You are Robyn Casterton, nine days into the job as chief executive of Reef Coast Futures, the regional development agency in Townsville, North Queensland, Australia. Two letters arrived this afternoon. Before a single dollar moves, you have to say what this regional economy is made of, and everything else will be built on that answer.
The situation
The first letter is from the mining-services contractor that has anchored the region for thirty years: it is winding down. That is 600 direct jobs and perhaps 900 more in the firms that supply it. The first redundancies come in March. The second letter renews your grant, with a condition: A$3.2 million of your A$8 million annual budget, 40 per cent, will be released only against outcomes shown in twelve months: ventures demonstrably scaling, jobs created, and private money drawn in beside the agency's own. Another region is competing for a larger allocation next year.
This region of 230,000 people starts more small businesses than anywhere else in regional Queensland, yet only 42 per cent are still trading after three years, against a national regional benchmark of 55 per cent. Local capital is thin, customers are far away and specialist skills are hard to find. The last attempt to change that, a A$1.5 million twelve-week accelerator copied from capital-city programs, has three ventures still trading two years on. Today every agency dollar draws in 40 cents of private money; the state wants A$1.50.
On the meeting-room wall are three ways of reading the place. Mining services, sugar and tourism are what the region knows. A marine-science base, renewable-energy potential and agricultural technology beside the sugar industry are what your own briefing papers call under-used capabilities. And some on the board hold that a regional economy is like any other, and that good models travel. You have A$4.8 million of discretionary money and ten ventures in the pipeline, but the board wants the diagnosis first.