The famous quote “A desk is a dangerous place from which to view the world” by British author John le Carré was imparted to me during my first week of work at Essential Economics in 2008, and has resonated since.
The field of urban economics – the study of the interaction of land and people – is necessarily characterised by a great deal of background data analysis. As a result, most consultants tend to spend more time with Microsoft Excel than we do with our own families. The ‘love triangle’ is completed by the close relationship with our good friends Microsoft Word and/or PowerPoint, that provide our clients with an insight to a wide range of quantitative and qualitative data.
Urban economists require skills in socio-economic, business and property market analysis combined with attention to detail, commercial acumen, and the ability to simplify complex problems into component parts. The ability to present analysis and recommendations in a way that is easily understood by a variety of audiences across varying business types is also important.
Delivering specific, relevant and considered recommendations to clients which have been logically derived from available data is what urban economists get paid for. In this “modern age” – the age of computers and information technology – providing this information can in some respects be undertaken more efficiently than ever.
However, this means the temptation to undertake projects via desktop analysis alone has never been greater. It makes perfect sense; we seem to have everything at our fingertips now, we no longer need to get out and dig for information.
Although the ‘desktop’ approach may be entirely appropriate for some projects, certainly the hat size does not fit universally. For many projects, viewing the world from behind the desk without fully understanding the real world subtleties of a locality can lead to sub-optimal outcomes and, in some cases, the provision of highly misleading advice.
We recently undertook a project in regional Victoria which involved providing a detailed economic assessment of a large industrial precinct of some 200 hectares as an input to a master plan. Our brief involved, among other aspects, providing advice on the adequacy of that land and whether justification existed for rezoning additional land.
Having completed the policy context review from the office, there was little doubt that sufficient land existed in the precinct to effectively accommodate any industrial businesses which desired to move there.
The temptation was palpable to skip ahead and undertake the detailed background analysis, safe in the knowledge that previous industrial land audits had also demonstrated that vacant land in the precinct was bountiful. The precinct enjoyed frontage to a major national highway and adjoined an existing railway line.
Surely potential opportunities could now be explored for the large tracts of vacant land that Google Earth imagery showed existed in the precinct?
Luckily, due to a well-structured and appropriately resourced client brief, as part of our project tasks we were able to arrange to meet face-to-face with approximately 12 key businesses in the precinct to discuss their history, current operations and future plans.
One of the businesses we consulted was an abattoir. This business was responsible for providing around 8% of all jobs in the local municipality. During lengthy discussions it was revealed that the company had consolidated landholdings of some 80ha, of which only approximately 5ha contained facilities which were visible from aerial imagery. The abattoirs – a key industry in the region – claimed that the balance of their land was actually of strategic importance to their business model as they were using the “vacant” land to agist stock in preparation for processing.
In effect, the vacant land afforded the abattoir flexibility when buying livestock from markets. The long-term intentions of the land owner absolutely did not include the redevelopment or sale of this land.
So, the pre-consultation desktop audit via aerial photography had concluded that 83ha of land in the precinct was classified as being vacant, and this figure was confirmed by background reports which included the findings of previous land audits.
However, these desktop conclusions were dramatic misrepresentations of the local-level situation in the precinct, which in fact had a vacant land component of only 8ha.
The ultimate recommendations for the precinct were therefore considerably different when real world considerations were accounted for.