Home Articles Business & Invest The Gold Coast economy – the experts’ view

The Gold Coast economy – the experts’ view

Marshall Hall | February 2016

The Gold Coast is well known as an international tourism destination and fast-growing city (and the cranes are back in a big way). But it’s the depth of the economy and the sheer number of businesses that make the city an attractive investment.

We’re not just spruiking, according to our contributor Marshall Hall who sat down with the experts.

The Gold Coast may not be home to big multi-nationals but there’s a strong international business presence – the city acts as headquarters to numerous international companies including the likes of surfwear company Billabong, luxury boat builders Riviera and Maritimo, bus manufacturer BusTech, streaming music provider Guvera and software developer Opmantek.

Professor Elizabeth Roberts, the Head of the School of Business and Tourism at Southern Cross University, says the city’s lower average wages, a highly desirable location, and lower property prices make the Gold Coast a great place to base a business.

“The Gold Coast lifestyle is legendary,’’ Professors Roberts says. “What is not as widely known is that one of five people in the Gold Coast region work for themselves. This makes the Gold Coast fertile ground for new entrepreneurs and Small to Medium Enterprises.”

Professor Roberts says the Gold Coast had enjoyed a five-year average annual growth rate of 2.3 per cent and had an economy valued at $25.2 billion.

Sweet success – the Frosty Boy case study

One company that has moved its headquarters to the Gold Coast recently is international soft serve ice-cream manufacturer Frosty Boy.

Frosty Boy opened a purpose built, state-of-the-art manufacturing plant in the Gold Coast’s Yatala industrial precinct in 2014 as the company moved to expand production capabilities.

Frosty Boy chief executive officer Dirk Pretorius says the company had since expanded production to more than two million serves of ice cream daily.

“We chose to set up on the Gold Coast as it offered adequate space to house our facilities, provides us with access to skilled labour, and is an easily accessible destination that our international clients want to visit,” says Mr Pretorius.

“With the export market now representing 75 per cent of our sales, it is important that we are well positioned in the international market.”

Mr Pretorius says local businesses were also readily available to support Frosty Boy.

“We chose to use Gold Coast’s AP Constructions to build our 6000 square metre facility, who were very amiable and efficient,’’ he said.

“The Gold Coast is a great place for business, small or large, as everything is easily accessible, with the local council being very active in helping new businesses looking to get a foot in their respective markets.”

A dynamic city with a strong government and education sector

Fabrizio Carmignani, Professor of Economics at Griffith Business School says there are three key areas which make the Gold Coast an attractive location for businesses to set up.

“Firstly, it is a city with a dynamic potential; secondly, it has a local government that is supportive and forward-looking; and thirdly, it has an influential university sector that is building a knowledge base in the region that will boost the business sector going forward,’’ he said.

Professor Carmignani said the Gold Coast business community was “quite vibrant”.

“While it is not yet established as a business location like the major cities, it has significant potential for growth,” he says. “An increase in population will bring an increase in the demand for services. With events like the Commonwealth Games and related activities, it’s a region that is likely to develop demographically and socially. Having a footing in this type of business environment would be important and useful for an entrepreneur.”

Professor Carmignani says the council is developing comprehensive plans for the future that would support the growth of the local economy.

“There are times when governments interfere more than they support, but the City of Gold Coast seems to be forward-looking with a long-term strategy,” Professor Carmignani says.

“This inevitably results in a business environment where new ventures and initiatives can make progress.”

The Gold Coast was also becoming a centre of excellence for skilled labour, he said.

“The impact of the university sector on the city is noteworthy,” Professor Carmignani says. “What we have now is a knowledge precinct that lays the foundations for business success and which can support and drive innovation.

“This is especially so in the case of the Griffith Business School which has engaged strongly with the local business community to foster and nurture this environment.”

Entrepreneurial people

Baden U’Ren, the Head of Entrepreneurship at Bond University, says the Gold Coast has a major, natural advantage over other locations.

Dr U’Ren said he recently led a study tour to Silicon Valley and visited tech giants Google and Twitter as well as several Aussie start-ups.

“One factor was clear: it is all about the people,’’ he says.

“Sure, an entrepreneurial education system, conducive regulatory environment and a vibrant investment community have a significant role to play, but the ways in which employees are courted, hired, nurtured and supported in these innovative companies stood tall as a defining feature of the world’s most progressive companies.”

Dr U’Ren says the crux of the issue for companies was that innovation was driven by people, and innovative companies were doing everything they could to attract and retain the best and brightest.

“What does this mean for companies choosing a location to base their operations?” he asks.

“Where else can you provide such a magical place for your employees to live, to raise their families and to enjoy their time off than the beaches, waterways and hinterland of the Gold Coast?

“In the war for talent innovative companies are thinking broadly about the ways to provide value for their employees, and location is a key consideration.”

See Business Gold Coast for more.

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