IT Industry Attraction Project for Information Technology Enterprise in the Great Southern Region of Western Australia

An IT Industry Consultancy for the Great Southern Region Development Commission

Part 3: Investor Questions About Relocating to the Area


The aim of this phase of the study was to "...address questions that an investor might have about relocating an IT operation to the area". This was intended to provide:

  1. Clear indications as to economic and social circumstances to the region conducive to establishing operations in the region.
  2. Clear indications as to the policies in place that allow the potential operator to focus on important issues with the prospect of consistent answers.
  3. Clear indications of the level of community support for IT development.
  4. Clear indications of the options for dealing with a range of technical issues.
  5. A clear indication as to what the proponent needs to negotiate and information regarding the sources of this next level of information that might be required.

However, this approach of attracting IT operations to the area was not found to be the most appropriate for a region located away from Australia's east coast population. It is suggested that the region needs to organically grow local IT businesses to create factors which will then attract IT enterprises and outside investment to the region. This is developed further in part four of the report. One source of outside investment requiring special attention is Government. Political factors, not economic, are most important for deciding government call centre location and need to be addressed.

Economic and social circumstances to the region conducive to establishing operations in the region.

The resident population of the Great Southern region was 51,400 or 2.8 per cent of the State’s population in June 1998 (RDC 1998). Primary industries dominate, with broad-acre cropping, wool, livestock, horticulture - including viticulture - and fishing. Timber growing and tourism are growing industry sectors.

The region has one significant IT operation, a Telstra Call Centre with a theoretical capacity of approximately 40 seats, located in the town of Katanning. There are a number of small IT related businesses, such as Design Correlations, which specialises in making Numerically Controlled (NC) machinery and Geo Task (Australia) for computer-based mapping. With a conventional approach to development these businesses would be considered too small to be a significant to for industry development. However, given enough similar businesses this could provide significant employment and act as a catalyst for IT industry development.

As noted in Part 2, staff of the Department of Commerce and Trade of Western Australia, suggested that call centre development based on supporting local primary industry would be an option. An example would be support for the timber and wine industries, possibly with some government support to attract expansion. An existing example of IT support for the timber industry is Western Australia Department of Conservation and Land Management's online TreeNote booklets (DCLM 1999). These provide details on growing commercial timber in the region. This service could be developed into an integrated timber information service, and a way to promote the region as a location for investment in timber production.

Linking IT to popular new developments in primary production would also have benefits in promoting the lifestyle benefits of the region and making a virtue of its remoteness. As an example IT support for Viticulture could be promoted through on-line wine publications, such as Nine MSN's The Wine Magazine, which has featured the Great Southern Region:

This powerful symbol reminded me that the Great Southern is primarily Australian bush: and it is the traditional rural way of life that dominates here. Viticulture, winemaking and wine tourism are of only peripheral importance. Its isolation and the part-time nature of the wine industry in the region have been factors which have restrained the growth of wine tourism. While this is changing, such change will be a long, slow process. (Forrestal 1997)

Segal Quince & Partners (Segal 1985) report a statistical analysis of high technology industries around Cambridge. Most firms were independent, with only 25% subsidiaries of larger companies. The companies were small, with 30% having at most five employees and 75% having at most 30 people. There was significant movement of people between companies, the University and research laboratories, providing high quality technology transfer. Only 17% of new companies were by people straight from the University, more were from later spin-offs. The major reason for locating the firm in Cambridge was that the principles already lived there. Local contacts, market opportunities and a prestigious address were also factors. It is suggested that a modest version of this approach could be applied in the region and is described in part four.

Policies in place that allow the potential operator to focus on important issues

As noted in part one of the report, Government incentives and benefits were not found by research to be widely considered by organisations in their location decisions. While this research was specifically on call centre locational determinants, the author's experience suggests it would be generally applicable to IT businesses. Where such organisations locate in regional areas, outside Australia's major capital cities, it will most likely be to a major population centres of the east coast of Australia. Under this analysis, there is a significant challenge for the Great Southern Region. Even in the Western Australian context, the region is at a disadvantage to regional areas closer to Perth.

