“Place matters for our prosperity,” acclaimed economist Professor Ian Harper told the Property Congress crowd last week. “And building place in turn drives prosperity.”
A member of the Reserve Bank board and dean of the Melbourne Business School, Harper is one of Australia’s foremost economic minds. His perspectives on current economic conditions were illuminating, but his insights into how Australia’s property industry can shape our nation had people sitting on the edges of their seats.
Productivity growth is the key to rising living standards, Harper said. Exploring Australia’s prosperity agenda, Harper argued that one of the key planks is “better functioning cities”.
What must the property industry “do right” to drive national prosperity? There is a “long list”, he admitted. High on the list was “tackling congestion and NIMBYism” and “all the things that get in the way of creating great places”.
“As you design cities of the future, as you make places work, you will play a very important role in driving productivity and therefore future living standards,” he said.
Harper says modern economies have “moved on” from the industrial model where the basis for productivity was scale. Scale economies have been “done over by the digital revolution” and by micro-technologies.
“Economies of agglomeration will be the source of future productivity improvements.” Human connection is the seed of “innovation, entrepreneurship and growth” – and growth drives new ideas.
“The human brain burns no more metabolic energy coming up with a brilliant idea than staring blankly at a wall.” Ingenuity is stimulated by diversity. And diversity, in turn, is stimulated by agglomeration in our cities.
“There’s the key and that is the purpose of the work you do,” he told the audience.
“The answer is agglomeration” and “getting together to make our cities work”.
There is a reason why big professional services firm are “full on” about diversity and inclusion, Harper added. Big professional services firms are always “blending and confronting each other” with people from different backgrounds because this drives profitability and productivity. Why? Ideas.
But diversity alone was not enough, Harper said.
“The D without the I is no use. Diversity is a fact. Inclusion is an act.
“We are social creatures. We live together. We work together. We spur one another on to greater heights and that happens when we gather together – provided we gather together in places that don't set our teeth on edge and set us against one another, but set us together, in community.
“That's what place is about, ladies and gentlemen. I don't need to tell you that place matters for our prosperity.”