11/9/2017

The Knowledge City Index: Measuring the knowledge intensity of Australian cities

 

By Lawrence Pratchett, Richard Hu, Michael Walsh, and Sajeda Tuli

The Knowledge City Index is a new index developed by researchers from the University of Canberra, Australia. The index aims to give an insight into the resilience and capabilities across 25 major Australian cities, through an understanding of the changing nature of work and knowledge capability.

Part of our motivation in measuring the knowledge capacity of Australian cities stemmed from an interest in examining the changing nature of work. Roughly half of the jobs that currently exist in developed economies will no longer exist by 2030.

For some workers, it is the best of times, as their knowledge skills and creativity combine to make them increasingly valuable and prosperous. For others, it is the worst of times, as their hard-won skills and occupational learning become increasingly irrelevant. Automation, artificial intelligence, big data, and machine learning are making more jobs redundant, and are changing some fundamentally. It is not just unskilled or semi-skilled workers who face these threats from new technologies and the changing nature of work. Increasingly, many skilled and professional occupations are being affected by these same technologies. Their associated economic and social transformations are leading some to question the very future of our work. But, the future of work is not necessarily bleak.

As some occupations are replaced by technologies, others are likely to emerge in the new economies that flourish. However, these new occupations will require different skills from the past and will be focused around new forms of industry. Those occupations that will advance in the near future will be those in the information and knowledge areas, those that require human creativity and interpretation rather than the repeated application of rules, and those that require the more nuanced interpersonal skills which technologies are still not capable, and seem unlikely ever, of replicating.

Changing Australian cities 

We know which types of jobs are most likely to decline and we have some sense of what types of jobs, or at least which sectors, are likely to be most resilient. But this dichotomy of decline and resilience is not equally distributed across Australia. Some Australian cities are well positioned to grow and advance in the new technologically based knowledge economy that is emerging, but others lack the infrastructure or capacity to resist the impacts of technological redundancy. Just like for individual workers, for some Australian cities it promises to be the best of times but for many others it would appear to be the worst of times.

Therefore, this report covers 25 major cities in Australia in the below image. Encompassing an area of less than 5 per cent of Australia’s total land, these 25 cities accommodate 76 per cent of Australia’s national population, and 72 per cent of all jobs.

Image: 25 Significant Urban Areas in Australia.

The Knowledge City Index

Despite the importance of knowledge cities as the future drivers of prosperity, there is a surprising absence of tools with which to measure and compare different cities. Our purpose is to provide not only a snapshot of where Australian cities are at present but also to provide a tool that can be used in different countries and at different times. In the long term, therefore, we aim to provide both international comparison and time series data to compare the evolution of knowledge cities.

As a starting point, however, we focus on developing the index for comparing the present state of knowledge cities in Australia. In order to better understand how the new technology and the changing work are reshaping our cities, we developed a knowledge cities index (KCI) for 25 major Australian cities. The KCI combines a city’s knowledge capital (the underlying knowledge infrastructure) and knowledge economy (the knowledge activation). We constructed six indicators to measure them:

For all six indicators, we collected the data from Australian Bureau of Statistics, 2011 Census, since census data covered the broadest population range and at the same time. For knowledge capacity, we focus on residents with tertiary qualifications to measure a city’s locally based human capital. Knowledge mobility focuses on the number of migrant workers in knowledge intensive industries.  Migrants, in this sense, are defined as people from outside of the SUA who have moved to it within the last five years, and can include both Australians from other areas and workers from overseas.  This measure is important because it emphasises the extent to which a city can attract talent from outside of its own pool of resources.  Another indication of knowledge capital is ‘Digital Access’ to measure the physical infrastructure that underpins the knowledge economy.  In this instance, we use the number of households with an internet connection.

For Knowledge Economy, first we focus on Knowledge Industries – this indicator focuses on the importance of a knowledge base to the local economy by measuring the number of people employed in knowledge industries within the area. Secondly, we measure Income – this indicator is used as a proxy for the value-add that knowledge work contributes to the local economy by measuring the number of workers earning in the top income bracket (i.e. more than $104,000, pa). lastly we measures ‘Smart Work’ – this indicator measures the number of workers who do not commute but work from home.  We see this final measure as an important contributor to the knowledge economy because it reflects the changing work practices that are a major feature of the emerging knowledge economy.

The standardised values for each indicator range from 1 to 10. An idealised knowledge city that performs the best in all of the six indicators will have an index value of 60.

While building the index, first, we focus on the analysis by proportion, in order to establish which cities are the most knowledge intensive.  Second, we focus on the analysis by size, in order to understand which cities are the largest in terms of their contribution to the knowledge economy.  Third, we present the aggregated Knowledge City Index which balances both proportion and size to offer a relative measure of the knowledge city.  

Winners and losers

In our tale of 25 cities, five cities in Australia appear to be well prepared for the technological revolution that is already taking place and can be qualified as “a knowledge city”. These are Sydney, Melbourne, Canberra, Brisbane and Perth.  For these top five cities, it could be the best of times with technological revolution. The remaining 20 cities have significant knowledge limitations, it could well be the worst of times. It requires a nuanced approach to understanding the underlying components of these cities and to explore the social, political and economic implications that stem from them.

Areas that have conventionally relied on the manufacturing and mining industries for large scale employment lack the knowledge capital and have not developed the knowledge economy to respond successfully to the impact of new technologies on their economies. 

Top three cities in Australia

The KCI presents a portrait for each of the 25 Australian cities in terms of knowledge capability. Each portrait provides measures across two domains – Knowledge Capital (KC) and Knowledge Economy (KE) – in order to differentiate the input and output of a city’s knowledge base.

Sydney and Melbourne, the two largest cities in Australia, also appeared in the top of the KCI. Despite being nearly identical on knowledge capacity and their knowledge economy appears to be evolving in different ways. 

Canberra, the Capital of Australia, stands out as Australia’s knowledge city, despite its comparatively small scale of population and employment base. As a proportion of its overall population, it has more people employed in knowledge work and in knowledge intensive organisations than any other city. 

In the next step of the research, the index will be updated with new Australian 2016 Census data, which will give more advance picture of major Australian cities. Also, international comparison with other OECD countries such as Canada or New Zealand will be developed, however, subject to data availability.

Explore the Knowledge City Index here.

About the authors:

Lawrence Pratchett is Dean of the Faculty of Business, Government and Law, and Professor of Politics at the University of Canberra.

Richard Hu is Professor of Urban Planning and Design in the Faculty of Arts and Design, and Fellow of the Institute for Governance and Policy Analysis, at the University of Canberra.

Michael Walsh is Assistant Professor of Social Science in the Faculty of Business, Government and Law at the University of Canberra.

Sajeda Tuli is a PhD Candidate and Research Assistant in the Institute for Governance and Policy Analysis at the University of Canberra.

Image: Tali Le Bamba.

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