Literature Review Theme 3: Successful Transitions

The Regional Australia Institute (RAI) has undertaken a Stocktake of Regional Research project. One component of the project requires a literature review to be prepared for each of RAI's four themes, namely:

Theme 1 – Position and Potential: potential for new growth and prosperity in each region;

Theme 2 – Realising Opportunities: understand how opportunities for growth and development can translate into tangible benefits for regions;

Theme 3 – Successful Transitions: develop better strategies for communities in transition to enable them to cope with change; and

Theme 4 – Better Services and Engagement: better ways of engaging regional communities and delivering services.

This literature review addresses Theme 3 – Successful Transitions.

Transition is a constant and often unavoidable part of life. Transitions can impose an array of costs on those who are affected, including adaptation and transition costs, as well as produce losses in welfare.

However, transitions also produce new opportunities, gains in welfare and help drive innovation. The regional development policy task is to minimise costs, maximise gains and provide those adversely affected by change with the tools and ability to adapt. Many costs of transition are non-economic – such as environmental and social costs, and thus can be harder to measure. Evidence suggests readiness to cope with inevitable transition is the most effective response.

Transition can be more difficult for those who live in Australia's regional areas. Regional communities tend to have less diversified economies and can be disproportionately affected by exogenous factors such as drought, pestilence or changes in policy, for example the ban on live cattle exports to Indonesia in 2011 or water buy-backs in the Murray-Darling Basin.

Theme 3 focuses on enhancing the capacity of regions to transition successfully. Also, sometimes the size and spread of communities needs to change in order to respond to changed circumstances. This theme intends to identify what factors best allow successful transitions to occur with the lowest possible transition costs and minimal loss in welfare. The theme also necessarily deals with the issue of losers and winners from structural change and social transition.

Regions are subject to global and national forces that drive changes beyond their control. The smaller populations and less diverse economies of regions often mean that shifts in markets, policy or population can lead to significant and rapid changes in employment and business prospects. These shifts create significant uncertainty and stress for communities, undermining health and wellbeing in addition to economic costs.