereflectedinthestructureplanfortheSurryHillsdistrict(refertoFigure16).Itisclearfromthisplanthatresidentialwasproposedtobedominantlanduseandthisisalsoreflectedthroughtheplan’slanguagewhichsuggeststhatindustriallandusesareintrusiveandshouldbemanaged.Thisperspectivefailstorecognisetheimpactthatresidentialusesmayhavehadorcontinuetohaveonindustrialandcommercialdevelopment.ThisisreiteratedbyHu(2012,p.353)whobelievesthateconomicplanningwasnotanembeddedthemewithinthe1971-1977Plans:“Someeconomictraitscanbeidentifiedinafewpolicyitems;however,theoverallthematicintentionsareotherwise”.Thissomewhatremainstrueforthe1980Plan.

The1988and1991strategiesfocusedontheCBDandGlobalSydneyandnotthewiderprecinctsofvillageswithintheCityofSydney,andthereforedidnotcontaindetailedactionsforSurryHills.

Gentrificationisrecognisedasaparallelprocesswhichrelatestotheresidentialpropertymarket.However,thelocalbuzzinSurryHillshaslikelybeendrivenbythereinvestmentinbothresidentialandcommercialdevelopment.Gentrificationcouldhaveasignificantimpactoncommercialusesinthefutureiftheyarepricedoutbyresidentialdevelopmentandthiswillbediscussedbelow.

FIGURE 16: Surry Hills district structure plan

Source: (Council of the City of Sydney, 1980, p. 221)

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GROWTH OF THE CREATIVE INDUSTRIESThedataanalysiscontainedinAppendixBprovidesasnapshotofemploymentwithinSurryHillsoverthepasttwodecades(1991to2011).ThecreativeindustriesappeartohaveestablishedwithinSurryHillspriortothiswhichsuggeststhattheindustries’growthwaslikelyoccurringparallelorpriortogentrification.In1996,therewasevidenceoftheformerragtradeclusteraswellastheemergingcreativeindustries,highlightingaperiodoftransitionfromemploymentinmanufacturingtocreativeindustries.

In2011,SurryHillscontainedaclusterofcreativeindustries,withlimitedevidenceofitsformermanufacturingpast,butwithadiversemixoftheseindustriesincludingarchitecture,advertising,designandperformingarts.Thegrowthincreativeindustriesandprofessionalswasaccompaniedbyagrowthinthesupportindustriesincludingcafes,restaurantsandbarswhichcouldbecontributingtoalocalbuzzenvironment.TheseindustrieshavegrownsteadilydespitefluctuationsinthetotalnumberofjobslocatedinSurryHills.

AccordingtoCensusdata,themajorityofworkersbasedinSurryHillstraveltoworkviapublictransport,probablyreflectingitsproximitytoCentralStation.Surprisingly,theaveragecommutelengthforworkersbasedinSurryHillsisgreaterthantheaverageforacrossSydney.Despitethis,thereissomeevidencethatcreativeworkerstendtolivewithintheinnercity,particularlywithintheinnerwestandeasternsuburbs,reflectingtheconceptoftheresurgenceoftheinnercity(Hutton,2004;Storper,2013).

MODERN CREATIVE INDUSTRY CLUSTERSurryHillsisnowrecognisedasalocationofacreativeindustrycluster.ItwasmostlikelyfirstacknowledgedwithinSustainableSydney2030(CityofSydney,2008b).TheStrategyanditssupportingdocumentsreflectontheroleofvillagecentresacrosstheCityofSydney,includingSurryHills,asdiversenodesofeconomicactivitywhichplaya

significantrolewithintheregionalandglobaleconomy(CityofSydney,2008a,p.183).AnalysisbySGSEconomicsandPlanning(2007)illustratesclustersofcreativeindustriesandinformationandcommunicationtechnology(ICT)throughlocationquotient(LQ)analysishighlightingasignificantconcentrationofcreativeindustrieswithinSurryHills(refertoFigure17).

Theincreasingfocusonthecreativeindustriesisevidentthroughoutthestrategy.Akeyobjectivefocusesonsupportingthedevelopmentofthecreativeindustries(refertoFigure18).Objective7.3within Sustainable Sydney2030highlightsthatin2008therewasonlyrecentrecognitionofthestrengthofcreativeindustrieswithintheCityofSydneyandthereisaneedtofacilitatethedevelopmentofcompetitiveclustersofcreativeindustries.

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FIGURE 17: Clusters of creative industries and ICT (2001) FIGURE 18: Objective 7.3 – Support the development of creative industries

Source: (SGS Economics and Planning, 2007, p. 63)

Source: (Adapted from City of Sydney, 2008b, p. 109))

CITY NOW

Onlyrecentrecognitionofstrengthofcreativeindustries.Lackofappropriatespaceforcreativeindustries.

CITY IN 2030

ACitywhichfostersagloballycompetitiveclusterofcreativeindustries.ACitywhichunderstandsplansandprovidesspaceforcreativeindustries.

ACTION7.3.1 Identifythelocationandinfrastructureneedsofvariouscreativesandinnovativeindustries.

ACTION7.3.2 Developcreativeindustryandculturalprecinctstrategies.

ACTION7.3.3 EstablishaCreativeSpacesRegistertoprovideaccesstostudiospacesintheCity.

ACTION7.3.4 EstablishaCreativeIndustryForum.

ACTION7.3.5 Developapilotprogramthatencouragesstart-upculturalandcreativeenterprises.

ACTION7.3.6 Establishactivepartnershipswithbestpracticeadaptivereuseheritagespaces.

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ThesupportingdocumentsuggeststhatcreativeandculturalprecinctsacrosstheCityofSydneyhavetendedto“groworganically”basedonthemixofbusinessesandactivitiesandthecharacterofthelocalresidentialpopulation(CityofSydney,2008a,p.227).CityofSydney(2008a,p.227)believestheseprecinctscannotbeover-plannedandthatcouncilsandothergovernmentagenciescanprovidesupportthrough“goodplanning,networksandbranding,butnotbyover-investingand/ortryingtoup-zonerundownareas”.

Fromaneconomicdevelopmentperspective,theCityofSydney“hasn’treallydonemuchinSurryHills.Ithasjusthappened”(O’Brien2015).However,fromalanduseplanningperspective,whiletheCouncilmayhavelimitedinvolvement,itislikelythatthemaindriverforthecreativeindustryclusterhasbeen“thecharacterandheritagequalitiesofSurryHills”(Thomas2015).Councilhasminimisedredevelopmentopportunitiesbyholdingbackheightandfloorspaceratios,aswellasthroughheritagecontrols(Thomas2015).IthasinvestedinlocalinfrastructuresuchastheSurryHillsLibrary,parks,streetsandfootpaths“tocreateanamenityandimproveaccessibility,sothelookandfeeloftheplaceissomethingthat’sattractive”(Thomas2015).Thiscreatesapleasantplacetoliveandwork.ThesenotionsarereflectedintheprecinctdirectionsforSurryHillsunder Sustainable Sydney2030(CityofSydney,2008b)(refertoFigure19)whichfocusonpreservingorenhancingthebuiltenvironmenttocontinuetoattractcreativebusinesses.Thishighlightsapotentialroleofthepropertymarketinattractingcreativefirmsandthereforeindustryclustering.

FIGURE 19: Precinct directions for Surry Hills

Source: (Adapted from City of Sydney, 2008a, p. 64)

SURRY HILLS

Thisprecincthasdevelopedasalivelymixed-useandcreativebusinessprecinct.Thegrainandfeelareattractivetostart-upandsmalltomediumenterprises.

Development aims ― Preservethefinegrainandintimatescalebyprohibitingsiteamalgamationsandmaintainingexistingheightcontrols.

― PreservebuiltformexceptfordesignatedredevelopmentsitessuchasCentennialPlaza. ― ConsidercalmingWentworthStreettoprovideamoreeffectivecentretobetterlinktheareatoOxfordStreet.Thiscouldinvolvewideningthefootpathandothermeasurestofacilitatepedestrianlife,withElizabethStreetdesignatedforthroughvehicles.

Asidefromthebuiltenvironment,anumberofotherpotentialfactorsledtothegrowthofcreativeindustriesinSurryHills.Commercialrealestateagentsinterviewedaspartofthisthesissuggestthattechnologycompanies(Brown2015)ormarketinganddesignfirmswereoriginallyattractedtoSurryHills(Gunning2015).Asdiscussedaboveitwasmostlikelythelowcosthousingandstudioorwarehousespacethatattractedtheoriginalgrassrootscreativeproducerstothearea(Gibson,2006),andotherindustriesfollowed.

Morerecently,theCityofSydney(2012)FloorspaceandEmploymentSurveyidentifiedthecreativeindustriesasthelargestindustryofemploymentintheSurryHillsvillagearea,comprising20percentofbusinesses(417businesses),and24percentoftotalemployment(5,364jobs).TheCityofSydneyEconomicDevelopmentStrategyrecognisesSurryHillsasacreativeindustryhubwiththelargestconcentrationofcreativeindustrieswithintheLGA(refertoFigure20),alongsideanumberofotherindustryclustersincludingdigitalindustriesintheATP.ThishighlightsthatbothSurryHillsandATParerecognisedasbonafideclusterswithingovernmentpolicy.

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FIGURE 20: Industry clusters within the City of Sydney

Source: (City of Sydney, 2013, p. 16)

IntermsofNSWgovernmentstrategicplanning,SurryHillswasidentifiedasafringeemploymentareawithinthe1995metropolitanstrategy,Cities for the 21st Century(NSWDepartmentofPlanning,1995,p.92).Withinthe2010metropolitanstrategy,Metropolitan Plan for Sydney to 2036,aportionofSurryHillswasidentifiedwithintheCityEastprecinct.TheroleoftheCityEastprecinctincluded“providingbusinesssupportservicestotheCBDindiversecommercialpremisesandcreativeindustries”(NSWDepartmentofPlanning,2010,p.31),aswellasprovidingahighqualityresidentialenvironmentandbeingakeyareafortourismandentertainment.

AshighlightedinChapter1,the2014metropolitanstrategy,APlanforGrowingSydney,recognisedSurryHillsasitsownprecinctwithinGlobalSydney.SurryHillswasprimarilyrecognisedasaresidentialvillage,withitsemploymentrolesomewhatunderstatedatthestatelevel,butrecognisedconsistentlybytheCityofSydneyatalocallevel.

TheconcentrationofthecreativeindustriesinSurryHillshasbeensubjecttomediaattention.RecentarticlesintheSydneyMorningHeraldsuggestthatknowledgespilloversarespontaneouslyoccurringthroughchanceencountersinrestaurantsandcafesinSurryHills(Gittins,2014;Wade,2014a,2014b,2014c)primarilyduetotheconcentrationofknowledgeandcreativeindustrieswithintheprecinct.LordMayorofSydney,CloverMoore,isquotedassayingthattheknowledgejobshavenotgrowninSurryHillsbyaccidentandthatintheCityofSydney’sexperience“ittakescarefulplanningandinvestment”(Wade,2014a).However,thecontextdescribedabovesuggeststhatthisisnotnecessarilythecase.

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FUTUREDuetoitsmixedusezoning,thefutureofSurryHillsasacreativeindustryclusterissubjecttothepropertymarketandthereareavarietyofopinionsastowhetheritwillretainemploymentorturnovertoresidential.OnecommercialrealestateagentinterviewedforthisresearchbelievesthatthecreativesnowinSurryHillsarealreadypayingsignificantlyhighrentspersquaremetreandarelikelytoremainwithintheareabecauseofthebenefitsoftheamenity(Gunning2015)andhenceperceiveittobevalueformoney.

However,anothercommercialrealestateagentbelievedthattherisingrentlevelshasseenbusinesseslookingtoAlexandria,whichisgoingtobethenewSurryHills(Brown2015).Thereissaidtobelimitedvacantfloorspacewithinthecommercialmarketandanumberofwarehousebuildingsareturningovertoresidential(Brown2015).

SurryHills’cycleofgentrificationisreflectedinFigure21,andillustratesanincreasingnumberofwarehousesbeingconvertedtoresidentialuses.Tallon(2013,p.249)highlightsthatthe“de-industrialisationofformermanufacturingcentresleftbehindastockofredundantindustrialspaces,whichwereidealfortheneedsofcreativeindustriesuntildisplacedbytheeffectsofgentrification”.However,whetherSurryHillswillbesubjecttothisshiftisnotentirelyclear:itmaybethat“overthenext10yearsSurryHillswilllosethatinnovation...Whetheritwillbecompletedgoneisanotherthing”(Thomas2015).Thisraisessomeimportantquestionsabouttheroleofplanninginmaintainingclustersandwhetherthereisaneedtointerveneinthemarket.

SUMMARYSurryHillshasevolvedfromanindustrialquartertoacreativeclusterlargelywithouttheplannersnoticinguntilaftertheeventgiventhatnodetailedstrategicplanswerepreparedforSurryHillsbetween1980and2008.Fromtheanalysisabove,itappearsthatattractingemploymenthasneverbeenamajorissuewithpolicyfocusedonencouragingresidentialdevelopment.CityofSydneyhashistoricallycitedcommercialandindustrialusesasencroachingonresidential,inferringthatemploymentuseswerenotfavourable.ThisremainssomewhatthecaseinthesensethatSurryHills’roleasanemploymentprecinctisunderratedwithinNSWGovernmentstrategicplanningdocuments.Thefocusseemstobeonenhancingtheresidentialaspectsofthevillagesuchascultureandthearts.Thisfailstorecognisethecontributionoflocalworkers,despitethedetailedaimstosupportthecreativeindustrieswithinSustainableSydney2030.However,SurryHillsisrecognisedasacreativeindustryclusterandrecentmediaarticlessuggestthatknowledgespilloversarepresentwithinthecluster.

ReflectingonthecommentsmadeduringtheinquiryintotheplanningcontrolsforSurryHillsduringthe1930s,itisironicthatitwasbelievedtobenaïvetohopethatresidentialuseswouldreplaceemploymentuses,particularlysinceitislikelythatthiswillbeamajorissuemovingforwardforthesurvivalofthecreativeclusterinSurryHills.

FIGURE 21: Gentrification

Source: (Perry, 2014)

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FIGURE 21: Gentrification FIGURE 22: ATP context map

Source: Author

3.5 Australian Technology Park

TheATPinEveleighandisdescribedasoneofthenation’spre-eminenttechnologyandbusinessprecincts(AustralianTechnologyPark,2014a).TheATPislocatedadjacenttotherailwaycorridor,directlysouthwestofRedfernStation.Thesite(refertoFigure22)iszonedB7BusinessParkwhichpermitsofficeandlightindustrialusesandprohibitsresidential.

WithintheATPthereareanumberofbuildingswhichhousearangeofcommercialtenantsincludingtheLocomotiveWorkshop,InternationalBusinessCentreandtheNationalInnovationCentre(refertoFigure23).Therearealsoanumberoffirm-specificbuildingssuchasMediaCity(containingChannel7,PacificMagazinesandGlobalTelevisionstudios),theNICTA(NationalICTAustralia)buildingandtheBiomedicalbuilding(containingtheUniversityofSydneyFacultyofAgriculture).

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FIGURE 23: Map of ATP precinct

Source: (Australian Technology Park, 2015a)

CONCEPT AND VISIONIn1989,DrTomForganwasengagedbytheUniversityofSydneytoidentifyausefortheNSWGovernmentownedraillandatEveleighastherailusehadcometoanend(Forgan2015)(refertoFigure24).

Technologyparkswereinvogueatthetime(Forgan2015),andduringthe1990s“itseemedeverylocalgovernmentinNSWhadasitesetasideandzonedforIT-relateddevelopment”(Dunbar2015).TechnologyparkswerenotjustfashionableinAustralia,itwasaworldwidephenomenon(Hall&Castells,1994).

Theproposaltocreatea“world-classtechnologyprecinct”(AustralianTechnologyParkSydneyLimited,2014,p.10)wasalsoputtotwootheruniversitiesandwaseventuallyestablishedasaninitiativeoftheUniversityofNewSouthWales,theUniversityofSydneyandtheUniversityofTechnology(Sydney).TheconceptwassupportedbytheNSWGovernment,whichfacilitatedthetransferofthesiteforthepurposeoftheATP.

AsignificantsourceoffundingwastheAustralianGovernment’sBuildingBetterCitiesprogram.Eveleighwasidentifiedasoneof26areastrategiestobeendorsedundertheBuildingBetterCitiesprogramin1991withfundingsupportingredevelopmentformediumdensityhousingandopenspaceanddevelopmentofanAdvancedTechnologyPark(laternamedtheAustralianTechnologyPark)toencourageemploymentinknowledge-basedindustriesandscientificresearch(DepartmentofTransportandRegionalDevelopment,1996).

ThepurposeoftheATPwas(andstillis)“toprovideanenvironmentforcollaborativeresearch,knowledgesharinganddevelopmentwherecompaniescanforgealliancesandaccesssupportforcommercialisation”(AustralianTechnologyParkSydneyLimited,2014,p.10).

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FIGURE 24: Eveleigh rail yards prior to development of ATP

Source: (Australian Technology Park, 2015a)

GOVERNMENT OWNERSHIP AND MANAGEMENTTheATPopenedinJune1996(AustralianTechnologyPark,2015b).InitiallyForganmanagedtheATPonbehalfofthethreeuniversities.Heranoutofmoneypriortothecompletionoftheoriginalvisionandwasunabletosecureadditionalfunds,andin2000theNSWGovernmenttookoverthemanagementofthesite(Forgan2015).

TheSydneyHarbourForeshoreAuthority(SHFA)washandedthesite,eventhoughthesitewasawayfromtheforeshore,asitwasseenasanauthoritythatcoulddeliver(Dunbar2015).

Overthelast15years,managementhasshiftedbetweenvariousstateauthoritiesincludingtheRedfern-WaterlooAuthority(2005),theSydneyMetropolitanDevelopmentAuthority(2012)andmostrecentlyUrbanGrowthNSW(2013)(AustralianTechnologyParkSydneyLimited,2014).Formally,thesiteisownedandmanagedbytheAustralianTechnologyParkSydneyLimited(ATPSL)whichisanotforprofitcompanywholly-ownedbyUrbanGrowthNSW(AustralianTechnologyParkSydneyLimited,2014,p.8).ATPSLhasaconstitutionthatidentifiesthesortsoftenantsthatshouldbeaccommodatedwithintheATP,includingthoseengagedinresearch,technology,development,innovationandcommunity(Read2015).

TheATPcontainsanincubatorforinnovativesmallfirmsincludingsoftwareandtelecommunicationscompanies(Searle&Pritchard,2005,p.163),ATPInnovations,whichislocatedwithintheNationalInnovationCentre(refertoFigure23).ATPInnovationswascreatedinitscurrentformin2000.Asof2015,therewerearound70start-upcompanieswithintheincubatorwhichare“co-located”withinthebuilding(Hawthorn2015).ThisreflectssomewhattheoriginalvisionfortheATP(Read2015).SearleandPritchard(2005,p.163)suggestthatduetotheconcentrationoftheseindustrieswithintheATP,thereisasmallinformationtechnologyandtelecommunicationscluster“basedonlocalisationeconomies”.

Amongthoseinterviewedforthisproject,itislargelyconsideredthattheATPhasnotliveduptoitsexpectationsorForgan’svision(Read2015;Dunbar2015;Forgan2015).DuncanRead(2015),GeneralManageroftheATPSL,believes:

“ithasalwaysbeenabitofanuncomfortablefitinstategovernmentastowhoshouldownandmanageabusinessPark,becauseitisquiteaprivatesectorfocusedbusiness…government’sroleprobablymovedawayalittlebitfromthefocusontechnologyandinnovationmoretowardscreatingtheenvironment”.

Theremayhavealsobeenissuesassociatedwithprescriptivelandusecontrols,developmentcontextincludingthesurroundingenvironmentandcommunityacceptanceoftheproject(Dunbar2015).Thismayemphasisetheattractionofthemixed-usenatureofothersuccessfulITorcreativeclusters.

ThecommunityreactiontotheATPwasalsocitedbyForganasanissuethatmayhavepreventedtheATPinreachingitspotential.Forganwasattheforefrontofcommunitybacklash(refertoFigure25).

Forganbelievesthat“itcouldhavebeen,noquestion,aworld-classproject”andhasnotachieveditsoriginalvisionbecausethereisnobodydrivingit(Forgan2015).Thisisreflectedbythefracturedhistoryofsuccessivemanagementagenciesforthesite.

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FIGURE 25: Evidence of community backlash against ATP

Source: Forgan (date unknown), provided to Author by Australian Technology Park Sydney Limited

PLANNINGThefirstpolicydocumentthatrecognisedtheATPasgovernmentpolicywasthe1995metropolitanstrategyCitiesforthe21stCentury.ThestrategyreferencedtheredevelopmentofthesurpluslandownedbytheStateRailAuthorityknownastheEveleighRailyardsandadjoininglandoftheDepartmentofHousingforredevelopmentforarangeofbusinessuses,housingandopenspaceincludinganAdvancedTechnologyPark(NSWDepartmentofPlanning,1995,p.78).ThisstrategywaslikelyinsupportofthefundingprovidedbytheBuildingBetterCitiesprogram.TheATPwasexpectedtoutiliselinksbetweennearbyuniversitiesandindustries(NSWDepartmentofPlanning,1995,p.78).

Searle(1996),withinareportfortheDepartmentofUrbanAffairsandPlanning,recommendedthatastrategicplanfortheindustrialareasurroundingtheATPbedevelopedtoensurethattheareaassistedinsupportingthefunctionoftheATP.Whetherornotthisoccurredisunknown.

Thedevelopmentwassubjecttoamasterplanningprocess.ThefirstmasterplanfortheATPwasapprovedin1994(refertoFigure26),andhasbeenupdatedanumberoftimesundertherequirementsof Sydney Regional Environmental Plan No 26 – City West,mostrecentlyin2005.

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FIGURE 26: Original master plan for ATP

Source: Forgan (date unknown), provided to Author by Australian Technology Park Sydney Limited

ThevisionfortheATPidentifiedwithinthemorerecent2005masterplan(NettletonTribe,2005)was:

“toestablishaninternationallyrecognised,worldclasstechnologyandbusinesscentreaimedatbuildingglobalcompetitivenessinkeygrowthsectorsoftheeconomybyfacilitating:

― greaterlinksinthevaluechainbetweentheintellectualandresearchresourcesavailableinSydney'suniversitiesandclustersoffirmsinstrategicindustriesthroughappliedresearchandproductdevelopment;

― theincubationofnewideasinanenvironmentthatfostersresearchanddevelopment;

― theestablishmentofindustriesontheSitethatcarryoutscientificresearchandscientificdevelopmentasanintegralaspectofthatindustry;

― adaptivereuseandinterpretationoftheoriginalrailwayusebuildingsandelementswhichareofheritagesignificanceandshowthehistoricalusesoftechnology;

― theestablishmentofusesontheSitewhichwillhaveapositiveimpactonthehistoric,social,economic,naturalorbuiltenvironmentsofthesurroundinglocality;

― constructionofhighqualityinnovativebuildingsandprovideleadershipintheprovisionofecologicallysustainableurbandevelopmentandstimulatingurbanform;and

― aninspiring,invitingandsafepublicdomainappropriatetoaworldclasstechnologypark”.

Thisvisionhighlightsthefocusofgovernmentpolicyonclustersofindustriesandfirms,particularlyresearchanddevelopmentwithstronglinkstouniversitiesanddrivinginnovation.However,itisaparticularlybroadvisionwhichmayhavebeendifficulttoachieve.

Fromastrategicplanningperspective,theATPhasreceivedrelativelylittleattentionwithintherecentmetropolitanstrategieswiththefocusturningtothebroaderCentraltoEveleighprecinct.TheCityofSydneyisnotresponsiblefortheATP,however,theCityofSydneyEconomicDevelopmentStrategyrecognisestheATPasaclusterofdigitalindustries(refertoFigure18)reflectingthefocusoftheprecinctontechnology-relatedcreativeindustries.

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GROWTH OF THE CREATIVE INDUSTRIESAnalysisofhistoricalCensusdata(refertoAppendixB)revealedevidenceofaformermanufacturingindustryclusterinEveleighduringthe1990swithanumberofjobsidentifiedwithinvariousspecialisedmanufacturingindustriesofemployment.Therewasawidershiftinemploymentduringthisperiodwithgrowingemploymentincomputinganddesignindustriesobservedin1996priortotheopeningoftheATP.

In2011,theATPclusterofcreativeindustrieswasprimarilyinformationmediaandtelecommunicationindustriesassociatedwithMediaCity,whichopenedin2008,andthefocusontechnologyfirms.UnlikeSurryHills,theATPcontainsasmallproportionofjobswithinfoodandaccommodationservicesandthisindustryofemploymenthasnotgrownoverthepasttwodecades.

TheaveragecommutingdistancefortheATPin2011wasonlyslightlyhigherthanthatofSurryHills,whilepublictransportusewaslowerandprivatetransportusesignificantlyhigher.ThismaybeduetotheavailabilityofcarparkingwithintheATP(albeitatacost)andsurroundingtheATP.PrivatetransportusewaslowerthantheSydneyaverage.WiththeaveragecommutingdistanceforSurryHillsandtheATPbeinggreaterthantheSydneyaverage,thissuggeststhatthereislimitedevidencethatworkersliveincloseproximitytowheretheywork.Despitethis,theanalysisearlierinthischapterillustratesthatthecreativeworkersgenerallylivewithintheinnercityofSydney,whichismoreaccessibletotheemploymentcentresinGlobalSydneycomparedtootherareasofSydney.

FUTURETheATPisnotfullydeveloped,andthereisanaimforthistooccurwithinthenext10years.Accordingtothe2014annualreport,theATPcontainsaround4,500jobsandthetargetismorethan9,000jobs(AustralianTechnologyParkSydneyLimited,2014).TheATPSL(2014),claimshighandstabletenantoccupancylevelsatbetween97and100percent.Tenantsincludecompaniesofallsizesworkingwithinarangeofindustriessuchasinformationtechnology,research,development,government,mediaandeducation(AustralianTechnologyParkSydneyLimited,2014).

AsmentionedinChapter1,APlanforGrowingSydneyintroducestheCentraltoEveleighprecinctaspartofGlobalSydneywhichincludestheATP.UrbanGrowthNSWisresponsibleforthetransformationofthisprecinctwhichisexpectedtoplayaroleinaccommodatingtheexpansionofSydneyCBDofficespace(NSWDepartmentofPlanningandEnvironment,2014).Thisprecinctisalong-termprospect(20to30years)andisexpectedtoaccommodatemediumandhighdensityoffice,education,retail,hospitalityandresidentialdevelopment.Alongsidethis,UrbanGrowthNSWannouncedinDecember2014thatitwasseekingexpressionsofinterest(EOI)forthesaleoftheATP(AustralianTechnologyPark,2014b;McKenny,2014).

AccordingtotheGeneralManageroftheATPSL:

“Government’snowthinkingthatitsjob’sdoneintermsofcreatingthecriticalmassanditmightnotbethebestpersontocontinuetodeliverandmanagethePark,becausetheprivatesectorcanbringinnewfundsandnewbuildingsandattractnewtenantstocompletetheTechnologyPark”(Read2015).

ThroughouttheEOIprocess,therewasspeculationthatGoogleandtheCommonwealthBankofAustraliawereinterestedinthesite(Ruehl,2015a,2015b).Inlate2015,largeAustraliansoftwarecompanyAtlassianwasgainingsignificantmediatractioninresponsetoitsbidtopurchasethesite(Fitzsimmons,2015a,2015b,2015c,2015d;Mao,2015;Needham,2015),rejuvenatinginterestintheATPtoremainatechnologypark.On12November2015,itwasannouncedthatMirvacwasthesuccessfulpartyandthattheCommonwealthBankofAustraliawouldbetheanchortenant(Cummins,2015;Ruehl,2015c;UrbanGrowthNSW,2015).TheEnvironmentalImpactStatementfortheredevelopmentofthesitewaslodgedbyMirvacinDecember2015andproposesthedevelopmentofthreenewbuildings(refertoFigure27),107,000squaremetresintotal,formixedcommercial,retailandcommunitypurposes(JBAUrbanPlanningConsultants,2015).

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FIGURE 27: Artists impression of one of the new buildings proposed for the ATP

Source: (JBA Urban Planning Consultants, 2015)

SUMMARYTheATPisaplannedtechnologyhubwhichwasdesignedtofacilitateknowledgespillovers.Thesiteisprotectedforbusinessparkemploymentusesthroughitszoning,withthefocusontechnologyandinnovationcontainedintheATPSLconstitutionratherthanthezoning.Hence,thereareanumberoflayersofcontrolintermsofbothgovernanceandlandusecontrols.

ManagementhasshiftedmultipletimesanditappearsthattheoriginalvisionbehindtheATPmayhavedilutedwhenpropertydevelopmentarmsoftheNSWGovernmentwerebroughtintomanagetheATP.IthasnowalsobeeneffectivelysubsumedintotheCentraltoEveleighprecinct.TheATPalsofailedtosecurecatalystinfrastructureandthecriticalmassthatmighthaveboostedthepotentialfortheoriginalvisiontobeachieved.

ThefutureoftheATPisunclearfollowingthesale,yettherecouldbeopportunitiesforthetechnologyfocustobeenhancedifalargesoftwarecompanywassecuredasananchor tenant.

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3.6 Conclusion

Thechapterrevealsadichotomyofapproachestoestablishingindustryclustersfromaplanningperspective.Thefirstapproachisunplanned,organicallydrivenbythemarket–SurryHills.Thesecondapproachisplanned,developedthroughclearpolicydirections–theATP.ThecontrastingapproacheshighlightthepotentialroleofplanningintheevolutionofcreativeindustryclustersandotherpotentialdriversalongsidetheeconomicforcesidentifiedwithintheliteraturebyMarshall(1920).

TheclusterofcreativeindustrieswithinSurryHillsevolveddespitethehistoricalpolicyfocusonresidentialdevelopment.Thelackofplanningraisesimportantquestionsregardingthefutureofclusterwithlimitedplanningmechanismstoprotectthecreativeindustriesfrompotentiallyturningovertoresidentialuses.AnunderstandingoftheeconomicbenefitsforfirmsassociatedwithbeinglocatedinSurryHills(potentiallyincludingknowledgespillovers)willbekeytounderstandingthelikelyfutureofSurryHillsandwhethertheclusterhasthepotentialtowithstandturningovertoresidentialdevelopment.

TheclusteroftechnologyfirmswithintheATPrepresentsasomewhatmanufacturedapproachtoclusteringinvolvingsignificantinvolvementfromgovernmentand,aswellastheuniversitysector,andvariousmasterplansandpolicylevers.TheprotectionofATPagainsttheinfluxofresidentialdevelopmentthroughitsbusinessparkzoningandtheconstitutionoftheATPSLhasretainedtheemploymentfocus.However,theATPrepresentsasomewhatoutdatedconceptofa(sub)urbanbusiness/technologypark.ThebusinessparkzoninghaspotentiallyrestricteditsabilitytoevolveintoamoremodernurbaninnovationdistrictasidentifiedbyKatzandBradley(2013),highlightingapotentialdebatebetweentheneedforplanningtoremovebarrierstogrowthversussupportingthegrowthofemploymentinthefaceofapropertymarketdrivenbyresidentiallanduses.

Anotherareaofcomparisonbetweenthesecasestudieswillbethespecificindustryconcentratedwithineachclusterandthischapterprovidesthebasisforfurtherreflectionduringthisthesis.Whiletheseprecinctscontainwhatisdefinedwithinthisthesisascreativeindustries,thefinegrainindustriesthatwerepresentineachcasestudyatthelastCensusin2011weresomewhatdifferent.SurryHillscontainedaclusterofadvertising,architectureanddesignindustries,whereastheATPcontainedaclusterofmediaandcomputer-relateddesignindustries.

ItwasexpectedthatthecreativeworkerswouldliveclosetoSurryHillsandtheATP,butinrealitycreativeworkerscommutefromalloverSydney.However,thereisageneralconcentrationintheeasternhalfofSydneyclosetothejobsclusteredintheinnercityofSydney.

SurryHillsandtheATPareappropriatecasestudiesforcomparisonwithinthisthesisbecauseofthelocationalsimilarities,beinglocatedwithintheGlobalEconomicCorridorandtheCityofSydneyLGA.Theprecinctsbothevolvedfromformerindustrialprecincts,generallyoverthesameperiod,andprovidesimilarhistoricalcontextsforcomparison.WhiletheATPwasdevelopedwiththevisiontocreateanenvironmentwhereknowledgespilloversoccur,thistypeofactivityhasalsobeendescribedwithinthemediaasoccurringwithinSurryHills.Thenatureofplanning(orlackof)presentsanopportunitytocomparehowplanningcanimpactonthedynamicswithinthesetwoindustryclusters,whilealsotakingintoconsiderationothervariables.

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68

Methodology

The methodological approach adopted for this thesis is

primarily qualitative, with interviews with firms and

workers the main source of empirical evidence.

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CHAPTER 4: METHODOLOGY

4.1 Introduction

Thischapteroutlinesthemethodologicalapproachadoptedforthisthesis.DrawingontheanalysisofthetwocasestudiesdiscussedinChapter3,itprovidesthejustificationforadoptingacasestudyapproachandthespecificcasestudieschosen.

4.2 Research question

AsdiscussedinChapter1,thefollowingresearchquestionwillbethefocusforthisresearch:

To what extent do localised knowledge spillovers drive local industry clustering?

Thefollowingsub-questionswillalsobeaddressedbythisresearch:i. Wheredoworkerssourcetheirknowledge(informal

networks,formalnetworksorboth)?ii. Whereareconnectionsformedandhowdotheyevolve

intoaworkingrelationship?iii. Whydofirmschoosetolocateinalocalindustrycluster?iv. Whatroledoesplanningplayinpromotinglocalised

knowledgespillovers?

Thekeytermswithintheresearchquestioncanbedefinedasfollows:

― Industrycluster:“ageographicallyproximategroupofinterconnectedcompaniesandassociatedinstitutionsinaparticularfield,linkedbycommonalitiesandcomplementarities”(Porter,2000,p.254).ThefocusofthisthesisislocalindustryclustersinSydneyasidentifiedwithinstrategicplanningdocuments.

― Knowledge:“subtle,contextual,specific,andissharedbetweenpersons.Ifallweneededwasinformationwewouldneverleavehome;wecouldtelecommutetowork”(Katz&Bradley,2013,p.118).Thisstudy,however,isconcernedwithknowledgethatiseconomicallyvaluabletotheworkerorfirm.Thatis,knowledgethatrelatestoproductsorserviceswhichthefirmorworkerscurrentlydevelop/provideand/orfuturemarketopportunitiesforthefirmandknowledgethatalsocontributestoanincreaseintheproductivityorearningcapacityofthefirm.

― Localisedknowledgespillovers:knowledgeexternalitiesboundedinspace.Knowledgespilloversareimplementedthroughnon-marketinteractions,thatis,withoutdirectcompensationfortheproduceroftheknowledge(Huber,2007,p.50).Inthecontextofthisresearch,thespatialboundariesinquestioncoverrelativelycompactprecinctsorsuburbssuchastheATPandSurryHills,asdistinctfromregionalspatialunits,suchastheinnercityofSydneyortheGlobalEconomicCorridor.

4.3 Case study approach

Yin(2014,p.4)highlightsthatacasestudyapproachisoftenusedtocontributetoknowledgeonindividuals,groups,organisations,social,politicalandrelatedphenomena.“Thedistinctiveneedforcasestudyresearcharisesoutofthedesiretounderstandcomplexsocialphenomena”(Yin,2014,p.4).Understandingknowledgespilloverswouldarguablybeconsideredacomplexsocialphenomenon,particularlyduetothedifficultyassociatedwithtracingtheexchangeofknowledge.

Thetwocasestudieshavebeenchosenbasedontheirrespectivehistory,currentemploymentfocusandthelevelofinvolvementofgovernmentinplanninganddevelopmentoftheemploymentarea.ThecontextandjustificationforthesecasestudieswasexploredinChapter3andasummaryisprovidedbelow.

SURRY HILLSSurryHillscontainsaclusterofcreativeindustrieswhichevolvedorganicallyoverthepastfewdecadesfromaformerclothingmanufacturingcluster.Thereislimitedevidenceofstrategicplanningand Sustainable Sydney 2030 acknowledgedthatithadevolvedorganically.TheCityofSydneywouldliketocontinuetofacilitatethefunctionandgrowthofthecentre.Despitethis,thereislimitedrecognitionoftheareaasanemploymentcentrewithinstateorlocalgovernmentplanning.

