Last week I looked at the geography of suburban jobs in Melbourne (Where are the suburban jobs?), finding there are 31 centres that account for just 20% of all suburban jobs. There is a large variation in the size of centres, with the largest four – Clayton, Tullamarine, Kew/Hawthorn and Box Hill – accounting for nearly half of the jobs in these centres.
Today I want to look at the economic functions of suburban centres, as indicated by their industry composition. If a centre is specialised by industry compared to jobs in the rest of the suburbs, it suggests it has a distinct economic role. It could also mean that the benefits of agglomeration may not be especially important.
Actually it’s a little more complex than that – specialisation implies that being in a large, diverse centre is not that important, but being spatially close to firms in the same or a related sector is. In other words, firms seek to minimise the costs of density by locating just with “their own kind” and avoid the overhead of firms from whom they obtain little benefit.
The data shows that the economic functions of suburban centres are many and varied and differ markedly from the 80% of suburban jobs that are not located in centres. Some centres are dominated by a single industry and accordingly have a distinct “personality”. There are thirteen such centres, mostly focussed on Retail or Manufacturing, although Latrobe is concentrated in Education and Heidelberg in Health.
Yet that only tells part of the story. With only one exception, all centres have a specialisation in at least one of 17 industries and some are specialised in multiple industries. For example, although Box Hill is not dominated by a single industry like Latrobe is, it nevertheless has specialisations in Health and Government (defined as having at least twice the share of jobs in each of these two industries as jobs located outside centres do). Health accounts for 27% of jobs in Box Hill and Government for 17% – the respective figures for suburban jobs outside of centres are just 11% and 4%.
Some centres like Burwood East, Sunshine and Broadmeadows are specialised in three industries. The only truly “diversified” centre is Kew/Hawthorne, whose sectoral composition is reasonably similar to that of the rest of the suburbs in all industries (note that larger centres tend to have fewer specialisations because there is less variability). Read the rest of this entry »