It doesn’t take rocket science to know why localities and regions decline. You just have to look at patterns.
In a post on my personal blog I asked: Monday Forum - why is there an investment strike? Here My focus was national, global, macro, but you can see the effect at local level.
Over the second half of the twentieth century, the number of locally or regionally owned businesses declined across Northern NSW. This broke the nexus between local savings and investment. Previously, local savings moved to local investment via the channel created by local businesses. Those businesses no longer exist. Local profits accrue to externally controlled enterprises. Local personal savings and especially superannuation go to external entities that cannot afford to focus locally.
Obviously, I am generalising, but I think that it’s a pretty fair summary. So what do we do about it? One option would be the creation of a New England investment bank to create a new channel. This is a far from perfect idea, but it might be a start.
What do you think?