Australia’s opportunity deficit is widening
Australia is running an opportunity deficit in its biggest cities. Housing, congestion and service pressures are eroding the everyday ‘deal’ in Sydney and Melbourne. The question is no longer whether people and investment will look elsewhere, but where that momentum will land. With remote work normalising, the energy and industrial transition accelerating, and many regional centres still offering a more achievable pathway to security and prosperity, the next shift in Australia’s economic geography is sitting in plain sight.
Prosperity moves, and the map of opportunity shifts
In his recent article, America’s Great Migration, Joel Kotkin points to an old truth captured by Herodotus in the 5th Century BC: prosperity doesn’t stay put. ‘For many states that were once great have now become small; and those that were great in my time were small formerly.’ The lesson isn’t sentimental – it’s practical. People move. Capital follows. And when the conditions that once made a place ‘great’ start working against the aspirations of ordinary households, momentum shifts elsewhere.
Power and growth aren’t permanently anchored to the old centres; they move toward opportunity. Over time, economic gravity shifted from Venice and Genoa to Antwerp, then to Amsterdam, and later to London as trade routes, finance, security, and state capacity evolved.
Kotkin argues the same dynamic is now playing out within America. As the elite remain concentrated in New York, Los Angeles, and San Francisco, momentum has accelerated toward places once dismissed as culturally or economically second-tier: Texas, Arizona, the Carolinas, and Florida. The emerging growth cities – Dallas-Fort Worth, Raleigh, Houston, Austin, Phoenix, Nashville, Salt Lake City – share a basic advantage: they still offer working and middle-class people a believable pathway to a better life.
Australia should take this as a clear signal: the next winners will be those places that can still provide good jobs, attainable housing and reliable services at a cost that working households can actually sustain.
The limits of ‘big-city inevitability’
For decades, Australia’s economic story has been written in the language of ‘big-city inevitability’. Sydney and Melbourne have been treated as the default arenas for ambition: the headquarters, the high-wage services, the cultural cachet, and thick labour markets. That story is not wrong, but it is incomplete – and increasingly expensive.
When the cost of entry to the ‘opportunity cities’ rises faster than wages, the national growth model starts to strain. Young people delay forming households. Key workers get pushed further out. Businesses struggle to recruit. Commutes lengthen. A sense of progress, especially for those without family wealth, becomes harder to sustain. As the parent of two young adults – one a teacher in training, the other an apprentice diesel mechanic – I can see how quickly the big-city deal stops working.
Why regional Australia is now the challenger
The supremacy of Australia’s superstar cities is undermined not by their lack of wealth, but by their growing inability to convert wealth into broad opportunity. The moment that happens, the door opens for challengers. In Australia, that door is regional.
This isn’t a romantic call for a return to the bush, or a plea to ‘save the regions’. It’s an opportunity proposition. Regional Australia can be the next platform for national prosperity if it can compete on the things that matter: jobs, housing, infrastructure, services, and the daily experience of raising a family.
First, the geography of work has changed. Remote and hybrid work are no longer fringe arrangements for a lucky few. They are now embedded in many professional sectors. That matters because the largest barrier to regional migration has always been employment choice. If a household can bring one income with them, or access metro clients from a regional base, the calculation shifts. Suddenly, a move becomes less a career gamble and more a lifestyle and balance-sheet decision.
Second, the geography of industry is shifting. The energy transition is intensely place-based. Renewables, storage, transmission upgrades, critical minerals, hydrogen ambitions, new manufacturing, and processing don’t cluster neatly in CBD towers. They cluster where the sun, wind, land, ports, and grid connections are. Add defence, logistics, food production, health, and education and you have a pipeline of regionally anchored activity that can support deeper labour markets over time.
Third, the affordability advantage is still powerful. Regional housing is not ‘cheap’ in the way it once was, and some towns have experienced sharp price growth. But relative to metropolitan entry costs, many regional centres still offer what the big cities increasingly cannot: attainable home ownership, room for families to grow, and a shorter distance between effort and reward. That affordability dividend can translate into higher fertility intentions, stronger community participation, and more entrepreneurial risk-taking because households have financial oxygen.
Making the bargain credible: three delivery priorities
But none of this is automatic. Kotkin’s American examples didn’t grow by vibes alone; they grew because they offered a workable bargain to the middle class. If regional Australia is to become the next engine of national prosperity, we need to make that bargain credible and durable.
Enabling infrastructure
Fast, reliable digital connectivity is now as fundamental as roads. So is frequent, safe transport between regional centres and capital cities – rail where viable, upgraded highways where necessary, and regional aviation that works for business, not just tourism. Connectivity expands labour markets, improves access to specialist services, and reduces the sense of distance that still shapes decision-making.
Economic ecosystems
Population growth without job depth creates fragility. The goal should be regional ‘complete communities’ anchored by a mix of industries, institutions, and skills pipelines. This includes universities and TAFEs aligned to local specialisations; health services capable of retaining talent; and policies that support startups and advanced manufacturing.
Housing supply and sequencing
If regional centres repeat the metropolitan mistake of constraining supply, underinvesting in enabling infrastructure, and letting prices outrun wages, the opportunity window will close.
Herodotus reminds us that prosperity moves, while Kotkin shows what that looks like in real time. When old centres become too costly and too constrained, growth migrates to places that still feel possible.
Australia’s regions can be those places. Not as a consolation prize, but as the next chapter: a network of competitive, connected, opportunity-rich regional cities and towns that relieve pressure on the capitals while expanding the nation’s productive base. The prize is bigger than decentralisation. It’s a more resilient Australia – one that doesn’t force aspiration into a handful of crowded postcodes but spreads the conditions for a good life more widely across the continent.