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AUSTRALIAN TECHNOLOGY PARKTheATPsitsonthesiteoftheformerstaterailyards.TheredevelopmentofthisbrownfieldsitewasannouncedaspartoftheBuildingBetterCitiesProgramintheearly1990s.Thevisionwastoprovideanenvironmentforcollaborativeresearchandknowledgesharing.ThesitewasNSWGovernmentplannedandownedandremainsinstategovernmentownership,howeverUrbanGrowthNSWwhocurrentlymanagestheATPhasrecentlysoldthesite.

4.4 Network analysis

Networkanalysis,includingactor-networktheory,couldbeappliedwithinstudiesthataimtotraceknowledgespillovers.Actor-networktheoryisbasedontheconceptthat“entitiestaketheirformandacquiretheirattributesasaresultoftheirrelationswithotherentities”(Law&Hassard,1999,p.3).Huber(2007,p.11)suggeststhat“nearlyallempiricalresearchonnetworksinregionalstudiesandeconomicgeographydoesnotapplyappropriatemethodsofnetworkanalysisthathavetheabilitytoanalysetherelationalstructureofnetworks”.Socialnetworksandinformalpersonalrelationshipsarelikelytobekeyelementsthatfacilitateknowledgespillovers,suggestingsocialnetworkanalysiscouldbeanappropriateapproachtotracingknowledgespillovers.However,astudybyHuber(2007,p.134)intosocialnetworksandknowledgespilloversfoundthat“Sincenostructuredrelationsbetweentheactorsexist,suchprocessesdonotseemtobetraceablebymeansofsocialnetworkanalysis.Possiblyonlydeepqualitativeinterviewsarecapableofcastinglightonphenomenaofsuchsort”.Thissuggeststhatqualitativeinterviewscouldbeamoreadequateapproachtotracingknowledgespilloversthansocialnetwork.Qualitativeinterviewshavebeenadoptedastheprimaryresearchmethodforthisthesis.

4.5 Overview of method

Themethodologyadoptedforthisstudyprimarilyinvolvesqualitativeresearchsupportedbyquantitativeanalysis.ThemethodsareoutlinedinrelationtoeachresearchquestioninTable3.

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TABLE 3: Research questions, methods, data sources and analysis

RESEARCH QUESTION RESEARCH METHODS, DATA SOURCES & ANALYSIS

To what extent do localisedknowledgespilloverspromotelocalindustryclusters?

Variousmethods(discussedbelow)tounderstandwhetherknowledgespilloversaredrivingfirmlocationandthereforeclusteringand/orwhetherthereareotherdriversthataremoreprominentorstronger.

i. Wheredoworkerssourcetheirknowledge(informalnetworks,formalnetworksorboth)?

Throughthequalitativeinterviews,workerswereaskedvariousquestionsthatrelatedtosourcingknowledge,includingbothinformalandformalnetworksaswellasinternalandexternaltothefirm.

ii. Where are connectionsformedandhowdotheyevolveintoaworkingrelationship?

Qualitativeinterviewswithbothfirmsandworkersinvolvedarangeofquestionstounderstandtheextentofprofessionalnetworks,particularlywhereconnectionsareformed,andifandhowknowledgeissharedbetweentheseconnections.Theintervieweeswereaskedaboutlocationtounderstandthespatialrelationshipbetweenthenetworkandthefirmlocation.

iii. Whydofirmschoosetolocateinalocalindustrycluster?

QualitativeinterviewswithfirmsinwhichintervieweeswereaskedwhythefirmchosetolocatewithinSurryHillsorattheATP.Thiswassupportedbythestatedpreferencesurveywhichrequiredfirmstorankthetop10reasonsforlocatinginSurryHillsortheATPtoidentifykeyfactorsdrivingtodrivingfirmlocationandclustering.

iv. Whatroledoesplanningplayinpromotinglocalisedknowledgespillovers?

Analysisoftheurbanplanningcontextthroughahistoricaldocumentandpolicyreview(detailedinChapter3)providedanunderstandingoftheroleofplanninginthedevelopmentofthecluster.TheroleofplanninginpromotingknowledgespilloverswasexploredthroughacomparativeanalysisofSurryHillsandtheATPtounderstandwhetherthereisarelationshipbetweenplanningandknowledgespillovers.

Themethodsarediscussedinmoredetailbelow.

CONTEXT ANALYSISResearchingtheurbanplanningcontextprovidesanunderstandingoftheroleofplanningintheevolutionofeachcasestudyarea.Alongsidethereviewofhistoricaldocumentsandlocalandstategovernmentstrategicpolicies,detailedinChapter3,contextinterviewswerealsoundertaken.

CONTEXT INTERVIEWSInterviewswereconductedwitharangeofexpertsthatcouldprovidecontextforthetwocasestudiesincludinghistoricalcontextaswellasanunderstandingofhoweachofthecasestudiesfunctionsatpresent.

Intermsof Surry Hills(refertoTable4),interviewswiththeExecutiveManagerofStrategicPlanningandUrbanDesignandtheManagerofEconomicStrategy,bothfromtheCityofSydney,providedfurthercontexttotheroleofCityofSydneyfromalanduseplanningandeconomicdevelopmentperspective.

TwoprominentcommercialrealestateagentswhohavebeenbasedinSurryHillsforthepast15yearswereinterviewed.Theagentsprovidedcommentonhowtheareahasevolvedoverthisperiod,andprovidedanunderstandingofcurrentandpotentiallyfuturecommercialmarketdynamicsinSurryHillsandacrossSydneymorebroadly.

ThehistoricalvisionandevolutionoftheATPoverthepasttwodecadeswasinformedbyinterviewswithvariouspeopleresponsibleformanagingtheATP,bothpastandpresentincluding:

― TomForgan:thefounderoftheATP ― DrBillDunbar:aformerpublicservantwhowasinvolvedincoordinatingvariouseconomicdevelopmentprojectswithintheDepartmentofPremierandCabinetduringthelate1990sandearly2000sincludingtheATP

― DuncanRead:thecurrentGeneralManageroftheATPSL.

Theseinterviewsweresupplementedbytwootherinterviews(refertoTable5).HamishHawthorn,thecurrentCEOofATPInnovations(theincubatorwithintheATP),wasinterviewedtodevelopanunderstandingofitsrolewithintheATPandnetworkswithintheATP.BrentHarman,theGlobalHeadofRealEstate&ExperienceatAtlassianwasinterviewedtoprovidecontextaroundwhyAtlassianwasinterestedinpurchasingtheATP.

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INTERVIEWEE POSITIONORGANISATION

INSIGHTS REFERENCE

AndrewThomas ExecutiveManager,StrategicPlanning&UrbanDesignCityofSydney

AndrewhasbeenworkingattheCityofSydneysince2004.HeprovidedinsightintothehistoricalandcurrentapproachestostrategicandstatutoryplanninginSurryHillsandacrosstheCityofSydney.

Thomas2015

FrancescaO'Brien Manager-EconomicStrategyCityofSydney

FrancescaprovidedanoverviewofeconomicdevelopmentpoliciesandmechanismswhichtheCityofSydneyhasadoptedandhowthesecouldorwouldapplytoSurryHills.

O’Brien2015

DavidBrown RealEstateAgentDBProperty

DavidsetuphiscommercialrealestateagencyinSurryHillsin1998andprovidedanoverviewofthecommercialmarketinSurryHillsandhowithasevolvedoverthepast15years,aswellasfutureprospects.

Brown2015

MalcolmGunning RealEstateAgentGunningCommercial

MalcolmsetupanofficeofhiscommercialrealestateagencyinSurryHillsin2000andprovidedanoverviewofthecommercialmarketinSurryHillsandhowithasevolvedoverthepast15years,aswellasfutureprospects.MalcolmisalsotheheadoftheRealEstateInstituteofNSW.

Gunning2015

INTERVIEWEE POSITIONORGANISATION

INSIGHTS REFERENCE

REFERENCE

DuncanRead GeneralManager,AustralianTechnologyParkSydneyLimited

DuncanhasbeentheGeneralManageroftheATPSLfortwoyearsandprovidedinsightintothehistoryaswellascurrentplanningandmanagementoftheATP.

Read2015

BillDunbar ChiefExecutiveOfficerSGSEconomicsandPlanning

BillwasemployedwithintheInfrastructureCoordinationUnitoftheNSWDepartmentofPremierandCabinetduringthelate1990sandearly2000s.HeprovidedcommentaryonthedevelopmentoftheATPandgovernmentthinkingandprocessbehindit.

Dunbar2015

TomForgan TomForganwasthevisionarybehindtheATPandthereforewasabletodiscusshowtheideabegan,thedevelopmentprocessandgovernancearrangements.

Forgan2015

HamishHawthorn ChiefExecutiveOfficerATPInnovations

HamishhasbeentheCEOofATPInnovationsforthelast10yearsandprovidedanoverviewoftheroleofATPInnovationsasanincubatorandnetworkinteractionsbetweenworkerswithintheNationalInnovationCentreattheATP.

Hawthorn2015

BrentHarman GlobalHeadofRealEstate&ExperienceAtlassian

BrenthasbeenatAtlassianforthepasttwoyearsandisresponsiblefortherealestatestrategyandstaffexperience.HeprovidedanunderstandingofAtlassian’svisionfortheATPaswellasmorebroadlyhowAtlassiandecideswheretolocateitsoperationsinSydneyandglobally.

Harman2015

TABLE 4: Context interviews (Surry Hills)

TABLE 5: Context interviews (ATP)

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DATA ANALYSISTheanalysisoftheplanningcontextwassupportedbyanalysisofsecondarydatawhichtrackedhoweachofthecasestudyareashasevolvedoverthepasttwodecadesintermsofemploymentandconcentrationofthecreativeindustries.

DataanalysiswasconductedusingtheBTSJourneytoWork(JTW)datawhichisderivedfromCensusdataeveryfiveyears.TheBTSJTWdatasetincludesdataonemploymentbyindustryandoccupation,originofworktripsandmethodoftraveltowork.BTSJTWdatawasavailableforthepreviousfiveCensusyears(1991,1996,2001,2006and2011).

AnLQisaratiousedtodeterminetheconcentrationordominanceofaparticularindustrywithinageographicalarea.BillingsandJohnson(2012,p.642)suggeststhatscholarshaveadoptedarangeofmetricstoidentifythepresenceofclusters,howeveranLQremainsthemetricofchoice.Forthepurposeofthisstudy,thecalculationusedwas:

LQforcasestudyarea=

Proportionoftotalemploymentwithinthecasestudyarea

Proportionoftotalemploymentwithinthebenchmarkarea

Thespatialaggregatelevelusedcanimpactontheresults(Billings&Johnson,2012),andcareshouldbetakenintheinterpretationofresults.TheCityofSydneyLGAandGreaterSydneyMetropolitanArea(SydneyGMA)wereusedasbenchmarksfortheLQanalysis.WhileaNSWbenchmarkmayhavebeenmoreappropriate,thepurposeoftheanalysiswastounderstandthepresenceofclusterswithinthecasestudyareascomparedtoacrossSydney.

TheoverarchingfindingsofthedataanalysiswereprovidedinChapter3andthedetailedanalysisiscontainedinAppendixB.Detailonthedefinitionofgeographiesandindustries,includinghowthecreativeindustriesweredefined,arecontainedinAppendixC.

TRACING KNOWLEDGE SPILLOVERSQualitativeinterviewswereconductedtotraceknowledgespilloversandunderstandiftheydriveindustryclustering,

QUALITATIVE INTERVIEWS – FIRM PERSPECTIVEInterviewswereconductedwithChiefExecutiveOfficers(CEOs),Directors,FoundersorOwnersofbusinesseswithineachclusterwhowerealsoresponsibleforchoosingthelocationofthebusinessandcouldprovideinsightsintotheperspectiveofthebusiness.Thefirmswereselectedbasedonindustrytypetoensuretheyfitwithinthedefinitionofcreativeindustriesandwererepresentativeofthecluster.

FirmrepresentativesweregenerallycontactedwhereinformationontheCEO,Directors,FoundersorOwnerswasreadilyavailableonline.Eachfirmrepresentativewascontactedviaemail(whichincludedapersonalisedletteraddressedtotheinterviewee)andinvitedtoparticipate.Furtheremailsandphonecallswereusedtofollowupwhererequired.Insomeinstances,afirmwascontactedbecausetheyweresuggestedbyanotherfirmrepresentativewhowasinterviewed.

Initially,fivefirmswithineachcasestudyweretargeted.However,thesenumberswereincreasedtoboostthenumberofworkerinterviewsandensurethatawell-roundedperspectivewascaptured.InSurryHills11firmrepresentativeswereinterviewed(refertoTable6)andwithintheATPsevenfirmrepresentativeswereinterviewed(refertoTable7).Thefirmshavebeencategorisedbasedonhowtheintervieweedescribedthefunctionandoperationofthefirmandthesizeofthefirmintermsofnumberofemployees.Foursizecategorieshavebeenadopted:

― Start-up:wherethefirmidentifiesasbeinginthestart-upphase(generallywithoneortwoemployees).

― Small:lessthan20employees. ― Medium:20to50employees. ― Large:morethan50employees.

FIRM CATEGORISATION

SIZE JOB TITLE OF INTERVIEWEE

1 Software Start-up ProductandImplementationManager

2 Architectureandplanning

Large Director

3 Digitalagency Small ManagingDirector

4 Digitalagency Small ManagingDirectorand Founder

5 Architecture Medium ManagingDirector

6 Landscapearchitecture

Start-up Director

7 Architecture Large ManagingDirector

8 Planningandurbandesign

Small CEO

9 Architecture Large StudioDirector

10 Digitalagency Large Owner

11 PlanningandEconomics

Medium Principal

TABLE 6: Firms in Surry Hills

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FIRM CATEGORISATION

SIZE JOB TITLE OF INTERVIEWEE

1 Software Small CEO

2 Hardware Small Co-Founder

3 ICTresearchinstitution

Large ChiefOperatingOfficer

4 Lifesciences Start-up ManagingDirector

5 Lifesciences Small CEO

6 Designandmultimedia

Small ManagingDirector

7 Hardware Start-up Co-Founder

TABLE 7: Firms within the ATP

Throughoutthisthesis,theseintervieweesarereferredtoasthefirmrepresentatives.Theinterviewreferencesareintendedtoprovideenoughdetailontheroleofeachfirmrepresentativeandtypeoffirminordertoderiveanyconclusionsregardingthefirm,itssizeandknowledgespillovers.Thereferencescontainthefollowinginformation:

(position,firm(sizeoffirm),location,year)

Forexample:(ManagingDirector,architecturefirm(medium),SH,2015)

Note:SH=SurryHillsandATP=AustralianTechnologyPark

TheinterviewsfocusedonunderstandingwhythefirmhaschosentolocateinSurryHillsortheATP,aswellashowstaffarerecruited,theextentofthefirm’sprofessionalnetwork(includingclients,collaboratorsandsuppliers)andtheknowledgeofthefirmandhowthisisdevelopedandshared.Theintervieweeswerealsoaskedtheiropiniononknowledgespilloversfromtheirexperienceasaknowledgeworker.Theseweresemi-structuredinterviewsandthequestionsarecontainedinAppendixD.

InordertoestablishwhythefirmhaschosentolocateinSurryHillsortheATP,eachintervieweewasaskedanopenendedquestionandthenrequestedtofillinastatedpreferencessurvey(overleaf).Thesurveyrequiredthemtorank(from1to10)thetop10reasonsforlocatinginSurryHillsortheATP.Thismethodwasadoptedsothatanyreasonswhichwerenotlistedwithinthesurveywouldbeidentifiedupfronttoavoidtheintervieweesbeinginfluencedbythesurvey.

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Statedpreferencessurvey:reasonforlocatinginSurryHills/ATPPleaserankyourtop10reasonsforlocatinginSurryHills/ATPfrom1to10

LABOUR MARKET

1 Locationofexistingemployees

2 Hiringstaff/recruitment(attractinglabour)

FORMAL BUSINESS LINK

3 Existinglocalcustomers/clients

4 Accesstopotentialcustomers/clients

5 Potentialtocollaboratewithresearchinstitutions

6 Potentialtocollaboratewithotherfirms

7 Accesstolocalsuppliers/serviceproviders

KNOWLEDGE

8 Learningthroughpersonalnetworks

9 Events(conferences,workshops)whichareheldinSurryHills/ATP

LOCATION

10 CloseproximitytoCBD

11 TheSurryHills/ATP“brand”

12 Availabilityofcafes,restaurantsandbars

13 Accesstootherservices(e.g.postoffice,medicalcentres,banks)

14 Accesstoresidentialaccommodation

15 Conducivetostart-upbusinesses

PROPERTY MARKET

16 Availabilityofofficespace

17 Suitabilityofofficespaceavailable

18 Cheaperrentscomparedtootherlocations

19 Opportunitytoexpand/consolidate/contract

TRANSPORT AND INFRASTRUCTURE

20 Easyaccesstoworkbycar

21 Accesstoparking

22 Availabilityofpublictransport

23 Bicycleaccessorfacilities

OTHER

24

25

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ThestatedpreferencessurveywasdevelopedbasedonasimilarsurveyusedwithinastudyoftechnologyfirmsinNorthernSydney(Green&Hughes,2009),withanumberofthefactorsalteredorremovedastheywerenotapplicabletothisstudyorthefirmsbeinginterviewed.Newfactorswerealsoincludedbasedonoutcomesoftheliteraturereview.

Apilotofthestatedpreferencessurveywasundertakenbyfivecolleagueswhowererecentlyinvolvedintheprocessofreassessingthelocationofafirm.Followingfeedbackfromthepilot,afewminoralterationsweremadetothesurveypriortodistributiontointerviewees.

Locations within Surry HillsThelocationofeachofthefirmswhichparticipatedinthisstudyisillustratedinFigure28,includingdetailonthetypeoffirm,thesizeofthefirm,theyearinwhichthefirmmovedtoitscurrentlocationandtheyearinwhichthefirmmovedtoSurryHills(whichinsomecaseswasthesameyearthefirmmovedintoitscurrentlocation).Thisdoesnotconsidertheyearinwhichthefirmwasestablished,whichinmostcaseswasnotinSurryHills.

Theintervieweeswerespreadacrosstheprecinct,butsomewhatofanorthsouthdividecanbeseenwithaconcentrationofarchitecturefirmsinthenorth.Someofthefirmswerelocatedwithinthesamebuilding.Thesewereconvertedwarehousebuildingswhichweresubdividedintonumerouscreativesuitesforfirmsofvarioussizes.AnumberoffirmsrecentlymovedofficewithinSurryHillsandthefirmrepresentativeswereabletocommentonnotonlythedecisionmakingprocessinvolvedinmovingtoSurryHillsinitially,butalsothedecisionmakingprocessofrelocatingofficesandwhetheralternativelocationsexternaltotheSurryHillsprecinctwereconsidered.

FIGURE 28: Locations of firms within Surry Hills

Source: Author

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FIGURE 29: Locations of firms within the ATP

Source: Author

Locations within the ATPThefirmswhichparticipatedinthisstudywithintheATPwerelocatedwithinfourofthebuildingswithintheATP:theLocomotiveWorkshops,theInternationalBusinessCentre(IBC),theNationalInnovationCentre(NIC)andtheNICTAbuilding.Figure29similarlydetailsthetypesoffirms,thesizeofeachfirmandtheyearinwhichthefirmwasestablishedormovedtotheATP.MediaCitywasnottargetedasitisseensomewhatseparatetotherestoftheATP.Governmentdepartmentswereavoidedasthelocationchoiceoftheseagenciesisnotconsideredtoreflectamarketprocessbutrathertheavailabilityofgovernmentownedlandorfloorspace.NICTA,however,wasinterviewedasitisrepresentationofaresearchinstitutionandthereforehasthepotentialtohavestronglinkstothefirmswithintheATP.

TheNICbuildingcontainsATPInnovations,whichasdetailedinChapter3isanincubator.However,onefirmbasedintheNICbuildingisnotpartoftheprogram.ReferencestofirmswithinNICbuildingthroughoutthisthesisincludeallthreefirms,whereasreferencestofirmswhicharepartoftheATPInnovationsprogramonlyincludesthetwostart-upfirms.

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QUALITATIVE INTERVIEWS – WORKER PERSPECTIVEFollowingtheinterview,eachfirmrepresentativewasaskedtonominatethreeemployeeswhowouldbewillingtoparticipateinaninterview.Whilethemajorityoffirmrepresentativeswereabletodoso,insomecasesthefirmrepresentativedeclined,wereunabletofindstafforhadnoorfewemployees.Asmentionedabove,thenumberoffirminterviewswasincreasedtoboostthenumberofknowledgeworkerinterviewswherenoemployeeswereavailable.

Thefocusoftheseinterviewswastounderstand:

― howknowledgeisdevelopedandsharedwithinthecluster

― jobmovements(wheretheyworkedpreviously) ― howsocialinteractionisinitiatedandhowitevolvesintoaworkingrelationship

― exampleswheretheyhaveconsideredtohavereceived/developedeconomicallyvaluableknowledgewithsomeoneexternaltothefirm.

Again,theseweresemi-structuredinterviewsandthequestionsarecontainedinAppendixE.

Thetargetwas15interviewswithineachcasestudy.Thiswasbasedonwhatwasconsideredtobemanageableforthescaleofthisstudy,whilealsoprovidingenoughevidencetodrawconclusionsrelatingtoknowledgespilloversandfirmlocationwithinthecontextofthetwocasestudyareas.

InSurryHills,18workerswereinterviewedfromsevendifferentfirms(refertoTable8).

TABLE 8: Workers based in Surry Hills

FIRM CATEGORISATION SIZE JOB TITLE OF INTERVIEWEE1 Architectureandplanning Large SeniorUrbanDesigner

2 Architectureandplanning Large AssociateDirector(Planning)

3 Architectureandplanning Large Associate(InteriorDesign)

4 Digitalagency Small CreativeDirector

5 Digitalagency Small AccountDirector

6 Architecture Large TeamLeaderofInteriorDesign

7 Architecture Large GraduateArchitect

8 Architecture Large SeniorAssociate

9 Planningandurbandesign Small SeniorPlanner

10 Architecture Large Associate

11 Architecture Large StudioDirector

12 Architecture Large AssociateDirector

13 Digitalagency Large DesignDirector

14 Digitalagency Large GeneralManager

15 Digitalagency Large GroupBusinessDirector

16 Planningandeconomics Medium Consultant(GIS)

17 Planningandeconomics Medium SeniorConsultant(Planner)

18 Planningandeconomics Medium Associate(Economist)

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TABLE 9: Workers based within the ATP

FIRM CATEGORISATION SIZE JOB TITLE OF INTERVIEWEE1 Software Small BusinessArchitect

2 Software Small SeniorBusinessArchitect

3 Hardware Small EngineeringManager

4 Hardware Small ChiefOperatingOfficer

5 Hardware Small HeadofIT

6 ICTresearchinstitution Large ResearchEngineer

7 ICTresearchinstitution Large PrincipalUserExperienceDesigner

8 Designandmultimedia Small SeniorDigitalDesigner

Duetoalackoffirmsavailabletobeinterviewedandthesizeofthefirms,eightworkerinterviewswereconductedfortheATP.Despitethis,theseinterviewswereconsideredtoprovideawell-roundedperspectiveinconjunctionwiththeperspectiveofthefirm.Theseeightworkerswerefromfourdifferentfirms(refertoTable9).

Throughoutthisthesis,theseintervieweesarereferredtoascreativeworkers.Referencestotheinterviewsreflecttheformatofthefirminterviewsdetailedabove.ComparativeanalysisThetwocasestudieswerecomparedthroughacomparativeanalysisoftheresults.TheframeworkadoptedisbasedonthemechanismsofknowledgespilloversidentifiedbyHuber(2007):

― knowledgeflowsviamobilityofthelabourforce ― knowledgeflowsviaentrepreneurshipandspin-offs ― knowledgeflowsviarelationshipswithcustomersandsuppliers

― knowledgeflowsvianetworksofpersonalrelationships.

Thisframeworkdrewthefindingsfromeachcasestudytogetheranddevelopedanunderstandingofhowknowledgeflowsrelatetothegeographicalareaandiftheyweredrivingfirmlocation.Thediscussionwaslinkedbacktoliteratureandcurrentpolicydebatesrelatingtoknowledgespilloversandindustryclustering,particularlywithinthecontextofSydney.

4.6 Ethics approval

EthicsapprovalwasgrantedbytheUNSWBuiltEnvironmentHumanResearchEthicsAdvisoryPanelatitsmeetingon20May2015(approvalnumber155052).TherelevantapprovaldocumentsandprojectinformationstatementwhichwasdistributedtoresearchparticipantsarecontainedinAppendixF.

4.7 Conclusion

Themethodologicalapproachadoptedforthisthesisisprimarilyqualitative,withinterviewswithfirmsandworkersthemainsourceofempiricalevidence.Thisapproachisconsideredappropriateduetothelackofquantitativedataavailableandtheopportunitieswhichqualitativeinterviewsprovidedforanin-depthinquiryintoknowledgespillovers.ThetotalnumberofinterviewsconductedaspartofthisstudywasconsideredtobeadequateandprovidesarobustevidencebaseforthepurposeofanalysingmechanismsofknowledgespilloverswithinthecontextofSurryHillsandtheATP.

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Firm location, networks and knowledge sharing

The creative community that has organically developed in

Surry Hills does not necessarily foster knowledge exchange

but drives the motivation and innovation of creative workers.

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CHAPTER 5: FIRM LOCATION, NETWORKS AND KNOWLEDGE SHARING

5.1 Introduction

Thischapterisdividedintotwomainsections:Section5.2isfocusedonSurryHillsandSection5.3isfocusedontheATP.Aconsistentframeworkforanalysisisappliedtoeachcasestudycoveringfactorsdrivingfirmlocation,networksoffirmsandworkers,anunderstandingofknowledgeandprocessesofknowledgesharing.

AnalysisofthefactorsdrivingfirmstolocatewithinSurryHillsandtheATPisprovidedfromtheperspectiveofthefirmbasedoninterviewsconductedwithfirmrepresentativesandastatedpreferencesurvey.TheanalysisacknowledgesthatwhatisconsciouslydeterminedtohaveinfluencedfirmstolocateinSurryHillsortheATPmaynotreflectwhathashappenedinreality,highlightingtheimportanceoffurtherunderstandingnetworksandknowledgesharingprocesses.

Thenetworksoffirmsandworkersincludesclients,suppliers,otherprofessionalsandthelabourmarket.Thefocusoftheanalysisisthegeographicextentofthenetwork.Itisimportanttounderstandthegeographicdimensionofnetworksbecausenetworksareconsideredtofacilitateknowledgespilloversandtheextenttowhichtheseareconcentratedcouldhighlighttosomedegreewhetherknowledgespilloverscouldbeconsideredtobedrivingindustryclustering.

Inordertounderstandprocessesofknowledgesharing(andeventuallytraceknowledgespillovers)knowledgeisdefinedinthecontextofbothcasestudyareas.Thebroadunderstandingofwhatconstitutesknowledgeisdrawnoninthesubsequentanalysisofknowledgesharingprocesses,particularlykeythemeswhichweredrawnfromtheinterviewsincluding:

― internalknowledgesharing(withinthefirm) ― externalknowledgesharing(informalversusformal) ― knowledgesharingwithinsharedenvironments ― creativecommunity ― incentivestoshare,competitionandtrust ― theroleofgeography.

ComparisonsaredrawnbetweenthecasestudiesandquestionsraisedregardingthemaindriversoffirmlocationandtheroleofknowledgespilloverswhichwillbefurtherexploredinChapter6.

5.2 Surry Hills

ThissectionanalysesthefactorsdrivingfirmstolocateinSurryHills,basedontheresultsofthestatedpreferencesurveyandinterviews.Itdiscussesthegeographicextentofthenetworkofclients,suppliers,professionalsandlabour.Knowledgeisdefinedandarangeofthemesrelatingtoknowledgesharingdiscussedbasedonthequalitativeinterviewsconductedaspartofthisstudy.

FACTORS DRIVING FIRMS TO LOCATE IN SURRY HILLSThestatedpreferencesurveyidentifiedtwokeyreasonsdrivingfirmstolocateinSurryHills(refertoTable11).ProximitytotheCBDwasconsideredtobethetopreasonforlocatingwithinSurryHillsduetotheproximitytoclients,withthemajorityoffirmsidentifyingthatkeyclientsaregenerallylocatedintheCBDandthereforeaccessibilitytotheCBDisimportantforproductivityandefficiency.Thesuitabilityofofficespaceavailablewasthesecondreason.Thisreflectedthedesiresofcreativefirmstobelocatedinconvertedwarehousespacesthatcanbecustomisedtosuitthefirmratherthanmorecorporateofficetowerswhichwerenotconsidereddesirableorappropriate.ThesetworeasonsreflectelementsoftheSurryHillscommercialpropertymarket(furtherdiscussedbelow).

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RANK REASON SCORE1 CloseproximitytoCBD 82

2 Suitabilityofofficespaceavailable 70

3 Availabilityofcafes,restaurantsandbars 53

4 TheSurryHills/ATP“brand” 47

5 Availabilityofpublictransport 45

6 Hiringstaff/recruitment(attractinglabour) 41

7 Availabilityofofficespace 38

8 Cheaperrentscomparedtootherlocations 33

9 Accesstopotentialcustomers/clients 29

10 Locationofexistingemployees 26

11 Potentialtocollaboratewithotherfirms 24

12 Conducivetostart-upbusinesses 22

13 Existinglocalcustomers/clients 22

14 Opportunitytoexpand/consolidate/contract 21

15 Easyaccesstoworkbycar 12

16 Accesstoresidentialaccommodation 11

17 Bicycleaccessorfacilities 10

18 Learningthroughpersonalnetworks 7

19 Events(conferences,workshops)whichareheldinSurryHills/ATP 4

20 Potentialtocollaboratewithresearchinstitutions 3

21 Accesstolocalsuppliers/serviceproviders 2

22 Accesstootherservices(e.g.postoffice,medicalcentres,banks) 2

23 Accesstoparking 1

TABLE 10: Reasons for locating in Surry Hills PROPERTY MARKETAsmentionedabove,proximitytotheCBDwasthetopreasonforlocatinginSurryHillsamongthefirmsinterviewedaspartofthisstudy.AlongsideproximitytotheCBD,otherelementsconsideredimportantincludedamenitiessuchastheavailabilityofcafes,restaurantsandbars.Accessibilitymoregenerally,particularlytheavailabilityofpublictransport,rankedhighlybecauseitisnotonlyeasyforworkerstocommutetoSurryHillsbutalsoeasilytraveltomeetingswithclientsintheCBDandalsoacrossSydney(Associate,planningandeconomicsfirm(medium),SH,2015).

Theavailabilityofsuitableofficespacewasamajorconsiderationbecausecreativefirms,particularlyarchitecturefirms,arelookingforofficespacewhichisopenandcanbetailoredtofittheirstyle.Alargearchitecturefirm,whichhadrecentlymovedtoSurryHills,hadoutgrownitspreviousofficeinnearbyDarlinghurstandwaslookingforalargeroffice.Thebuildingspecificallywasdrivingthelocationofthefirm:

“Ithinkit’smorethatthisbuildingchoseus,ratherthanwechoseSurryHillsbutwewerelookingforintermsofalocation,SurryHillsmet”.

(StudioDirector,architecturefirm(large),SH,2015)

Thegeneralavailabilityofservicedco-workingspaceswithinSurryHillscomparedtootherlocationswasasignificantdriverforoneparticularfirmtolocateinSurryHills.TheplanningandurbandesignfirmrepresentativenotedthatthemajorityofthesebuildingswerelocatedinSurryHills,andthereforethefirmendedupinSurryHillsasaresultofthelocationofsupplywithinthemarket.

LABOUR MARKETTherearetwomainconsiderationsforfirmsinrelationtothelabourmarketandlocation.Firstly,existingemployeesandwhethertheyareabletoeasilyaccessitfromtheirplaceofresidence.Secondly,theabilitytoattractlabourandwhetherbeinglocatedinSurryHillsimprovesorreducesthisability.

ThelocationofexistingemployeeswasrankedtenthasareasonforlocatinginSurryHills(refertoTable11).Whileitwasnotthetopconsiderationforfirms,somefirmsdidtakeitintoconsideration.OnefirmrepresentativehighlightedthatagoodproportionofstafflivedwithinafivekilometreradiusofSurryHills,andtherewasasignificantbiastofindinganofficewithintheinnercity.AfirmthatrecentlymovedofficeswithinSurryHillshadconsideredotherlocations.Someoftheconcernsinrelationtootherlocationsincludedalackofamenitiesforstaffandafearthatstaffwouldresignordislikeworkinginthatparticularlocation.Thisdoesnotnecessarilyrelatetothelocationofexistingemployeesandtheirabilitytotraveltowork,butdoestaketheperspectiveoftheworkerintoaccount.However,thisdidnotseemtobeamajorconsiderationforoneparticularfirm,withafirmrepresentativenotingthat:

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“Noneofuswanttoworkinthecity,ourstaffdon’twanttoworkinthecity.SurryHillsisverycentralforallourstaffandtheyseemreallyhappyherebutthat’snotwhy(thefirm)movedhere”.

(ManagingDirector,architecturefirm(medium),SH,2015)

Otherfirmrepresentativesacknowledgedthatproximitytotheplaceofresidenceofdirectorsremainsanimportantconsiderationinconsideringmovinginthefutureastheyallliveclosetotheofficeandvaluetheabilitytowalktowork(Director,architectureandplanningfirm(large),SH,2015).ThisechoesthefindingswithinastudyofindustryclusteringinSydneybySearle(2010).

Theabilitytoattractlabourwasamajorconsiderationforastart-uplandscapearchitecturefirmwhichwasabletohireitsfirststaffmemberwithinsixweeksofmovingtoSurryHills.Whiletheabilitytoattractlabourrankedrelativelywellinthestatedpreferencesurvey(higherthanlocationofexistingemployees),therewaslimiteddiscussionofthisbyfirmswhenaskedtheopen-endedquestionofwhythefirmchosetolocateinSurryHillspriortobeingpresentedwiththestatedpreferencesurvey.LocationalandpropertymarketaspectsofSurryHillsandthebrand(discussedbelow)weremuchgreaterconsiderationsforfirmsasemphasisedbythesurveyresults.

SURRY HILLS BRANDThenotionofaSurryHillsbrandwasincludedwithinthestatedpreferencesurveyandwhiledetailofwhatthisbrandmightentailwasnotprovidedtointerviewees,agenerallyconsistentappreciationandunderstandingofthebrandwasdescribedbythemajorityofthefirmrepresentativeswhowereinterviewed.SurryHillsisconsideredtoreflectacoolvibewhichis“Creative,driven,open-minded”(ProductandImplementationManager,softwarefirm(start-up),SH,2015).Itisavibethatfirmswanttoeitherbeassociatedwithorbeapartof.

Mostsignificantly,thearchitecturefirmrepresentativesbelievedthatbeinglocatedinSurryHillssendsamessagetoclientsthattheirarchitecturefirmtakesdesignseriously.ThisisconsideredtobereflectedwithinthequalityofthebuiltenvironmentwithinSurryHillsaswellastheinternalfitoutofafirm’sofficespace.Thiswasemphasisedbythefirmrepresentativefromoneparticulararchitecturefirm:

“WealsochosetolocateinSurryHillsbecause…It’sareallygoodurbanenvironmentandIthinkthat’simportantforArchitects,notjusttoprojectthemselvesasbeingwelllocated,butsoyoufeelhappywhenyouwalkoutthedoor”.

(ManagingDirector,architecturefirm(medium),SH,2015)

Thequalityoftheurbanenvironmentisimportantfromforcreativeinspiration.Forothercreativefirms,thebrandofSurryHillsisalsoimportantforclients.AfirmrepresentativefromonedigitalagencyhighlightedtheexpectationthatdigitalagencieswillbelocatedinSurryHills(ManagingDirector,digitalagency(small),SH,2015).

Forastart-uplandscapearchitecturefirmamajordriverwastohavetheSurryHillsbrandonbusinesscardsandletterheadsbecauseitsuggeststhatthefirmisprofessionalandseriousaboutitswork(Director,landscapearchitecturefirm(start-up),SH,2015).ThefirmwasalsoconsciouslymakingthemovetoSurryHillstoridthepotentialstigmaofbeingtooeasygoingwhichwasassociatedwithbeinglocatedinNorthManly.

WhilebeinglocatedwithinSurryHillsmaybeexpectedfromarchitecturefirmsanddigitalagencies,itcanalsobeapointofdifferentiationforsomefirmssuchasaplanningandeconomicsfirmwhosedirectcompetitorsarealllocatedwithintheCBD(Principal,planningandeconomicsfirm(medium),SH,2015).

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FORMAL BUSINESS LINKSFactorswhichwerecategorisedasformalbusinesslinksrankedrelativelylowincludinglearningthroughpersonalnetworks,potentialtocollaborateandaccesstolocalsuppliers.AlthoughthesefactorsmaynotbedrivingfirmstolocateinSurryHills,firmrepresentativeshighlightedthatmovingfurtherfromtheCBDisperceivedtopotentiallyhaveasignificantimpact,withsomesuggestingthattheywouldnotconsiderlocatingalongthenorthshoreincentressuchasNorthSydney,StLeonardsorChatswood:

“IsupposeovertimepersonalnetworkshavebecomeimportantbutIwouldsaythatit’sprobablynotasimportantindrivingourofficechoice.Havingsaidthat,wewouldn’tmovetoChatswood”.

(Director,architectureandplanningfirm(large),SH,2015)

OnefirmrepresentativenotedthattheirfirmmovedfromtheATPtoSurryHillsin2007duetothebrandofSurryHillsandthetypeofofficespaceavailable,buttherewasalsoanassumptionthattherewouldbemoreopportunitiestobumpintosomeonefromasimilartypeoffirmintheATP(Principal,planningandeconomicsfirm(medium),SH,2015).Asacknowledgedbytheinterviewee,thisdoesnotnecessarilymeantherehavebeenalotofopportunitiestocollaborate.

TIMING AND FIRM SIZEThereasonsthatdrivefirmstolocateinSurryHillsdifferedbasedonwhenthedecisionwasmadeaswellasthesizeofthefirm.FirmrepresentativesfromfirmsthatmovedtoSurryHillspriorto2008highlightedthatrentsweremuchcheaperinSurryHillscomparedtootherlocationsandthatwasasignificantconsideration.Asmentionedpreviously,anumberofthesefirmshavemovedlocationswithinSurryHillsoverthepastfewyearsandintheprocessre-evaluatedwhetherSurryHillsremainedadesirablelocationforthefirm,despitetheincreasingrents.ThesefirmrepresentativesgenerallybelievedthatthereareanumberofbenefitsassociatedwithremaininginSurryHills,particularlythebrandthathasdevelopedandtheamenityonoffer,andarewillingtopaythehighrentstoremaininSurryHills.

ArchitecturefirmshavegenerallybeenlocatedinSurryHillsforthelongestperiodoftime.TheexceptionwasalargearchitecturefirmwhichrecentlymovedtoSurryHillsfromDarlinghurst.AllthearchitecturefirmrepresentativesinterviewedhighlightedthattherewasnotonlyasignificantclientbaseintheCBD,buttherewasalsoasignificantclientbaseintheeasternsuburbsofSydney,particularlyforresidentialdevelopment.ThisappearstohavebeenanhistoricaldriverforarchitecturefirmstolocateinSurryHillsbecauseproximitytotheeasternsuburbswasconsideredimportant.

ThefirmsthathavelocatedinSurryHillsforalongerperiodarelargerthanthenewerfirmsandhavecontinuedtogrowsincemovingtoSurryHills,suggestingthatthesefirmsmaynowhavegreatercapacitytopaythehighrents.Ontheotherhand,firmswhichhaverecentlylocatedinSurryHillsaregenerallyinpursuitofthebrandwhichhasbeenestablishedandopportunitiesthisbrandrepresentsforthebusiness,includingopportunitiestocollaborate,attractlabourandclientsandtheamenitythathasevolved.

NETWORKS OF FIRMS AND WORKERS LOCATED IN SURRY HILLS AnunderstandingofthespatialelementsofthenetworksforcreativeindustriesisdrawnfromfirmrepresentativesandcreativeworkersinterviewedinSurryHillsandincludesthenetworkofclients,networkofsuppliers,generalprofessionalnetworkandthelabourmarket.ThediscussionraisesquestionsastothespatialextentofthenetworkinrelationtoSurryHills.

CLIENTSAsmentionedpreviously,thefirmrepresentativesidentifiedthatclientsweregenerallylocatedwithintheCBD.ThisislikelyduetothesignificantconcentrationoffirmsgenerallywithintheCBD,particularlylargecorporationsordevelopersandNSWGovernmentagenciesservedbythecreativeindustries.AnumberoffirmshaveclientslocatedacrossSydney,Australiaandinternationally.ItwasveryrareforafirmtohaveaclientbasedinSurryHillsandwheretheclientwasbasedinSurryHillsiswasnotconsideredtobeasignificantorongoingclient:

“It’sprettyrarethatwehaveclientsorthataroundhere.”

(Associate(InteriorDesign),architectureandplanningfirm(large),SH,2015)

Basedontheinterviewsconductedaspartofthisstudy,forthecreativefirmsbasedinSurryHills,thespatialextentoftheclientnetworkexpandsbeyondSurryHills.

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SUPPLIERSInrelationtosuppliers,threekeytrendswereobservedthroughtheinterviews.Firstly,anumberoffirmshavesupplierslocatedwithinSurryHills,andwherethesuppliersfallwithinthecreativeindustries,itismorelikelythattheywillbelocatedinSurryHills.Akeyexampleofthisisthecomparisonbetweenlandscapearchitecturefirmsandengineeringfirmswhicharebothsupplierstoarchitects.ThereareanumberofarchitecturefirmswhoengagelandscapearchitecturefirmswhicharebasedinSurryHills,althoughthisisnotthecasewithengineeringfirmsastheywerereportedbyintervieweestogenerallybeconcentratedwithinNorthSydneyorStLeonards.

Secondly,thereisasignificantconcentrationofinteriorsuppliersincludingfabric,furniture,lightingandleathersupplierswhichcouldbeconsideredtobespecialisedserviceprovidersforinteriordesignfirms(abenefitassociatedwithlocalisationeconomies).TwoInteriorDesignerswereinterviewedandbothhighlightedthatthepresenceofsupplierswasconvenientastheywereabletoeasilytotaketheirclientstotheshowrooms(Associate(InteriorDesign),architectureandplanningfirm(large),SH,2015).However,sincethesesupplierswerenotinterviewedaspartofthisstudyitisnotclearwhatisdrivingthesesupplierstolocatewithinSurryHills.ItislikelythattheirpresenceinSurryHillsisduetotheragtradeandfurnituremanufacturingwhichonceflourishedinSurryHills.Assuch,thesesupplyindustriesmaywellrepresentareasonwhysomeofthenewercreativeindustrieslocatedinSurryHillsinmorerecentyears.

Finally,firmrepresentativesoftennotedthatsupplierswerenotselectedbasedonlocation.FirmrepresentativesoftenstatedthattheyengagedsuppliersinSurryHillsjustbecausethatisjustwheretheyhappentobe(Owner,digitalagency(large),SH,2015).WhileitwasconvenienttoengagesuppliersbasedinSurryHills,anestablishedrelationshipandexperienceworkingtogetheronprojectswerekeydeterminingfactorsforengagingsuppliersorcollaboratorsratherthangeographicalproximity:

“Wewon’tcollaboratejustbasedongeography.We’llcollaboratewithwhoisbestforthejobandiftheyhappentobelocatedatEnfield²thensobeit”.

(AssociateDirector(Planning),architectureandplanningfirm(large),SH,2015)

ThispointwassimilarlyreiteratedbyfirmrepresentativeswhodidnotusesuppliersbasedinSurryHillsandstatedthatengagingsuppliersorcollaboratingwithfirmswhowerenotbasedinSurryHillswasnotanissuebecause:

“Youpickthefirm,youdon’tpickthelocation.”

(ManagingDirector,architecturefirm(medium),SH,2015)

Whileitisnotclearwhethersuppliersareco-locatinginSurryHillsinresponsetotheconcentrationofcreativeindustries,therelationshipsdonotappeartobeformedfrombeingbasedinSurryHills.ItisconvenienttoengagewithsuppliersbasedinSurryHills,howeveritisnotaconsistentthemeacrossallfirmsandprojectexperiencewasseenasmorevaluable.

PROFESSIONAL NETWORKTheprofessionalnetworkoffirmsandworkersincludesclientsandsuppliers,discussedabove,aswellasprofessionalassociations,ex-colleaguesandpeoplewhoattendedthesameuniversity.Basedontheinterviews,itwasapparentthattheprofessionalnetworkoffirmsandcreativeworkerswasnotconfinedtoSurryHills.

Thenetworkwasnotgeographicallycontained,butratherindustrybased.IntervieweesoftenstatedthattheindustrywhichtheyworkwithinwassmallinSydney,notnecessarilyphysicallyorspatiallybutratherintermsofinterconnectedness.

TheprofessionalassociationsorbodiesthatfirmsorworkerswereassociatedwithwerecommonlybasedintheCBDorinthecaseoftheAustralianInstituteofArchitectsinPottsPoint.AsaresultformaleventsareoftenheldintheCBDorPottsPoint.

Connectionsareoftendevelopedfrompreviousworkplaces.Ex-colleagueswereseenasasignificantpartoftheprofessionalnetworkofthemajorityofinterviewees.However,ex-colleagueswerenotnecessarilyconcentratedinSurryHills.Thisisfurtherdiscussedbelowinrelationtothelabourmarket.

²AsuburblocatedinsuburbanSydney

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TheintervieweeswereaskedtoindicatetheproportionoftheirprofessionalnetworkwhichisbasedinSurryHills.Majorityofintervieweesstated30percentorless,withanumberofpeopleindicatingfivepercentorless.Wheretheinterviewee’sprofessionalnetworkwasgenerallyrestrictedtothefirminwhichtheyareemployed,thiswasoftenbecausetheywereinamorejuniorpositionandmostlikelyhadlimitedexposuretotheindustrycomparedtoothermoreseniorcolleagues.MajorityofintervieweesindicatedthattheirprofessionalnetworkwasspreadacrossSydneyandevenAustralia.WhiletheprofessionalnetworkisnotlimitedtoSurryHills,thisdoesnotdiscountthevalueoflocalrelationshipswhichwasnotmeasuredaspartofthisresearch.

LABOUR MARKETItwasimportanttounderstandwhetherlabourflowsbetweenfirmswithinSurryHillsasthiscouldbeapotentialmechanismofknowledgespillover.Basedontheinterviews,thelabourmarketwasindustrybasedratherthangeographicallycontainedandthereforelabourwasobservedtoflowbetweenfirmswithinthesameindustrywhichisnotnecessarilyconfinedtoSurryHills.

Allworkerswhowereinterviewedwereaskedwheretheyworkedpreviously(typeoffirmandlocation).OnlyoneworkerwhowasinterviewedhadpreviouslyworkedinanotherfirmbasedinSurryHills.However,therewasnosignificantlinkbetweenthesetwofirmsandtheywererecruitedtoworkfortheircurrentemployerthroughanex-colleaguefromapreviousemployerbasedinWoolloomooloo³.AlltheotherintervieweeswerepreviouslyemployedinanumberofdifferentlocationsincludingtheCBD,Pyrmont/Ultimo,Darlinghurst,NorthSydneyandinotherAustraliancitiesoroverseas.Basedontheworkersinterviewedaspartofthisstudy,thereislimitedevidenceofatightlyconnectedlabourmarketwithinSurryHills.

WorkersgenerallyseemtoflowthroughfirmswithinthespecificindustryinwhichtheyareemployedandthisnetworkcanbespreadacrossSydney,althoughitisgenerallyfocusedaroundtheinnercitywhichislikelyassociatedwiththeconcentrationoffirmsinthisarea.

Relatedly,themajorityofcreativeworkersinterviewedcitedthatlocationwasnotamajorfactorinthedecisiontoworkfortheircurrentemployer.Insayingthat,anumberofworkershighlightedthattheywouldnotworkinNorthSydney:

“IfIlookatplacesIwouldwork,Iwasn’tgoingtogotoplaceslikeNorthSydney,asfarawayasthatfromtheCity…Ireallydidn’twanttogoanyfurtherthanSurryHillsintermsofdistancefromtheCity.”

(StudioDirector,architecturefirm(large),SurryHills2015)

Thiswasgenerallybecauseitisimportantfortheirjobtobelocatedclosetowheretheylive.Whensomeintervieweeswereaskedfurtherquestionsaboutwhatdecisioncamefirst,placeofresidenceorwork,intervieweesoftenstatedthattheywouldnotmovehouseduetoworklocationbutwouldchoosetheirplaceofworkbasedonaccessfromhome.Someintervieweesmadethedecisionsomewhatsimultaneously.

Anotherconsiderationisspin-offfirms.ItwassuggestedthatprofessionalswholefttheirpreviousfirmtostartuptheirownbusinessesgenerallychosetostartthenewbusinessathomeratherthaninanofficeinSurryHills.Therefore,thereisalackofevidencethatthisisoccurring.

Mostofthefirmrepresentativesbelievedthattheyhadlowstaffturnoverorthatitwasnotsignificantlyhighfortheirindustry.Themajoritysaidstaffwererecruitedtoexpandthebusinessfirstandforemost,aswellasreplacestaff.Anumberoffirmrepresentativesidentifiedthefirmasbeinginthegrowthstage.Firmsthathaverecentlymovedofficegenerallyindicatedthatthiswasduetooutgrowingthepreviousofficespace,alsoindicatinggrowth.

Theamountoftimeinwhichtheworkershadbeenemployedattheircurrentfirmvariedfromlessthanayearupto15yearswiththemajorityofpeoplewithinthreetofiveyears.Whileitislikelythatentry-levelprofessionalswillmovejobsmoreregularlythanmoreseniorstaff,anumberofyoungprofessionalswereinterviewedwhohadbeenemployedintheircurrentfirmforthreeormoreyears.

LabourisalsoflowingintoandoutSurryHillsascreativeworkersmovejobsandfirmsmovelocation.CreativeworkersarenotnecessarilymovingbetweenfirmswithinSurryHillsbutratheracrosstheindustryandacrosstheinnercityofSydney.

SPATIAL NETWORKThediscussionaboveinrelationtonetworkshighlightsthat,basedontheinterviewsconductedaspartofthisstudy,thereislimitedevidenceofanyspecificspatialconnectivitywithinSurryHills.Socialproximityappearstobeofgreaterimportanceratherthangeographicproximityatthisscale.

SurryHillsisconvenientintermsofaccesstotheCBD,andtootherlocationswhereclientsandsuppliersarelocated.ThereislimitedevidenceofthelabourmarkethavingstrongtiestoSurryHillswithcreativeworkersstatingthattheirpreviousplacesofemploymentwerelocatedoutsideSurryHills.Connectionswithinthenetworkaregenerallybasedonpreviousprojects,clientsorplacesofworkratherthanSurryHillsasalocation.

Socialproximityseemstoplayagreaterroleindevelopingandretainingrelationshipsratherthangeographicproximity.ThereseemstobearoleforSurryHillsinnurturingrelationships,becauseitiseasytomeetupwithconnectionslocally.Nevertheless,someintervieweeshighlightedthattheydidnotknowthatsomeoftheirconnectionswerebasedinSurryHillsuntiltheybumpedintothem:

³AsuburbtotheimmediateeastoftheSydneyCBD

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FIGURE 30: Location of creative industries across Sydney (1 dot = 100 jobs)

Source: Author

“It’sreallyamusinghowyoudon’tknowthatthey’reactuallyworkingaroundhereandyourealisethatthey’reactuallyworkinghere…It’sconvenientthatthey’resoclose.”

(Consultant(GIS),planningandeconomicsfirm(medium),SH,2015)

ThiscouldbeduetothefactthatwhilethereisaconcentrationofcreativeindustriesinSurryHills,thecreativeindustriesarespreadacrossSydney.Althoughthereareafewkeylocationsinwhichthecreativeindustriesarelocated(particularlywithintheinnercitywherethereisageneralconcentrationofemployment),thereisnosingleprecinctwithinSydneyinwhichtheseindustriescluster(refertoFigure30).

Anemergingtrendwithinthisanalysisofthenetworkisastronginterconnectedinner-cityemploymentareawhichcomprisesasignificantproportionoftheGlobalEconomicCorridor.Withinthisareathereisastrongnetworkofsuppliers,clients,professionalsandpotentialfutureandpastemployeesforthecreativefirmslocatedinSurryHills.Thisinner-cityemploymentclusterwouldnotbeconsideredanindustryclusterassuch,duetothediversityofemploymentuses,butratherwouldbeconsideredtoemulatetheconceptofurbanisationeconomies.ThisprovidesfurtherevidenceofstrongurbanisationeconomieswithinSydney,moresothanlocalisationeconomies,asidentifiedbySearle(2010).

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KNOWLEDGE OF FIRMS AND WORKERS LOCATED IN SURRY HILLS Theintervieweeswereaskedwhattheyconsideredasknowledgewhichiseconomicallyvaluabletotheirfirmorthemselvesasworkers–thatis,theknowledgetheyrequireforthepurposeoftheirjobortheknowledgetheyproduceaspartoftheirjob.Themajorityofintervieweesfounditverydifficulttoexplainordescribethisknowledge.Therewereanumberofkeythemesthatwereobservedacrosstheinterviews:

― Theknowledgewhichisconsideredimportantisoftenknowledgeonprocesses and management,forexampletheabilitytomanageteams,workwithotherpeople,manageprojectsandunderstandwhattheclientwants.

― Theknowledgethefirmproducescanoftenbedescribedasthefirm’smarket niche.Forexample,oneparticulararchitecturefirmhasenteredanicheareaoftheadaptivereuseofbuildings,withspecificknowledgeandexperienceinthisarea.Fortheplanningandeconomicsfirm,itsmarketnicheisunderstandingthespatialimplicationsofeconomicissuesandtrends.

― The culture of the organisationisoftenconsideredpartoftheknowledgeofthefirm

― Theknowledgeofthecreativeindustriesisnot easily traceablewhichwashighlightedbyoneparticularintervieweewhostated:

“It’snotasifwedevelopIPthatwethengosell.”

(ManagingDirector,digitalagency(small),SH,2015)

Basedontheinterviews,theknowledgethatwouldbeconsideredvaluableinrelationtoknowledgesharingandknowledgespilloverscouldbemuchbroaderthanwhatmightbeconsideredinnovativeandseemstorelatemoretoknowledgeofbusinessprocessessuchashowtoworkwithparticularclients,businessdevelopmentandmanagingstaff.Huber(2012)questionedwhetherclustersaremoreimportantforseniormanagersforsourcingbusiness

knowledgeratherthandevelopers/researchersintermsoftechnicalknowledgeandthisobservationsomewhatreflectsthis.Inthiscontext,theknowledgeofthecreativeindustrieswouldnotbeconsideredeasilytraceablethroughmethodsadoptedwithintheliteraturesuchastracingpatentcitationswhichhasbeenadoptedinanumberofstudiesincludingJaffeetal.(1993)andSonnandStorper(2008).

KNOWLEDGE SHARING BETWEEN FIRMS AND WORKERS LOCATED IN SURRY HILLS TheinterviewsrevealedsixkeythemesinrelationtoknowledgesharinginSurryHills:

― Internal knowledge sharing: learningwithinthefirmasthesourceofinnovation.

― External knowledge sharing (informal versus formal): focusonformalmechanismssuchascollaborationonprojectsandthroughprofessionalevents.

― Knowledge sharing within shared environments: the roleofco-workingenvironmentsanditspresenceinSurryHills.

― Creative community:thecollectivecreativecommunityasasourceofcreativeinspirationormotivation.

― Incentives to share, competition and trust: whether thereareanyincentives,ortrustandtheissuewithcompetition.

― Role of Surry Hills:istheclusterimportantinallofthis?

Thesesixthemesarefurtherdiscussedbelow.

INTERNAL KNOWLEDGE SHARINGInternalknowledgesharingwasoftenseenasmorevaluablethanexternalsourcesofknowledgeforcreativeworkersbasedinSurryHills.Anumberofintervieweesindicatedthatthemajorityoftheirlearningtakesplacewithinthefirm.Internalknowledgesharingmechanismsarebothformalandinformal,andincluderegularinternalteammeetings,trainingsessionsandseminarsaswellasmoresocialmechanismssuchasafterworkdrinks.However,

projectsorproject-specificinteractions,aswellasinternalresearchanddevelopment,werealsoseenasvaluablesourcesofknowledgeandinnovationwithinthefirm.Thiswashighlightedbyonecreativeworkerwhocomparedthevalueofinternalknowledgesharingasopposedtoexternalknowledgesharing:

“Asageneralcomment,Ithinktheknowledgeyoulearnatworkandasaprofessionalismostlyfrompeoplewithinyourwork,totheextentthatitismostlyfromyourownresearchandnotspeakingtootherpeopleoutsideyourwork.”

(SeniorConsultant(Planner),planningandeconomicsfirm(medium),SH,2015)

Oftenthesourceofinnovationandknowledgewastheidentificationofaproblemorsomethingneedingtobefixed.Inthiscase,innovationwasmorelikelytooccurinternallycomparedtoaccessingknowledgeonhowotherpeopledothings(ManagingDirector,digitalagency(small),SH,2015).Thispointwassimilarlysupportedbyanotherintervieweewhobelievedthatteamsworkingtogetherforlongperiodsoftimearethetruegeneratorsofknowledge(ManagingDirectorandFounder,digitalagency(small),SH,2015).Thisreinforcesthevalueofinternalresearchanddevelopmentassourceofknowledgedevelopmentandinnovation.

Largerfirmsthatcontainedseveraldivisionsorserviceareasnotedthatcollaborationoccurredinternallybetweendifferentteams,moresothanwithexternalfirms.Anexampleofthiswasanarchitecturefirmthatalsocontainedurbanplanning,interiordesignandurbandesigndivisionswhichcollaboratetogetherregularly(Director,architectureandplanningfirm(large),SH,2015).Whilesmallfirmsdidnotnecessarilyhavethevarietyofskillsandexpertisetodrawonin-house,theystillimplementedinternalmechanismsforknowledgesharingsimilartothoseofthemuchlargerfirms.

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EXTERNAL KNOWLEDGE SHARING (INFORMAL VERSUS FORMAL)Intermsofexternalknowledgesharing,informalinteractionswererarelycitedwithintheinterviews.OnefirmrepresentativehighlightedthattheyhadexpectedtheretobemoreinformalinteractionsoccurringinSurryHills:

“It’sfunnyisn’tit?Whenwewerethinkingaboutmoving,Ithinkwehada,Ikindofthoughttherewouldbemoreaccidentalpartnershipandsharingofviewsandsharingideasanditdoesn’treallyhappenthatmuchatall.”

(Principal,planningandeconomicsfirm(medium),SH,2015)

Thelackofinformalinteractionshighlightstheimportanceofmoreformalinteractionsbetweenfirmsasasourceofknowledgeexchange.Formalinteractionsbetweenfirmsincludecollaborationonprojects;engagingsuppliersandspecialisedserviceproviders;structuredmeetingswithclientsorpotentialclients;andindustryevents.Collaborationandoutsourcingworktosupplierswereseenasmechanismsofknowledgesharingforcreativefirms,aswellasthecollaboratorsandsuppliers.ThisisnotconfinedtoSurryHillswithfirmsoftenengagingsuppliersacrossSydney.

Despitethedesireamongsomeoftheintervieweestobeabletoaccessmoreinformalprocessesforsharingknowledge,therewasageneralagreementthatformalmechanismsaremoreeffective.TheDirectorofastart-uplandscapearchitecturefirmsaidhehadtomakeaconcertedefforttocatchupwithcontactsinotherfirmsandithastobeorganised.Anotherintervieweesuggestedthatthereshouldbeorganisedopportunitiesforknowledgesharingbetweenfirms(ManagingDirector,digitalagency(small),SH,2015).Thishighlightsthatformalisingknowledgesharingwasconsideredtobemoreeffective.

Formalprofessionaleventssuchasconferences,seminarsandnetworkingeventswereoftenseenasvaluableforlearningandknowledgesharing.However,asmentionedpreviously,theseeventswereoftenheldoutsideSurryHillsandoftenwithinthenearbyCBD.

Oneintervieweehighlightedthatforhim,knowledgesharingwasnotphilanthropic,itistheserviceheisproviding(AssociateDirector(Planning),architectureandplanningfirm(large),SH,2015).Whetherornothereceivesdirectfinancialcompensationimmediately,heultimatelyreceivescompensationwhenheisengagedtoundertakeworkbythosecontactsinthefuture.Strictlyspeaking,thisprocesswouldnotbeconsideredaknowledgespilloverassuchbecausethereisessentiallycompensationprovidedtotheknowledgesource.

Importantly,formalmechanismsofknowledgesharingdonotnecessarilyrequirethefirmstobelocatedwithinSurryHills(sincetheinteractionsareorganisedasopposedtobeingserendipitous).ThisquestionstheroleofknowledgespilloversindrivingfirmlocationwhichwillbefurtherexploredinChapter6.

KNOWLEDGE SHARING WITHIN SHARED ENVIRONMENTSWithinSurryHillstherearetwotypesofsharedenvironments.Thefirstareformalco-workingenvironmentenvironmentsforstart-upfirms.Co-workingenvironmentsarehosting,workingandmeetingplacesforentrepreneurs(CreativeWallonia,2013inMoriset,2014).Theobjectiveofaco-workingenvironmentistopromoteinteractionbetweenfirms(Moriset,2014)aswellasprovideamoreaffordableofficespaceforstart-upfirms.Firmsoftenrentadeskoranumberofdesksratherthananentireofficesuite.

Anintervieweeworkinginaco-workingenvironmentinSurryHillsbelievedthatsheismorelikelytomeetotherpeopleandshareknowledgeinaco-workingenvironmentbecauseshedoesnotknowanyoneelsewhoworksinotherofficesinSurryHills(ProductandImplementationManager,softwarefirm(start-up),SH,2015).

Thesecondtypeofsharedenvironmentisthemoreinformalsharingofofficesbytwocompanies,oftenwithonefirmsub-lettingofftheotherfirm.ThisisrelativelycommoninSurryHillsandfourfirmswithinthisstudycurrentlyshareanofficewithanotherfirm.Insomecases,thiswasconsideredtoleadtoknowledgesharingthroughworkingonprojectstogetherorsharingideasthroughmoreinformalinteractions.Anintervieweefromonefirmhighlightedthatknowledgesharingusedtooccurquiteregularlywhenthefirmwassharingitsofficespacewithotherfirmsas:

“we’dhavethesecommonareasandwe’dallhangoutasfriendssowe’dbeabletocrosspollinateourideasandbeabletousethemforourdifferentdisciplineswhichwasreallynice.”

(ManagingDirectorandFounder,digitalagency(small),SH,2015)

Generally,thesesharedenvironmentswereconsideredtofacilitatecloseinteractions.However,intermsofdrivingfirmlocation,thismechanismrelatestothepropertymarketduetothesupplyofthesespaceswithinSurryHillsandtheleaseterms(rentandlength)whicharelikelytobedesirableforstart-upfirms.

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CREATIVE COMMUNITYThecreativecommunitywasdescribedbyanumberofdifferentintervieweesasasourceofmotivationthatfostersinnovation.Theconceptdescribedbyoneintervieweeaslikebeingpartofatribereflectingnotionsofacreativemilieu:

“inafunnypsychologicalwayyouactuallyfeelpartofatribal-ness...it’sabitlikebeinginthetribe.Youknowthesepeoplebysight,yousayhello,youdon’tinteractwiththembutit’sanicefeelingtohave.”

(ManagingDirector,architecturefirm(large),SH,2015)

AnotherintervieweesuggestedthatbeingbasedinSurryHillswasnotaboutknowledgesharing,butrathertheintangibleideathatotherpeopleareinthesamesituation,facingthesameissuesandthiswasmotivationtodowell,“theempathyofsortofsharingasituation”(ProductandImplementationManager,softwarefirm(start-up),SH,2015).Thiswassimilarlyhighlightedbyanothercreativeworkerwhostatedthatitisabout“sharedexperience”(Director,architectureandplanningfirm(large)SH,2015).

ThecreativecultureinSurryHillsmayindirectlyfosterinnovationthroughmotivationratherthandirectlythroughknowledgesharing:

“It’smoreasense,Ithink,lessdirectlyrelatedtocommerciallyvaluableknowledge,thanasenseofasharedcreativeculturewhichisenriching…youmeetpeoplethatyouknow,youhaveachataboutwhatthey’redoingandit’snotthatyouwanttostealtheirideasormuscleinonit,it’smorethatyougetasenseof,wow,thisisagreatvibrantenvironmentandIthinkthat’sreallyimportanttothesenseofculturalconnectionandknowledgeproductionandthesenseoflike-mindedness.LikeIcan’timaginebeinglocatedinabusinessparkbecause...youwouldn’tgetthatsenseofculturearoundyouthatsupportsyourcreativeendeavour…Idon’tthinkit’sasenseofpassingthingsover.Itreallyisjustpartoftheculture”.

(ManagingDirector,architecturefirm(medium),SH,2015)

TheconceptofthecreativemilieuofSurryHillsasacommunitycomesbacktothenotionthatSurryHillshasaverypowerfulbrand,whetheritbevaluablefromtheperspectiveofattractingclients,attractingworkersorthegeneralatmosphereofthelocationreflectingtheconceptoflocalbuzzasdiscussedwithintheliterature(Batheltetal.,2004;Storper&Venables,2004).

INCENTIVES TO SHARE, COMPETITION AND TRUSTPorter(1985,1998,2000)suggestscompetitionfostersinnovation.AsdiscussedinChapter2,thetensionbetweencompetitionandcooperationrestsontheideathateitherknowledgespilloversdonottakeplaceacrosscompetitorsorthatthecostsofknowledgespilloversacrosscompetitorsareoutweighedbythebenefitsfromotherformsofknowledgespillover(Huggins&Izushi,2011).Theinterviewsrevealthatcompetitionisseenasamajorbarriertoknowledgesharingbetweenfirms.Competitionseemstofosterinnovationeitherwithinthefirmorthroughformalpartnershipswheremonetarycompensationisavailable.

Forthemostpart,thereappearstobelittleincentivetoshare(butabigincentivetoconsume)andalackoftrustbetweencompetitors.Asoneintervieweeputit:

“look,generallyarchitectsanddesigners,we’reprettysceptical.There’sthatthingof,howdoyouexplainit,there’snotthatopennesstoshareasmuchasyoushould.There’sabitofarrogancethat’salwaysbeenaroundintheindustry…Wedon’tsharestuffwithotherarchitects.”

(TeamLeaderofInteriorDesign,architecturefirm(large),SH,2015)

Assuggestedabove,whetherornotafirmisconsideredacompetitorwillimpacttheopennessofafirmtoshareknowledge.Afirmrepresentativefromonearchitecturefirmhighlightedthattheywouldconsidersharingknowledgewithcollaborators,suchasengineers,butthesefirmsarenotlocatedinSurryHills.

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Thereisalsoaleveloftrustthatneedstobedevelopedandthistakestime.Itmaybethatthereismoretrustbetweendifferenttypesoffirmswithinthecreativeindustriesratherthandirectcompetitors.Anotherfirmsimilarlyhighlightedthatknowledgesharingoccursacrossdesignprofessionsratherthanbetweendirectpeersduetocompetition(SeniorUrbanDesigner,architectureandplanningfirm(large),SH,2015).However,thiscouldbeconsideredafunctionofthepresenceofspecialisedserviceprovidersinlocalisationeconomiesratherthanknowledgespilloversasabenefitinitself.

ROLE OF SURRY HILLS Whilethereissomeevidenceofknowledgesharingbetweenfirms,thelocationisimportanttotietheseconceptsbacktothetheoryoflocalisationeconomiesandtheconceptofspatialclustering.SurryHillswasoftenseenbyintervieweesasthefacilitatorintermsofprovidinganeutralterritoryforpeopletoexchangeideas(Owner,digitalagency(large),SH,2015).Forexample,barsandcafesprovideaneutralterritoryforcreativeprofessionalstomeetupandexchangeknowledge.

WhileitisdifficulttomeasuretheimpactofSurryHills,anumberofintervieweeshighlightedthattheexperiencemightbequitedifferentinotherlocations,suchasNorthSydneyorMascot.However,locatinginprecinctsthatarerelativelycloseby,suchastheCBDandDarlinghurst,mayalsoachievesimilarresults:

“Ithinkitwouldbequitesubtle…butIknowthere’sthingsliketravellinglengthmeansthatwe’reintheofficemoreandthereforeourcommutetoourclientsortheircommutetousmeansmoreproductivity,butIthinksayforexampleifwemovedtoNorthSydneyyouwoulddefinitelythensaythatourknowledgebaseisverystronglyreliantonourlocationinSurryHills,whereasifwemovedtoDarlinghurstsayorifwemovedtotheCBDforexampleyouprobablywouldn’tnoticeitasmuchsoIthinkitdependswhatyou’recomparingitto…SurryHillshasbecomeverymuchapartofouridentityanditisembeddedinourknowledge...andcausewedoalotofworkaroundhere…it’sagoodworkingmodelandgoodtypologyofacity.”

(Director,architectureandplanningfirm(large),SH,2015)

ThisisreinforcedthroughthedecisionofmanyfirmstoremaininSurryHillswhengoingthroughtheprocessofresigningaleaseorfindinganewofficebecauseoftheunknownimpactthatleavingSurryHillsmayhaveonthefirm,whichcouldincludeanintangibleknowledgebenefit.Theknowledgebenefitwouldlikelyremainifthealternatelocationwasstillaccessible,butitwouldpotentiallybethevibeandamenitythatwouldchange.

AnumberofintervieweescommentedthatknowledgewasprobablyexchangedbetweenworkersfromdifferentfirmswithinSurryHills,whiletheywereyettoexperienceit.Reflectingonthenotionofknowledgeexchanges,thisintervieweesummedupageneralfeelingregardingtheconcept:

“Istillkindoflikethetheory,eventhoughifIreallythinkaboutit,Idon’tknowwhetheritisrealforusinSurryHills.It’sreallyhardtopindownandit’sreallyhardtosayyeahitexistsforus.Istillcan’thelpbutthinkthere’sagreattruthtoit,youknow.You’dthinkifyouplonkaloadofsimilarfirmsinthesameplacethere’dbesomesortofsharingofinformation,somesortofknowledgetransfer,you’dthink,butIcan’tgiveyouanyevidencewhereit’shappenedfor(ourfirm)inSurryHills.”

(Principal,planningandeconomicsfirm(medium),SH,2015)

Similarly,someintervieweesnotedtheopportunityforcollaborationinSurryHills,althoughtherewerenotalwaysadequateopportunitiesforthistooccur,particularlyduetothedifficultyinmeetingorfindingoutaboutotherfirmsinSurryHills.AsdiscussedinChapter2,firmsinaclustermustbelinkedinsomeway(Martin&Sunley,2003).ThediscussionaboveillustratesthelimitedevidenceoflinksbetweenfirmswithinSurryHills.ThisquestionswhetherSurryHillsisinfactafunctionalcreativeindustryclusterorjustagroupofco-locatedfirmswhohappentoworkbroadlywithinthesameindustryasaresultofwiderpropertymarketdynamics.Oneintervieweesimilarlyreflectedonthis,notingthatSurryHillsislikelyjustalooseclusterofsimilarindustries:

“They’requitedifferentfromlooseclustersofsimilarindustriesthatwehaveinPyrmontandSurryHills...there’sabigdifferencebetweencolocationandfunctionalclustering...Ifyou’vegotfirmsthathaveareasontobelocatednexttoeachotherandareasontocollaboratethentherewillbeaverydifferentworkingarrangement,verydifferentwayofsharinginformationcomparedtofirmsthatarejustsohappentobeinasimilarindustry,locatedinthesamebuildingoronthesamestreet.”

(Principal,planningandeconomicsfirm(medium),SH,2015)

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SUMMARYThepropertymarkethasplayedandcontinuestoplayaroleindrivingcreativeindustriestoclusterinSurryHills.FactorsthatcharacterisethepropertymarketinSurryHillsratedhighlyinthestatedpreferencesurvey,includingitsproximitytotheCBD,thesuitabilityofavailableofficespace(particularlywarehousesthatcanbeconvertedintostudiosthroughadaptivereuse),theavailabilityofcafes,restaurantsandbars,theSurryHillsbrandandtheavailabilityofpublictransport.

Intermsofthenetworkofclients,suppliers,professionalsandlabourforthecreativeindustries(andcreativeworkers),thereislimitedevidenceofageographicconcentrationofthisnetworkinSurryHillsbutratheranindustry-specificnetwork,highlightingtheimportanceofsocialproximityovergeographicproximity.Aninner-cityemploymentnetworkisincreasinglyobserved,moresothanaSurryHillsnetwork,suggestingevidenceofurbanisationeconomiesratherthanlocalisationeconomies.

Innovationappearstooccurinternallywithinthefirm,castingdoubtontheroleofexternalsourcesofknowledge.Fromanexternalperspective,knowledgesharinginthecontextofSurryHillsislimitedtoformalinteractions,particularlyduetoalackofincentives,andtrustandcompetition.Theinterviews,madeitclearthatacreativecommunityandclearbrandrepresentwhatfirmswanttobeassociatedwith.Thisfurthersupportstheroleofthepropertymarketindrivingfirmlocation.SurryHillsremainsanaccessiblelocationwhichisconvenientforfirmsandworkers,particularlyduetoitsproximitytotheCBD.Thisisasignificantconsiderationforfirms.

Theanalysisabovequestionstheroleofknowledgespilloversindrivingfirmlocation,aswellasgeographicscale,andthiswillbefurtherexploredinChapter6. 

5.3 Australian Technology Park

ThissectionadoptsanidenticalframeworktoanalysetheATP,drawingontheresultsfromthestatedpreferencesurveyandtheinterviewsconductedwithfirmrepresentativesandworkersbasedintheATP.IthighlightssimilaritiesanddifferencestotheexperienceSurryHills,wherepossible,reflectingontheroleoftheATPinrelationtoknowledgesharing.

FACTORS DRIVING FIRMS TO LOCATE WITHIN THE ATPBasedonthestatedpreferencessurvey,thepotentialtocollaboratewithotherfirmsisconsideredtobethetopreasonfirmslocatewithintheATP(refertoTable11).

ThisreflectstheplannednatureoftheATPandthemarketedbrandwhichemphasisesopportunitiestocollaboratewithotherfirmsbylocatingattheATP(forexamplerefertoAustralianTechnologyParkSydneyLimited,2014).TheothertopreasonsforlocatingwithintheATPincludetheATPbeingconducivetostart-upbusinesses,theATPbrandandthepotentialtocollaboratewithresearchinstitutions.ThishighlightsastrongerpreferenceforlocationsthatfacilitatestrongbusinesslinksforafirmcomparedtoSurryHills.Beingconducivetostart-upbusinessesrelatesinparttostudyingfirmsthatwereestablishedwithintheATPasstart-ups.ProximitytotheCBDalsorankedhighly.SomefactorsrelatingtoamenityrankedmuchlowercomparedtoSurryHills,withtheavailabilityofcafes,restaurantsandbarsreceivingzerovotes.

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RANK REASON SCORE1 Potentialtocollaboratewithotherfirms 48

2 Conducivetostart-upbusinesses 35

3 TheSurryHills/ATP“brand” 33

4 Potentialtocollaboratewithresearchinstitutions 30

5 CloseproximitytoCBD 29

6 Accesstopotentialcustomers/clients 27

7 Availabilityofpublictransport 26

8 Events(conferences,workshops)whichareheldinSurryHills/ATP 23

9 Learningthroughpersonalnetworks 21

10 Opportunitytoexpand/consolidate/contract 19

11 Suitabilityofofficespaceavailable 18

12 Cheaperrentscomparedtootherlocations 14

13 Hiringstaff/recruitment(attractinglabour) 11

14 Existinglocalcustomers/clients 10

15 TechnologyCommunity(beingpartof) 10

16 Locationofexistingemployees 6

17 Accesstoparking 6

18 Accesstolocalsuppliers/serviceproviders 5

19 Bicycleaccessorfacilities 3

20 Accesstootherservices(e.g.postoffice,medicalcentres,banks) 2

21 Availabilityofcafes,restaurantsandbars 0

22 Accesstoresidentialaccommodation 0

23 Availabilityofofficespace 0

24 Easyaccesstoworkbycar 0

TABLE 11: Reasons for locating within the ATP PROPERTY MARKETSincetheATPisgovernmentownedandmanaged,thepropertymarketisnotentirelymarketdriven.Tenantsareofferedreducedrentsormoreflexibleleaseterms(theleasesareoftenbetweenoneandthreeyears⁴)comparedtootherlocationsandthisisamajorattractionbecauseitprovidesflexibilityforsmallfirmsthatmightbeunabletocommittolongleases.TherearealsoopportunitiesfortenantstomovetenancieswithintheATP,whichsupportstheexpansionandcontractionofbusinesses(Read2015,ATP).

TheATPclearlylacksbroaderamenity,particularlycomparedtootherlocationssuchasSurryHills.ThiswasregularlycitedbyintervieweesasnegativeaspectofworkingattheATP.

ThedynamicswithintheNICbuilding,inwhichATPInnovations(theincubator)islocated,differtothebroaderdynamicsacrosstheATP.AdividebetweentenantsintheNICbuildingandtheLocomotiveWorkshopsandIBCwasevidentthroughouttheinterviewswhichreflectsthefindingsofanearlierstudybySwat(2006).ThefirmsthatwerepartoftheATPInnovationsprogramwereonlyconcernedaboutwhatoccurredwithintheNICbuilding.Thisishighlightedthroughcommentsfromfirmrepresentativesfromtwostart-upfirmsthatbothhadaspirationstohaveanofficeinSurryHillswhenthefirmsoutgrowATPInnovations:

“Ican’timaginebeinginthat(LocomotiveWorkshops)building…IfIwasn’tinthisbuilding(NIC),noIwouldn’tbehere.I’drentaterraceinSurryHills...Justforthevibe,ifnotanythingelse.”

(ManagingDirector,lifesciencesfirm(start-up),ATP,2015)

“ThisbuildingistheextentoftheParkforus…wewanttomoveoutwithoneofourfriendcompanies,alsointhisbuilding,andwewanttogetlikeanofficeinSurryHills,bigopenspace,topfloor,convertedwarehouseisthedreamandhavelotsofnaturallightandourownspace.”

(Co-founder,hardwarefirm(start-up),ATP,2015)

Thesestatementsinferthatthereasonwhythesestart-upfirmshavelocatedwithintheATPisduetotheATPInnovationsprogramratherthantheATPitself(Hawthorn2015).

ATPInnovationswouldliketoseefirmsmovingthroughregularlyasitispartoftheincubatorbusinessmodel,withfirmsmovingintospaceswithinotherbuildingswithintheATPsuchastheLocomotiveWorkshopsandIBC.Thisdoesnotseemtobeapreferenceforthesefirmsasindicatedabove.TheroleofthepropertymarketindrivingfirmlocationismuchlesssignificantcomparedtowhatwasobservedinSurryHills.

BasedondataprovidedbytheATPSL

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LABOUR MARKETThelocationofexistingemployeesandtheabilitytoattractlabourwererankedlowerbyfirmrepresentativesbasedintheATPcomparedtoSurryHills.ThroughtheinterviewsitwasclearthatthesewerenotmajorconsiderationsforfirmsinchoosingtolocatewithintheATP.FirmrepresentativesgenerallythoughtthattheATPwasaccessible,particularlybypublictransport,suggestingthatlocationwasnotabarriertoattractinglabour:

“theaccesstopublictransportisrelevantforthelabourmarketthemostandhiringstaffandattractinglabour,it’sagoodplacebecauseofitslocation.”

(ChiefOperatingOfficer,ICTresearchinstitution(large),ATP,2015)

DespiteanalysisinChapter3(andAppendixB)suggestingthatasignificantproportionofATP-basedworkerstraveltoworkviacar,themajorityofintervieweestravelledtoworkviapublictransport.

Fromtheperspectiveofcreativeworkers,theATPwasnotconsideredaparticularlydesirablelocation.Inreferencetowhetherlocationwasasignificantconsiderationinacceptingthejob,onecreativeworkedstated:

“Onlyinthatitwasn’tdifficulttogettobutitcertainlywasn’tadrawcard.”

(SeniorBusinessArchitect,softwarefirm(small),ATP,2015)

ThissameintervieweehighlightedthattheamenitiesandservicesavailablewithintheATPandsurroundswereextremelylimited,particularlycomparedtoworkingintheCBD.Asaresult,theworkertriestoworkfromhomeasmuchaspossible.Basedonthisanalysis,thelabourmarketdoesnotappeartobeamajordriverforfirmstolocatewithintheATPasotherlocations(particularlytheCBD)wereconsideredtobemoreattractivefromanaccessibilityandamenitypointofview.

ATP BRANDAsdiscussedabove,theATPbrandscoredwellasareasonforfirmstolocatewithintheATP.Forsomefirmrepresentativesthebrandisaboutbeingpartofatechnologicalcommunity(CEO,softwarefirm(small),ATP,2015).Forothers,theATPisconsideredthebestplacetocreateatechnologybusinessinAustralia(Co-Founder,hardwarefirm(small),ATP,2015).Onefirmrepresentativesuggestedthatthebrandisaboutcorporatecredibilityandbeingtakenseriouslyasafirm:

“Whenyoutellsomeonethatyou’reaTechnologyParkcompany,Isupposeitmeansalittlemore,you’reonelevelupfromagaragehacker,you’renolongerinthehomeoffice.”

(ManagingDirector,lifesciencesfirm(start-up),ATP,2015)

ItmaybethathavinganofficewithintheATPsignifiesthatthecompanyisatastagethatitcanaffordtopayrentandthereforeisnolongerseenasahighriskforclients.

Thenotionofabrandisaboutbeingpartofacommunityofsimilarfirmsandthepositioningofthefirm.TosomeextentthisreflectsthecommentsmadebyfirmsbasedinSurryHills.TheATPbrandisseenasapositiveattributebyfirmrepresentativesandworkerslocatedwithintheATP.However,basedontheinterviewsitseemsthesefirmsseetheATPasasteppingstonetomoredesirablelocationssuchasSurryHillsortheSydneyCBD.

FORMAL BUSINESS LINKSWhilethepotentialtocollaboratewithotherfirmswasrankedasthetopreasonforlocatingwithintheATP,thisdoesnotnecessarilyreflecttheexperiencesfromafirmperspective.Inreferencetoopportunitiestocollaborateandtheconceptofknowledgesharingandlearning,onefirmrepresentativestatedthat:

“Someofthethingswethoughtwouldhappendidn’thappen.”

(CEO,lifesciencesfirm(small),ATP,2015)

Thislackofcollaborationisfurtherdiscussedinrelationtotheprofessionalnetworkandknowledgesharingbelow.

ForthetwofirmswithintheATPInnovationsprogram,thefirmrepresentativeswerebothinvolvedinpreviousventuresaspartoftheATPInnovationsprogramandhadstrongconnectionstotheCEOofATPInnovations.Thislink,whilenotnecessarilyaformalbusinesslink,wasakeyreasonforthefirmstoreturntotheprogram.

AdesignandmultimediafirmhadexistingformalbusinesslinkswiththeATPpriortolocatingthereastheATPSLwasaclientforthefirm.Thefirmrepresentativehighlightedthatitwasnotitsfirstchoiceoflocationbuttheywerepresentedwithagoodoffer.Therefore,thereissomeevidencethatexistingformalbusinesslinkscouldbeconsideredadriverforfirmstolocatewithintheATP,butitisnotconsideredtobesignificantorwidespread.

FIRM SIZE AND LOCATIONUnlikeinSurryHills,theredoesnotseemtobeanyspecifictrendsinrelationwhenthefirmwasestablishedwithintheATP,whichislikelyduetothefactthatthepropertymarketismuchmoretightlymanaged.However,whetherornotthefirmisastart-upwithinATPInnovationsdoeshaveabearingonthefactorsdrivingfirmlocationandthishasbeenalludedtoabove.

ThediscussionabovehasstartedtohighlightthatthefactorsthatdrivelocationaldecisionsalignwiththeopportunitiessoldtothefirmsbytheATPSL,suchasthepotentialtocollaboratewithotherfirms.Start-upfirmslocatewithintheATPbecauseofthesupportprovidedbyATPInnovations.Thisisparticularlyapparentwhenstart-upfirmsexpecttomovetoofficesinSurryHillsiftheyoutgrowATPInnovations

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andnolongerrequirethissupport,indicatingitisthemaindriverofbeingthere.WhilefirmsmayhavechosentolocatewithintheATPforaparticularreason,whetherornottheperceivedbenefitsoflocatingwithintheATPhaveoccurredwillbeexploredbelowinrelationtonetworksandknowledgesharing.

NETWORKS OF FIRMS AND WORKERS LOCATED IN THE ATPAnunderstandingthespatialextentofthenetworkforworkersandfirmslocatedintheATPisdrawnfromthenetworksoffirmrepresentativesandworkersinterviewedaspartofthisstudy.NetworksarenotconfinedtotheATP;rather,connectionsarespreadacrossabroadergeography,demonstratedintermsofclients,suppliers,professionalsandthelabourmarket,asdiscussedbelow.ThequestionswhethertheATPcouldbeconsideredaclusterofinterconnectedfirmsorjustagroupofco-locatedfirmsdrivenbytheplanningandmanagementoftheATP.

CLIENTSOfthesevenfirmsinterviewed,onlyonehadaclientwithintheATPandthatwasthedesignandmultimediafirmwhohadworkedfortheATPSL.Amongthetechnologyfirms(hardware,softwareandlifesciences),clientsaregenerallylocatedacrossAustraliaincludinggovernmentandprivatesectorgroups.Thehealthsectoristhemainclientforthelifesciencesfirmsandduetoitsnaturehasnoobviousspatialclustering.WhilefewclientsarelocatedwithintheATP,itisseenasanaccessiblelocationintermsofproximitytoclients,particularlythoselocatedintheCBD.

SUPPLIERSTheextenttowhichfirmsusedsuppliersvaried.Forhardwarefirms,thesuppliersaregenerallymanufacturerslocatedelsewhereinAustraliaorinternationally.ThedesignandmultimediafirmusesarangeofcontractorsincludingphotographersandvideographerswhoarealllocatedexternallytotheATP.ForNICTA,theuniversitiesare,tosomeextent,suppliers.Thereareoftenlimitedopportunitiesforfirmstopartnerorcollaboratewithotherlocallybasedfirms:

“It’snotobviouscausethetypeofcompaniesherewouldn’treallybeourtargetclient.SoitismorelikelythatwemightgointosomesortofpartnershipratherthanaclientsuppliertyperelationshipbutIhaven’tseenanythingthat’sobvious.”

(BusinessArchitect,softwarefirm(small),ATP,2015)

ThelackofsupplierrelationshipswithintheATPcouldbeduetothenarrowfocusofeachfirmonaspecificproductorserviceaswellasrestrictionsonthetypesoffirmsthatcanlocatewithintheATP.AsdiscussedinChapter3,theATPSLconstitutionsetsupthetypeoffirmsthatshouldbelocatedwithintheATP,withafocusonscienceandtechnology.ThismaylimitopportunitiesforfirmswhocouldprovideaservicetootherfirmstolocatewithintheATP.

PROFESSIONAL NETWORKTheprofessionalnetworkoffirmsandworkerslocatedwithintheATPexpandsbeyondtheATPwiththemajorityofconnectionsformedoutsidetheATP.BothfirmrepresentativesandcreativeworkersgenerallyreportedthattheydidnotknowanyotherworkerswithintheATPonaprofessionalbasis,orwheretheydidtheconnectionswerenotconsideredstrong:

“Wetendtoprettymuchdoourownthing.Youknow,someoftheothersmallercompaniescometousoccasionallybutit’smorebecausewe’vegotasmalllabupstairsandtheywanttousethetoolsorsomething.”

(EngineeringManager,hardwarefirm(small),ATP,2015).

TheCo-founderofahardwarefirmbasedintheNICbuildingclaimedtohavestrongconnectionstoworkersandfirmswithintheNICduetothesheerlengthoftimethathehasbeenworkingwithintheATPonvariousventures(since1998).Asaresult,heconsideredhimselftoberelativelyactiveinengagingwithotherfirmsandworkerswithintheNICbuilding.

Workersgenerallyretainedstronglinkstopreviousplacesofemployment,whichisconsistentwiththeliterature(Huber,2007).Howevertheworkers’previousplacesofemploymentaregenerallylocatedoutsideoftheATPandoftenintheSydneyCBD.Anexceptiontothisarethefoundersofstart-upsbasedintheNICbuilding,whoretainedsomeconnectionstopreviousstart-upventuresthatwerealsobasedinthebuilding.However,whenthesefailedortheymovedon,theirex-colleaguesdidnotalwaysremainattheATP.

AnumberofintervieweescurrentlyattendorpreviouslyattendedMeetupsforthetechnologyindustryinSydney.Thiswasoftenseenasanimportantsourceofknowledgeandlearning(asdiscussedfurtherbelow).Meetup(2015)isanetworkoflocalgroupsforarangeofpeopleortopicsincludingthetechindustry.MeetupswereoftenheldintheCBD,atlargetechnologyfirmssuchasAtlassian,andthereforetherearelimitedtiestotheATP.ThishighlightsthatcreativeworkershavebeenfocusedondevelopingtheirprofessionalnetworkoutsideoftheATP,anditislikelythatthisisduetoalackofopportunitieswithintheATP.

LABOUR MARKETTwomainflowsoflabourwereobservedinrelationtotheATP.Firstly,labourflowsintotheATP,oftenthroughexistingprofessionalconnections.ThesecondobservationwaslabourflowswithintheATP;howeverthiswasrestrictedtotheNICbuilding.

Thefirmsinterviewedaspartofthisstudyprefertorecruitnewstaffthroughexistingnetworks.Wherethiswasnotpossible,theyuseadvertisementsandrecruiters.AnumberofworkersfromasoftwarefirmpreviouslyworkedwiththeCEOatanotherfirminSydneyCBD.ThisdemonstratestheflowoflabourfromoutsidetheATP.Similarlyinotherfirms,workershadpre-establishedconnectionstotheco-foundersorseniormanagement.Therewerealsocaseswhereworkershadnoconnectionspriortoacceptingapositioninthefirm.

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TherewasalsosomeevidenceofemployeesmovingwithinATPthroughspin-offswithintheNICbuilding.Ashighlightedpreviously,thisoccurswhenthestart-upfailsandthefoundersorworkersseekoutotheropportunitieswithinotherstart-upsinthesamebuildingorstartingaspin-off.ThismovementoflabouriscontainedtotheNICbuildingandATPInnovationsoftenmatchestheappropriatepeopleandallowsthenewfirmtoestablishaspartoftheATPInnovationsprogram.

AnexceptiontothisisNICTA,whichhasahightargetforstaffturnoverandencouragesworkerstoestablishspin-offcompanies(ChiefOperatingOfficer,ICTresearchinstitution(large),ATP,2015).NICTAspin-offswerenotinterviewedaspartofthisstudy,butthereissaidtohavebeensomestart-upsestablishedwithintheNIC.

SPATIAL NETWORKAsheerlackofemploymentdensityandopportunitiesencouragescreativeworkerstofocusondevelopingtheirprofessionalnetworkexternaltotheATP.ThelackofinteractionbetweenfirmsandworkerswithintheATPwasemphasisedbyanumberofcreativeworkerswhohadnodirectinteractionwithotherworkersbasedintheATP.ThisislikelyduetothesmallsizeoftheATPintermsofthenumberofjobsbecausetherearelikelytobefeweropportunitiestoformconnections:

“TheATPisjustnotbigenough,that’stheproblem…I’dliketoseemorebuildingswithmorecompanieswithmorepeoplecomingandgoing.”

(ChiefOperatingOfficer,ICTresearchinstitution(large),ATP,2015)

Relatedly,anotherfirmrepresentativehighlightedthattherearelimitedopportunitiesforcollaboration,duetoalackofresultsandthetimeittakes(ManagingDirector,designandmultimediafirm(small),ATP,2015).

Astouchedonearlier,therealsoappearstobeadivisionbetweenthedifferentbuildingswithfirmslocatedwithintheNICbuildingbeingsomewhatdisinterestedinthefirmswhicharelocatedintheLocomotiveWorkshopsandIBCandwouldrathermoveoutoftheATPwhentheygrowratherthanwithintheATPbecauseoftheperceptionofthetypesoffirmsintheotherbuildings:

“Noway.They’reweird…Idon’tfeellikethere’smuchcollaboration.”

(Co-founder,hardwarefirm(start-up),ATP,2015)

ThissuggestsstrongeropportunitiesforfirmsandworkerstogrowtheirnetworkconnectionsoutsideoftheATPthanwithin.ThismaybeduetoalackofcriticalmassorthelocationofexistingconnectionsandmajorclientsoutsideoftheATP.Thissupportsthefindingsofa2006surveyoftheATPwhichfoundthatonly10percentofbusinesseshadcollaborativeprogramswithothertenantsintheATP(Swat,2006).ThisobservationisnotuniquetotheATP.Thenetworkofclients,suppliers,professionalsandlabourforcreativefirmsandworkersbasedinSurryHillssimilarlyextendedbeyondthegeographicalboundaryoftheclusterintoamuchbroaderinner-cityemploymentcluster.TheATPisalsopartofthisbroaderclusterwhich,asdiscussedearlier,mostlikelyreflectstheconceptofurbanisationeconomies.

KNOWLEDGE OF FIRMS AND WORKERS LOCATED IN THE ATPTheknowledgeoftechnologyfirmslocatedwithintheATPiseasiertodefinecomparedtotheknowledgeoffirmslocatedinSurryHills,asfirmsbasedwithintheATPproduceorsellaspecificproductratherthanprovideageneralserviceasisthecaseforcreativefirmsinSurryHills.TherearethreemaincategoriesofknowledgeforfirmslocatedwithintheATP:

― specificproduct(softwareorhardware)whichmayormaynotbepatented

― understandingofhowtouse,implementordeveloptheproduct

― businessprocesses,includingclientrelationshipmanagementandprojectmanagement.

TheknowledgeoffirmswithintheATPcanbepatentedtosomeextent.However,asdiscussedbelow,knowledgeisnotalwayspatentedduetoissuesaroundcompetitionandtrust.Therefore,themethodoftracingpatentcitationsadoptedbyJaffeetal.(1993)andSonnandStorper(2008)isdifficulttoreplicatefortheATP.

KNOWLEDGE SHARING BETWEEN FIRMS AND WORKERS LOCATED IN THE ATPTheinterviewsrevealedsixkeythemesinrelationtoknowledgesharingintheATP:

― Internal knowledge sharing:learningwithinthefirmasthesourceofinnovation.

― External knowledge sharing (informal versus formal):formalmechanismssuchascollaborationonprojectsandprofessionaleventsaswellasmoreinformalinteractions.

― Knowledge sharing within shared environments:theroleofATPInnovations,asasharedenvironment,infacilitatingknowledgesharing.

― Creative community:thenotionofatechnologicalcommunitywithintheATPanditsimpactoninteractions.

― Incentives to share, competition and trust:registeringpatentsandwhetherthereisaneedforamediatortofacilitateknowledgesharing.

― Role of the ATP:whethertheATPplaysaroleinfacilitatingknowledgesharing.

Thesesixthemesarediscussedbelow.

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INTERNAL KNOWLEDGE SHARINGThemajorityoffirmrepresentativesidentifiedformalandinformalprocessesforknowledgesharingwithintheirfirmincludingregularinternalmeetingsregardingbothprojectsandbusinessdevelopment,aswellasproject-basedtrainingandlearning.Largefirms,inthiscaseNICTA,hostregularinternalseminarsthatprovideanopportunityforworkerstolearnfromotherworkerswithintheorganisation.Firmrepresentativesfromsomeofthesmallfirmsreflectedthatduetothesizeoftheirbusiness,workersneedtounderstandhowtodoeverythingandthatisawayoflearningandknowledgesharing.Internalknowledgesharingwasseenbyfirmrepresentativestobevaluableparticularlyduetoalackoftrustandgeneralpreferencetorestrictexternalknowledgesharingwhichwillbediscussedinmoredetailbelow.

EXTERNAL KNOWLEDGE SHARING (INFORMAL VERSUS FORMAL)Basedontheinterviewsconductedaspartofthisstudy,informalopportunitiestointeractdonotappeartooccurserendipitouslyintheATP.Highlightingthislackofinformalcontacts,afirmrepresentativefromtheSurryHillscasestudywhosefirmwaspreviouslylocatedwithintheATPreflectedontheexperienceofworkingwithintheATP’sLocomotiveWorkshops.Hebelievedthatinformalinteractionsarepotentiallylimitedbythedesignandfunctionofthephysicalspace:

“Thedesignofthespaceisreallylimitedbytheheritagerestrictions…prettydifficulttoturnthatintomodernfunctionalwarehousespaces.SoIthinkthat’sareallimitationandthelayoutoftheofficesprobablydidn’tlenditselftomingling.ThatwasoneproblemIthink.”

(Principal,planningandeconomicsfirm(medium),SH,2015)

Thishighlightstheimpactofthebuiltenvironmentonopportunitiesforinteraction.

Inresponsetothislackofinformalinteraction,thereappearstohavebeenaconcertedeffortfromtheATPSLtofacilitatesocialinteractionsbetweenfirmsandworkersthroughanumberoforganisedeventssuchasMelbourneCupdrinks.

OpportunitiesforexternalknowledgesharingwerenotconsideredtobeconsistentacrosstheATP.FirmsbasedwithintheIBCbuildingbelievedtheyexperiencedfeweropportunitiestointeractandshareknowledgecomparedtofirmswithintheNICbuilding.ThisalsoreflectedanexpectationthatbeinglocatedwithintheATPwouldprovideopportunitiestointeractwithotherworkersandfirms:

“TheinteractionbetweenthetenantsisweakerthanIwouldhavehoped….I’vebeenabitdisappointedinopportunitiesforthat(knowledgesharing)…it’sjustvery,veryfewopportunitiestoreallyinteractmuch…wehaven’tfoundanybodythathasanysynergywithwhatwedo.”

(CEO,softwarefirm(small),ATP,2015)

“Inthisparticularbuilding(InternationalBusinessCentre)we’reisolatedandwegetlessvaluefromourproximitythanotherbusinesses.”

(CEO,lifesciencesfirm(small),ATP,2015)

FromtheperspectiveofthefirmsandworkerswithinATPInnovations(withintheNICbuilding),therewereanumberofopportunitiestointeractwithotherfirmsandworkerswithinthebuildingandthiswillbediscussedinmoredetailbelow.

Alongsideagenerallackofinteraction,therealsoappeartobeanumberofbarrierstoknowledgesharing.Therewasaperceptionamonganumberofintervieweesthattherewasnotenoughpeopletoshareknowledgewith,particularlyknowledgethatwouldbeofbenefittothefirm(andtheworker).Asaresult,itseemsthatfirmshavedecidedtofocusoninternalinnovation,asreflectedonbyonefirmrepresentative:

“Lookwetryandcollaborate,butlookattheendoftheday,we’velearnttostopalotofthistrivialsortofuniversitytypecollaboration.Wejustbringingreatpeopleandworkwithutilitiespeopletosolverealproblemsandshiptensofthousandsofproducts.”

(Co-Founder,hardwarefirm(small),ATP,2015)

Anotherconsiderationisdifferentpersonalitiesandwhetherornotworkersenjoyinteractingwithotherworkers.TheHeadofITfromahardwarefirmidentifiedtheopportunitiestointeractbuthedidnotattendtheseeventsbecausehedidnotenjoynetworking(HeadofIT,hardwarefirm(small),ATP,2015).

SurryHillsoffersafocusonformalinteractionsasasourceofknowledgesharing.However,withintheATPthefocusisonorganisedinformalinteractionsfacilitatedbytheATPSL.ThereisalackofclientorsupplierrelationshipswithintheATPandformalinteractionsappeartobelimitedtoconferenceevents,whichweregenerallynotattendedbyworkersbasedwithintheATP.ThepresenceoftheATPSLnaturallyprovidesmoreopportunitiesfororganisedinformalinteractionscomparedtoSurryHills;however,theeffectivenessoftheseinteractionsislimited.

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KNOWLEDGE SHARING WITHIN SHARED ENVIRONMENTS Ashighlightedabove,knowledgesharingprocesseswithinATPInnovationsdifferedtotherestoftheATP.Interactionsbetweenfirmsandworkersismediatedororganisedthroughvariousprocesses.HamishHawthorn,theCEOofATPInnovations,saidtheseinteractionsattractfirmstotheATPInnovationsprogram:

“ThatdifferentiatesusfromtherestoftheParkwhichismoreofatraditionalbusinesspark,whereasasanincubatorweareselectingthecompaniesthatjointheportfoliocausethat’sthesecondplankofwhatweoffer.Andthat’sahighlycuratedconnectedecosystemofotherstart-upentrepreneursthatyouarepartof.”

(Hawthorn2015)

ATPInnovationsencouragestheturnoveroffirmsasapartitsbusinessmodel.Theturnoverofbusinessesbringsinnewknowledgeandmotivatesexistingfirmsastheyseeotherfirmsgrowing,hiringandmovingon(Hawthorn2015).Thismodelofencouragingtheturnoveroffirmsdiffersfromthegovernmentlandlord/tenantrelationshipacrosstherestoftheATP,whichisfocusedonsecuringtenantsforthelongterm(Hawthorn2015).

Thecoordinationofinteractionsrecognisesthatproximityisnotadriveronitsown,ratherthereneedstobeopennesstosharing,collaboration,andanalignmentoftechnologyandinformation.Whileaconduciveenvironmentcanbecreated,mediationisimportant:

“Sothisideaofknowledgespilloverbeingsomethingthatdoesn’trequireintervention,Ithinkunderestimateshowdirecteditneedstobe…Youneedanenvironmentwhereitthenwillstarttohappenbutyougottoalsohavesomesortofcatalyst.”

(Hawthorn2015)

HawthorndescribedATPInnovations’threetypesoffacilitationassocialevents,formalmeetingsandadirectedandforcedefforttoconnectpeople.

ItisimportanttoacknowledgethatATPInnovationshaveastakeineachbusinessthatispartoftheincubationprogram–thisoffersasignificantincentive.Thiswillbediscussedinmoredetailbelowinrelationtoincentivestoshareknowledge.FirmswithintheIBCandLocomotiveWorkshopsdonothaveexposuretothisfacilitation.

SincerepresentativesfromonlytwofirmsfromtheATPInnovationsprogramwereinterviewedaspartofthisresearch,itisdifficulttoconcludewhetherthefacilitationmechanismsarevaluableandeffective.However,thefirmrepresentativesweremorepositiveaboutbeingbasedwithintheATP,generallynotingthattheirexpectationsweremet,comparedtofirmrepresentativeswhowerebasedinotherbuildings.

CREATIVE COMMUNITYSurryHills,generallyoffersaconsistentappreciationoftheroleofthecreativecommunityandthemotivationitprovidesforcreativeworkers.Incomparison,ATPfirmrepresentativesandworkersdidnotexpressthesameconnectiontothecommunity.FromtheperspectiveoftheGeneralManageroftheATPSL,theATPisatechnologycommunityinwhichregularinteractionsoccurbetweenfirmsandworkers(Read2015).However,theextenttowhichthisoccursislimitedandtheredoesnotseemtobethesameviewofopportunitiesorsenseofcommunityinferredbytheATPSL.Thistosomedegreerelatestothedividebetweentenantswithinthedifferentbuildingswithsomewhatofanusandthemattitude:

“Theotherbuilding(LocomotiveWorkshops)isforadifferentcrowd.”

(HeadofIT,hardwarefirm(small),ATP,2015)

TheATPwasnotseenasatechnologyhubbytheHeadofITatahardwarefirmbecausetherewerenotlike-mindedindividualsthatspecifictechnologyknowledgecanbesharedwith:

“WhatI’mlookingforissomeonewhoisdeeplytechnicalandunderstandstechnologiesthatIcankindofshareideas(with)…IthinkthepoolofwhoIcantalktoissmaller.”

(HeadofIT,hardwarefirm(small),ATP,2015)

ThelackofacohesivecommunitycouldalsorelatetothenatureofthetechnologyindustrymoregenerallyinSydney.TheintervieweealsocommentedthatinSydneythereisnotaspecificplacethatisgeneratingtechiepeoplewhichsuggeststhereisnotechnologyhubinSydney.

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ThishasbroaderimplicationsforapplyingthesekindsoftechnologyclusterapproachestocomparablelocationsintheSydneycontext.Thetechnologyindustryrepresentsasubsetofthecreativeindustries,whichasdiscussedpreviouslyarenotconcentratedinanyparticularlocationinSydneybutratherwithintheinnercityofSydneygenerally(refertoFigure30).Variousproposalshaveidentifiedopportunitiesforcreativeindustryclusters(includingthetechnologyindustry)tobedevelopedwithinrenewalprecinctsthroughouttheinnercityincludingtheBaysPrecinctandCentraltoEveleigh(bothmanagedbyUrbanGrowthNSW)aswellasmorebroadlyacrossSydneyandNSW.Consideringthecommentsabove,thereisapotentialneedtoscalebacktheapproachandconcentrateonfewerkeylocationsthatcandevelopastechnologyhubs.Thiswillalsoassistingrowingthetalentpool,anissuecitedwidelybyAtlassian,alargeAustraliansoftwarecompany.

Atlassian: a case study in firm locationAtlassianwasinterviewedaspartofthisstudybecauseitpresentedanopportunitytounderstandthefactorsthatalargeandsignificantsoftwarefirmgothroughwhendecidingwheretolocateitsoffice.Atthetimeoftheinterview,AtlassianwasbiddingforthepurchaseoftheATPandthecompanywasparticularlyvocalinthemediaduringthisbiddingprocess(Fitzsimmons,2015d).ThefocusofthediscussionwasitsexistingperceptionoftheATP,whythecompanywasconsideringpurchasingthesiteandthevisionforitsfuture.WhileAtlassianwasunsuccessfulinthetenderprocess,anumberoflessonsfromtheinterviewhaveimplicationsforthewaygovernmentsplanforemployment.BusinesspreferenceshaveevolvedfromthebusinessparkmodelreflectedinMacquarieParktoamorevibrantandaccessibleCBDasreflectedinthesummaryoftheinterviewcontainedinFigure31.

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AtlassianisanAustralianenterprisesoftwarecompanystartedbyMikeCannon-BrookesandScottFarquharin2002.Thefirstmajorofficeforthefirmwaswithinthecity,nearDarlingParkanditscurrentofficeisonGeorgeStreetnearMartinPlaceinanheritagebuilding.Atlassianhasbeeninthebuildingforfouryearsandisreportedlydoublinginsizeeverytwoyears.TheSydneyofficeemploys700peopleandisexpectedtoreach900peoplebytheendofthefinancialyear.AtlassianalsohasofficesinSanFranciscoandAustinwithpartnersitesinGdanskandVietnam.

Therapidgrowthofthecompanypresentstwokeychallenges: ― alackofphysicalspacetoaccommodatethegrowth ― alackofsupplyofexperiencedtalentedpeople.

ProximitytotheSydneyCBDisimportantforAtlassianasalotofstaffliverelativelyclosetotheoffice.AccordingtoAtlassian,thevibrancyoftheCBDisimportantbecausestaffworkuntilsevenoreighto’clockeachnightandwhentheyleavetheofficetheydon’twanttobeinatypicalcorporatecampuslikeNorthRyde/MacquarieParkwheretheywouldjustgetintheircarandgohome.TheywanttobeabletomeetupwithfriendsorfamilyafterworkandtheCBDhasagreatvibetoit.InresponsetoadiscussionregardinglocatinginWhiteBay,accessibilityisconsideredtobeamajorconstraint–“unlessyoubuyeveryoneahelicopter,youcan’tgettherequickly”.

AnotherconsiderationforAtlassianisaccessibilityasthecompanyhostsusergroupMeetupsregularlyasanimportantpartofadvocacyforthefirm.Therefore,thecurrentofficelocationwithintheSydneyCBDisideal–thesizeisjustalimitationasthecompanywouldliketobeinonebuilding.ThelogicaloptionforAtlassianwouldbetolocatewithinahigh-risetowerwithintheCBDbutthefirmlikesuniqueheritagebuildings.

AtlassianbelieveslocatinginNorthRyde/Macquariewouldkilltheirbusiness.Similarly,theSanFranciscoofficeislocatedindowntownSanFranciscoratherthanSiliconValleyduetosimilarreasonsandinAustinitismuchthesame.

TheATPwasseenasanoptiontosolvebothissuesdescribedabove.However,AtlassianhadpreviouslydeclinedtolocateattheATPwhentheoptionwasputtothem.AtlassianstatedthatitwouldgototheATPifitcouldbesomethingmorethanatenantandcreatea‘trulyworld-classtechnologyecosystem’.Atlassianwouldliketohaveownershipandcontrolofthespaceratherthanbeatenant.

WhileAtlassianwasunsuccessfulinitsbidtopurchasetheATP,thecompanyhighlightedthattheplanwastodevelopandgrowatechnologyecosystem,itwasimportantthatthegrowthwassomewhatorganicratherthanoverlyplanned–“youcancurateit,youcan’tcreateit”.

AtlassianbelievestheATPis“abitlikeashoppingcentrewithoutananchortenant.There’splentyofspecialtyshopsdoingawesomestuffbutthere’snoanchortenant,there’snocriticalmass,sothereforeithasn’tbecomeafocalpointfortheindustryaroundwhichcriticalmasscanbedeveloped”.

However,withlessthan1,000jobs,AtlassianalonemaynothaveprovidedsufficientcriticalmassbutwouldhavesignificantlyincreasedcurrentlyemploymentonthesiteandwouldhavehadthepotentialtodrivethetechnologyfocusoftheATPthroughitsactivitiesandinternationallinks.

Source:ThediscussionaboveisbasedonaninterviewwithHarman(2015)fromAtlassian

FIGURE 31: Atlassian case study

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INCENTIVES TO SHARE, COMPETITION AND TRUSTAlackoftrustwasaconsistentthemeintheinterviewsandemphasisestheneedforinteractionsbetweenworkerstobefacilitatedinordertopromoteknowledgesharing.AsdiscussedinrelationtoSurryHills,competitionwasalsoseenasamajorbarriertoknowledgesharingbetweenfirmswithintheATP.Thereisalackoftrustandfirmrepresentativeswereextremelyprotectiveofvaluableknowledgeandintellectualproperty.Onefirmrepresentativehighlightedthatthedecisiontopatentisdependentonanumberoffactorsincludingwhetheranotherfirmwouldbeabletoreverse-engineerthetechnologyandwhetheranotherfirmisclosetoproducingasimilarproduct(ManagingDirector,lifesciencesfirm(start-up),ATP,2015).Thisfirmrepresentativewasparticularlyprotectiveofthefirm’sproductanddidnotdelveintomuchdetailonitsfunctionsorcapabilities.Meetingswereoftenheldoffsitetoavoidunintentionalknowledgesharing,despitethefactthattherearenotconsideredtobeanydirectcompetitorswithintheNICbuildingortheATP.

Thelackoftrustreinforcestheneedforcoordinatedinteractions.Asmentionedpreviously,ATPInnovationshasastakeineachofthebusinessesintheincubatorandhasavestedinterestedinthesuccessofthesefirms.Knowledgesharingisseenasvaluableforsolvingproblemsforstart-upfirmsandthishasdriventhefacilitation.Onefirmrepresentativereinforcedthispoint,acknowledgingtheimportanceofdevelopingtrustwhichtakestime:

“itneedssomefacilitation(fromsomeone)whoatthesametimedoesn’tneedtomakehugeamountsofmoneyfromthefacilitation…Justthisspacealoneisn’tgoingtodoit,youneedsomesortoforganisingfactorthatdoesn’tgetgreedy.”

(ManagingDirector,designandmultimediafirm(small),ATP,2015)

ThedifficultywithreplicatingtheATPInnovationsmodelistheneedforapartywithvestedinterestinthesuccessofthefirmsunderitsmanagement,whichworksinthecontextofanincubator.Asidentifiedabove,thetenant-landlordrelationshipalonewillnotsupportthisprocess.

ROLE OF ATPTheroleoftheATPinfacilitatingknowledgesharingappearstobelimited.Knowledgesharingisnotconsideredtooccurthroughaseriesofserendipitouscircumstances,butratherneedstobeintentionallyfacilitated.TheneedforfacilitationquestionstheimportanceofgeographicproximityandtheconceptofknowledgespilloverswhichwillbefurtherdiscussedinChapter6.

ThelackofcriticalmasswithintheATPislikelytorestrictopportunitiesforinteractionbetweenfirmsandworkers,aswellasalackofaknowledgecrossover.ThereislimitedevidenceofknowledgesharingoccurringbetweenfirmsexceptwithinATPInnovationswhereitisentirelyfacilitatedandisessentiallypartofthepackagethatATPInnovationsoffers.OnecouldarguethisisthatessentiallypartoftherentthesefirmspaytobepartoftheATPInnovationsprogramandthereforetheknowledgesharingisnotanexternalitybutpartofthepackage.However,whileATPInnovationsencouragesknowledgesharing,itsroleindevelopingrelationshipsbetweenfirmsmaybethesourceoffutureknowledgeexchangeswhichitdoesnotfacilitate.

ThelackofinteractionsbetweencreativeworkersandlinksbetweenfirmsintheATPraisesthekeyquestionastowhethertheATPcanbeconsideredaclusteroraloosecollectionofco-locatedfirmsparticularlyduetoalackofinteractionbetweenworkersandfirms.ThiswasraisedbyoneintervieweewhoreflectedontheirtimeworkingwithintheATP:

“TheATPhadalotgoingforit…(but)itdidn’treallyworklikeanactiveclusterandIknowthatwaspartoftheidea.Itwasjustaloosecollectionofoffices.”

(Principal,planningandeconomicsfirm(medium),SH,2015)

Thisemphasisestheissuesassociatedwithdefiningaclusterandtheneedforlinksbetweenfirmstobeobserved,ashighlightedbyMartinandSunley(2003).Withoutaninterconnectednetwork,interactionsandknowledgesharingtheATPislikelytoreflectaloosecollectionofco-locatedfirmsmanagedbytheATPSLratherthananactiveandfunctioningcreativecluster.

SUMMARYThedriversoffirmlocationobservedwithintheATPweremorebusiness-focusedthanlocation-focused.WhiletheATPandSurryHillsaresimilargeographically,theamenityexperiencevariesgreatlyandthelocationsattractsubstantiallydifferentfirmsdespitebothbeingclassifiedascreativeindustries.TheATPhasagreatertechnologyfocus(softwareandhardware)comparedtoSurryHillswhichhasastrongertraditionallycreativefocus(architectureanddigitaldesign).Thesefirmslikelydesiredifferentattributeswithinafirmlocation;however,thereisevidencethatthiswasnotalwaysthecase,asdemonstratedwhentwofirmrepresentativesfromstart-upfirmsbasedintheATPexpressedanambitiontorelocatetoSurryHills.

Intermsofthestatedpreferencesurvey,factorsthatratedhighlywerenotalwaysevidentinreality,particularlythepotentialtocollaboratewithotherfirms.ThishighlightsthatthebrandwhichistosomeextentsoldtofirmrepresentativeswholocateintheATPdoesnotnecessarilyreflecttheexperience.TheexperienceforfirmrepresentativeswhoarepartoftheATPInnovationsprogramdiffersandthisislikelyduetotheATPInnovationsbusinessmodelandassociatedincentiveforATPInnovationstofacilitatecollaborationsthatarevaluabletothesuccessofthesebusinesses.

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Intermsofthenetworkofclients,suppliers,professionalsandlabourforthecreativeindustries,therewaslimitedevidenceofageographicconcentrationofthisnetworkwithintheATP.ThismaybedrivenbyalackofdensitywithintheATP.Itmayalsoreflectabroadertrend,discussedinrelationtoSurryHillsofaninner-cityemploymentnetworkwhichtheATPfitsin.

ThefocusforfirmsbasedwithintheATPisinnovationdevelopedinternallywithinthefirmthroughresearchanddevelopment.Thisisduetoanumberoffactorsincludingalackoftrustandincentivestoshare,aswellasagenerallackofinteractionsbetweenfirmsandworkerswithintheATP.TheexperiencewithinATPInnovationsdifferswithinteractionsbetweenfirmsandworkersthatarepartoftheprogramfacilitatedbyATPInnovationsitselftodriveandcommongoalofbusinesssuccess.AlackofacreativecommunitywasidentifiedandthismayhighlighttheneedforatechnologyhubinSydney,whichquestionstheexistingapproachtoplanningforcreativeclustersacrossSydney.TheroleofknowledgespilloversindrivingthesefirmstolocatewithintheATPappearstobelimitedandthiswillbediscussedinmoredetailinChapter6.

ThegenerallackofinteractionandlinksbetweenfirmsagainhighlightsthattheATP,likeSurryHills,ispotentiallymorereflectiveofagroupofco-locatedfirmsmanagedbytheATPSL,ratherthanafunctioningindustryclustering.

5.4 Conclusion

TheanalysisabovehighlightsthatthedriversoffirmlocationwithinSurryHillsandtheATParemarkedlydifferentandreflect,tosomeextent,thenatureoftheclustersfromaplanningperspective.ForSurryHills,thepropertymarketisthemostsignificantdriverforfirms.SurryHillsisadesirablelocationfrombothanamenityandaccessibilitypointofview.ThebrandofSurryHillshasevolvedandisconsideredtobesynonymouswithfirmswhotakecreativityseriously.TosomeextentthereisanexpectationthatfirmswithinthearchitectureanddigitaldesignindustrieswillbelocatedinSurryHillssothereisadrawcardfromtheperspectiveofclients.

FortheATP,thedriversarebasedmoreonbusinessopportunities,particularlythepotentialtocollaboratewithotherfirms.ThisreflectsthenatureoftheATPasaplannedandmanagedtechnologyparkandthevisionthatissoldtofirms.WhiletheATPbrandisconsideredtobepositiveandremainsadriverforfirms,itisapparentthattheATPisseenasasteppingstone(fromthehomeoffice)forstart-upswhichaspiretolocatewithinSurryHillsortheSydneyCBDinthefuture.

ProximitytotheCBDisakeydriverforfirmsinbothSurryHillsandtheATP,highlightingabroadertrendofemploymentclusteringwithintheinnercityofSydney.

Thenetworksoffirmsandworkerslocatedinbothcasestudyareasarespatiallymuchbroaderthantheclusterboundaryitself,suggestingthatboundariesaretosomeextentanarbitraryindicator.Thenotionofadenseinnercityemploymentclusteremergedthroughtheanalysis,particularlyinthecaseofSurryHills,signifyingthepresenceofurbanisationeconomiesmorethanlocalisationeconomies.

TheknowledgeoffirmslocatedinbothSurryHillsandtheATPdiffers.ForfirmsbasedinSurryHills,knowledgeisgenerallynotpatentablebutforfirmsintheATPtheknowledgecan,toanextentbepatented.However,thereareissuesaroundcompetitionandtrust.Knowledgeincludesnotonlyafirm’sservicesorproducts,italsoincludesknowledgearoundbusinessmanagementprocesses.Forbothcasestudies,knowledgeisnoteasilytraceable,whichsupportedthemethodologicalapproachofqualitativeinterviewswithfirmrepresentativesandworkerstotraceknowledgespillovers.

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ForfirmsinSurryHillsandtheATP,thefocusisinnovatinginternallythroughresearchanddevelopment.WithinSurryHillstherewassomeevidenceofknowledgesharingthroughformalproject-basedinteractionsbetweenfirmsandsuppliers,yetthiswasnotalwayscontainedwithinSurryHillsassuppliersareoftenlocatedoutsideoftheprecinct.IntheATP,thereislittleformalinteractionbetweenfirmswithclientsandsupplierslocatedoutsideoftheATP. MoreinformalinteractionsarefacilitatedbytheATPSL,thoughthesearegenerallynotproductive.TheexperiencewithinATPInnovationsmaybemoreproductive,withinteractionsbetweenfirmsandworkersthatarepartoftheATPInnovationsprogrambasedonacommongoaldrivenbythevestedinterestthatATPInnovationshasineachfirm.

ThecreativecommunitythathasorganicallydevelopedinSurryHillsdoesnotnecessarilyfosterknowledgeexchangebutdrivesthemotivationandinnovationofcreativeworkers.ThiswasnotobservedwithintheATPwherealackofcohesionislikelyduetoalackofdensitybutalsopotentiallyassociatedwithownershipandmanagementstructure.TechnologyfirmsdonotnecessarilywanttobelocatedinabusinessparkbutareincreasinglyseekingmorevibrantandaccessibleCBDlocations,asdemonstratedinthecaseofAtlassian.ThishighlightstheneedtorethinktheapproachtoplanningtechnologyparksandmorebroadlycreativeclustersacrossSydneyandtheimportanceofunderstandingwhatdrivesfirmstolocateinaparticularlocation.

Withinbothcasestudyprecincts,competitiondoesnotfosterknowledgeexchangebuthindersitwithalackofincentivestoshareandalackoftrust.ThisisovercometosomedegreewithinATPInnovationsthroughmediatedinteractionsbetweenfirms.However,thismodelisnoteasilytransferrabletotherestoftheATPorSurryHills.

Thegenerallackofinteractionandlinksbetweenfirmsraisesquestionsregardingthedefinitionofeachcasestudyasanindustrycluster.Rather,SurryHillsandtheATPmightbemoreappropriatelyconsideredaslooseclustersofco-locatedfirms.InthecaseofSurryHills,thisco-locationispotentiallydrivenbybroaderpropertymarketdynamics.FortheATP,theco-locationisdrivenbyplanningandintentionaldevelopmentofspaceforthesefirms.

Drawingonthesequestionsregardingthepresenceofthedriversoflocalisationeconomieswithinthecontextofthesetwocasestudies,theroleofknowledgespilloverswillbefurtherexploredinthefollowingchapter.

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Comparative analysis of creative clusters, knowledge spillovers and the planning process

However, a market for the creative industries still needs to exist, as zoning a site will not necessarily

result in development.

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CHAPTER 6: COMPARATIVE ANALYSIS OF CREATIVE CLUSTERS, KNOWLEDGE SPILLOVERS AND THE PLANNING PROCESS

6.1 Introduction

ThediscussionwithinChapter5relatedtoknowledgesharingmorebroadlywithinSurryHillsandtheATP,andalludedtosomeoftheelementsrelatingtothedefinitionofknowledgespilloversandgeographicboundaries.Thefocusofthischapterwillbeknowledgespilloversasdefinedwithintheliterature,withafocusonthemechanismsascategorisedbyHuber(2007).UnderstandingwhetherknowledgespilloversoccurasdefinedwithintheliteratureisanimportantstepinunderstandingmorebroadlywhatdrivesindustryclusteringinthecontextofSurryHillsandtheATP.Thisisparticularlythecasesinceknowledgespilloversareconsideredtobethemostsignificantdriverofindustryclustering.

ThischapterfirstlydiscusseswhetherknowledgespilloverscouldbeconsideredtobedrivingindustryclusteringinthecontextofSurryHillsandtheATPthroughanalysisofthefourmechanismsofknowledgespillovers.Secondly,itdiscussesotherdriversoffirmlocationthatarenotnecessarilycapturedwithintheexistingeconomicgeographyliterature,specificallythepropertymarket.Finally,itexplorestheroleofplanninginfacilitatinglocalemploymentclusters,includingcreatingnewclustersandmaintainingexistingclusters,whichwillinformanyrecommendationswithinthefollowingchapter.

6.2 Analysis of knowledge spillovers

Inanalysingknowledgespilloverswithinthetwocasestudyprecincts,itisimportanttorevisitthedefinitionoflocalisedknowledgespilloversadoptedforthepurposeofthisstudyasbeingknowledgeexternalitiesboundedinspace(Huber,2007).Theassumptionwithintheliteratureisthatknowledgeflowsfreelybetweenco-locatedfirmsthroughnon-marketinteractionsandthereisnodirectcompensationfortheproduceroftheknowledge.

AsdiscussedinChapter2,Huber(2007)identifiesfourmechanismsofknowledgespilloverthathavebeenadoptedasaframeworkforanalysisinthecontextofSurryHillsandtheATP.Themechanisms,assummarisedinChapter2,arerepeatedbelow:

1. Knowledgeflowsvia mobility of the labour force: when labourmovesbetweenfirmsorresearchinstitutions,theytransferpersonalknow-howandknowledgeaboutthepreviousfirmorresearchinstitution.Inaddition,itislikelythatpersonalnetworksbetweenformeremployeeswillsubsequentlyremainactive(Huber,2007,p.89).

2. Knowledgeflowsvia entrepreneurship and spin-offs: whenindividualssetupnewenterprises,theyexploittheknowledgeandpersonalcontactstheydevelopedintheirpreviousposition.Inthiscontext,venturecapitalistsareconsideredtoprovidenotonlyfinancialsupportbutalsoaccesstoawideinformalandformalnetwork(Castilla,2003;Zook,2004bothcitedinHuber,2007,p.89).

3. Knowledgeflowsvia relationships with customers and suppliers:customersorclients,andsuppliers,mayhaveinsightsintorivalfirmsorresearchinstitutionswhichtheycommunicatetoothers.However,thequalityofthisknowledgemightnotbehighasthecustomer,clientorsupplierisindirectlyinvolvedintheknowledgeactivities(Huber,2007,pp.89-90).

4. Knowledgeflowsvia networks of personal relationships:thisoverarchingconceptconsidersthatnetworksofpersonalacquaintancesfacilitateknowledgeflows,witharangeofdifferentsub-mechanismsandprinciples(Huber,2007,p.90)includinginformationtradingandsocialobligations.

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1. KNOWLEDGE FLOWS VIA MOBILITY OF LABOUR FORCEKnowledgeflowsviathemovementoflabourcanbemeasuredbyunderstandingtheextentofthelabourmarketandnetworkofflowsacrossSydney.AsdiscussedinChapter5,workersinterviewedaspartofthisstudywereaskedwheretheyworkedpreviously(typeoffirmandlocation)inordertounderstandhowlabourflowswithinSurryHillsandtheATPandmorebroadlyacrossSydney.Firmrepresentativeswerealsoaskedaboutrecruitmentmethodsandstaffturnovertounderstandthemobilityofthelabourforce.

SURRY HILLSFortheindustriesconcentratedinSurryHills,workersgenerallyappeartoflowthroughfirmswithintheindustryinwhichtheyareemployed.OnlyoneintervieweehadpreviouslybeenemployedbyanotherfirmlocatedinSurryHills.AllotherintervieweeswerepreviouslyemployedbyfirmslocatedoutsideSurryHills,albeitoftenwithintheinnercityofSydney.WhilethereisaclusterofcreativeindustrieswithinSurryHills,thecreativeindustriesarealsoclusteredinanumberofotherlocationsacrossSydney,particularlywithintheGlobalEconomicCorridorwherethemajorityofjobswithinSydneyarelocated.ThereisnotonespecificlocationinSydneyinwhichcreativeworkersareemployed.Intervieweesoftencommentedthatthespecificindustrysectorwithinwhichtheyworkedwassmall,implyingthateveryoneknowseveryoneandthisoftenfacilitatesflowsbetweenfirmshighlightingtheimportanceofsocialproximityabovegeographicalproximity(BenLetaifa&Rabeau,2013).

Intermsoflabourforcemobility,whilestaffturnoverfluctuatesacrossthefirmsandnewemployeesareapotentialsourceofinnovationandnewknowledge(Searle,2010),ifworkersarenotoriginatingfromotherfirmswithinSurryHills,itisdifficulttoassumethatthemobilityofthelabourforceisasourceofknowledgeflows.Therefore,thereisnoevidenceoflocalisedknowledgespilloversoccurringwithinSurryHillsduetothelocalmobilityofthecreativelabourforce.

AUSTRALIAN TECHNOLOGY PARKSimilarobservationsweremadeinrelationtothelabourmarketwithintheATP.Asdiscussedpreviously,anumberofworkerswhowereinterviewednotedthattheyknewtheiremployerpriortobeingemployedintheircurrentpositionandthiswasduetoworkingwiththempreviouslywithinanotherfirm.FirmslocatedwithintheATPareusuallyentrepreneurialventuresandthefoundersgenerallybringlabourfromtheirpreviousplaceofemploymentwiththembecausetheyknowandtrustthem.However,intermsofthespatialelementtothismovement,thisconnectionwasformedoutsidetheATP.ThereislimitedevidenceoflabourmovementswithintheATPandwherelabourwasobservedtomovebetweenfirmsthiswasthroughspin-offswhichwillbediscussedbelow.Therefore,aswithSurryHills,ifworkersarenotmovingbetweenfirmswithintheATP,itisdifficulttoassumethatthemobilityofthelabourforceisasourceofknowledgeflows.

CONCLUSIONWithlimitedevidenceoflabourflowswithinthecreativeindustriesgeographicallytiedtoSurryHillsandtheATP,thereisnoevidencethatthisisasourceofknowledgeflow.ItcanbeconcludedthatknowledgespilloversviamobilityofthecreativelabourforceasdefinedbyHuber(2007)havenotbeenobservedwithinthecontextofthisresearch.

2. KNOWLEDGE FLOWS VIA ENTREPRENEURSHIP AND SPIN-OFFSItisimportanttounderstandtherelationshipbetweenthespin-offandtheoriginalfirmfromageographicalperspective.Oncethisisunderstood,flowsofknowledgecanbetracedandassumptionsmaderegardingknowledgespillovers.Interviewswithfirmrepresentativesprovidedinsightintothehistoryofthefirmandwhetherthefirmitselfwouldbeconsideredaspin-off.

SURRY HILLSThefirmsbasedinSurryHillswereformedthrougharangeofmeans.AnumberofarchitectureandplanningfirmsestablishedinSydneyasabranchofficeofaMelbourne-basedfirm.Thedigitaldesignfirmsarespin-offsfrompreviousfirmsfromtheinnercityofSydney–areassuchasDarlinghurstorBalmain.Thiswassimilarlythecasewiththetwostart-upfirms(landscapearchitecturefirmandsoftwarefirm).Additionally,somearchitecturefirmrepresentativesmentionedthatpreviousemployeeshadlefttoestablishtheirownfirms,startingbyworkingfromhomeratherthanSurryHills.Inthecontextofthisstudythereisnoevidenceofnewfirmspin-offsinSurryHillsandthereforethereisnoevidencethatthisisamechanismofknowledgespilloverwithinSurryHills.

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AUSTRALIAN TECHNOLOGY PARKAsdiscussedwithinChapter7,withintheATPthereissomeevidenceofspin-offsestablishingintheNICwhereastart-uphasfailedandthefoundersorworkershavesetupanewfirm.WhilethisisnotrepresentativeofpatternsacrossthewiderATP,itservesasevidenceofspin-offswithintheheavilymediatedenvironmentofATPInnovationsandtheNIC.UnlikeinSurryHills,therearelikelytobemoreopportunitiesforspin-offstoestablishwithintheATPduetothepresenceofATPInnovations,anincubatortailoredtostart-upfirms.AsmentionedinChapter5,anumberofintervieweesmentionedthatspin-offsfromNICTAhaveoccurredwithstart-upsestablishedwithintheNIC;however,thesefirmswerenotinterviewedaspartofthisstudy.Withevidencethatspin-offsoccurintheNIC(andATPInnovations)thisispotentiallyamechanismofknowledgespillover.

CONCLUSIONTheobservationsinrelationtoentrepreneurshipandspin-offshighlightakeydifferencebetweentheorganic(unplanned)creativeclusterinSurryHillsandtheplannedtechclusterattheATP.Thefindingsfromtheinterviewsprovidenoevidenceofspin-offfirmsestablishingwithinthegeographicboundaryofSurryHills.WithintheATP,spin-offshavebeenobserved,andtheopportunityforspin-offfirmstoremainwithintheATPisprovidedbythepresenceoftheincubatorthatsupportsstart-upfirms.Whiletheremaybeopportunitiesforspin-offfirmstoremaininSurryHillsinco-workingspacesthatmayprovideasimilarenvironmentforthesefirmstosetupoperations,co-workingspacesdonotgenerallyprovidethebusinesssupportservicesprovidedbyATPInnovations.Therefore,whileknowledgespilloversarepotentiallybeingfacilitatedbyspin-offsinATPInnovationswithintheNICattheATP,thisisconsideredananomalysinceitisahighlymanagedenvironment.ItdoesnotnecessarilyrepresentabroadermechanismacrossindustryclustersinSydney.

3. KNOWLEDGE FLOWS VIA RELATIONSHIPS WITH CUSTOMERS AND SUPPLIERSKnowledgeflowsviarelationshipswithclientsandsupplierscouldbeassociatedwithamarketinteraction,suchasaformalengagementonaproject.Overthedurationofaproject,aclientmayspillknowledgeinformallytothefirminrelationtocompetitors.Thefirmbenefitsfromthisspecificknowledgewithoutpayingforit.Thismechanismisdifficulttotraceanditisimportanttounderstandthegeographicalrelationshipbetweenthefirms,clientsandsuppliers.

SURRY HILLSProximitytoclientsisanimportantdriverforfirmstolocatewithinSurryHills,butthisisassociatedwithitsproximitytotheSydneyCBD.Moreover,manyofthoseinterviewedhadclientslocatedacrossSydney,Australiaandinternationally.ThelackofclientrelationshipswithinSurryHillssuggeststheunlikelihoodofknowledgespilloversbetweenfirmsandclientsatthisgeographicalscale.

TherewassomeevidenceofsupplierrelationshipswithinSurryHillsforcertainfirms.NotallsupplierrelationshipsarebasedinSurryHillssothereisnotanexclusiveconcentrationofsuppliernetworks.AsdiscussedinChapter5,theserelationshipswerenotnecessarilyestablishedduetobeinglocatedinSurryHills,buttheserelationshipsmaystillfacilitateknowledgespillovers.Basedontheinterviews,interactionsbetweensupplierswereprimarilyformalproject-basedinteractions.WhereintervieweesdiscussedcatchingupwithotherprofessionalswithintheirnetworkinSurryHills,thediscussionswerealwaysbasedonfutureopportunitiestoworktogetheronaproject(collaborationorsupplier-clientrelationship).Ratherthansuppliersprovidinginsightsintorivalfirmsorresearchinstitutions,itappearsthatinthecaseofSurryHills,potentialknowledgeflowsbetweensuppliersandfirmswereassociatedwithaformalproject-basedrelationship.

AUSTRALIAN TECHNOLOGY PARKAsdiscussedinChapter5,therearelimitednetworkconnectionsbetweenfirmsintheATP.TheclientsoffirmswithintheATParegenerallylocatedoutsidetheATP,theexceptionbeingthedesignandmultimediafirmthathadtheATPSLasaclient.AlackofclientrelationshipssuggeststhisisnotamechanismoflocalknowledgespilloverswithintheATP.ThisisalsothecaseforsuppliersthatarealsonotlocatedwithintheATP.WhileopportunitieswereidentifiedbysomeofthefirmrepresentativesinterviewedwithinATPInnovations,therewerenoexistingsupplierrelationships.ThereforeknowledgeflowsviarelationshipswithclientsandsupplierscouldnotbeconsideredasamechanismofknowledgespilloverinthecaseoftheATPcluster.

CONCLUSIONTheclientandsupplierrelationshipsforfirmsbasedinSurryHillsandtheATParenotexclusivelyconcentratedwithinthegeographicboundaryoftheseclusters,buttherewassomeevidenceofsupplierrelationshipswithinSurryHills.

Whileknowledgeflowsareinevitableviarelationshipswithcustomersandsuppliers,thesewillprimarilybeviaformal,andoftenproject-specific,relationships.AshighlightedbyHuber(2007),thevalueoftheknowledgeexchangedmaynotbehighsincetheclientorsupplierisindirectlyinvolvedintheknowledgeactivities.Thefindingsdiscussedhereindicatethatwhileknowledgeflowsviarelationshipswithcustomersandsupplierscannotbeentirelyruledout,thevalueofknowledgespilledoverthroughthismechanismandtherolethismechanismplaysdrivingclusteringisdebatableinthecontextofSurryHillsandtheATP.

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4. Knowledge flows via networks of personal relationships

Thisoverarchingconceptconsidersthatnetworksofpersonalacquaintancesfacilitateknowledgeflowsandoverlapssomewhatwiththethreemechanismsdiscussedabove.ThismechanismisofteninferredwithinpopularisedliteratureandinrecentmediaarticlesthatsuggestspilloversoccuraxiomaticallywithinindustryclustersinSydney.AnunderstandingofifandhowthisoccursinthecontextofSurryHillsandtheATPwasdevelopedthroughthequalitativeinterviewswithfirmrepresentativesandworkerswhichsoughttounderstandtheextentofprofessionalnetworksandinteractionsbetweenworkersandfirms.Thetwomajorconsiderationsinrelationtothisconceptarethegeographicextentofpersonalrelationships(thenetwork)andincentivestoshareknowledge.Thediscussionbelowrelatestoprofessionalrelationshipswhichhavenotbeenconsideredthroughthediscussionsaboveandtheextentoftheprofessionalnetworkmorebroadly.

SURRY HILLSWithinSurryHillsnetworksofpersonalrelationshipsclearlyexist,althoughtheknowledgeflowsassociatedwiththesepersonalrelationshipsaretiedtoformalrelationships(marketinteractions).Competitionseemstofosterinnovation,butthisoccurslargelywithinthefirm,asfirmsareveryprotectiveoftheirknowledge.

ThisraisesquestionsastotheroleofSurryHillsasaspecificgeographicentity.Basedontheinterviews,thegeographicextentoftheprofessionalnetworksoffirmsandworkersbasedinSurryHillsextendsbeyondSurryHills,particularlyacrosstheinnercityofSydneywherethemajorityofknowledgejobs(includingwithinthecreativeindustries)arelocated.FirmsinSurryHillsbenefitfromproximitytotheCBD

andpotentiallystronglinksassociatedwithitspositioningintheGlobalEconomicCorridor.Theaccessibilityofthelocationmeansclientsandsuppliersdonotnecessarilyneedtobeco-locatedinSurryHillsassuppliersandclientscaneasilytraveltoSurryHillsandworkerscaneasilytraveltomeetingswithintheCBDandelsewhereinSydney.Ashighlightedbyanumberofinterviewees,firmsdonotchoosesuppliersbasedonproximitybutratherrapportandabilitytodeliver.ThishighlightsthattheextentoftheprofessionalnetworkbeyondSurryHillsisnotnecessarilyanissueforproductivityandinfactmaybedrivingfirmstolocatewithintheprecinctasopposedtowithintheCBD.

AUSTRALIAN TECHNOLOGY PARKTherearelimitedpersonalrelationshipswithintheATPandthereforelimitedopportunitiesforknowledgespilloverstooccur.Alongsidethis,firmsareconsciousofsharingknowledgeasthereisalackoftrust.ThereisanetworkofpersonalrelationshipswithintheNICfacilitatedbytheCEOofATPInnovations,butthereisafinancialincentivefortheCEOofthisfacilitytopromotetheseduetoATPInnovations’investmentineachfirm.Itwouldbedifficulttoconsiderthisanorganicknowledgespilloverasitisahighlymediatedinteractionandtiedtoasignificantpotentialfinancialbenefit.AsdiscussedinChapter5,thisinitialcuratedencounterbetweenfirmssetupbyATPInnovationsmay,however,facilitatefurtherknowledgespillovers.

CONCLUSIONAprincipalconclusionisthatwhileformalrelationshipsfosterknowledgesharing,thefactthattherelationshipisformalisedraisesthequestionastowhetherthiscouldbeconsideredatrueknowledgespilloverintermsofthedefinitionbyHuber(2007).Alackofincentivestoshare,inter-firmcompetitionandlackoftrustplaceintoquestionthevalueofsharingknowledgeforafirmandactasabarrierratherthanafacilitatorofknowledgespillovers.

LOCALISED KNOWLEDGE SPILLOVERSThegeographicextentofthenetworksofprofessional(orpersonal)relationshipsextendswellbeyondthegeographicboundariesofSurryHillsandtheATPasdefinedwithinthisstudy.Thishighlightsthatwhileitisdifficulttosuggestthatknowledgespilloversdonotoccurviathismechanism,thereisnoevidencethatthishasanyrelationshiptothefirmbeinglocatedineithercasestudyarea.Thesetwoprecinctsarewellintegrated,fromanaccessibilityperspective,intothenetworkofknowledgeindustries(includingthecreativeindustries)acrosstheinnercityofSydneyandasaresultthespatialboundaryofthetwocasestudyprecinctsis,inthecontextofthisresearch,anarbitraryindicatorofthepresenceoflocalisationeconomies.Thetwocasestudiesmaybebetterclassifiedasagroupofco-locatedfirmsratherthanclustersduetoalackofstronglinksbetweenfirms(particularlywithintheATP)andthusalackofinterconnectednesswhichisthekeybasisofthedefinitionofanindustrycluster.AshighlightedbyMartinandSunley(2003)thereisnothinginherentintheliteraturetodefinethespatialrangeorlimitsofclustering.Inthecontextofthisresearch,itappearsthatatthisspatialscaleclusteringprocessesarenotoperating.ThisreflectsthefindingsofpreviousstudiesofclusteringinSydneybySearleandDeValence(2005)andSearle(2010)which,asdiscussedinChapter2,foundthaturbanisationeconomiesaredrivingclusteringinSydney,moresothaninter-firmclusterlinks.

TheobservationsrelatingtoknowledgespilloversaresummarisedinTable12,highlightingalackofevidenceinSurryHillsandtheATP.Thereissomeevidenceofknowledgeflowsviaentrepreneurshipandspin-offsintheATPandsomeevidenceofknowledgeflowsviarelationshipswithclientsandsuppliersinSurryHills.However,thisisrestrictedtoanumberofconditionsandnotwidespread.

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TABLE 12: Summary of analysis of the mechanisms of knowledge spillovers

MECHANISM SURRY HILLS ATP CONCLUSION

Knowledgeflowsviamobilityofthelabourforce

Knowledgeflowsviaentrepreneurshipandspin-offs

Knowledgeflowsviarelationshipswithcustomersandsuppliers

Knowledgeflowsvianetworksofpersonalrelationships CHAPTER 3

CHAPTER 4

CHAPTER 3

CHAPTER 4

CHAPTER 3

CHAPTER 4

CHAPTER 3

CHAPTER 4

CHAPTER 3

CHAPTER 4

CHAPTER 3

CHAPTER 4

CHAPTER 3

CHAPTER 4

CHAPTER 3

CHAPTER 4

CHAPTER 3

CHAPTER 4

CHAPTER 3

CHAPTER 4

CHAPTER 3

CHAPTER 4

CHAPTER 3

CHAPTER 4

CHAPTER 3

CHAPTER 4CHAPTER 3

CHAPTER 4

CHAPTER 3

CHAPTER 4

Legend

Lackofevidence

Someevidence

Observed

Source:Author

Basedontheanalysisconductedabove,trueknowledgespilloversasdefinedwithintheliteraturearenotconsideredtobedrivingtheclusteringoffirmsinthecontextofthisresearch.AsemphasisedbyHuber(2012)theroleofknowledgespilloversindrivinglocalisationeconomiesisoverstated.Theforcesbehindclusteringatthisscalearethereforemuchmorelikelytoberelatedtopropertymarketdynamics,asemphasisedinChapter5.Thisisfurtherexploredbelow.

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6.3 Other drivers of firm location

Driversoffirmlocationvaryatdifferentgeographicalscales.AsdiscussedwithinChapter2,urbanisation economies involveeconomicinteractionsbetweenindustriesandarisefromalargenumberofdifferentindustrieslocatedincloseproximitytoeachother(TheWorldBank,2009).Ontheotherhand,localisation economiesinvolveeconomicinteractionswithinanindustryandarisefromalargenumberoffirmswithinthesameindustryinthesamelocation(TheWorldBank,2009),reflectingtheconceptofindustryclustering.

TheoutcomesofthisresearchquestionwhetherSurryHillsandtheATPcouldbeconsideredindustryclusters.Asdiscussedpreviously,MartinandSunley(2003,p.10)suggestthatfirmsinaclustermustbelinkedinsomeway.Firmswithineachofthecasestudyprecinctshavelimitedbusiness-relatedconnections,andwhilethefirmsoperatebroadlywithinthecreativeindustries,thisappearstobetheonlyclearlinkbetweenthem.Asaresult,theleveltowhichthesecasestudiesrepresentlocalisationeconomiesisunclear.

InthecontextofSydney,thereisstrongevidenceofurbanisationeconomies(Searle,2010)particularlyintheinnercityofSydneyandnorthshore,drivenbyaccesstolabour.Thishighlightsthatthelabourmarketisastrongdriverforfirmlocationatasubregionalscale.

Atthelocalscale,itappearsthatthepropertymarketisadriveroffirmlocation,actingasasorterofindustriesandfirmswithinthelargeragglomerationoffirms.Thepropertymarketrepresentsasubsettotheotherdriversandisnottraditionallydiscussedwithinthiscontextwithintheliterature.

WithintheunplannedSurryHillsprecinct,thepropertymarkethasbeenobservedasakeydriveroffirmlocation.Table13comparesthetopfivereasonsthatdrivefirmlocationbasedonthestatedpreferencesurvey,asreportedearlier.ThefocusonthepropertymarketwithinSurryHillsisparticularlyapparentwhencomparedtotheATPwhereagreaterpresenceofbusiness-relateddriverswasobserved.FortheATP,planningandeconomicdevelopmentarekeydriversoffirmlocationduetohistoryandcurrentgovernmentownershipoftheprecinct.However,thiswilllikelychangewiththesaleoftheATPtotheprivatesector.

TABLE 13: Top 5 reasons for locating in Surry Hills and the ATP

RANK SURRY HILLS ATP 1 CloseproximitytoCBD Potentialto

collaboratewithotherfirms

2 Suitabilityofofficespaceavailable

Conducivetostart-upbusinesses

3 Availabilityofcafes,restaurantsandbars

TheSurryHills/ATP“brand”

4 TheSurryHills/ATP“brand”

Potentialtocollaboratewithresearchinstitutions

5 Availabilityofpublictransport

CloseproximitytoCBD

Legend

Businessrelatedconsiderations

Propertymarketconsiderations

THE ROLE OF THE PROPERTY MARKET IN EMPLOYMENT CLUSTERS GENERATING LOCAL Basedontheresearchconductedwithinthisthesis,thepropertymarketisasignificantdriverforfirmstolocatewithinSurryHills.Thishasbeenassociatedwiththeprocessofgentrificationintheresidentialpropertymarketinthisarea,andtheresurgenceoftheinnercityasadesirablelocationinitsownright.AsthedesirabilityofSurryHillsasaresidentiallocationhasincreased,theemploymentwithinthecreativeindustrieshasincreasedhighlightingthatthepropertymarketisapotentialdriveroffirmlocationandclustering.

ThepropertymarketinSurryHillsischaracterisedbyitsproximitytotheCBD,asupplyofsuitableofficespaceforcreatives(forexample,warehousesthatcanbeconvertedtostudiospacesthroughadaptivereuse)andtheamenityassociatedwithothersupportingusesandthebuiltenvironmentincludingcafes,restaurantsandbars.TheSurryHillsbrandrepresentssomewhatofanumbrellaconceptwhichencompassesthesecharacteristics.TheseareallthekeyreasonsfirmsidentifiedasinfluencingthedecisiontolocateinSurryHills.

Theavailabilityandlocationofsuitablyzonedlandhasaroletoplayinwherefirmscanlocateandindustriescancluster.InSydneyandNSW,zoningisoftenusedtoprotectanareaforemploymentusesbecauseresidentialuseswillbeconsideredofhighervalueandwillpricecommercialandindustrialusesoutofthemarket(Spencer,2014).Whereamixedusezoningisadoptedinaparticulararea,thereisariskthatthedevelopmentcouldcompriseprimarilyresidentialuseswithsomeretailorcommercialatgroundlevel(Spencer,2014).Councilsoftenimplementaminimumrequirementforretailandcommercialfloorspacewithinthesezonestoavoid100percenttransitiontoresidentialasthisisnottheintentionofthezone.However,theexperiencewithintheCityofSydneyisdifferentwithastrongmarketforcommercialusesbothwithintheCBDandsurrounding

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precinctssuchasSurryHills.Thecurrentmixeduse⁵zoningofSurryHillsissubjecttothepropertymarket,sincethereisnorequirementforaminimumamountofemploymentuses.ThisfurtherhighlightsthesignificanceofthepropertymarketinpromotingtheclusteringofcreativeindustrieswithinSurryHillsaswithoutastrongmarketforcommercialuses,residentialuseswouldlikelydominate.

AsdiscussedinChapter3,thefutureofSurryHillsasacreativeindustryclusterissubjecttothecyclesofthepropertymarket.WarehouseswithinSurryHillsareincreasinglybeingconvertedtoresidentialusesandthereisanecdotalevidencethatthecreativeindustriesarealreadybeingpushedoutofSurryHills,highlightingtheimpactofthepropertymarketonfirmlocation.However,thereareavarietyofopinionsastowhetherthecreativeindustrieswillremaininSurryHills,willbepricedoutbyresidential,orwhetherthebenefitsassociatedwithbeinglocatedwithinSurryHillswarrantthehighrents.

WhileitisacknowledgedthatthelabourmarketandbusinesslinksarekeydriversforfirmslocatinginSydneyorintheGlobalEconomicCorridor,locatinginSurryHillsspecificallyisassociatedwiththepropertymarket,whichcanactasasortingmechanismforindustriesandfirmswithinthebroaderagglomerationofindustries.

THE ROLE OF PLANNING IN FACILITATING LOCAL EMPLOYMENT CLUSTERSTheroleofplanninginpromotingthedevelopmentofcreativeindustryclustersremainsunclearwithintheexistingbodyofliterature.ThereisoftenamisconceptionthatexistingmodelsaretransferrablewithgovernmentsoftenlookingtoreplicateSiliconValleyinanumberofcities,includingSydney.

Theliteraturesuggeststhatindustryclusters,particularlywithinthecreativeorknowledge-basedindustriesaremorelikelytoevolveorganicallyratherthanviapublicpolicyinitiatives(Tallon,2013),particularlyinresponsetotheamenityqualitiesofthecity(Searle&Pritchard,2008)andcontextissignificant.Scott(2006,p.12)highlightstheneedtobalanceinterventionandorganicgrowth,suggestingthaturbanplannershaveanimportantroletoplayin:

“fosteringpositiveurbansynergiesthroughappropriateland-usecontrolsandinhelpingtoclearawaythebottlenecksanddiseconomiesthatappearconstantlyascitiesexpand”.

Scott(2006,p.15)alsosuggeststhatcreativity“mustbeorganicallydeveloped”.Theconfusioninrelationtotheroleofplanningstemsfromthecontradictionthatorganicgrowthiskeybutthereisaroleforplanningaswell.Here,organicmaybeconsideredtobeanaturally-evolvingprocesswherelanduseplanningwasnotentirelyabsent,buttherewasnogovernmentinterventioninvolved.ThisreflectstheexperienceinSurryHills.

WhilethepropertymarketisconsideredasignificantdriverforfirmstolocateinSurryHills,theroleofplanninginfacilitatingthepropertymarketshouldnotbeignored.DespitetherebeingnoconcertedefforttoestablishaclusterofcreativeindustriesinSurryHills,andtheclusterwasacknowledgedinretrospect,thelandusecontrolshelpedfacilitatethecreativeindustriesbybeingflexibleandpotentiallyclearingbottlenecks.ThemixedusezoneadoptedinSurryHillsisconsideredbyJensen(2009)tobeoneoftwozoneswhichhavethebroadestcompatibilitywiththecreativeindustries(theotherzonebeingthelocalcentrezone,whichisalsopresentwithinSurryHills).

LanduseplanninghasalsohelpedtoensurethereisadequatebuildingstocktoattractcreativeindustriestoSurryHills.AnumberofwarehousesinSurryHillsarelistedaslocalheritageitemsundertheSydney Local Environmental Plan 2012whichmeanstheycannoteasilybedemolished(Thomas2015).Thede-industrialisationofmanufacturingleftbehindredundantindustrialspacesintheformofwarehouseswhichwereidealfortheneedsofthecreativeindustries(Hutton,2004;Tallon,2013)andplanningcontrolshavehelpedprotectthesewarehousesfromredevelopment

FortheATP,thenatureofthedevelopment,ownershipandmanagementmeansthatplanningandeconomicdevelopmentplayedasignificantroleindrivingthelocationoffirms.Thebusinessparklandusezoningpermitsofficeandlightindustrialusesandprohibitsresidential.Byprotectingthesiteforemploymentusesonly,thezoningservesasadriverforfirmstolocatewithintheATP.However,amarketforthecreativeindustriesstillneedstoexist,aszoningasitewillnotnecessarilyresultindevelopment.

Inadditiontothezoningcontrols,ATPSLalsoplaysaroleindrivingfirmlocationthroughbothmarketingandleasingactivities.Basedontheinterviews,thebrandoftheATPdevelopedbytheATPSLissoldtoprospectivefirms.FirmsarealsoselectedbasedoncriteriasetoutintheconstitutionoftheATPSLwithafocusonattractingfirmsengagedinresearch,technology,development,innovationandcommunity.ATPInnovationshasevenmoreinvolvementinfirmlocation,determiningwhichfirmscanlocateintheNICbuildingaspartoftheincubatorprogram.Whilethismaynotbeconsideredaroleforplanningassuch,theserestrictionsimpactfirmlocation.

TheATPalsocontainsheritagelistedwarehouses,thescaleofthesewarehousesmadeitdifficulttofitoutandthereforemaynotnecessarilyhavethesameattractionaswarehousesthatcanbeeasilyconvertedtostudiospacesbythetenantsinSurryHills.

⁵TherearealsoprecinctsinSurryHillswhicharezonedGeneralResidentialandLocalCentre.TheMixedUsezoneistheprimaryzoneandgenerallywherethecreativeindustriesarelocated

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Thisdiscussionraisesthequestion-whatisthebestapproachtoplanninginordertofacilitatelocalemploymentclusters?Therearetwomainconsiderations:

― Canlocalemploymentclustersbecreated?(andifso,how?)

― Canexistinglocalemploymentclustersbemaintained?(andifso,how?)

CAN LOCAL EMPLOYMENT CLUSTERS BE CREATED?Whileneithercasestudycanbedefinedasacluster,thereareimportantlessonsfromtheATPandSurryHillsintermsofattractingthecreativeindustriesandknowledge-basedindustriestoparticularlocations.TheapproachofcreatinganemploymentclusterinSydneyhasgenerallyinvolvedzoninglandforemploymentuses,forexampletheATPandMacquariePark.Thisapproachhasnotnecessarilybeensuccessful.

ThevisionforMacquarieParkinthe1960swastodevelopanindustrialparkwithlinkstoauniversity,basedontheAmericanmodelofStanfordUniversityandSiliconValley(Freestone,1994,1996,2010;Mansfield&Hutchinson,1992).WhiletherewasoriginallyarequirementthatfirmslocatedinMacquarieParkcarryoutresearch,thiswasnotafocusofthebusinesseswhichlocatedthere(Freestone,1996,p.26),highlightingthedifficultyincontrollingbusinessfunctionsthroughzoning.MacquarieParkisconsideredtohaveevolvedinto“aprestigioussuburbancorporate‘branchplant’addresswhereeconomicactivityrevolvesaroundadministration,sales,storageanddistributionratherthandynamicproductresearchanddevelopment”(Freestone,1996,p.27).Whileitmightbeconsideredsuccessfulfromthepointofviewofcreatingjobs,with45,000jobsasof2011(CityofRyde,2016),MacquarieParkhasnotachievedtheaimsofitsoriginalvision,particularlythelinksbetweenfirmsandMacquarieUniversity.ThishighlightsthedifficultyinreplicatingtheSiliconValleymodelinadifferentcontext.

AsdiscussedinChapter3,itiswidelyconsideredthattheATPalsodidnotmeetitsoriginalvision.WhentheNSWGovernmenttookoverthemanagementoftheATP,thelinkstotheuniversitiesdiminished.Theinconsistencyofmanagement,withresponsibilityshiftingbetweenmultiplegovernmentagenciessince2000,mayalsohaveimpactedonitssuccessasthefocusshiftedawayfrominnovationandtowardsattractingtenants.Thelackofasignificantanchortenantwasalsohighlightedasapotentialfailure.Googledidnotwanttolocatethere(Ruehl&Harley,2015)andAtlassianonlywantedtolocatethereifitwasnolongergovernmentownedandithadsomesortofcontrol.TheCommonwealthBankofAustraliaissettobecomethenewanchortenantoftheATPaspartofMirvac’ssuccessfulbidtopurchasethesite,resultinginthemovementof10,000jobs(fromParramattaandSydneyOlympicPark)totheATP(Cummins,2015).TheATPmightbeconsideredasuccessintermsofsecuringthesejobs,butnotintermsofachievingitsoriginalvision.Additionally,withtheinfluxofbackofficejobswithintheCommonwealthBankofAustralia,itisunlikelythattheATPwillcontinuetocontainasignificantconcentrationofthecreativeindustriesandmayevolveintomoreofastandardbusinesspark(moresothanitalreadyis).

TheexperiencesoftheATPandMacquarieParksuggestthatitisdifficulttodeveloplinksbetweenuniversitiesandbusiness.SiliconValleyisconsideredanidealmodel,butthecontextinwhichitevolvedisimportant.AsdiscussedinChapter2,SiliconValleyissuccessfulduetovariousfactorsanditwasnotspecificallyplanned.ItsgrowthwasfuelledbymilitaryspendingduringWWIIandtheclusterwasabletoadapttothedevelopmentoftechnology.However,newstart-upsareincreasinglyestablishingwithintheSanFranciscoCBDratherthanoutinSiliconValley(TheEconomist,2015),reflectingtheshiftawayfromthesuburbanbusinessparkmodeltowardstheinnercityofglobalcities(Katz&Bradley,2013;Katz&Wagner,2014).ThistrendwassimilarlydemonstratedbyAtlassian,whichhasestablisheditsCalifornianofficeindowntownSanFranciscoratherthanSiliconValley,becausethevibrancyoftheCBDisimportanttoitsstaff.

Theapproachofzoninglandforbusinessparkusesmaynolongerbeappropriate.SearleandPritchard(2008,p.199)questionthestandardplanningapproachoftechnologyparksandwhetherthisideaisnowoutdated.Thebusinessparklandusezoningisunlikelytofacilitateacreativeindustryclusterwithoutastrongmarketfortheseuses.Asdiscussedwithintheliterature,apositiveoutcomecannotbeforced(Lambooy,1997).Zoningasitedoesnotnecessarilyresultinacluster,justas“labellingsomethinginnovativedoesnotmakeitso”(Katz,Vey,&Wagner,2015).Localormetropolitangovernmentsarequicktojumponthelatesteconomicdevelopmentbandwagon.Inthecaseofinnovationdistricts,governmentssometimeslackanunderstandingofwhataninnovationdistrictisandwhatisrequiredtofosterinnovation(Katzetal.,2015).Oftenwhatresultsis“misguidedgovernmentglitz”(Doctorow,2014).Anunderstandingofexistingcompetitiveadvantagesinparticulareconomicsectorsisvitalandthisagainhighlightstheimportanceofcontext.Katzetal.(2015)suggestthatconnectivity,diversityandqualityofplacearenecessarytocreateauniqueandvibrantenvironmentwhereinnovationcanthrive.ThesethreeelementsarereflectedinSurryHills.

SurryHillsprovidesanalternateapproachtocreatingalocalemploymentcluster.However,itmayrepresentananomalyratherthanamodelforadaptation.SurryHillsevolvedduringaperiodwhenemploymentwasconsideredtobeahighervalueusecomparedtoresidentialintheinnercityofSydney.Duringthe1980s,zoningwasusedtoprotectresidentialareasandcontrolagainstwhatwasconsideredtobeincompatibledevelopment.Thecreativeindustriesestablishedintheareadespitethis,highlightingtheroleofthepropertymarketinprovidingtheadequatespacesforfirmstooccupy.

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TheelementsofthepropertymarketinSurryHillsthatcouldbeconsideredtocharacteriseasuccessfullocalemploymentclusterinclude:

― suitablefloorspaceforthecreativeindustriesintheformofheritagewarehousesthatcanbeconvertedtostudiospacesthroughadaptivereuse

― finegrainbuiltenvironmentassociatedwithitsdevelopmenthistoryincludingsmalllotsandblocksandpermeablespaces

― diverseandfragmentedownershipwhichcontributestothediversityofbuiltform

― accessibility(viapublicandprivatetransport),particularlytotheCBDbutalsotothecreativeworkforcewhoareconcentratedineasternSydney

― amenityandculture(thelocalbuzz)associatedwithcafes,barsandrestaurantsaswellastheatres.

TheseelementscanallbesummarisedasthebrandofSurryHillsandissignificantlydifferentfromtheapproachtotheATP.SurryHillsisaproductofitstime.ItwouldbedifficulttoreplicateSurryHillsinotherareasacrossSydneybecausethecontextissosignificant.

WhetheritbeSurryHillsorTechCityinLondon,thecreativeindustriesmorebroadly“generallystartinplacesyou'renotlooking…Theyoftenstartinplacesnobodyelsewantstobe,asthey'reverylowcost”(Silver,2011).TechCity,originallyreferredtoasSiliconRoundabout,evolvedintheearly2000swhenrentswerecheapinEastLondonandthisattractedthecreativeindustries(particularlytechstart-ups)(Gray,2014).AswithSurryHills,theclusterevolvedorganicallyanditappearsasthoughthegovernmenthassimilarly

claimedsomecreditforitssuccess(Gray,2014).WhiletheNSWGovernmentwantstoreplicateTechCityorRooseveltIslandinNewYorkCity(whichisincompleteandthereforeitssuccessisunknown)atWhiteBay(intheBaysPrecinct⁶)(Mao,2015),itisimportanttorememberthat:

“Techhubsarerarelycreatedbygovernmentandalmostneverbytheofferoffreeofficespace.They'realmostalwayscreatedbygovernmentsknockingdownimpedimentstostartingandgrowth,andthenlettingentrepreneurstakecareoftherest”(Silver,2011).

ManyoftheelementsofSurryHillsdescribedabovearedifficulttoreplicateandtheroleofgovernmentnowandintothefutureisquitelimited.However,governmentcanremoveanyimpedimentstothegrowthofemployment,whetheritisensuringthezoningfacilitatesratherthanrestrictstheselanduses,providingadequatefundingforeducationandbusinessorencouragingdiversitybyensuringthatdevelopmentisnotdominatedbyonedeveloper.Ultimately,thereisastrongroleforgovernmentinprovidingaccessiblelocationsforemploymentacrossSydneythroughinvestmentsinpublictransportinfrastructure.

CAN EXISTING LOCAL EMPLOYMENT CLUSTERS BE MAINTAINED?WhetherexistingemploymentclusterscanbemaintainedisanimportantconsiderationforSurryHillsasitsfutureasanemploymentclusterisunknown.Asdiscussedpreviously,thereisanecdotalevidencethatcreativeindustriesarealreadybeingpushedoutofSurryHillsanditisnotclearwhetherthiswillcontinue.Thishighlightsapotentialroleforplanninginmaintainingexistingemploymentclusters.

Governmentinvolvementinorganicemploymentclusterscankillthecreativeenergythatinspiredtheseclusters(Doctorow,2014;Gray,2014).ThereismuchtolearnfromtheexperienceinTechCity.HackneyCouncilreportedlyallowedthedemolitionofwhatwasconsideredtobeaffordableofficespacetomakeroomformorevaluableresidentialdevelopment(Doctorow,2014).Thishasnotonlyreducedtheamountofofficespaceavailable,ithasalsopusheduprents.

Theremaybearoleforplanning,particularlyatalocalgovernmentlevel,toprotectexistingcreativeclustersfromresidentialturnover.Anapproachtoprotectingcheapofficeaccommodationforcreativeindustries(similartotheapproachforaffordablehousing)couldbeintroduced(Searle&Pritchard,2008,p.199).However,theeffectivenessofthisapproachandtheappropriatetoolstobeimplementedisnotyetknown.

Fragmentedownershipofexistingcommercialspaces(throughstratatitling)willlikelypreventawidespreadturnovertoresidentialuses.AnexampleofthisisHolt&HartinSurryHillswhichisaconvertedwarehousebuildingwhichcontainsarangeofcreativebusiness(someofwhichwereinterviewedaspartofthisstudy)andretailuses.Thebuildingisstratatitled(StrataSense,2016)andthesuiteswithinthebuildingareownedbydifferentgroups.Thediversityofownershipmeansthatitwouldbedifficultforthebuildingtobeturnedovertoresidentialasthiswouldinvolvecooperationbyallowners.Existingstratatitleschemesmayinadvertentlyprotectthecreativeindustriesfrombeingpricedoutbyresidential;however,thisdoesnotpreventsmallscalecreativefirmsbeingpricedoutbylargercreativefirms.

⁶TheBaysPrecinctisarecentlyidentifiedurbanrenewalprecinctlocateddirectlywestofDarlingHarbourandtheSydneyCBD

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6.4 Conclusion

Thischapterdemonstratesthattrueknowledgespillovers,asdefinedwithintheliterature,arenotconsideredtobedrivingtheclusteringoffirmsinSurryHillsortheATPinthecontextofthisresearchandtheroleofknowledgespilloversindrivinglocalisationeconomiesisoverstated.Theforcesbehindclusteringatthisscalearemuchmorelikelytoberelatedtopropertymarketdynamics.

SurryHillsandtheATPmaybebetterclassifiedasgroupsofco-locatedfirmsratherthanclustersduetoalackofstronglinksbetweenfirms(particularlywithintheATP).InthecontextofSydney,thereisstrongevidenceofurbanisationeconomiesatasubregionallevel,drivenbyaccesstolabour.

Alongsidethis,thepropertymarketcanactsomewhatasasorterofindustriesandfirms.ThepropertymarketinSurryHillsischaracterisedbyitsproximitytotheCBD,asupplyofsuitableofficespaceforcreatives(forexample,warehousesthatcanbeconvertedtostudiospacesthroughadaptivereuse)andtheamenityassociatedwithothersupportingusesincludingthecafes,restaurantsandbarsandthebuiltenvironment.TheSurryHillsbrandrepresentssomewhatofanumbrellaconceptthatencompassesthesecharacteristicswhichfirmrepresentativesidentifiedasinfluencingthedecisiontolocateinSurryHills.

Theroleofplanninginfacilitatingthepropertymarketshouldnotbeignored.ThemixedusezoningisconsideredtobebroadlycompatiblewithcreativeindustriesanditsflexibilitymayhavefacilitatedthegrowthoftheseindustriesinSurryHills.LanduseplanninghasalsohelpedensureadequatebuildingstockwasavailabletoattractthecreativeindustriestoSurryHillsbyheritagelisting–andprotecting–warehouses.

FortheATP,planningandeconomicdevelopmentarekeydriversoffirmlocationduetothehistoryofthesiteandcurrentgovernmentownership.ThiswilllikelychangewiththesaleoftheATPtotheprivatesector.Byprotectingthesiteforemploymentusesonly,thezoningservesasadriverforfirmstolocatewithintheATP.However,amarketforthecreativeindustriesstillneedstoexist,aszoningasitewillnotnecessarilyresultindevelopment.Inadditiontothezoningcontrols,ATPSLalsoplaysaroleindrivingfirmlocationthroughbothmarketingandleasingactivities.

Thisdiscussionraisesthequestion:whatisthebestapproachtoplanningwhichfacilitateslocalemploymentclusters?Thefirstconsiderationiswhetherlocalemploymentclusterscanbecreatedandthesecondconsiderationiswhetherlocalemploymentclusters,whichhaveevolvedorganically,canbemaintained.

TheapproachinSydneyhasgenerallyinvolvedzoninglandforemploymentuses,forexampletheATPandMacquariePark,inabidtorecreatethedynamicsofSiliconValley.Thisapproachhasnotnecessarilybeensuccessfulandissomewhat outdated.

Understandingthecontextinwhichorganicclustersevolvedisimportant.Whatisoftenseenasanidealmodelwasoftenaproductofitstimeandthefactorsthatleadtothesuccessoftheseplacesarenoteasytoreplicateindifferentcontexts.Governmentinterventioncanalsohaveadetrimentalimpactonorganicallyevolvingclustersbykillingthecreativeenergythatdrivesthesuccessoftheseplaces.

Thereislikelytobearoleforgovernmentinremovinganyimpedimentstothegrowthofemploymentclustersbyensuringplanningcontrolsfacilitatethecreativeindustries,providingadequatefundingforeducationandbusinessandencouragingdiversitysuchthatdevelopmentisnotdominatedbyonedeveloper.ThegovernmentwillalwaysretainaroleinprovidingaccessiblelocationsforemploymentacrossSydneythroughinvestmentsinpublictransport.

Theremayalsobearole,particularlyforlocalgovernment,inensuringthatappropriatespacesforthecreativeindustriesinexistingorganicclustersareretainedandprotectedfromturnovertoresidentialusesassociatedwithgentrification,asthiscouldpotentiallydiminishthecluster.

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Conclusion

In terms of the planning process, the role of planning in facilitating

creative industry clusters remains unclear.

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CHAPTER 7: CONCLUSION

7.1 Introduction

Thischaptersummarisesthefindingswithintheprecedingchaptersinresponsetothemainresearchquestionandeachofthesub-questionsproposedaspartofthisresearch.Recommendationsareprovidedforbothstateandlocalgovernmentanddrawfromthefindingsinrelationtotheroleofplanningindrivingindustryclustering.Areasforfurtherresearchhavebeenalsobeenidentifiedwhichcanbuildonthefindingsofthisresearch.

7.2 Research questions

Thefollowingdiscussionrevisitstheresearchquestionandsub-questionstodrawsomeconclusionsregardingtherelationshipbetweenindustryclusters,knowledgespilloversandtheplanningprocess.

TO WHAT EXTENT DO KNOWLEDGE SPILLOVERS PROMOTE INDUSTRY CLUSTERING?Theliteraturesuggeststhatknowledgeflowsfreelybetweenfirmswithinaclusterthroughnon-marketinteractionsandthereisnodirectcompensationfortheproduceroftheknowledge.However,asdemonstratedwithinthepreviouschapters,thereislimitedevidenceofthisoccurringwithinSurryHillsandtheATP.Inthecontextofthisresearch,trueknowledgespilloversarenotconsideredtobedrivingtheclusteringoffirmsatthelocalgeographicscale.

Thereissomeevidenceofknowledgeflowsviaentrepreneurshipandspin-offsintheATPandsomeevidenceofknowledgeflowsviarelationshipswithclientsandsuppliersinSurryHills.Thisisrestrictedtoanumberofconditionsandnotwidespread.Therewaslittleevidenceoftheothermechanismsofknowledgespilloverswithinbothcasestudyprecincts.

Theroleofknowledgespilloversindrivinglocalisationeconomiesisoverstated,andthereforetheextenttowhichknowledgespilloversaredrivingindustryclusteringislimited.Theforcesbehindclusteringatthisscalearethereforemuchmorelikelytoberelatedtopropertymarketdynamicsandthisisdiscussedfurtherbelow.

i. Where do workers source their knowledge from (informal networks, formal networks or both)? Throughthequalitativeinterviews,workerswereaskedvariousquestionsthatrelatedtosourcingknowledge,includingbothinformalandformalnetworksaswellasinternalandexternaltothefirm. WorkersinbothSurryHillsandtheATPsourcedknowledgeinternally(withinthefirm)andexternallythroughformalnetworksandrelationships,particularlywhenworkingonaspecificprojectorproduct.Thereislimitedevidenceofworkerssourcingknowledgefrominformalnetworksduetoanumberofissuesassociatedwithtrustandincentivestoshare.Formalrelationshipsprovideagreaterincentivetoshareandtheformalisingoftherelationshipbuildstrust.Internally(withinthefirm)thisisnotanissueandknowledgeflowsfreely.However,theseinteractionsdonothaveanygeographicrelationshiptoSurryHillsortheATP. WithinATPInnovations(intheATP),knowledgesharingwasmediatedbytheCEOofATPInnovations.Duetoitsvestedinterestedineachofthefirmswhicharepartofitsprogram,trustwasbuiltandtherewasagreaterincentiveforinteractionstobefacilitated.

ii. (iWhere are connections formed and how do they evolve into a working relationship? Qualitativeinterviewswithbothfirmsandworkersinvolvedarangeofquestionstargetedatunderstandingtheextentoftheinterviewees’professionalnetwork,particularlywhereconnectionsareformed,andifand

howknowledgeissharedbetweentheseconnections.Theintervieweeswereconsistentlyaskedaboutlocationtounderstandthespatialrelationshipbetweenthenetworkandthefirms’locationinSurryHillsortheATP. Generally,connectionswereformedoutsidetheprecinctatpreviousplacesofemployment,whileworkingonprojectswithclientsorsuppliersoratuniversity.ThegeographicextentoftheprofessionalnetworksofworkersandfirmsextendswellbeyondtheprecinctboundariesofSurryHillsandtheATP.Networksarestrongwithintheindustryandsocialproximityisconsideredtobemoresignificantthangeographicproximity.Oftenitwasdifficulttoestablishwhentheconnectionevolvedintoaworkingrelationshipbutitwasclearthatlocationhaslittleimpactonthis.

iii. Why do firms choose to locate in an industry cluster? Thestatedpreferencesurveydistributedduringtheinterviewrequiredfirmstorankthetop10reasonsforlocatingintheapplicablecasestudyareatoidentifykeyfactorsdrivingtolocateinSurryHillsortheATPandthereforefactorsdrivingclustering.Duringthequalitativeinterviews,intervieweeswereaskedmorebroadlywhythefirmchosetolocatewithinSurryHillsorattheATP. Inthecontextofthisresearchotherfactors,asidefromknowledgespillovers,areconsideredtodrivefirmlocation.Whilethisstudyisnotfocusedontheroleofthicklabourmarketsandspecialisedserviceprovidersper se,thesetwootherforcesofclusteringarosethroughouttheinterviewsandthestatedpreferencesurvey.Despitethis,thesetwofactorsarenotsolelydrivingfirmlocationandthereappearstobeasignificantfactornottraditionallyconsideredwithintheeconomicgeographyliterature:thepropertymarket.

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WithinSurryHillsthepropertymarkethasbeenobservedasakeydriveroffirmlocationwhichcomprisesitsproximitytotheSydneyCBD;thesuitabilityofofficespaceavailable(heritagewarehousebuildingsthatcanbeconvertedintostudiospacesthroughadaptivereuse);theavailabilityofcafes,restaurantsandbars;andtheavailabilityofpublictransport.ThesefactorsrepresenttheSurryHillsbrandwhichappealstofirmsandisconsideredastrongdriveroffirmlocation.ThesignificanceofthepropertymarketasadriveroffirmlocationinSurryHillsisparticularlyapparentwhencomparedtotheATP. FortheATP,planningandeconomicdevelopmentcurrentlydrivefirmlocationduetoitshistoryandcurrentgovernmentownershipoftheprecinct.Business-relatedconsiderationsrankedhighly,includingthepotentialtocollaboratewithotherfirmsandresearchinstitutionsandanunderstandingthattheATPisconducivetostart-upbusinesses.However,thispotentialtocollaboratedidnoteventuateforfirms,suggestingthatwhatismarketedtofirmsdoesnotalwaysreflectreality.ThebrandandcloseproximitytotheCBDwerealsosignificantconsiderations. ThedifferencebetweenthetwocasestudiesreflectsthenatureoftheplanningprocesswiththeunplannedSurryHillsbeingmarket-drivenandtheplannedATPbeingpolicy-driven.

iv. What role does planning play in promoting localised knowledge spillovers? Anunderstandingoftheroleofplanningisconsideredimportanttohighlightwhethercurrentpolicyapproachesandzoningmechanismsthatpromoteindustryclusteringalsoindirectlypromoteknowledgespillovers.Analysisoftheurbanplanningcontextthroughanhistoricaldocumentandpolicyreview(detailedinChapter3)providedanunderstandingofthe

roleofplanninginthedevelopmentofthecluster.TheroleofplanninginpromotingknowledgespilloverswasexploredthroughacomparativeanalysisofknowledgespilloverswithinSurryHillsandwithintheATPtounderstandwhetherthereisarelationshipbetweenplanningandknowledgespillovers. DuetoalackofevidenceofknowledgespilloverswithinSurryHillsandtheATP,theroleofplanninginrelationtoknowledgespilloversislimited.However,thereisalikelyroleforplanninginfacilitatinglocalemploymentclusters,bycreatinglocalemploymentclustersandmaintainingexistingemploymentclusters. Understandingthecontextinwhichunplannedclustersevolvedisimportant.Manysuccessfulindustryclustersevolvedorganicallyanditisimportanttoconsiderthecontextinwhichtheseclustersestablished.Governmentinterventioncouldkillthecreativeenergywhichdrivesthesuccessoftheseplaces. However,thereislikelytobearoleforgovernmentinremovinganyimpedimentstothegrowthofemploymentclustersbyusingplanningcontrolstofacilitatethecreativeindustries,providingadequatefundingforeducationandbusinessandencouragingdiversitysuchthatdevelopmentisnotdominatedbyonedeveloper.GovernmentwillalwaysretainaroleinprovidingaccessiblelocationsforemploymentacrossSydneythroughinvestmentsinpublictransport. Additionally,theremayalsobearole,particularlyforlocalgovernment,inensuringthatappropriatespacesforthecreativeindustriesinexistingorganicclustersareretainedandnotturnedovertoresidentialusesbyincreasingpressuresassociatedwithgentrification,asthiscouldpotentialkillthecluster.

7.3 Recommendations

TheNSWGovernmentshouldmoveawayfrompoliciestorecreatetechnologyhubsinSydney(thenextSiliconValleyorTechCity)andfocusoncreatingaccessiblelocationsforemployment.Thisisbasedonanunderstandingthatthecontextisimportantanditisdifficulttorecreatesuccessfulclusterswhichlikelyevolvedorganically.Additionally,basedonthesuccessofSurryHills,varietyintermsofscaleandtheurbanmorphologywillencourageadiversityofactivitiesandfirms.

TheNSWGovernmentshouldalsorecognisethatknowledgeandcreativeemploymentcannotbeattractedtoallurbanrenewalprecinctsacrossSydney.Thesesiteswilllikelycompetewitheachotherandfirmswillchoosealocationbasedonconnectivityandaccessibility.TheNSWGovernmentshouldfocusongrowingtheknowledgeandcreativeindustriesinSydney(andAustralia)throughfundingandeducation.Growingtheworkforcewillpotentiallyassistingrowingtheseindustries.

Stateandlocalgovernmentbothneedtoplanforemploymentatabroaderlevel.Thisthesisfoundthattheprofessionalnetworksoffirmsandworkerswithinthecreativeindustriesspreadmuchwiderthatthegeographicboundaryoftheclusterandsuggestthatclustersfunctionatsubregionalorregionallevels(likelybasedonthelabourmarket).Planningforemploymentatasubregionalormetropolitanlevelwillbettersupporttheseclusters.

Localgovernmentshouldretainanyexistingconcentrationsofemployment,wherepossible.Throughzoningfortheseusesappropriatelyorprovidingflexibility,localgovernmentmaybeabletoattractthecreativeindustriestoitslocalarea,butwillneedtoensurethatresidentialusesdonotpriceoutemployment.Furtherresearch,asdetailedbelow,isrequiredtoinvestigatewhattoolscouldbeused.

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7.4 Areas for further research

Thereareanumberofareasoffurtherresearch.

Firstly,adeeperunderstandingoftheeffectivenessofvariousapproachestoprotectingspaceforthecreativeindustries(suchasprovidingaffordableofficeaccommodationbyprotectingrents)isrequired.Thisunderstandingwillbetterguidelocalgovernmentindeterminingitsrole,ifany,inmaintainingexistingclustersofthecreativeindustries.Itisalsounderstoodthattheseplaceswillevolveandthegrassrootscreativeindustrieswillshiftovertimeleavingimprovedplacesbehind.Flexibilityaroundthisshouldbeincorporatedintopolicy.

Secondly,theroleofthelabourmarketindrivingurbanisationeconomiesversuslocalisationeconomiesshouldbeexploredinthecontextofAustraliancities.AnunderstandingofthiswillsupportplanningforemploymentandeconomicdevelopmentpolicieswhichseektoattractemploymenttocentresoutsidetheCBDbyprovidingabetterunderstandingofwhatdrivesemploymenttoclusterinsubregions.

Further,thelinkbetweendiversifiedglobalcitiesandurbanisationeconomiesversusthelinksbetweenspecialisedcitiesandlocalisationeconomiesshouldbeexplored.Itisexpectedthatdiversifiedglobalcitiesarenaturallymorelikelytocontainurbanisationeconomies,asopposedtolocalisationeconomies,duetothenatureoftheeconomy.ThiswasobservedinSydney,butfurtherresearchshouldexplicitlyexplorethislink.Anunderstandingofthiswillinfluencelocaleconomicdevelopmentpolicyapproachesforglobalcitiesaswellasmediumsizedspecialisedcitiesthataremorelikelytobevulnerabletoeconomicdownturns.TheintegrationoflanduseandeconomicplanningwithintheNSWGovernmentwouldlikelybebeneficialindrivingthis.

Finally,theroleofplanninginclusterdevelopmentshouldbeexploredthroughfurthercasestudyanalysisincludinginternationalapproachestozoning.ItwillbeimportanttounderstandthecontextinanycasestudiesbeforeadoptingsimilarmodelsintheAustraliancontext.

7.5 Concluding remarks

Despitealackofanunderstandingoftherelationshipbetweentheplanningprocess,industryclusteringandknowledgespillovers,theNSWGovernmentisfocusedondrivingindustryclusteringasakeyplanningpolicyobjectivewithinSydney.Thisresearchhasconcludedthat,inthecontextofSurryHillsandtheATP,localisedknowledgespilloversarenotamajordriveroftheselocalindustryclusters.Theroleofknowledgespilloversindrivinglocalisationeconomiesisoverstated.Theforcesbehindclusteringatthisscalearemuchmorelikelytoberelatedtopropertymarketdynamics.

ThisresearchalsoraisesquestionsregardingthedefinitionofclusterswithinSydney,particularlyduetoobservationsregardingthebroaderspatialextentofthenetworkofworkersandfirmsinterviewedaspartofthisstudy.

Sydneyisadiversifiedglobalcitywhichcontainsemploymentinarangeofindustrysectors.Thereisnoonemajorindustryofemploymentandhencenoonespecificclusterofemployment.Thereisstrongevidenceofurbanisationeconomies,particularlyintheinnercityofSydney,whichisconsideredtobedrivenbyaccesstolabour.Thissuggeststhatthelinkbetweenglobalcitiesandlocalisationeconomiesispotentiallylimitedandlocalisationeconomiesmaybemorelikelytobeobservedwithinspecialisedcities.

Intermsoftheplanningprocess,theroleofplanninginfacilitatingcreativeindustryclustersremainsunclear.ThereisoftenamisconceptionthatexistingmodelsaretransferrablewithgovernmentsoftenlookingtoreplicatesuccessfulindustryclusterssuchasSiliconValleyincitiessuchasSydney.Itisimportanttounderstandthecontextinwhichtheseclustersdevelopedanditisoftenanorganicprocessduetoanumberoffactorsincludingtheeconomicclimateatthetime.Thesefactorsaredifficulttoreplicate.However,thereispotentiallyaroleforplanninginprovidingaccessiblelocationsforemploymentgenerally,andmaintainingexistingclustersofthecreativeindustries.

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Appendix AOverview of metropolitan plans for Sydney 1948-2014

The Planning Scheme for the County of Cumberland (CumberlandCountyCouncil,1948)(refertoFigure32)wasthefirststrategicplanforSydneyandfocusedonmovingawayfromamonocentriccitywithParramattaidentifiedasthesecondCBDforSydney.

The1968Sydney Region Outline PlanintroducedMacarthur-CampbelltowninsouthwestSydneyasanewgrowthareaforresidentialandemployment(refertoFigure33).NewindustriallandwasproposedacrossSydney,particularlyinthewest,signifyingthebeginningoftheshiftofindustrialusestowardsthewest,followingpopulationandhousingexpansionintothe1950sand1960s(Fagan,2000).

In1988,Sydney into its third centuryintroducedacentrespolicyforSydney(refertoFigure34).However,themetropolitanplansofthe1990s,adoptedafocusonclustersofemploymentactivityandconcentratingemploymentinalimitednumberofthesecentresandclusters(refertoFigure35andFigure36).Thismayhavebeeninresponsetorecognitionofboththeshifttoroadlogisticsandfurtherpopulationandhousingsuburbanisation.

FIGURE 32: County of Cumberland functional plan (1948)

FIGURE 33: Sydney Region Outline Plan (1968)

FIGURE 34: Sydney into its third century (1988)

Source: (Cumberland County Council, 1948)

Source: (State Planning Authority of New South Wales, 1968)

Source: (NSW Department of Environment and Planning, 1988, p. 44)

128

FIGURE 35: Cities for the 21st Century (1995)

FIGURE 36: Shaping our Cities (1998)

Source: (NSW Department of Planning, 1995, pp. 103-104)

Source: (NSW Department of Urban Affairs and Planning, 1998, p. 9)

By2005,thefocusoftheCity of Cities (NSWDepartmentofPlanning,2005)hadshiftedtoanetworkofcentresandcorridors,withaparticularfocusontheGlobalEconomicCorridor(refertoFigure37).TheGlobalEconomicCorridorwasoriginallyidentifiedastheareabetweenMacquarieParkandSydneyAirport.ItwasconsideredtobetheeconomicpowerhouseoftheAustralianeconomycontaining40percentofSydney’stotaljobsin2005,and75percentofinformationtechnologyandtelecommunicationjobs(NSWDepartmentofPlanning,2005,p.86).TheGlobalEconomicCorridorcontainsfiveofthesixuniversitiesinSydney,significanthealthandresearchfacilities,aswellasindustrialareasandtransportgateways(NSWDepartmentofPlanning,2005,p.86).

129

FIGURE 37: City of Cities: Metropolitan Strategy for Sydney to 2031 (2005)

Source: (NSW Department of Planning, 2005, pp. 10-11)

SpecialisedcentreswerealsointroducedinCity of Cities.Specialisedcentresareareascontainingmajorairports,ports,hospitals,universities,researchandbusinessactivitiesthatperformvitaleconomicandemploymentrolesacrossthemetropolitanarea(NSWDepartmentofPlanning,2005,p.92).TheNSWDepartmentofPlanning(2005)identifiedaneedtomanagethewaythesecentresinteractwiththerestofthecity.Thesecentreshavearesearchanddevelopmentfocus.

The2005strategyalsoidentifiedafocusoninnovationandknowledgeclusterswithanactiontoworkwiththePremier’sCouncilonScience,Innovation,EconomicDevelopmentandTradetoprepareanInnovationStrategy,whichwastofocusonboostinginnovationactivitiesatkeylocations(NSWDepartmentofPlanning,2005,p.68).ThesekeylocationsincludedtechnologyparkssuchastheATPandNorthRyde,whichwasidentifiedascontainingsignificantinformationandcommunicationtechnologies,biotechnologybiomedicaldeviceandpharmaceuticalindustryclusters(NSWDepartmentofPlanning,2005,p.69).

Strengtheningindustryclusterswasintroducedasanotherkeyactionwithinfrastructurehighlightedasamajormagnetforbusinessesandkeytostrengtheningexistingandcreatingnewclusters:

“Toachievethebenefitsofclustering,andtheemploymentcapacitytargetsforthestrategiccentres,thereisaneedtoplanforandcreateenvironmentsthatattractnewbusinessactivitiesandtoprovidemagnetinfrastructureasacatalystfornewinvestment”(NSWDepartmentofPlanning,2005,p.87).

Thishighlightsthatplanningisconsideredvitaltofacilitatingindustryclusters.

TheconceptsandstrategiesintroducedinCity of Cities were generallyretainedinthefollowingmetropolitanstrategyin2010,Metropolitan Plan for Sydneyto2036(refertoFigure38).The2010strategyalsoacknowledgedthatinnovationanddevelopmentcanoftenoccurinsmall-scalefirmswhicharegenerallylocatedwithintheinnercityinareassuchasSurryHillsandChippendaleduetotheavailabilityoflowercostspacewithaccesstolargeorganisationandmajorprecincts(NSWDepartmentofPlanning,2010,p.139).

130

FIGURE 38: Metropolitan Plan for Sydney to 2036 (2010)

Source: (NSW Department of Planning, 2010, pp. 18-19)

Thisresearchanddevelopmentfocushaspotentiallybeenlostwithinthe2014metropolitanstrategyAPlanforGrowingSydney(NSWDepartmentofPlanningandEnvironment,2014)becausespecialisedcentresarenolongeracategorywithinthecentrehierarchyandthesecentresarenowlabelledmorebroadlyasstrategiccentres(refertoFigure39).

131

FIGURE 39: A Plan for Growing Sydney (2014)

Source: (NSW Department of Planning and Environment, 2014, pp. 12-13)

132

Appendix BData analysis

SURRY HILLSThissectionanalysesemploymentdataforSurryHillsfrom1991to2011,illustratinghowtheindustrycompositionoftheprecincthasevolvedduringthisperiod.TheanalysishighlightstheclustersofindustriesandoccupationswhichhaveemergedandcomparesthesetotheindustriesandoccupationswhichwerelocatedinSurryHills15to20yearsago.TheresidentialoriginofworkerswhowereemployedinSurryHillsin2011hasbeenmappedtounderstandwhetherworkerslivedincloseproximitytotheprecinctandhowtheytravelledtowork.

Broad trends in employmentTotalemploymentinSurryHillsfluctuatedoverthepasttwodecades(refertoFigure40).In1991therewerealmost22,000jobslocatedinSurryHills.Adeclinewasexperiencedbetween1991and1996whichwaslikelyreflectiveofthedeclineinemploymentwithinthemanufacturingindustries.Therewasgrowthintotalemploymentbetween1996and2001;howeverthiswascounteractedagainbyadeclinebetween2001and2006,withtotalemploymentreachingitslowestlevelat19,170jobs.Aproportionofthisdeclinecouldbeattributedtotheboundarychange,butthisdidnotaccountforthetotaldecline⁷.Stronggrowthinemploymentwasexperiencedbetween2006and2011,witha34percentincreaseinemployment(6,500additionaljobs).

⁷Thenumberofjobswhicharelocatedwithin2001boundarybutexcludedfromthe2006boundaryislowerthanthedifferencebetweenthe2001and2006employmentnumbers.Thereisalackofinformationonwhetherthiscouldbeduetoapotentialundercount.

FIGURE 40: Total jobs 1991-2011 - Surry Hills

Source: Author using data from Bureau of Transport Statistics (1991, 1996, 2001, 2006, 2011)

Tota

l job

s

1991 1996 2001 2006 201121,743 19,888 22,271

Year

19,170 25,634

30,000

25,000

20,000

15,000

10,000

5,000

-

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133

ThefluctuationsintotalemploymentweremostlikelyreflectiveofachangingeconomicstructureinSurryHills.In1991,20percentofworkerswereemployedinmanufacturingand19percentofworkerswereemployedinprofessionalandfinancialservices(refertoFigure41).Since1991,professionalandfinancialservicesasanindustryofemploymentgrewinSurryHillstoalmost30percentoftotalemployment.Ontheotherhand,manufacturingdeclinedtoonlytwopercentofemployment.Anothernoticeabletrendwasthegrowthinaccommodationandfoodserviceswhichdoubledfromfourpercentofemploymentin1991toninepercentofemploymentin2011.Informationmediaandtelecommunicationsgrewstronglybetween2001and2006intermsoftheproportionoftotalemploymentwithinthisindustry,butprofessionalandfinancialservicesgrewatamuchstrongerratebetween2006and2011.

ThesetrendsarefurtheraccentuatedwhencomparedtotheCityofSydneyLGAandSydneyGMA.WhilemanufacturingalsodeclinedacrosstheCityofSydneybetween1991and2011,itdeclinedatamuchslowerrateandfromamuchsmallerproportionoftotalemploymentwhencomparedtoSurryHills.In1991,only10percentofemploymentacrosstheCityofSydneywaswithinmanufacturingindustries(refertoFigure42).Thiscomparedto20percentwithinSurryHills.TheCityofSydneyexperiencedstrongergrowthwithintheprofessionalandfinancialservicescomparedtoSurryHills,particularlybetween1991and2001.However,thisstabilisedoverthepastdecade.EmploymentwithinaccommodationandfoodservicesacrosstheCityofSydneyhasremainedrelativelystable,whichhighlightsthesignificanceofthegrowthinthisindustryobservedinSurryHills.

AcrosstheSydneyGMA,thetrendsweremuchmorestable(refertoFigure43).Theproportionoftotalemploymentwithinprofessionalandfinancialservicesremainedsteadyataround20percentoftotalemploymentbetween1996and2011.Theproportionofpeopleemployedinmanufacturingdeclined,butatamuchslowerratethaninexperiencedSurryHills.ThishighlightsthebroadershiftintheeconomicgeographyofSydneyexperiencedoverthepasttwodecades.ThisshiftwascharacterisedbyadeclineinmanufacturingintheinnercityandthemovementofmanufacturingouttothewesternsuburbsofSydney,aswellasstronggrowthinprofessionalandfinancialservicesemploymentwithintheinnercityofSydney.

FIGURE 41: Trends in key industries – Surry Hills

Source: Author using data from Bureau of Transport Statistics (1991, 1996, 2001, 2006, 2011)

50%

45%

40%

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20%

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Accommoda�on and Food Services

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1996 2001 2006 2011Year

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134

FIGURE 42: Trends in key industries – City of Sydney FIGURE 43: Trends in key industries – Sydney GMA

Source: Author using data from Bureau of Transport Statistics (1991, 1996, 2001, 2006, 2011) Source: Author using data from Bureau of Transport Statistics (1991, 1996, 2001, 2006, 2011)

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135

FIGURE 43: Trends in key industries – Sydney GMA

Source: Author using data from Bureau of Transport Statistics (1991, 1996, 2001, 2006, 2011)

FIGURE 44: Industries of employment (ANZSIC8 1 digit) 2011 – Surry Hills

Source: Author using data from Bureau of Transport Statistics (2011)

Surry Hills City of Sydney Sydney GMA

Industries of employment (ANZSIC 1 digit)

Prop

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jobs

0%

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10%

15%

20%

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Industries of growth and declineIn2011,therewerefourmainindustriesofemploymentinSurryHills:

― Professionalandtechnicalservices, ― Publicadministration, ― Informationmediaandtelecommunications,and ― Accommodationandfoodservices.

Theseindustriesweresignificantintermsoftotalemploymentin2011,particularlycomparedtotheCityofSydneyandSydneyGMA(refertoFigure44).SurryHillslackedtheconcentrationoffinanceandinsuranceserviceswhichisthelargestindustryofemploymentintheCityofSydney,duetoitsconcentrationwithintheSydneyCBD.

Creativeindustriesweredrawnoutasaseparateindustryofemployment,whichhighlightsthesignificantconcentrationofthecreativeindustriesinSurryHillsin2011(refertoFigure45).Almost25percentofworkersinSurryHillswereemployedwithinthecreativeindustries.Thisindustryofemploymentwassupportedbyemploymentwithinpublicadministration(duetothepresenceofstateandfederalgovernmentagenciesinthegovernmentownedofficebuildingsatCentennialPlazaonElizabethStreet)andaccommodationandfoodservices.

8AustralianandNewZealandStandardIndustrialClassification;refertoAppendixCfordescription

136

FIGURE 45: Industries of employment (ANZSIC 1 digit) 2011 with creative industries – Surry Hills

Source: Author using data from Bureau of Transport Statistics (2011)

Surry Hills City of Sydney Sydney GMA

Industries of employment

Prop

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jobs

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Between2006and2011,thecreativeindustriesexperiencedthestrongestgrowthintermsoftotaljobs,withanadditional1,800jobs(refertoFigure46).However,intermsofproportionategrowth,smallerindustriessuchasartsandrecreationandeducationgrewatmuchfasterrates(refertoFigure47).ThegrowthinemploymentinthecreativeindustriesinSurryHillsbetween2006and2011similarlyexperiencedacrosstheCityofSydneyandSydneyGMA,highlightingthatthegrowthofthecreativeindustrieswasrepresentativeofawidertrendacrossSydneyandnotnecessarilyuniquetoSurryHills.

137

FIGURE 46: Growth/ decline in industries of employment (ANZSIC 1 digit) between 2006 and 2011 in Surry Hills (absolute)

FIGURE 47: Growth/decline in industries of employment (ANZSIC 1 digit) between 2006 and 2011 in Surry Hills (proportionate)

Source: Author using data from Bureau of Transport Statistics (2006, 2011) Source: Author using data from Bureau of Transport Statistics (2006, 2011)

2,000

1,500

1,000

500

-500

--

Num

ber o

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Industries of employment

Agricu

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Mining

Man

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sion

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Prop

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Agricu

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Wholesale Trade

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Industries of employment

Surry Hills City of Sydney Sydney GMA

Prop

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150%

100%

50%

0%

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Analysisofindustriesofemploymentatamorefinegrainlevel(ANZSIC4digit)wasconducted,comparingtheindustriesofemploymentin1996and2011.ThisanalysishighlightstheindustrieswhichwerepotentiallyclusteringinSurryHills.SpecialisationwascalculatedusinganLQ(againsttheCityofSydneyandSydneyGMAasbenchmarks).Theresultsin1996and2011arenotdirectlycomparablebecausetheindustryclassificationswereupdatedin2006,butsomegeneralconclusionscanbedrawnfromcomparingtheresults.

In1996,theremnantsoftheformerragtradeinSurryHillswerestillvisible.Therewasstillemploymentinanumberofmanufacturingindustriesin1996,whenmanufacturingrepresented17percentofemployment.Theseincludedclothingmanufacturing,clothingwholesaling,women’sandgirlswearmanufacturing,textileproductwholesaling,andelectricalandequipmentmanufacturing(refertoTable14).SurryHillsretainedasignificantspecialisationintheseindustriesevenwhentheywereindecline.

Notably,therewasevidenceofthegrowingcreativeindustriesin1996.SurryHillshadaspecialisation(comparedtotheCityofSydneyandSydneyGMA)inmusicandtheatreproductions,architecturalservices,advertisingservicesandfilmandvideoproduction.

NewspaperprintingorpublishingwasasignificantindustryofemploymentwithinSurryHillsduetothepresenceofNewscorp,andrepresentedsomewhatofahybridindustrywithbothmanufacturing(printing)andcreative(publishing)functions.

138

TABLE 14: ANZSIC 4 digit industries of employment (≥1% total employment), 1996, Surry Hills

CODE 4 DIGIT INDUSTRY JOBS % LQ-CITY OF SYDNEY LQ-SYDNEY GMA8112 StateGovernmentAdministration 1,103 5.5% 2.04 4.78

2421 NewspaperPrintingorPublishing 998 5.0% 5.18 12.95

7321 Banks 906 4.5% 0.67 1.63

9631 PoliceServices 791 4.0% 2.90 5.85

8111 CentralGovernmentAdministration 655 3.3% 1.52 3.43

8431 HigherEducation 502 2.5% 1.16 2.17

8440 OtherEducation 497 2.5% 2.94 3.05

5730 CafesandRestaurants 486 2.4% 1.05 1.22

2240 ClothingManufacturing,undefined 395 2.0% 4.73 5.70

5243 Newspaper,BookandStationeryRetailing 389 2.0% 3.74 4.12

4722 ClothingWholesaling 378 1.9% 5.27 10.13

8623 DentalServices 372 1.9% 5.99 5.26

9241 MusicandTheatreProductions 354 1.8% 4.30 12.54

5210 DepartmentStores 328 1.6% 2.20 1.35

2242 Women'sandGirls'WearManufacturing 312 1.6% 5.50 12.78

5221 ClothingRetailing 298 1.5% 1.65 1.85

7869 BusinessServices,nec 286 1.4% 1.94 2.26

5720 Pubs,TavernsandBars 280 1.4% 2.55 3.44

7821 ArchitecturalServices 279 1.4% 2.21 3.31

4721 TextileProductWholesaling 259 1.3% 4.54 8.85

7851 AdvertisingServices 258 1.3% 2.61 2.90

2859 ElectricalandEquipmentManufacturing,nec 249 1.2% 8.15 5.46

7841 LegalServices 248 1.2% 0.27 0.89

9111 FilmandVideoProduction 235 1.2% 5.19 5.63

8729 Non-ResidentialCareServices,nec 221 1.1% 1.80 1.33

5710 Accommodation 208 1.0% 0.47 1.32

7120 TelecommunicationServices 202 1.0% 0.38 0.69

Source:AuthorusingdatafromBureauofTransportStatistics(1996)

Legend

Creativeindustries Manufacturing Cafes,barsetc. Othernotableindustries

139

In2011,thepresenceofthecreativeindustrieswithinSurryHillswasapparentthroughthepresenceofcomputersystemdesignandrelatedservices,advertisingservicesandarchitecturalserviceswhichalldemonstratedhighemployment,asignificantspecialisation(comparedtotheCityofSydneyandSydneyGMA)andstronggrowthbetween2006and2011(refertoTable15).

Therewereanumberofothertrendsinindustries,bothcreativeandnon-creative,whichareworthnoting:

― Newspaper publishingwasthemostsignificantindustryofemploymentwithinSurryHillsandanindustryofspecialisation,howeverithadexperiencedrelativelyslowgrowthinemploymentbetween2006and2011,whichwaspotentiallyduetochangingstructureoftheindustry.

― Therewereasignificantnumberofjobsincentral government administrationwithinSurryHills.ThiswasduetotheconcentrationofanumberoffederalgovernmentofficeswithintheCentennialPlazabuildingsonElizabethStreetsuchastheDepartmentofVeteransAffairs,DepartmentofSocialServicesandIndigenousCoordinationCentre.

― Cafes and restaurantswasthefifthlargestindustryofemploymentinSurryHills.Theindustryexperiencedstronggrowthbetween2006and2011,andwasanindustryofspecialisationforSurryHills.Similartrendswereobservedforpubs, taverns and bars asanindustryofemployment.ThesetrendshighlightapotentiallocalbuzzwhichmayhavedevelopedinSurryHills.

― TherewerestillremnantsoftheformerragtradeinSurryHillswithclothing and footwear wholesaling an industryofspecialisationforSurryHillswhichemployedarelativelysignificantnumberofworkersinSurryHills.

― Asignificantconcentrationofemploymentwithinperforming arts operation,comparedtoSydneyGMA,whichwaslikelyduetothepresenceoftheAustralianInstituteofMusic,BelvoirTheatreandOperaAustraliawithinSurryHills.

140

TABLE 15: ANZSIC 4 digit industries of employment (≥1% total employment), 2011, Surry Hills

CODE 4 DIGIT INDUSTRY JOBS % LQ-CITY OF SYDNEY LQ-SYDNEY GMA GROWTH 06-115411 Newspaperpublishing 1,394 5.4% 6.72 19.34 3.3%

7510 Centralgovernmentadministration 1,171 4.6% 3.24 5.61 84.1%

7000 Computersystemdesignandrelatedservices 1,139 4.4% 1.41 2.17 95.7%

6940 Advertisingservices 1,031 4.0% 2.66 7.43 179.4%

4511 Cafesandrestaurants 943 3.7% 1.63 2.02 48.5%

7711 Policeservices 826 3.2% 4.76 5.47 12.2%

7520 Stategovernmentadministration 701 2.7% 1.20 2.14 -31.7%

6921 Architecturalservices 626 2.4% 3.09 6.50 26.0%

8790 Othersocialassistanceservices 548 2.1% 3.66 1.68 74.0%

6924 Otherspecialiseddesignservices 536 2.1% 4.14 6.35 43.7%

3712 Clothingandfootwearwholesaling 505 2.0% 4.54 9.27 13.0%

6962 Managementadviceandrelatedconsultingservices 499 1.9% 1.17 2.26 77.0%

4520 Pubs,tavernsandbars 469 1.8% 2.34 3.42 40.4%

4512 Takeawayfoodservices 386 1.5% 1.49 0.75 224.4%

9001 Performingartsoperation 384 1.5% 5.09 20.48 19.3%

6931 Legalservices 363 1.4% 0.31 1.11 86.2%

4400 Accommodation 345 1.3% 0.65 1.42 16.2%

4251 Clothingretailing 343 1.3% 1.31 1.33 84.4%

6950 Marketresearchandstatisticalservices 306 1.2% 2.65 3.85 32.5%

7211 Employmentplacementandrecruitmentservices 285 1.1% 0.88 1.92 -21.5%

7299 Otheradministrativeservicesnec 261 1.0% 2.03 3.89 8.8%

8102 Highereducation 257 1.0% 0.39 0.75 117.8%

9559 Otherinterestgroupservicesnec 257 1.0% 2.38 4.24 35.3%

8101 Technicalandvocationaleducationandtraining 252 1.0% 1.46 1.47 26.0%

8401 Hospitals(exceptpsychiatrichospitals) 247 1.0% 0.49 0.30 72.7%

8219 Adult,communityandothereducationnec 247 1.0% 2.15 2.17 36.5%

7294 Callcentreoperation 247 1.0% 6.03 9.27 85.7%

Source:AuthorusingdatafromBureauofTransportStatistics(2006,2011)

Legend

Creativeindustries Manufacturing Cafes,barsetc. Othernotableindustries

141

Occupations of employmentTheoccupationstructureofSurryHillshasremainedrelativelyconsistentsince1996,despitethechangingemploymentcompositionobservedinSurryHillsoverthisperiod.Theproportionofpeopleemployedintypicalwhitecollaroccupationsincreasedmarginallybetween1996and2001andthiswasaccompaniedbyasmalldeclineintheproportionofpeopleemployedintypicalbluecollaroccupations.

In2011,SurryHillscontainedasignificantproportionofworkersemployedasProfessionals,followedbyClericaland

FIGURE 48: Occupations of employment (ANZSCO9 1 digit) 2011 – Surry Hills

0%

5%

10%

15%

20%

25%

30%

35%

40%

Occupa�ons of employment (ANZSCO 1 digit)

Prop

or�o

n of

jobs

Surry Hills City of Sydney Sydney GMA

Managers Professionals Technicians and Trade Workers

Community and Personal

Service Workers

Clerical and Administra�ve

Workers

Sales Workers Machinery Operators and

Drivers

Labourers

Source:AuthorusingdatafromBureauofTransportStatistics(2011)

Administrativeworkers(refertoFigure48).TheoccupationprofileofSurryHillsgenerallyreflectedthatoftheCityofSydney.However,acrosstheSydneyGMAthereisamuchsmallerproportionofProfessionalsandagreaterproportionofbluecollaroccupations.

Analysisofoccupationsatafinegrainlevelwassimilarlyconductedfor1996and2011.In1996,clothingtradespersonsandsewingmachinistsweresignificantoccupationsofspecialisationforSurryHills(refertoTable16).Astheragtradewasdeclining,therewasevidenceofanascentcreativeclusterwithdesignersandillustratorsthe

fourthlargestoccupationofemploymentandjournaliststhesixth.ComputingprofessionalsandmarketingandadvertisingprofessionalswerealsopresentasoccupationsofemploymentinSurryHillsin1996.TherewasasignificantconcentrationofadministrativeoccupationsinSurryHillsin1996includinggeneralclerks,secretariesandpersonalassistantsandkeyboardoperators.Thesewerelikelysupportingoccupationsforvariousoccupationswithintheprecinct.

9AustralianandNewZealandStandardClassificationofOccupations;refertoAppendixCfordescription

142

TABLE 16: ANZSCO 4 digit occupations of employment (≥1% total employment), 1996, Surry Hills

CODE 4 DIGIT INDUSTRY JOBS % LQ-CITY OF SYDNEY LQ-SYDNEY GMA6111 Generalclerks 939 4.7% 1.25 1.76

8211 Salesassistants 668 3.3% 1.10 0.69

5111 Secretariesandpersonalassistants 639 3.2% 0.64 0.85

2533 Designersandillustrators 530 2.7% 3.46 5.07

6143 Bankworkers 511 2.6% 1.01 1.86

2534 Journalistsandrelatedprofessionals 468 2.3% 3.23 7.54

3911 Policeofficers 467 2.3% 2.40 4.65

6121 Keyboardoperators 429 2.2% 1.26 1.84

6211 Salesrepresentatives 419 2.1% 1.56 1.32

2211 Accountants 366 1.8% 0.49 0.95

3292 Projectandprogramadministrators 355 1.8% 0.98 1.65

2231 Computingprofessionals 348 1.7% 0.58 0.96

1231 Salesandmarketingmanagers 334 1.7% 1.06 1.28

3311 Shopmanagers 313 1.6% 1.51 0.85

6131 Receptionists 294 1.5% 1.06 1.01

1112 Generalmanagers 282 1.4% 0.87 1.24

4941 Clothingtradespersons 272 1.4% 4.53 6.09

1000 Managersandadministrators,nfd 270 1.4% 1.29 1.17

6141 Accountingclerks 258 1.3% 0.94 1.16

2291 Humanresourceprofessionals 251 1.3% 0.98 1.83

9111 Cleaners 240 1.2% 0.91 0.75

2221 Marketingandadvertisingprofessionals 233 1.2% 1.11 1.64

3291 Officemanagers 226 1.1% 0.98 1.09

6323 Waiters 199 1.0% 0.83 1.19

7211 Sewingmachinists 195 1.0% 4.99 3.05

Source:AuthorusingdatafromBureauofTransportStatistics(1996)

Legend

Creativeindustries Manufacturing Cafes,barsetc. Othernotableindustries

In2011,SurryHillscontainedasignificantconcentrationofcreativeprofessionalsincludinggraphicandwebdesigners,advertisingandmarketingprofessionals,journalistsandarchitectsandlandscapearchitects,withhighLocationQuotientsindicatingsignificantspecialisation(refertoTable17).

143

TABLE 17: ANZSCO 4 digit occupations of employment (≥1% total employment), 2011, Surry Hills

CODE 4 DIGIT INDUSTRY JOBS % LQ-CITY OF SYDNEY LQ-SYDNEY GMA GROWTH 06-112324 Graphicandwebdesigners,andillustrators 772 3.0% 2.96 6.15 1508.3%

5311 Generalclerks 732 2.9% 1.22 1.22 306.7%

1311 Advertising,publicrelationsandsalesmanagers 724 2.8% 1.11 1.98 616.8%

2251 Advertisingandmarketingprofessionals 722 2.8% 1.72 3.74 1404.2%

2124 Journalistsandotherwriters 693 2.7% 3.03 9.11 4231.3%

5111 Contract,programandprojectadministrators 613 2.4% 1.32 2.49 1877.4%

6211 Salesassistants(general) 579 2.3% 0.98 0.53 124.4%

6113 Salesrepresentatives 521 2.0% 1.87 1.81 313.5%

2321 Architectsandlandscapearchitects 470 1.8% 3.18 7.92 3515.4%

2211 Accountants 459 1.8% 0.40 0.94 264.3%

4413 Police 445 1.7% 3.85 3.81 1102.7%

4311 Barattendantsandbaristas 438 1.7% 1.99 2.05 342.4%

2613 Softwareandapplicationsprogrammers 429 1.7% 0.82 1.89 793.8%

4315 Waiters 370 1.4% 1.32 1.64 802.4%

5511 Accountingclerks 361 1.4% 0.97 1.12 73.6%

1421 Retailmanagers 344 1.3% 1.22 0.73 73.7%

3513 Chefs 343 1.3% 1.52 2.17 757.5%

998 Inadequatelydescribed 323 1.3% 0.97 1.21 127.5%

2231 Humanresourceprofessionals 321 1.3% 0.90 2.14 970.0%

5121 Officemanagers 310 1.2% 1.20 1.13 342.9%

1111 Chiefexecutivesandmanagingdirectors 292 1.1% 1.26 1.97 403.4%

5421 Receptionists 288 1.1% 0.98 0.82 116.5%

6393 Telemarketers 274 1.1% 8.14 10.90 9033.3%

2253 Publicrelationsprofessionals 270 1.1% 2.08 5.15 2900.0%

Source:AuthorusingdatafromBureauofTransportStatistics(2006,2011)

Legend

Creativeindustries Manufacturing Cafes,barsetc. Othernotableindustries

144

Theseoccupationsallexperiencedparticularlystronggrowthinemploymentbetween2006and2011.Similartrendswereobservedforcontract,programandprojectadministrators.AnumberofoccupationswhichcouldbeconsideredassupportservicestothecreativeindustrieswerealsosignificantintermsofthelevelofspecialisationcomparedtotheCityofSydneyandSydneyGMAandthelevelofgrowthexperiencedbetween2006and2011.Theseincludebarattendantsandbaristas,waitersandchefswhichagainhighlightapotentiallyemerginglocalbuzzenvironmentinSurryHills.

Journey to work and mode shareJTWdatawasanalysedtodevelopanunderstandingastowhetherworkersbasedinSurryHillsalsolivewithintheinnercityofSydneyasthismightbeconsideredadriveroffirmlocation.Relatedly,ifworkerslivelocallytheymaybemorelikelytosocialiseintheareaandthiscouldbeconsideredtopromotesocialinteractionsandknowledgespilloversbetweencreativeworkers.

In2011,40percentofworkerslivedwithin10kilometresoftheprecinct.Mostsignificantly,sixpercentofworkerslivedwithinSurryHills(refertoFigure49).

FIGURE 49: Origin of workers travelling to Surry Hills, 2011

Source:AuthorusingdatafromBureauofTransportStatistics(2011)

145

OutsideofSurryHills,workersgenerallyresidewithintheinnerwestandeasternsuburbsofSydney,howeverdoliveacrossSydney.TheaveragedistancetravelledtoworkamongthoseworkersbasedinSurryHillsis18kilometreswhichisslightlyhigherthanthereportedaverageacrossSydneyof15kilometres(BureauofInfrastructure,2015)10.

ThemajorityofworkersinSurryHillstraveltoworkviapublictransport.CentralrailwaystationislocatedalongtheborderoftheprecinctandislikelytobeakeydriverofthehighpublictransportusageasitisthelargesttransportinterchangeinSydney.Therearealsoanumberofbusrouteswhichtravelaroundtheborderoftheprecinctalongmajorarterialroads.Publictransportusagehadbeendeclininguntil2006whentherewasaspikeintheproportionofworktripstoSurryHillsmadeviapublictransport(refertoFigure50).Thiswasaccompaniedbyasharpdeclineinprivatetransportusageoverthesameperiod.Thegeneraldeclineinpublicandprivatetransportusagebetween1991and2011wasaccompaniedbyanincreasingusageofactiveformsoftransportsuchaswalkingandcycling,andanincreaseintheproportionofpeopleworkingfromhomewhichisrepresentedwithintheothercategory.

10ThemethodologyadoptedbytheBureauofInfrastructure(2015)wasreplicatedfortheSurryHillscalculation

FIGURE 50: Trends in mode share – Surry Hills

Source:AuthorusingdatafromBureauofTransportStatistics(1991,1996,2001,2006,2011)

1991 1996 2001 2006 2011

Year

Public transport

Ac�ve transport

Private transport

Other

50%

60%

40%

30%

20%

10%

0%Pr

opor

�on

of tr

ips

146

ThemodeshareforworkersinSurryHillswasgenerallyreflectiveofmodeshareacrosstheCityofSydney(refertoFigure51).However,therewasamarginallyloweruseofpublictransportinSurryHillscomparedtotheCityofSydney,buttherewereahigherproportionofpeoplewhowalkedandcycledtowork(activetransport)inSurryHillscomparedtotheCityofSydney.AcrosstheSydneyGMA,privatetransportusagewasmuchhigherthanpublictransportusageandthiswasduetoanumberoffactors,particularlythevariationinpublictransportaccessibilityacrossSydney.

FIGURE 51: Comparison of mode share – Surry Hills

Public transport Private transport Ac�ve transport Other

Mode of transport

Prop

or�o

n of

trip

s

0%

10%

20%

30%

40%

50%

60%

70%

Surry Hills City of Sydney Sydney GMA

Source:AuthorusingdatafromBureauofTransportStatistics(2011)

147

AUSTRALIAN TECHNOLOGY PARKSimilaranalysisasaboveadoptingthesamemethodologytotrackemploymentwithintheATPoverthepasttwodecades

Broad trends in employmentIntermsofanalysis,theATPisaverysmallemploymentprecinctandthereforethemovementofasinglefirmintooroutoftheprecinctbetweencensusperiodscanhaveasignificantimpactonthedata.AswithSurryHills,employmentwithintheATPhasfluctuatedoverthepasttwodecades(refertoFigure52).In1991and1996theareainwhichtheATPcurrentlysitscontainedaround900jobs.TheATPopenedinNovemberafterthe1996censuscollectiondate(6August1996)andthereforetheincreaseinemploymentassociatedwiththeopeningoftheATPwasnotcaptureduntilthe2001Census.Thedeclineinemploymentbetween2001and2006mighthavebeenduetotheexitofamajorfirm,howeveritmayalsobeduetoageographicalvariationinboundaries.Thenon-ATPareacomprisesmostlyresidentiallandusesandtheraillinebutwouldhavealsolikelycapturedsomelocalemployment.Thegrowthinemploymentbetween2006and2011wasassociatedwiththecompletionoftheNICTAheadquartersin2008andthecompletionofMediaCityin2010(comprisingChannel7,PacificMagazinesandGlobalTelevision).

FIGURE 52: Total jobs 1991-2011 - ATP

-

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

1991 1996 2001 2006 2011917 915ATP 1,723 1,256 1,883

Tota

l job

s

YearSource:AuthorusingdatafromBureauofTransportStatistics(1991,1996,2001,2006,2011)

148

The2014ATPAnnualReport(AustralianTechnologyParkSydneyLimited,2014)reportedthattherewere4,500jobswithintheATPasof2014.Thiswassignificantlymorejobsthanreportedatthetimeofthe2011Census.OfficialnumbersprovidedbyATPthroughitsannualreportsfrom2006to2014aredetailedinFigure53.BasedonthesenumberstheATPhasgrownfrom1,200jobsin2006to2000jobsin2011and4,500jobsin2014,almostdoublingeveryfiveyears.ThesefiguresarerelativelyconsistentwiththenumberofjobsreportedintheCensusin2006and2011.The2014employmentnumberwasbasedonatenantsurveyconductedin2014bythegovernmentownedmanagementcompany,ATPSL,andresultedinanupdatingofthe2013figurewhichwasconsideredtohavebeenoutofdate11.

11ConclusionbasedonresponsefromATPSLregardingcalculationofemploymentnumbersandtenantsurvey

FIGURE 53: Total jobs ATP 2006-2014

1,000

1,500

2,000

2,500

1,000

1,000

1,000

1,000

1,000

500

-20061,200 1,200 1,200 1,800 2,000 2,000 3,000 3,000 4,500

2007 2008 2009 2010 2011 2012 2013 2014ATP

Tota

l job

s

Year

Source:AuthorusingdatafromAustralianTechnologyParkSydneyLimited(2006,2007,2008,2009,2010,2011,2012,2013,2014)

149

FIGURE 54: Employment by building across the ATP

Source:AuthorbasedondataprovidedbyATPSLfromTenantSurvey2014

TheemploymentnumbersbyindividualbuildingacrosstheATPin2014isillustratedinFigure54.ThesedataaredrawnfromtheATPSLTenantSurveywhichwasconductedin2014.Accordingtothedata,therewere5,190jobswithintheATPin2014.However,thisincludesstudentsofboththeUniversityofSydney(Biomedicalbuilding)andtheTopEducationInstitute(LocomotiveWorkshops).Excludingthestudents,theemploymentwithintheATPwasaround4,500jobs(asreportedabove).

ThecompositionofemploymentwithintheATPhasevolvedoverthepasttwodecadesasaresultoftheredevelopmentofthesiteintoatechnologypark.In1991,16percentofworkerswereemployedinmanufacturingand11percentofworkerswereemployedinprofessionalandfinancialservices(refertoFigure55),whichwaslikelyreflectiveofthesurroundinglandusesastheATPwasstillunderconstruction.In2011,manufacturingwasnolongeranindustryofemploymentwithintheATP.

ProfessionalfinancialservicesgrewintheATPtoover35percentofemploymentin2006.Howevertheseindustriesexperiencedasignificantdeclineinemploymentbetween2006and2011toreachunder15percentoftotalemploymentin2011.Accommodationandfoodservicesremainedstableataroundtwopercentofemploymentoverthepasttwodecades.Informationmediaandtelecommunicationshasexperiencedparticularlystronggrowthbetween2006and2011tobecomethelargestindustryofemploymentwithintheATP.ThiswasduetotheestablishmentofMediaCityattheATP(asdiscussedabove).

Asmentionedpreviously,theATPisasmallprecinctandcautionmustbetakenwhenobservingtrendsassmallabsoluteincreasesinthenumberofjobswithinaparticularindustrycanhavequitevolatileimpactsontheproportionofemploymentinaparticularindustry.ThisisevidentwhencomparingtrendswithintheseindustriesacrosstheCityofSydneyandSydneyGMA.ThevariationinTZboundariesfortheATPareaalsoneedstobetakenintoaccount.Despitethis,thegrowthininformationmediaandtelecommunicationsissignificantwhencomparedtotheCityofSydneyandtheSydneyGMA.ThisindustryhasremainedrelativelystableacrosstheCityofSydneyoverthepasttwodecadeswithanincreaseintheproportionofpeopleemployedinthisindustrybetween2001and2006fromthreetosixpercent(refertoFigure56).

AcrosstheSydneyGMA,theproportionofemploymentwithinInformationMediaandTelecommunicationshasremainedrelativelystableataroundtwopercentofemploymentoverthepasttwodecades(refertoFigure57)whichsuggeststhattheindustryisnotasignificantindustryofgrowthforSydneyGMAasawhole.ThecompleteeradicationofmanufacturingasanindustryofemploymentintheATPisindicativeofrestructuringoftheeconomyfrommanufacturingtoservicebasedemploymentwhichhasbeensomewhatobservedacrosstheSydneyGMA,howevernottotheextentthathasbeenexperiencedintheinnercitythroughdevelopmentssuchastheATP.

150

FIGURE 55: Trends in key industries - ATP

Source:AuthorusingdatafromBureauofTransportStatistics(1991,1996,2001,2006,2011)

1991 1996 2001 2006 2011

Year

50%

45%

40%

35%

30%

25%

20%

15%

10%

5%

0%

Prop

or�o

n of

tota

l job

s

Manufacturing

Informa�on Media and Telecommunica�ons

Accommoda�on and Food Services

Professional and financial services

FIGURE 57: Trends in key industries - Sydney GMA

Source:AuthorusingdatafromBureauofTransportStatistics(1991,1996,2001,2006,2011)

Prop

or�o

n of

tota

l job

s

1991 1996 2001 2006 2011

Manufacturing

Informa�on Media and Telecommunica�ons

Accommoda�on and Food Services

Professional and financial services

Year

50%

45%

40%

35%

30%

25%

20%

15%

10%

5%

0%

FIGURE 58: Industries of employment (ANZSIC 1 digit) 2011 – ATP

Source:AuthorusingdatafromBureauofTransportStatistics(2011)

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Agricu

lture

Mining

Man

ufactu

ring

Elect.

, gas

, wate

r, was

teConstr

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Wholesale Trade

Retail Tr

ade

Accomm. a

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Transp

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Inform. m

edia an

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Finan

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Rental, h

iring a

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Professional

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l

Admin. and su

pport

Public ad

ministra�

onEd

uca�on

Health ca

re

Arts an

d recre

a�on

Other servi

ces

Industries of employment (A NZSIC 1 digit)

Prop

or�o

n of

jobs

ATP City of Sydney Sydney GMA

FIGURE 56: Trends in key industries - City of Sydney

Source:AuthorusingdatafromBureauofTransportStatistics(1991,1996,2001,2006,2011)

Prop

or�o

n of

tota

l job

s

1991 1996 2001 2006 2011Year

Manufacturing

Informa�on Media and Telecommunica�ons

Accommoda�on and Food Services

Professional and financial services

50%

45%

40%

35%

30%

25%

20%

15%

10%

5%

0%

151

INDUSTRIES OF GROWTH AND DECLINEIn2011,InformationmediaandtelecommunicationswasthemainindustryofemploymentinATPintermsofbothproportionoftotalemploymentwithinATPandcomparedtotheCityofSydneyandSydneyGMA(refertoFigure58).Thisindustrywassupportedbypublicadministration(duetothepresenceofofficesofanumberofstategovernmentagencieswithintheATPsuchasRoadsandMaritimeServicesandtheDepartmentofEducationandTraining)andprofessionalandtechnicalservices.

Oncecreativeindustriesweredrawnoutasaseparateemploymentsector,theconcentrationofcreativeindustrieswithinATPisapparent(refertoFigure59).In2011,over40percentofworkersbasedintheATPwereemployedwithinthecreativeindustries.Thisindustryofemploymentissupportedbypublicadministrationandprofessionalandtechnicalserviceswhicharenotconsideredtobecreative.

Between2006and2011,thecreativeindustriesgrewstronglyintermsoftotaljobs,withanadditional600jobs(refertoFigure60),aswellasproportionategrowth,growingby350percent(refertoFigure61).Thegrowthinthecreativeindustries,intermsofemployment,wasmuchgreaterthanacrosstheCityofSydneyandSydneyGMAoverthesameperiod,howeverthemarkeddifferenceillustratedinFigure61isduetothesmallbaseemploymentnumberfortheATP.

Thecompositionofemploymentatafinegrainlevel(ANZSIC4digit)intheATPandsurroundingareawasalsoanalysedfortheATPfor1996and2011.EmploymentwasrelativelylowwithintheATPandsurroundingsin1996priortotheopeningoftheATP.However,therewasaconcentrationofmanufacturingobserved.Thisincludedclothingmanufacturing,railwayequipmentmanufacturing,printing,men’sandboys’wearmanufacturingandcardiganandpullovermanufacturing(refertoTable18).Alongsidethis,therewereanumberofjobswithinaswellasrailtransportemployment,whichwaslikelyassociatedwiththerailwaylandsurroundingtheATPwhichwascapturedinthe

boundarysincetheEveleighRailyardshadclosedin1989.TherewasevidenceofmoreprofessionalservicesindustrieswhichmayhavebeengrowinginthesurroundingareaspriortotheopeningoftheATPincludingcomputerconsultancyservices,telecommunicationservicesandscientificresearch.Thismayhighlightapre-existingclusteroftheseindustrieswithinthesurroundingareawhichwaslocatedincloseproximitytotheUniversityofSydney.

FIGURE 59: Industries of employment (ANZSIC 1 digit) 2011 – ATP

Source:AuthorusingdatafromBureauofTransportStatistics(2011)Pr

opor

�on

of tr

ips

ATP City of Sydney Sydney GMA

Agricu

lture

Mining

Man

ufactu

ring

Elect.

, gas

, wate

r, was

teConstr

uc�on

Wholesale Trade

Retail Tr

ade

Accomm. a

nd food

Transp

ort an

d ware

housing

Inform. m

edia an

d teleco

mm.

Finan

ce an

d insu

rance

Rental, h

iring a

nd real

estate

Professional

and te

chnica

l

Admin. and su

pport

Public ad

ministra�

onEd

uca�on

Health ca

re

Arts an

d recre

a�on

Other servi

ces

Crea�ve

industr

ies

Industries of employment

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

FIGURE 60: Growth/decline in industries of employment (ANZSIC 1 digit) between 2006 and 2011 in the ATP (absolute)

Source:AuthorusingdatafromBureauofTransportStatistics(2006,2011)

Agricu

lture

Mining

Man

ufactu

ring

Elect.

, gas

, wate

r, was

teConstr

uc�on

Wholesale Trade

Retail Tr

ade

Accomm. a

nd food

Transp

ort an

d ware

housing

Inform. m

edia an

d teleco

mm.

Finan

ce an

d insu

rance

Rental, h

iring a

nd real

estate

Professional

and te

chnica

l

Admin. and su

pport

Public ad

ministra�

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uca�on

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Other servi

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Crea�ve

industr

ies

Industries of employment

Num

ber o

f job

s

-100

100

200

300

400

500

600

700

-200

-

FIGURE 61: Growth/decline in industries of employment (ANZSIC 1 digit) between 2006 and 2011 in ATP (proportionate)

Source:AuthorusingdatafromBureauofTransportStatistics(2006,2011)

Industries of employment

Prop

or�o

n of

jobs

ATP City of Sydney Sydney GMA

Agricu

lture

Mining

Man

ufactu

ring

Elect.

, gas

, wate

r, was

teConstr

uc�on

Wholesale Trade

Retail Tr

ade

Accomm. a

nd food

Transp

ort an

d ware

housing

Inform. m

edia an

d teleco

mm.

Finan

ce an

d insu

rance

Rental, h

iring a

nd real

estate

Professional

and te

chnica

l

Admin. and su

pport

Public ad

ministra�

onEd

uca�on

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re

Arts an

d recre

a�on

Other servi

ces

Crea�ve

industr

ies

-150%

-100%

-50%

0%

50%

100%

150%

200%

250%

300%

350%

400%

152

TABLE 18: ANZSIC 4 digit industries of employment (≥1% total employment), 1996, ATP

CODE 4 DIGIT INDUSTRY JOBS % LQ-CITY OF SYDNEY LQ-SYDNEY GMA7834 Computerconsultancyservices 60 6.8% 5.61 5.14

7120 Telecommunicationservices 49 5.6% 2.07 3.78

6200 Railtransport 39 4.4% 4.53 7.94

7855 Businessmanagementservices 31 3.5% 2.69 3.65

2249 Clothingmanufacturing,nec 28 3.2% 18.30 25.43

2823 Railwayequipmentmanufacturing 28 3.2% 152.43 50.50

2412 Printing 25 2.8% 2.76 2.96

2241 Men'sandboys'wearmanufacturing 23 2.6% 86.17 47.07

2422 Otherperiodicalpublishing 22 2.5% 5.65 12.20

2240 Clothingmanufacturing,undefined 21 2.4% 5.70 6.86

7854 Businessadministrativeservices 21 2.4% 1.83 3.00

2232 Cardiganandpullovermanufacturing 19 2.2% 245.18 249.96

8431 Highereducation 18 2.0% 0.94 1.76

7864 Securityandinvestigativeservices(exceptpolice)

18 2.0% 8.14 5.23

7810 Scientificresearch 18 2.0% 7.79 7.09

8634 Communityhealthcentres 16 1.8% 13.63 8.31

8421 Primaryeducation 15 1.7% 6.89 1.15

8113 Localgovernmentadministration 13 1.5% 3.04 1.83

4623 Motorvehiclenewpartdealing 13 1.5% 39.39 4.68

9900 Non-classifiableeconomicunits 12 1.4% 2.02 1.27

5329 Automotiverepairandservices,nec 12 1.4% 6.10 1.82

8432 Technicalandfurthereducation 10 1.1% 2.05 1.77

6644 CustomsAgencyServices 9 1.0% 4.67 6.66

Source:AuthorusingdatafromBureauofTransportStatistics(1996)

Legend

Creativeindustries Manufacturing Cafes,barsetc. Othernotableindustries

In2011,therewerethreemainindustrieswhichdominatedemploymentintheATPwithhighemployment,highgrowthbetween2006and2011andsignificantspecialisationcomparedtotheCityofSydneyandSydneyGMA.Theseincludedmagazine and other periodical publishing, free-to-air television broadcasting(Channel7includingPacificMagazinesandGlobalTelevisionstudios)andscientific research services (NICTA)(refertoTable19).Theseindustriesweresupportedbystate government administration(RoadsandMaritimeServices), motion picture and video production and computer system design and related services.ThesewereindustriesinwhichtheATPhasaspecialisation,buthaveexperienceddeclinesinemploymentbetween2006and2011.Thesupportindustriessuchascafes,restaurantsandbarswhichwerepresentinSurryHillswerenotsignificantindustriesofemploymentwithintheATP,whichhighlightsakeydifferencethatmayimpactonamenityandthelocalbuzzenvironment.

153

TABLE 19: ANZSIC 4 digit industries of employment (≥1% total employment), 2011, ATP

CODE 4 DIGIT INDUSTRY JOBS % LQ-CITY OF SYDNEY LQ-SYDNEY GMA GROWTH 06-115412 Magazineandotherperiodicalpublishing 403 21.4% 34.38 101.56 47.2%

7520 Stategovernmentadministration 294 15.6% 6.88 12.24 -71.4%

5621 Free-to-airtelevisionbroadcasting 181 9.6% 10.55 33.94 1541.8%

6910 Scientificresearchservices 131 7.0% 14.45 22.82 219.3%

8591 Ambulanceservices 97 5.2% 103.10 43.55 116.2%

5511 Motionpictureandvideoproduction 83 4.4% 10.19 24.07 -43.3%

7000 Computersystemdesignandrelatedservices 79 4.2% 1.33 2.05 -86.4%

3499 Othermachineryandequipmentwholesalingnec

61 3.2% 27.24 19.56 1930.0%

7600 Defence 49 2.6% 2.54 3.65 308.3%

8102 Highereducation 40 2.1% 0.81 1.59 -66.2%

8023 Combinedprimaryandsecondaryeducation 40 2.1% 9.33 2.70

5910 Internetserviceprovidersandwebsearchportals

36 1.9% 6.05 18.90 -32.6%

Source:AuthorusingdatafromBureauofTransportStatistics(2006,2011)

Legend

Creativeindustries Manufacturing Cafes,barsetc. Othernotableindustries

154

OCCUPATIONS OF EMPLOYMENTTheoccupationsofworkersbasedintheATPhassomewhatevolvedsince1996.Between1996and2001therewasstronggrowthintypicalwhitecollaroccupationsandthiswasaccompaniedbyadeclineintheproportionofpeopleemployedintypicalbluecollaroccupationsoverthesameperiod.In2011,theATPprimarilycontainedprofessionalswithahigherproportioncomparedtoCityofSydneyandSydneyGMA(refertoFigure62).

Lookingbackto1996,theworkforceinEveleighwasquitedifferentpriortothedevelopmentoftheATPwithprimarilyadministrativeandmanufacturingoccupationsofemploymentincludingsewingmachinists,salesrepresentatives,projectandprogramadministrators,cleaners,secretariesandpersonalassistantsandgeneralclerks(refertoTable20).ThisreflectsasimilartrendobservedinSurryHillsin1996.Further,thereiscontinuedevidenceofthestartofacreativeclusterwithanumberofcreativeoccupationsemergingwithintheATPsurroundsincludingcomputingprofessionals,designersandillustratorsandjournalistsandrelatedprofessionals.

FIGURE 62: Occupations of employment (ANZSCO 1 digit) 2011 – ATP

Source:AuthorusingdatafromBureauofTransportStatistics(2011)

Prop

or�o

n of

jobs

Managers Professionals Technicians and Trade Workers

60%

50%

40%

30%

20%

10%

0%Community and Personal Service

Workers

Clerical and Administra�ve

Workers

Sales Workers Machinery Operators and

Driverrs

Labourers

ATP City of Sydney Sydney GMA

Occupa�ons of employment (ANZSCO 1 digit)

155

TABLE 20: ANZSCO 4 digit occupations of employment (≥1% total employment), 1996, ATP

CODE 4 DIGIT INDUSTRY JOBS % LQ-CITY OF SYDNEY LQ-SYDNEY GMA4316 Communicationstradespersons 42 4.7% 14.82 14.82

2231 Computingprofessionals 41 4.6% 2.52 2.52

7211 Sewingmachinists 31 3.5% 10.83 10.83

6211 Salesrepresentatives 27 3.0% 1.90 1.90

3292 Projectandprogramadministrators 23 2.6% 2.39 2.39

1112 Generalmanagers 22 2.5% 2.16 2.16

9111 Cleaners 22 2.5% 1.53 1.53

5111 Secretariesandpersonalassistants 21 2.4% 0.63 0.63

6111 Generalclerks 20 2.2% 0.84 0.84

3311 Shopmanagers 19 2.1% 1.15 1.15

2533 Designersandillustrators 18 2.0% 3.85 3.85

7993 Storepersons 16 1.8% 1.08 1.08

8211 Salesassistants 15 1.7% 0.35 0.35

1231 Salesandmarketingmanagers 15 1.7% 1.29 1.29

4912 Printingmachinistsandsmalloffsetprinters 14 1.6% 4.36 4.36

2534 Journalistsandrelatedprofessionals 12 1.3% 4.32 4.32

8311 Guardsandsecurityofficers 12 1.3% 3.12 3.12

4112 Metalfittersandmachinists 12 1.3% 1.63 1.63

6153 Stockandpurchasingclerks 11 1.2% 1.28 1.28

1299 Otherspecialistmanagers 11 1.2% 2.59 2.59

1000 Managersandadministrators,nfd 10 1.1% 0.97 0.97

3291 Officemanagers 10 1.1% 1.08 1.08

1211 Financemanagers 9 1.0% 1.35 1.35

5911 Bookkeepers 9 1.0% 1.23 1.23

2222 Technicalsalesrepresentatives 9 1.0% 1.92 1.92

7311 Truckdrivers 9 1.0% 1.02 1.02

Source:AuthorusingdatafromBureauofTransportStatistics(1996)

Legend

Creativeindustries Manufacturing Cafes,barsetc. Othernotableindustries

In2011,theATPcontainedasignificantconcentrationofcreativeprofessionalsincludingjournalistsandotherwriters,artisticdirectors,andmediaproducersandpresenters,film,television,radioandstagedirectorsandperformingartstechnicians(refertoTable21).Theseoccupationsexperiencedparticularlystronggrowthinemploymentbetween2006and2011duetotheinfluxofmediacompanies.Thehighgrowthproportionswerereflectiveofthesmallemploymentbasein2006.

156

TABLE 21: ANZSCO 4 digit occupations of employment (≥1% total employment), 2011, ATP

CODE 4 DIGIT INDUSTRY JOBS % LQ-CITY OF SYDNEY LQ-SYDNEY GMA GROWTH 06-112124 Journalistsandotherwriters 166 8.8% 9.86 29.67 936.9%

2613 Softwareandapplicationsprogrammers 95 5.1% 2.47 5.70 98.3%

2121 Artisticdirectors,andmediaproducersandpresenters

92 4.9% 9.37 26.35 2980.0%

5999 Othermiscellaneousclericalandadministrativeworkers

72 3.8% 10.02 17.66 94.9%

1351 ICTmanagers 65 3.5% 2.27 5.15 110.0%

1311 Advertising,publicrelationsandsalesmanagers 60 3.2% 1.24 2.22 -41.1%

3131 ICTsupporttechnicians 53 2.8% 2.85 4.91 64.1%

2324 Graphicandwebdesigners,andillustrators 51 2.7% 2.67 5.54 6.5%

4111 Ambulanceofficersandparamedics 51 2.7% 82.19 27.42 143.3%

2123 Film,television,radioandstagedirectors 48 2.6% 7.26 17.89 1510.0%

2251 Advertisingandmarketingprofessionals 37 2.0% 1.20 2.61 -22.7%

5111 Contract,programandprojectadministrators 37 2.0% 1.09 2.05 19.7%

2621 Databaseandsystemsadministrators,andICTsecurityspecialists

37 2.0% 3.31 6.99 85.5%

5311 Generalclerks 33 1.7% 0.75 0.75 -81.7%

3995 Performingartstechnicians 33 1.7% 6.27 11.76 996.7%

6113 Salesrepresentatives 29 1.5% 1.40 1.36 -77.2%

2600 ICTprofessionalsnfd 27 1.4% 2.03 4.14 141.8%

2631 Computernetworkprofessionals 26 1.4% 3.27 5.93 159.0%

2632 ICTsupportandtestengineers 25 1.3% 5.01 10.93

2340 Naturalandphysicalscienceprofessionalsnfd 24 1.3% 14.06 21.20 2280.0%

2000 Professionalsnfd 20 1.0% 1.30 2.84 -32.4%

2211 Accountants 19 1.0% 0.23 0.52 -85.0%

Source:AuthorusingdatafromBureauofTransportStatistics(2006,2011)

Legend

Creativeindustries Manufacturing Cafes,barsetc. Othernotableindustries

157

FIGURE 63: Origin of workers travelling to ATP, 2011ThegrowthofcomputingcontinuedwiththedevelopmentoftheATP,particularlythemorerecentestablishmentofNICTA,andthiswasevidentthroughthepresenceofanumberofgrowingICT-relatedoccupationsinwhichtheATPhasasignificantspecialisation.TheATPalsohadasignificantspecialisationinanumberofotheroccupations,suchasclericaladministrationandambulanceservices,whichalsogrewstronglyduringthesameperiod.Therewereanumberofsignificantoccupationsofemploymentwhichexperiencedlossesinemploymentbetween2006and2011includingadvertising,publicrelationsandsalesmanagers,advertisingandmarketingprofessionalsandgeneralclerks,whichwaspotentiallyduetoarestructuringwithinthemediaindustryormovementoffirmsoutoftheATP.

JOURNEY TO WORK AND MODE SHAREAswithSurryHills,thejourneytoworkdatawasanalysedtounderstandwhetherworkerslivelocally.Some20percentofworkerslivedwithintenkilometresoftheprecinct,andthreepercentofworkerslivearoundErskinevilleandAlexandriawhicharesuburbsdirectlytosouthoftheATP(refertoFigure63).

Source:AuthorusingdatafromBureauofTransportStatistics(2011)

158

However,overallworkersaretravellingforamuchwidercatchmentincludingtheeasternsuburbs,innerwestandnorthshore,aswellasnorthernsuburbssuchasHornsbyandsouthernsuburbsofSydneysuchasOysterBay(southofHurstville).In2011,commuterstravelledanaveragedistanceof21kilometrestoworkattheATP,whichisgreaterthantheaverageacrossSydneyof15kilometresfor2015andslightlymorethantheSurryHillsaverageof18kilometres12.

In2011,around45percentofworkersattheATPtravelledtoworkviaprivatetransport(refertoFigure64),whichisgreaterthantheproportionofworkerswhichcommutedviapublictransport.ThismayhavebeenduetotheavailabilityofcarparkingwithintheATP.PrivatetransportusageishigherforthoseworkerstravellingfromtheeasternsuburbswhichmaybeassociatedwithalackofdirectaccesstotheATPviarail.

12ThemethodologyadoptedbytheBureauofInfrastructure(2015)wasreplicatedfortheATPcalculation

FIGURE 64: Trends in mode share - ATP

Source:AuthorusingdatafromBureauofTransportStatistics(1991,1996,2001,2006,2011)

Prop

or�o

n of

jobs

Prop

or�o

n of

trip

s

60%

50%

40%

1991 1996 2001 2006 2011

30%

20%

10%

0%

Year

Public transport

Ac�ve transport

Private transport

Other

159

FIGURE 65: Comparison of mode share - ATP

Source:AuthorusingdatafromBureauofTransportStatistics(2011)

Prop

or�o

n of

jobs

Prop

or�o

n of

jobs

ATP City of Sydney Sydney GMA

70%

60%

50%

40%

30%

20%

Public transport Private transport Ac�ve transport Other

10%

0%

Mode of transport

In2011,themodeshareforworkersinATPdifferedfromthemodeshareacrosstheCityofSydneyandSydneyGMA(refertoFigure65),fittingsomewhatin-betweenthetwo.TherewashigherprivatetransportusageandlowerpublictransportusageintheATPthanacrosstheCityofSydney.GiventhelocationoftheATPdirectlyadjacenttoamajorrailstation,thisfindingisperhapssurprising.However,privatetransportusagewaslowerandpublictransportusagewashighercomparedtoacrosstheSydneyGMA.

160

Appendix CDetail on data analysis, geographies and industry codesGEOGRAPHIESThedatawasavailableattheTravelZone(TZ)geographywhichissmallerthanStatisticalLocalAreasbutlargerthanCollectionDistrictsorMeshBlocks(BureauofTransportStatistics,2015).TheTZdefinitionschangeregularlybasedonpopulationandemploymentgrowthandthereforethecentredefinitionsvaryforeachCensusyear.

SurryHillswasdefinedbasedontheTZboundariesfor2006and2011,whichalsoreflectstheareaidentifiedasSurryHillsasacentreandsuburb.TheboundarydefinedforSurryHillsforthepurposeofextractingdatafromthe1991,1996and2001JTWdata,isslightlylargerthan2011boundary(refertoFigure66).ThisisduetoaTZwhichcrossesovertheboundaryandcoversaportionofPaddington/Darlinghurst.TheTZcontainsonlyasmallamountofemploymentoutsideofSurryHillsandthusthedecisionwasmadetoretaintheTZinordertocapturetheentireSurryHillscentre.Somecautionshouldbetakenwheninterpretingtrendsinemploymentbetween2001and2006forSurryHills,acknowledgingthevariationintheboundary.

TheATPwasdefinedbasedontheareazonedforbusinessparkuses.TheTZboundariesfor2006and2011arerelativelyconsistentandcovertheATPaswellassurroundingrailland.Priorto2006,theTZboundarywasmuchlarger(refertoFigure67)duetothelowemploymentlevelsandthusthesmallestavailablegeographycapturesavarietyoflandusessurroundingtheATPincludingresidential,mixeduseandraillanduses.SomecautionshouldbetakenininterpretingtrendsforATP,duetothesignificantboundarychangebetween2001and2006.

FIGURE 66: Comparison of boundaries for Surry Hills 1991-2011

Source:Author

161

FIGURE 67: Comparison of boundaries for ATP 1991-2011

Source:Author

TheCityofSydneyLGAandSydneyGMAwereusedasbenchmarkstoisolateanyuniquetrendsorcharacteristicswithineachcasestudyarea.CityofSydneyisdefinedasthecurrentLGAboundary.Forthe1991,1996and2001Censusyears,theboundariesforthenCityofSydneyandSouthSydneyCouncilswerecombinedtoreflectthecurrentboundary.TheSydneyGMAboundarywasbasedontheareaidentifiedbytheBTSwithintheJTWdataasSydneyGMAforeachCensusyear.

INDUSTRY CATEGORIESTheindustryofemploymentcategoriesvariedbetweenCensusyears.In1991,therewere18broadindustriesofemploymentcategoriesand42sub-categories.In1993,theAustralianandNewZealandStandardIndustrialClassification(ANZSIC)andAustralianandNewZealandStandardClassificationofOccupations(ANZSCO)wereintroduced.The1993ANZSICreleaseincluded171digitindustrycategorieswithanumberofsubcategories;themostdetailedbeingthe4digitindustryclassifications.In2006,theANZSICcodeswereupdated,withtwoadditionalindustrycategoriescreatedtobringthetotalnumberof1digitcategoriesto19.Anumberofadditionsweremadetothemoredetailedclassifications.AcomparisonofindustrycategoriesisshowninTable22.Thismeantthatitwasdifficulttocompareemploymentwithinallindustriesacrossthefivecensusperiods.

Atabroadlevel,ANZSICcodescouldbecombinedtomatchthecategoriesin1991.Forexamplethe2006industriesofFinanceandInsuranceandProperty&BusinessServiceswerecombinedforthepurposeofcomparingtothe1991categoryofFinance,property&businessservices.Wherethe1991categoriesweretoobroad,thesubcategoriescouldbeusedtoextractaparticularindustryofemployment.Forexample‘Restaurants,hotels&clubs’,whichfitsunderthe1991industrycategoryRecreation,personal,otherservices,wasconsideredtobecomparabletotheANZSICcategoryofAccommodation,CafesandRestaurantsandthereforewasusedforthepurposeofcomparingthegrowthofthisindustryovertheperiodfrom1991to2011.

162

INDUSTRY CATEGORIES 1991 INDUSTRY CATEGORIES 1996 AND 2001 (ANZSIC 1993 RELEASE) INDUSTRY CATEGORIES 2006 AND 2011 (ANZSIC 2006 RELEASE)Agriculture,forestry,fish,hunt Agriculture,forestryandfishing Agriculture,forestryandfishing

Mining Mining Mining

Manufacturing Manufacturing Manufacturing

Electricity,gas,water Electricity,gasandwatersupply Electricity,gas,waterandwasteservices

Construction Construction Construction

Wholesale,retailtrade Wholesaletrade Wholesaletrade

Retailtrade Retailtrade

Accommodation,cafesandrestaurants Accommodationandfoodservices

Transport,storage Transportandstorage Transport,postalandwarehousing

Communication Communicationservices Informationmediaandtelecommunications

Finance,property&businessservices Financeandinsurance Financialandinsuranceservices

Property&businessservices Rental,hiringandrealestateservices

Professional,scientificandtechnicalservices

Administrativeandsupportservices

Publicadministration,defence Governmentadministrationanddefence Publicadministrationandsafety

Education Educationandtraining

Communityservices Healthandcommunityservices Healthcareandsocialassistance

Recreation,personal,otherservices Culturalandrecreationalservices Artsandrecreationservices

Personalandotherservices Otherservices

TABLE 22: Comparison of industry categories

Source:Author

163

1612Printingsupportservices 5610Radiobroadcasting

2591Jewelleryandsilverwaremanufacturing 5620Televisionbroadcasting,nfd

5400Publishing(exceptinternetandmusicpublishing),nfd 5621Free-to-airtelevisionbroadcasting

5410Newspaper,periodical,bookanddirectorypublishing,nfd

5622Cableandothersubscriptionbroadcasting

5411Newspaperpublishing 5700Internetpublishingandbroadcasting

5412Magazineandotherperiodicalpublishing 6921Architecturalservices

5413Bookpublishing 6924Otherspecialiseddesignservices

5420Softwarepublishing 6940Advertisingservices

5500Motionpictureandsoundrecordingactivities,nfd 6991Professionalphotographicservices

5510Motionpictureandvideoactivities,nfd 7000Computersystemdesignandrelatedservices

5511Motionpictureandvideoproduction 9000Creativeandperformingartsactivities,nfd

5514Post-productionservicesandothermotionpictureandvideoactivities

9001Performingartsoperation

5600Broadcasting(exceptinternet),nfd 9002Creativeartists,musicians,writersandperformers

J000Informationmediaandtelecommunications,nfd

TABLE 23: Creative industries (ANZSIC 4 digit categories)CREATIVE INDUSTRIESThegrowthofthecreativeindustries,particularlyintheinnercityofglobalcities,hasbeenincreasinglyobservedwithintheliterature.SincecreativeindustriesisnotaspecificindustryofemploymentwithintheANZSIC1digitcategories,inordertounderstandthesizeofthisindustrycomparedtotheotherbroadindustriesofemployment,thefinegrainindustries(ANZSIC4digit)whichcomprisethecreativeindustrieswereextractedfromtheBTSJTWdatasettocalculatetotalemploymentinthecreativeindustries.TheANZSIC4digitcodeswhichformthecreativeindustriesweresourcedfromarecentstudybySGSEconomicsandPlanning(2013)fortheformerCreativeIndustriesInnovationCentre(refertoTable23).

ThetotalemploymentwithineachoftheseindustrieswascalculatedforSurryHills,theATP,CityofSydneyLGAandSydneyGMAandtheemploymentnumbersweresubtractedfromtherelevantANZSIC1digitcategoriestoavoiddoublecounting.

Source:(AdaptedbyAuthorfromSGSEconomicsandPlanning,2013)

164

Appendix DInterview questions: firm interviews

FIRM LOCATION ― Whatdoesyourfirmdo?Whenandwherewasitestablished?

― Whatisthebusinessorcompanystructure?Howmanyemployeesdoyouhave?

― Wherewasthefirmlocatedpreviously? ― WhydidthefirmchoosetolocateinSurryHills/ATP?

• Followingresponse,pleasefilloutstatedpreferencessurvey(attached)

― WhatdoyoulikeanddislikeaboutworkinginSurryHills/ATP?

― Doyouhaveacompanypolicyonworkingfromhome?

RECRUITMENT ― Howdoyourecruitnewstaff?Doyouusepersonalcontacts,advertisements,previousclients?

― Doyoutargetstafftoexpandthebusinessorjustreplacestaffwhohaveleft?

― Isstaffturnoverhigh?

NETWORKS ― Whoareyourclientsandwherearetheylocated? ― Whoareyoursuppliers?Islocationimportantforsupplychainlinks?

― Whoareyourmaincompetitors?Wherearetheylocated?

― Whowouldyouconsideriswithinyourprofessionalnetwork?Wherearethesefirms/institutionslocated?

― Isyourfirmassociatedwithanyparticularprofessionalbodies?

KNOWLEDGE ― Whatwouldyouconsidertobetheknowledgeofyourfirm?Whatisthemostimportantknowledgerequiredtoworkatyourfirm?

― Whoaretheknowledgegenerators? ― Howisknowledgesharedwithinyourfirm? ― Howisknowledgesharedwithexternalworkersandfirms?

― Howdoyouthinkknowledgespillovers(particularlyeconomicallyvaluableknowledge)occurinrelationtoyourfirm?Doyouthinkyoushareknowledgewithotherfirmsandhow?Doesyourlocationimpactonthis?

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Appendix EInterview questions: worker interviews

ROLE AND LOCATION ― Whattypeoffirmdoyouworkfor? ― Whatisyourrolewithinthefirm? ― Howlonghaveyoubeenemployedbythisfirm? ― Wheredidyouworkpreviously?(firmandlocation) ― Wheredidyoustudy(ifapplicable)? ― Wheredoyouliveandhowdoyoutraveltowork? ― Whydidyoumovetothisfirm? ― Hadyouheardofthecompanybefore?Didyouhaveanyexistingrelationshipswithpeoplewhoworkedforthisfirmpriortoworkinghere?Hadyouworkedwithanyoneherepreviously?Ifso,inwhatcapacity?

― Waslocationamajorfactorinthedecisiontoworkforthiscompany?

― WhatdoyoulikeanddislikeaboutworkinginSurryHills/ATP?

― Doyouregularlyworkfromhome?

KNOWLEDGE ― Whatwouldyouconsidertobeeconomicallyvaluableknowledgeinrelationtoyourrole?

― DoyouthinkknowledgeisdevelopedandsharedbetweenfirmswithinSurryHills/ATP?Ifso,howdoesithappen?

FORMAL KNOWLEDGE SHARING ― Doyouhavemanyface-to-facemeetings?Ifsowherearethesemeetingsoftenheld(location)andwhoaretheyheldwith?

― Whatproportionofyourworkrelationshipsarewithfirms/workersbasedinSurryHills/ATP?Whatproportionareoutside?

― Doyouhaveanysignificantbusinessrelationshipsinthearea?

― Doyouattendmanyseminars/conferences/networkingevents?AretheseheldwithinSurryHills/ATPorinotherlocations?Doeslocationimpactonyourdecisiontoattendthese?

― Doyoufindattendingtheseeventsvaluableindevelopingrelationships?Doyouthinktheserelationshipsevolveintoaworkingrelationshipandanexchangeofeconomicallyvaluableknowledge?

INFORMAL KNOWLEDGE SHARING ― DoyouhaveanyexistingconnectionswithotherworkersandfirmswithinSurryHills/ATP?Ifso,howweretheseconnectionsformed?

― Doyouvisitcafes,restaurantsand/orbarsregularlyinthisarea?Ifso,atwhattimesoftheday?

― Doyousocialisewithworkersfromotherlocalfirms? ― Doyouspendmuchtimeinthelocalareaoutsideofworkhours?

― Canyouthinkofanexampleofwhenyoudevelopedeconomicallyvaluableknowledgewithsomeoneexternaltothefirm?Howwassocialinteractioninitiatedandhowdiditevolveintoaworkingrelationship?Whatwastheendresult?

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Appendix FEthics approvalApprovalfromBuiltEnvironmentHumanResearchEthicsAdvisoryPanel:

Appendices 238

Approval from Built Environment Human Research Ethics Advisory Panel:

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Projectinformationstatement:

Appendices 239

Project information statement: