Regional industry specialisation or regional industry diversification: is one better than the other?

This paper explores regional economic growth by examining regional economic industrial diversity levels within the Australian Bureau of Statistics (ABS) identified, statistical districts (SDists) of New South Wales (NSW) using the 2006 ABS Census of Population and Housing data. The national averages index of industrial diversity measurement found that most NSW SDists were industry specialised economies with Port Macquarie (33.03) being most specialised and Tamworth (4.73) being most diversified. The Regional Economic Modelling and Planning System (REMPLAN), an input-output model was then utilised to examine a hypothetical exogenous increase in demand on the ‘test’ SDist of Coffs Harbour, a relatively specialised economy. Modelling for the economic impact of an increase in demand of $20 million on employment, income, and value added found a potential for 94 more jobs, $2.980 million more wages, and $4.246 million more value added for an industrially specialised region than one which was more industrially diverse.