There are also disadvantages for the region with direct and indirect government assistance. An example of such government assistance was in the development of a call centre in the Cooma Region, which then attracted a major Defence Department contract (DoD 2000). There are also closer examples, such as at Bunbury (pop 37,000) , 350kms away from Albany with a 150 seat CentreLink Call-centre. According to Patrick Cox, currently undertaking research at the Australian National University on the interaction between regional call centres and regional/rural culture (personal communication 2000):

In a partial response to your query why CentreLink established a call-centre at Bunbury: 16 of CentreLink's 25 call-centres are in regional areas. The reasons given are that each centre employs 50 local staff and provides a government presence in the region. The selection of each region is probably politically motivated however, call-centres in regional areas experience little staff turnover, enjoy comparatively low leasing and staffing costs. Bunbury has high unemployment and a tertiary institution and therefore provides a good source of staff. It is reported at that Bunbury CentreLink Call-centre has 150 seats. As this is 10 times the size of the normal CentreLink Call-centre, this figure should be further investigated.

No further reasons for the unusual size for the Bunbury CentreLink Call-centre have come to light. However, it should be noted that Bunbury is in a marginal electorate. The extent to which lobbying could be undertaken by the Great Southern Region to attract government assistance for commercial businesses and the location of government owned business may be limited, but could still be worthwhile.

Level of community support for IT development

One of the IT success stories of the region are the Regional Telecentres located in many towns. As an example Katanning has a large Regional Telecentre in the Old Library Building, Austral Terrace. This centre has an ISP service with dial-in access for people in the surrounding region and plans to install video conferencing facilities. The telecentres have the potential to provide a range of services to micro-business and SMEs, including higher speed Internet connections and video conferencing facilities. There is the potential to collocate small call centres and business incubators with the Telecentres. This arrangement would suit web-based call centres and small software development companies.

Options for dealing with a range of technical issues

Technological developments have lessened the relevance of telecommunications and other infrastructure requirements in the location of IT businesses. The major costs for call centres, web and software development is staff, not telecommunications or equipment. A major new businesses can justify the installation of the required telecommunications infrastructure, a micro or small business needs little more than a standard telephone line. There are therefore few technical issues to be addressed for the region.

A major investment in upgrading of the telecommunications of the region would be unlikely to attract significant investment. However, it may be worthwhile to lobby Tesltra for installation of the General Packet Radio Service (GPRS) upgrade to the existing GSM mobile telephone cells and its CDMA equivalent in the region. This would allow use of specially fitted mobile telephones for Internet access at speeds comparable to the Public Switched Telephone Network (PSTN) in city areas. This would allow micro-businesses to use wireless internet access in place of installing a second telephone line.

One potential area for the expansion of network access is in Katanning. Web servers, call centres and other services requiring network access could be co-located in the existing Telstra Call Centre, or nearby, such as at the telecenter.

What the proponent needs to negotiate and next level of information required

A conventional approach to IT development would have printed brochures and videos, with high production standards, targeted to senior staff of major companies. Organic growth requires a different approach, with on-line information providing a directory of current businesses and support services. These can be used by local people considering setting up or expanding a business, as well as creating a sense of a healthy IT culture to attract outside investment. Any proposals received for major investments can be handled on a case-by-case basis by development authorities.


  1. Forrestal 1997 THE REMOTE GREAT SOUTHERN IN WESTERN AUSTRALIA, by Peter Forrestal, The Wine Magazine, 1997-2000, URL:

  2. RDC 1998 A Regional Development Policy for Western Australia, Regional Development Council of Western Australia 1998-2000, URL:

  3. TUG 1999 "ACR Net Sold", CLYDE TUG NEWS Newsletter, March, 1999 No.1, URL:

  4. DTRS 2000: Regional Solutions Programme, The Department of Transport and Regional Services, URL:

Further Information

Web page by Tomw Communications Pty Ltd A.C.N. 088 714 309 for the Great Southern Development Commission - Comments to: