[In]Sight User Guide - Regional Australia Institute

[In]Sight User Guide - Regional Australia Institute
[In]Sight 2014 User Guide
[In]Sight 2014 User Guide
Your guide to understanding
[In]Sight: Australia’s regional competitiveness index
[In]Sight User Guide – January 15
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[In]Sight 2014 User Guide
Table of Contents
About [In]Sight .................................................................................................................................................. 4
Changes for [In]Sight 2014 .................................................................................................................. 5
Using [In]Sight ................................................................................................................................................... 6
Using the Online Interactive Map ............................................................................................................ 6
[In]Sight Themes and Indicators .................................................................................................................... 7
Theme 1: Economic Fundamentals ............................................................................................................ 7
Theme 2: Labour Market Efficiency ......................................................................................................... 8
Theme 3: Business Sophistication .............................................................................................................. 9
Theme 4: Human Capital ......................................................................................................................... 10
Theme 5: Infrastructure and Essential Services .................................................................................... 12
Theme 6: Institutional Foundations ......................................................................................................... 14
Theme 7: Innovation .................................................................................................................................. 16
Theme 8: Technological Readiness ........................................................................................................ 17
Theme 9: Demography ............................................................................................................................ 18
Theme 10: Natural Resources ................................................................................................................. 19
Notes on Data Collection and Indicator Calculations ........................................................................ 20
Hachman Index of Economic Diversification .................................................................................... 20
Calculating Distance Scores in [In]Sight............................................................................................ 20
Websites Used to Source Presence of Major Organisation ........................................................ 20
Assessment Methodology for Local Economic Development Support ......................................... 22
Websites Used to Source Revenue Information Financial Burden of Local Government ....... 23
Time Series Differences ....................................................................................................................... 23
A Caution on Small Area Data .......................................................................................................... 23
Spatial Boundaries in [In]Sight .................................................................................................................... 25
Calculating [In]Sight Rankings ..................................................................................................................... 26
Indexation Methodology..................................................................................................................... 26
Outlier Adjustment in the Theme Rankings ....................................................................................... 27
Ranking System Limitations ................................................................................................................. 28
Data Review and Checking Processes ....................................................................................................... 29
Data Revisions 16/1/2015................................................................................................................ 29
Further updates ..................................................................................................................................... 30
End Notes ........................................................................................................................................................ 31
[In]Sight User Guide – January 15
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[In]Sight 2014 User Guide
[In]Sight User Guide – January 15
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[In]Sight 2014 User Guide
About [In]Sight
Australia’s regional areas are developing at different paces. Each has different
potential for positive growth and change.
[In]Sight: Australia’s regional competitiveness index enables Australians to access the
information they need on regions to make better informed decisions for regional
communities.
[In]Sight is a competitiveness index. Competitiveness refers to the combination of
institutions, policies and factors that determine the level of productivity of a country or
region.
[In]Sight builds on significant international experience in the development of
competitiveness indices. The design of [In]Sight reflects the experience and approach of
the World Economic Forum’s Global Competitiveness Report methodology, the European
Union’s Regional Competitiveness Index and Centre for International Competitiveness in
the UK.
The [In]Sight framework however is unique to Australia’s economic situation. [In]Sight is
also one of the finest grained and comprehensive assessments ever undertaken for the
Australian economy.
The ten themes and 68 indicators used in [In]Sight focus on the economic drivers that
determine longer term competitiveness. All of the main areas in which governments
influence a regions economic outcomes are assessed by [In]Sight.
Competitiveness is assessed at both the Local Government Area (LGA) level and also at
a regional level and includes both regional and metropolitan Australia.
As a result, [In]Sight provides 624 individual regional profiles covering the whole of
Australia at both the local and regional scales.
[In]Sight also goes further than most indices as the Regional Australia Institute (RAI)
makes all of the data available through the online interactive map for use alongside
reporting of the results. This puts over 97,000 pieces of information on the Australian
economy at the fingertips of every Australian.
This makes [In]Sight an essential tool for assessing our capacity to build new prosperity
and a better quality of life across our diverse nation.
[In]Sight User Guide – January 15
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[In]Sight 2014 User Guide
Changes for [In]Sight 2014
[In]Sight 2014 is the second iteration of Australia’s regional competitiveness index.
In early 2014, the RAI sought feedback and suggestions from stakeholders about ways
to enhance [In]Sight. The feedback received included suggestions on ways to improve
the methodology, suggestions on alternative indicators and requests for new website
functionality.
[In]Sight 2014 includes an expanded and revised indicator set, updated data and
refined methodology. Key changes include:

A suite of nationally-consistent indicators on the quality and performance of
regional and local institutions;

New indicators measuring the economic fundamentals of each region to
provide a more nuanced view of the state of each local and regional economy;

An updated method for calculating the distance for residence and businesses to
key infrastructure and essential services and natural resources;

New measures for technological readiness including quality of access to
broadband, mobile internet and mobile phone coverage in each LGA and
region;

New indicators on patents and business start-ups in innovation;

A new theme on demography to provide new information on population
dynamics in each area;

Updated data on unemployment, school performance, welfare dependency,
research organisations and income from own businesses;

Data for eight new regions will be added to align with state regions in Western
Australia, the Northern Territory and Tasmania that do not align to the national
Regional Development Australia (RDA) framework; and

A new robustness and ranking process to reduce the impact of outliers and
other data anomalies on [In]Sight on the interpretation of results.
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[In]Sight 2014 User Guide
Using [In]Sight
[In]Sight has a diverse range of applications and its results can be used in a number of
ways by all Australians.
[In]Sight can be accessed at www.regionalaustralia.org.au/insight. From the [In]Sight
home page users can:

Access basic information on [In]Sight including fact sheets, this user guide and
key findings;

Explore all of the [In]Sight data using the interactive online map; and

Download the RAI’s summary analysis for each theme and other analysis reports.
Using the Online Interactive Map
The online tool is user friendly and interactive. The first screen (screen shot below) shows
how to access data in [In]Sight in four easy steps:
[In]Sight User Guide – January 15
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[In]Sight 2014 User Guide
[In]Sight Themes and Indicators
A description of each theme and its associated indicators is provided on the following
pages, along with details on the sources of data used in [In]Sight.
Theme 1: Economic Fundamentals
The economic fundamentals of an LGA or region include measures of the size and
relative activity level in the economy. Solid economic fundamentals support local
businesses and workers and indicate a region successfully translating economic potential
into activity and growth.
[In]Sight measures the economic fundamentals of each LGA and region on a per person
basis. This approach allows more populated LGAs and regions to be compared to less
populated areas.
A larger stock of industrial and commercial buildings means an area can produce a
relatively larger amount of private sector activity. Higher wages, more hours worked
and larger business turnover per person indicates a region is more effectively translating
its workforce and other assets into economic activity. Strong investment in residential and
other buildings indicates confidence in the future and growing capacity in the economy.
This theme has been expanded and refined for [In]Sight 2014 with the addition of the
three new measures: number of hours worked, and two measures of the current asset
base of an area (value of commercial and industrial buildings). Building Approvals in the
previous index has been deconstructed into residential and non-residential which
provides more insight into an area’s economic profile.
The Economic Fundamentals theme includes three perspectives on each LGA and region the stock of productive assets, business and labour activity and levels of recent
investment (Table 1).
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[In]Sight 2014 User Guide
Table 1: Competitiveness Indicators for Economic Fundamentals Theme
Indicator
Description
Data Source
Indicator
Ranking System
Changes in
2014
Wage/labour
costs
Average wage and
salary income
Wage & salary
earner statistics
ABS
5673.0.55.003
Higher rankings
result from higher
wages
Updated
data
Business
turnover
Business turnover
per capita
ABS, cat. 8165.0
Higher rankings
result from higher
turnover
Updated
measure
Number of
hours worked
Average number of
hours worked per
week per working
age person
ABS Census, 2011
Higher rankings
result from more
hours worked
New measure
Building
approvals residential
$ value of residential
building approvals
per capita
Building approvals
Australia, ABS
Higher rankings
result from higher
values
Replacement
measure
Building
approvals –
non-residential
$ value of nonresidential building
approvals per capita
Building approvals
Australia, ABS
Higher rankings
result from higher
values
Replacement
measure
Value of
industrial
buildings
Value of industrial
buildings per capita
Geoscience
Australia
Higher rankings
result from higher
values
New measure
Value of
commercial
buildings
Value of commercial
buildings per capita
Geoscience
Australia
Higher rankings
result from higher
values
New measure
Theme 2: Labour Market Efficiency
Labour Market Efficiency measures how well a region engages its people within the
economy. Efficiency suggests a strong matching of workforce size and skills to the needs
of local firms. Maintaining efficiency over time suggests an adaptability of workforce
size and skills to changing needs.
[In]Sight measures Labour Market Efficiency through two measures of current
employment rates, three measures of the utilisation of the potential workforce and a
measure of skilled labour (Table 2).
Employment rates indicate the current level of demand relative to supply of workers in
the region. Unemployment may also reflect a mismatch between the local labour force
and firm needs.
The level of utilisation of the potential workforce indicates whether a region has longer
term structural challenges in achieving Labour Market Efficiency. The presence of longterm unemployment, lower participation rates and/or high welfare dependence suggests
longer term efficiencies issues in a region.
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[In]Sight 2014 User Guide
Skills are also important and most regions will need a mixture of skilled and unskilled
labour. A lack of skilled labour will limit the sophistication of local firms and the
adaptability of the economy to changing needs.
Table 2: Competitiveness Indicators for Labour Market Efficiency Theme
Indicator
Description
Data Source
Indicator
Ranking System
Changes
in 2014
Unemployment
rate
% persons in the
labour force
looking for work
Small Area
Labour Market
Estimates,
Department of
Employment
Higher rankings
result from lower
unemployment
Updated
data
Youth
unemployment
% persons in the
labour force aged
15-24 looking for
work
Census 2011,
Australian Bureau
of Statistics
Higher rankings
result from lower
unemployment
Same as
2013
Participation rate
% working age
population in the
labour force
Social Health
Atlas of Australia
PHIDU, University
of Adelaide
Higher rankings
result from higher
percentages
Updated
data
Skilled labour
% of workforce
employed as
managers and
professionals
Census 2011,
Australian Bureau
of Statistics
Higher rankings
result from higher
percentages
Unchanged
from 2013
Welfare
dependency
% of population
using Government
support as their
main source of
income
Social Health
Atlas of Australia
PHIDU, University
of Adelaide
Higher rankings
result from lower
percentages
Updated
data
Long term
unemployment
% People receiving
an unemployment
benefit for longer
than 6 months
Social Health
Atlas of
Australia,
PHIDU,
University of
Adelaide
Higher rankings
result from lower
percentages
New
measure
Theme 3: Business Sophistication
Firms provide a majority of jobs for most communities and ensure local resources and the
potential of a region can be translated into economic success.
A region with a more diverse business community, profitable small businesses and good
local access to financial expertise and facilitators of exports, imports and wholesale
trade is best positioned to compete in Australia’s economy (Table 3).
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[In]Sight 2014 User Guide
Table 3: Competitiveness Indicators for the Business Sophistication Theme
Indicator
Description
Data Source
Indicator
Ranking System
Changes
in 2014
Economic
diversification
Index of relative economic
diversification* comprising
measures regional industry
structure relative to the
national industry structure
Calculated from
ABS Census,
2011 employment by
industry data
Higher rankings
result from lower
measurements
Same as
2013
Exporters,
importers,
wholesalers
% employed as importers,
exporters or wholesalers
Census 2011,
Australian
Bureau of
Statistics
Higher rankings
result from higher
percentages
Same as
2013
Income source Average own
– own
unincorporated business
business
income
Estimates of
personal income
for small areas,
2009-10, ABS
Higher rankings
result from higher
incomes
Updated
data
Access to
local finance
Census 2011,
Australian
Bureau of
Statistics
Higher rankings
result from
greater access
New
methodology
Number of people
employed in banking,
building society operation,
credit union operation,
other depository financial
intermediation, depository
financial intermediation &
non-depository finance
Theme 4: Human Capital
The skills, health and education of a workforce are fundamental to a region’s
competitiveness.
Strong Human Capital allows communities and the individuals within these communities to
be more productive and more able to respond to shifts in the economy.
Human Capital is measured using nine indicators in [In]Sight 2014 (Table 4).
Five indicators measure basic educational outcomes in a local area or region, from early
childhood through to adulthood. Basic education is the foundation for competitive Human
Capital.
Two indicators measure the availability of technical and university qualifications in a
region. Having a large proportion of the workforce with a technical or university
qualification is essential to competitiveness.
Two key constraints on Human Capital are also included. Poor health or low levels of
English proficiency undermine the competitiveness of the workforce. Improving health in
the community and English proficiency provides a pathway for building a more
competitive economy over time.
[In]Sight User Guide – January 15
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[In]Sight 2014 User Guide
Table 4: Competitiveness Indicators for the Human Capital Theme
Indicator
Description
Data Source
Indicator
Ranking System
Changes in
2014
Early
childhood
development
% of children
developmentally
vulnerable
PHIDU,
University of
Adelaide, Social
Health Atlas of
Australia
High rankings result
from fewer
developmentally
vulnerable children
Same as
2013
Primary
school
education
% of high bands
achieved in NAPLAN
tests
MySchool data,
Australian
Curriculum &
Assessment
Authority
Higher rankings
result from higher
percentages
Updated
data
Secondary
school
education
% of high bands
achieved in NAPLAN
tests
MySchool data,
Australian
Curriculum &
Assessment
Authority
Higher rankings
result from higher
percentages
Updated
data
Early school
leavers
% of adult population
that did not complete
year 12
Census 2011,
Australian
Bureau of
Statistics
Higher rankings
result from low
percentage of
population that did
complete year 12
Same as
2013
Lifelong
learning
% of working age
population
participating in
education and training
Census 2011,
Australian
Bureau of
Statistics
Higher rankings
result from higher
percentages
Same as
2013
Technical
qualifications
% of working age
population with
certificate and diploma
qualifications
Census 2011,
Australian
Bureau of
Statistics
Higher rankings
result from higher
percentages
Same as
2013
University
qualifications
% of working age
population with a
university qualification
Census 2011,
Australian
Bureau of
Statistics
Higher rankings
result from higher
percentages
Same as
2013
Health
Adults with at least one
of the four health risk
factors; smoking,
harmful use of alcohol,
physical inactivity and
obesity
PHIDU,
University of
Adelaide, Social
Health Atlas of
Australia
Higher rankings
result from fewer
adults with risk
factors
Same as
2013
English
proficiency
% population with
English as first
language or, if second
language, speaks
English well
Census 2011,
Australian
Bureau of
Statistics
Higher rankings
result from higher
percentages
Same as
2013
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[In]Sight 2014 User Guide
Theme 5: Infrastructure and Essential Services
Infrastructure and Essential Services facilitate economic activity. A region that is well
connected to external markets and has good access to essential services best enables
businesses to compete in the wider economy and the facilitation of new investment.
Three key interdependent components of Infrastructure and Essential Services –
transport, education and health - are reflected in the measures included in [In]Sight
2014 (Tables 5a, b & c).
Transport infrastructure - roads, rail, airports and ports - are critical to the efficient
delivery of goods and services and support a region’s competitiveness in economic
markets by reducing freight costs.
Educational infrastructure is a vital component in the development of a region’s
population.
[In]Sight contains measures of access to primary, secondary, technical and further
education and tertiary education, indicative of a region’s ability to develop a skilled
and productive workforce.
Health infrastructure - access to medical facilities, allied health and GP services supports the ability of a community to support a healthy workforce.
Table 5: Competitiveness Indicators for Infrastructure & Essential Services Theme
Indicator
Description
Distance to
airport
Average distance
for residents and
businesses to the
nearest commercial
airport (km)
GIS calculations,
Airport Traffic Data
1985-2011, Bureau
of Infrastructure,
Transport and
Regional Economics
Distance
to port
Average distance
for residents and
businesses to the
nearest port (km)
GIS calculations; Map Higher rankings result New
of Australian ports,
from shorter distances methodology
Ports Australia
Road
infrastructure
Average distance
for residents and
businesses to the
nearest major
road.
GIS calculations using
GEODATA TOPO
2.5M 2003,
Geoscience Australia
Higher rankings
result from shorter
distances
New
methodology
Rail
infrastructure
Average distance
from SA1 to
nearest rail station
(either freight or
passenger)
GIS calculations;
GEODATA TOPO
2.5M 2003,
Geoscience Australia
Higher rankings
result from shorter
distances
New
methodology
[In]Sight User Guide – January 15
Data Source
Indicator
Ranking System
Changes
in 2014
Higher rankings result New
from shorter distances methodology
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[In]Sight 2014 User Guide
Indicator
Description
Data Source
Indicator Ranking
System
Changes
in 2014
Access to
tertiary
education
services
% of working age
population attending
university or another
higher education
institution
Census 2011,
Australian Bureau
of Statistics
Higher rankings result
from higher
percentages
Same as 2013
Access to
technical and
further
education
% of working age
population attending
technical or further
education institutions
Census 2011,
Australian Bureau
of Statistics
Higher rankings
result from higher
percentages
Same as 2013
Access to
primary
education
services
Distance to nearest
primary school
GIS calculations;
MySchool,
Australian
Government
Higher rankings result Same as 2013
from shorter distances
Access to
secondary
education
services
Distance to nearest
secondary school
GIS calculations;
MySchool,
Australian
Government
Higher rankings
result from shorter
distances
Same as 2013
Distance to a
medical facility
Average distance to
nearest medical
facility
GIS calculations
Higher rankings
result from shorter
distances
Replaces
distance to
hospital
Access to allied
health services
% of workforce
employed in health
services (excluding
hospitals)
Census 2011,
Australian Bureau
of Statistics
Higher rankings
result from higher
percentages
Same as 2013
Access to GP
services
Number of GP
services (patient
consultations) per
annum per capita
Social Health Atlas
of Australia, PHIDU,
University of
Adelaide
Higher rankings
result from greater
numbers of GP
services
Same as 2013
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[In]Sight 2014 User Guide
Theme 6: Institutional Foundations
Regions that are able to mobilise local resources are more likely to be successful than
those who submit to the influence of external forces.
The Organisation for Economic Co-operation and Development (OECD) and others have
identified that institutions are crucial to this mobilisation of resources in any regioni.
Institutions are important because they facilitate negotiation, dialogue and collaboration
among key actors in a region. Institutions also enable a region to exert external
influence by engaging on behalf of the region with higher levels of government and
other external actors important to a region’s economy (such as major corporations or
potential investors).
Formal institutions (such as local government or a major organisation such as a university)
and informal institutions (such as local industry or community networks) are important for
development as both can work to mobilise resources within and beyond a region.
Measuring the status and impact of institutional factors in [In]Sight remains challenging
as what constitutes an effective mix of institutions will differ between areas. It will also
change over time as conditions in a region changeii. Work on institutions has also noted
that more institutions are not always better. While some places can be challenged by
institutions that are too small or too few to facilitate growth, other places have a
plethora of institutional actors that conflict or crowd each other out and undermine the
successful mobilisation of local resources.
Given these theoretical and practical challenges, the [In]Sight Institutional Foundations
theme does not seek to provide a comprehensive assessment of institutional status or
performance in regional Australia. Rather [In]Sight provides a consistent and objective
assessment of whether the foundations exist for strong and successful local institutions in
each part of regional Australia.
Regions with stronger Institutional Foundations as measured in [In]Sight are more
competitive as they are better positioned to develop and maintain an effective mix of
institutions over time.
The theme includes measurements identifying the relative capacity and focus of local
government towards business and economic development. Local government is amongst
Australia’s most important regional development institutions as it is present in every local
area, is locally run and has formal powers to facilitate or constrain local economic
development.
However formal institutions outside of local government are also important to
competitiveness in regional Australia. To identify an area’s Institutional Foundations
beyond local government, [In]Sight measures the presence of other major organisations
and the relative size of the public sector workforce. These factors expand the formal
institutional presence in a region and deepen external institutional connections.
The presence of people with the qualifications and experience to support institutional
performance as well as the engagement of local people in voluntary activity is also
included. This provides an estimation of both the foundations for informal institutions. It
also indicates whether formal institutions are likely to be supported by local people with
the capacity and commitment to make them successful.
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[In]Sight 2014 User Guide
[In]Sight measures these different facets of institutional competitiveness through eight
indicators (Table 6). The institutions theme has been completely revised and updated in
2014 with the inclusion of a range of data not previously available at the national level.
Table 6: Competitiveness Indicators for Institutional Foundations Theme
Indicator
Description
Data Source
Indicator
Ranking System
Changes
in 2014
Public sector
workforce
% of workforce
employed in public
administration
Census 2011,
Australian Bureau
of Statistics
Higher rankings
result from
higher
percentages
Same as
2013
Leadership
capacity
% of the workforce
employed in
management, the
professions or selfemployed (including
farmers)
Census 2011,
Australian Bureau
of Statistics
Higher rankings
result from
higher
percentages
New measure
Community
skills base
% of the local
population with a
degree
Census 2011,
Australian Bureau
of Statistics
Higher rankings
result from
higher
percentages
New measure
Volunteering
% people aged 15
years and over who
participate in voluntary
work
Social Health Atlas
of Australia, PHIDU,
University of
Adelaide
Higher rankings
result from
higher
percentages
New measure
Presence of
major
organisations
Presence of post-school
educational institution
(university or TAFE);
major hospital and other
major publicly-funded
facility (excluding
defence)
Various websites –
see page 28 for
full list
Higher rankings
result from more
organisations
New measure
Local economic
development
support
Systematic assessment of
the availability of
business information and
pro-business policies
Local government
websites (refer to
page 30)
Higher rankings
result from
higher scores
New measure
Local
government
discretionary
expenditure
Local roads and
general purpose
spending
(per capita), estimated
entitlement
Local Government
National
Report2011-2012,
Department of
Infrastructure and
Regional
Development
Higher rankings
result from
greater
expenditure
New measure
Financial
burden of
local
government
Rate revenue
(per capita)
Various websites –
refer to page 30
for full details
Higher rankings
result from lesser
levels of
financial burden
New measure
[In]Sight User Guide – January 15
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[In]Sight 2014 User Guide
Theme 7: Innovation
Australia’s regions need to be at the forefront of cutting edge products and processes in
order to retain their competitive advantage.
[In]Sight 2014 measures two aspects of Innovation, the potential capacity for Innovation
and the extent to which this capacity is translated into products and processes (Table 7).
Capacity is measured through the number of research organisations, managers, research
and development (R&D) expenditure and human resources in science and technology.
Relative levels of innovation are assessed by the number of patents and businesses startups.
Number of patents and business start-ups are new indicators that have been added to
the Innovation theme in 2014.
Table 7: Competitiveness Indicators for Innovation Theme
Indicator
Description
Data Source
Indicator
Ranking System
Changes
in 2014
Human
resources in
science,
technology
% of people qualified
in the natural and
physical sciences, ICT or
engineering and
related technologies
Census 2011,
Australian Bureau
of Statistics
Higher rankings
result from higher
percentages
New
methodology
Research and
development
managers
% employed as
research and
development managers
Census 2011,
Australian Bureau
of Statistics
Higher rankings
result from higher
percentages
New
methodology
Presence of
research
organisations
% of research
organisations out of all
businesses
Innovation Australia
- Registered
research
organisations
Higher rankings
result from a
higher
percentages
New
methodology
Number of
patents
Number of patents
certified and granted
(2009-2014) per 1000
people
IP Australia
Higher rankings
result from more
patents
New measure
Business
start-ups
The number of new
businesses since 2009
as a percentage of all
businesses
Counts of Australian
Businesses, including
Entries and Exits,
Jun 2009 to Jun
2013, Australian
Bureau of Statistics
Higher rankings
result from more
new businesses
New measure
[In]Sight User Guide – January 15
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[In]Sight 2014 User Guide
Theme 8: Technological Readiness
Technological Readiness is an important facilitator of internal regional growth. The
physical location of a person or a product is increasingly less important in the Australian
and international business environment.
Communication technologies are now essential to efficient commercial practices and
productivity. They are transforming the way industries operate, propelling Australia’s
previously isolated regional economies into national and global markets.
A region’s Technological Readiness or its ability to rapidly absorb and make use of new
technologies is now a vital determinant of competitiveness.
Three key interdependent components of Technological Readiness are reflected in the
measures chosen for this theme (Table 8). Relative availability of technology
infrastructure indicates the opportunity for technology-linked growth in regions.
Technology take-up at a household level reflects relative engagement with technology in
the population. Finally, the presence of a technology workforce in the region provides a
measure of the capacity for technology-based innovation.
Table 8: Competitiveness Indicators for Technological Readiness Theme
Indicator
Description
Data Source
Indicator
Ranking System
Changes in
2014
Broadband
coverage
2-10 Scale of access
to high quality
broadband
My Broadband,
Department of
Communications
Higher rankings
result from higher
scores on the scale
New measure
Mobile internet
1-6 Scale of access
to mobile broadband
services and the
speed of those
broadband services
My Broadband,
Department of
Communications
Higher rankings
result from higher
scores on the scale
New measure
Mobile
coverage
% of the area that is
covered by a Telstra
3G service
Telstra
Higher rankings
result from higher
percentages
New measure
Internet
connections
% of households with
internet connection
ABS Census, 2011
Higher rankings
result from higher
percentages
New
methodology
Employment in
technologyrelated
industries
% of workforce
employed by
technology-related
businesses
ABS Census, 2011
Higher rankings
result from higher
percentages
New
methodology
Employment in
ICT and
electronics
% employed as ICT
and electronics
specialists
ABS Census, 2011
Higher rankings
result from higher
percentages
New
methodology
[In]Sight User Guide – January 15
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[In]Sight 2014 User Guide
Theme 9: Demography
The inclusion of the Demography theme in [In]Sight 2014 recognises the importance of
people and population to a region’s competitiveness.
Demography is difficult to change through regional development. History, wider
demographic trends (such as an ageing population) and national trends shape a region’s
competitive position. Demography is something that each region must work with to
succeed.
Each region has its own demographic profile. For instance, large populations attract a
diverse range of businesses, which find it convenient to be located near other relevant
businesses, forming agglomeration economies. However, population change – growth,
loss or turnover – affects employment or lifestyle opportunities. A stable population
supports the formation of social capital.
Measures in this theme describe the size, change, composition and distribution of each
LGA and a region’s population.
Table 9: Competitiveness Indicators for Demography Theme
Indicator
Description
Data Source
Indicator
Ranking System
Changes
in 2014
Population
size
Number of people in
the region
Regional Population
growth 2012-13,
ABS
Larger populations
are ranker higher
New
indicator
Population
density
Number of people
per square kilometre
Regional Population
growth 2012-13,
ABS
Higher density
leads to a higher
ranking
New
indicator
Population
growth
% change in
Regional Population
population from 2012 growth 2012-13,
to 2013
ABS
Higher rankings
result from higher
growth
New
indicator
Population
turnover
People that moved to
or from the region in
the last 5 years as a
% of the current
population
Australian
Population &
Migration Research
Centre estimates
using Census 2011,
ABS
Higher rankings
result from lower
percentages
New
indicator
Senior
dependency
Seniors (65+ years)
as a proportion of the
working age (15-64
years) population
National Regional
Profile 2012,
Australian Bureau
of Statistics
Higher rankings
result from a lower
senior dependency
ration
New
indicator
Youth
dependency
Youth (14 years or
below) as a
proportion of the
working age (15-64
years) population
National Regional
Profile 2012,
Australian Bureau
of Statistics
Higher rankings
result from a lower
youth dependency
ratio
New
indicator
[In]Sight User Guide – January 15
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[In]Sight 2014 User Guide
Theme 10: Natural Resources
Much of economic activity in regional Australia is directly linked to local natural
resources. Access to Natural Resources can create economic opportunities through
offering inputs to production (such as access to water or good quality soil), and can be
used to generate production outputs (such as minerals or extractives) or as a foundation
for services such as tourism and recreation. The nature of a region’s physical
endowments, in terms of both the access to natural resources and the physical attributes
of the region, are hugely influential in many regions’ current economies and future
opportunities.
Natural Resources are a component of a region’s competitiveness that is relatively
difficult or impossible for regions to meaningfully influence. As a result, less competitive
regions have limited scope for improving their competitiveness over time through
development efforts. The challenge for regions is in translating their competitiveness into
economic opportunities through the way in which local resources are used in the economy.
[In]Sight 2014 provides a diverse measure of Natural Resources competitiveness,
reflecting the diverse resources available across regional Australia. The theme includes
six measures (Table 10) indicating the workforce associated with mineral, timber,
agriculture, aquatic and agricultural resources and two measures identifying the
proximity of the region to the coast and nature reserves which can provide foundations
for tourism. Highly ranked regions in this theme are those with a diversity of natural
resource opportunities.
Table 10: Competitiveness Indicators for Natural Resources Theme
Indicator
Description
Data Source
Indicator
Ranking System
Changes in
2014
Mineral and
energy
resources
% employment in mining
Census 2011,
ABS
Higher rankings result
from higher
percentages
New measure
Timber
resources
% local workforce
employed in logging
Census 2011,
ABS
Higher rankings result
from higher
percentages
Same as 2013
Commercial
fishing and
aquaculture
% local workforce
employed in fishing &
aquaculture
Census 2011,
ABS
Higher rankings
result from higher
percentages
Same as 2013
Coastal
access
Distance from the
midpoint of each LGA to
the nearest coastline
GIS
calculations*
Higher rankings
result from shorter
distances
New
methodology
National
parks
Average distance (km)
for a region's residents
to the nearest nature
reserve or national park
GIS
calculations*
Higher rankings
result from shorter
distances
New
methodology
Agriculture
% of local workforce
employed in agriculture
Census 2011,
ABS
Higher rankings
result from higher
rates
New measure
*See ‘Calculating Distance Scores in [In]Sight (page 27) for more information.
[In]Sight User Guide – January 15
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[In]Sight 2014 User Guide
Notes on Data Collection and Indicator Calculations
[In]Sight provides access to the most up to date, nationally consistent data on LGAs and
regions. This section provides some notes on data and indicator calculations that underpin
indicators across many of the ten themes.
Hachman Index of Economic Diversification
The Hachman index has been used to calculate the economic diversification indicator in
the Business Sophistication theme. It accounts for disparity between the economic
structure of a region and that of a reference economy. The Hachman index shows how
diverse a given region’s economic structure is relative to that of the Australian economy.
Values closer to one would mean that the region’s economic structure is very diverse.
Values closer to zero would mean that the region does not have a diverse industrial
structure as compared to the nation.
Calculating Distance Scores in [In]Sight
For a number of indicators, [In]Sight relies on distance measures. Distance measures in
[In]Sight are derived using Geospatial Information Systems (GIS) software.
The GIS software contains digital spatial boundaries for very small geographic areas
(including ABS-derived Statistical Areas Level 1 and Mesh Blocks), population quantities
for those areas and location data for geographical positions of interest such as roads,
ports, airports etc.
Distance scores in [In]Sight are calculated by measuring the distance from the centres of
the small geographic areas to the nearest geographic location of interest, then
weighting these distances by the population. The data is then aggregated to LGA and
regional boundaries, giving a population-weighted score to indicate the proximity of the
area’s population to the particular feature of interest.
Websites Used to Source Presence of Major Organisation
Hospitals Sources
Victorian info from Department of Health, Victoria:
http://www.health.vic.gov.au/hospitals/pubwebs.htm
Private hospital information:
http://www.health.vic.gov.au/privatehospitals/index.htm
NSW information from the Health Engine website:
http://healthengine.com.au/find/Public_Hospital/NSW/ &
http://healthengine.com.au/find/Private_Hospital/Australia/
Queensland information from the Health Engine website:
http://healthengine.com.au/find/Public_Hospital/QLD/
http://healthengine.com.au/find/Private_Hospital/QLD/
[In]Sight User Guide – January 15
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[In]Sight 2014 User Guide
WA information from the Health Engine website:
http://healthengine.com.au/find/Private_Hospital/Australia/
http://healthengine.com.au/find/Public_Hospital/WA/
South Australia information from the NHPA My Hospitals website:
http://www.myhospitals.gov.au/private-hospitals & from SA Health.
Tasmania info from the NHPA MyHospitals website:
http://www.myhospitals.gov.au/browse/tas/tasmania/name-asc
NT info from the NHPA MyHospitals website:
http://www.myhospitals.gov.au/browse/nt
ACT info from the NHPA MyHospitals website:
http://www.myhospitals.gov.au/browse/act/canberra.
Some data are from the MyHospitals website run by the National Health Performance
Authority: http://www.myhospitals.gov.au.
Major Publicly Funded Facility
CSIRO: http://www.csiro.au/
PIRSA: http://www.pir.sa.gov.au/
Department of Environment and Primary Industries (DEPI) work locations:
http://www.depi.vic.gov.au/__data/assets/pdf_file/0005/183128/DEPI-WorkLocations.pdf
NSW Department of Primary Industries:
http://www.dpi.nsw.gov.au/aboutus/about/office
Queensland Government Department of Agriculture, Fisheries and Forestry:
http://www.daff.qld.gov.au/about-us/contact-us/offices
Government of Western Australia Department of Agriculture and Food:
https://www.agric.wa.gov.au/office-locations
Inland Fisheries Service:
http://www.ifs.tas.gov.au/about-us/contact-us
Forestry Tasmania:
http://www.forestrytas.com.au/contact
[In]Sight User Guide – January 15
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[In]Sight 2014 User Guide
Northern Territory Government Department of Primary Industry and Fisheries (DPIF):
http://www.nt.gov.au/d/Primary_Industry/index.cfm?header=Key%20Contacts
Post-school Educational Institutions (university or TAFE)
TAFE
https://www.tafensw.edu.au/
http://www.vic.gov.au/education/tafe-training/tafe-training-courses.html
http://tafeqld.edu.au/
http://www.tafesa.edu.au/
http://www.central.wa.edu.au/Pages/default.aspx
http://www.tastafe.tas.edu.au/
http://www.cdu.edu.au/cdu-vet
Universities
All universities as list at:
http://www.australianuniversities.com.au/list/
Assessment Methodology for Local Economic Development Support
The assessment of the availability of business information and pro-business policies was
made using a score of 0, 0.5 or 1for each of the following data set elements, giving a
total score of 0-10.
Business Accessibility
1. Business Page: the LGA has a business/economic development/investment page;
2. Statistics/Investment Prospectus: information on why it is good to invest in the
LGA;
3. Business links: links are provided to further useful information;
4. Business content: more information is provided than simply links to other websites,
substantive to business interest;
5. Quality of Business content: see above, is the page substantial?
Pro-Business Policy
6. Business grants;
7. Business advisory program: the LGA has programs that offers one-on-one advice
on starting a business;
[In]Sight User Guide – January 15
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[In]Sight 2014 User Guide
8. Business classes/workshops/seminars run by the LGA;
9. Business awards; and
10. Other business support programs.
Websites Used to Source Revenue Information Financial Burden of Local
Government
Victorian data from the Department of Transport, Planning and Local Infrastructure
website (2012-13)
http://www.dpcd.vic.gov.au/localgovernment/find-your-local-council/alpine
New South Wales data from the Office of Local Government document titled
“Comparative Information on NSW Local Government: Measuring Local Government
Performance 2012-13”
http://www.dlg.nsw.gov.au/dlg/dlghome/dlg_DocumentsIndex.asp?sectionid=1&docum
enttype=6&mi=3&ml=2
All other data from annual reports or financial reports published on LGA websites.
Time Series Differences
Data for small areas is produced irregularly in Australia and much of [In]Sight is reliant
on the ABS Census data. The most recent Census occurred in 2011 and many indicators
are not able to be updated until the next Census in 2016.
As a result, some data in themes is more recent than others. For example, in Labour
Market Efficiency, unemployment estimates are for June 2014 while other measures such
as youth unemployment can only be provided on the basis of the most recent census
data.
Users are encouraged to identify the time series for different data and look to local
knowledge to assess how factors may have changed since the last Census.
A Caution on Small Area Data
The RAI’s aim with [In]Sight has been to present the best available, nationally consistent
information we have about competitiveness in regional Australia.
Regional Australia includes a wide diversity of regions, from densely populated regional
cities to our many small rural and remote Heartland communities.
Some small area data in [In]Sight, particularly population related indicators, carries a
higher risk of error (i.e. that the measure does not accurately reflect the true situation)
than data on more populated areas.
Things can also change more rapidly in small areas as smaller numbers of people or the
arrival of a new business or investment will have a much greater impact on the overall
competitiveness situation for the community.
[In]Sight User Guide – January 15
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[In]Sight 2014 User Guide
Some users have suggested that given these challenges, the RAI should exclude data for
the smallest areas from [In]Sight.
However the RAI believes that this approach risks mirroring the pattern of excluding or
ignoring these areas in most mainstream analysis of the Australian economy.
On balance the RAI believes that it is better to make information available even if it has
limitations, than to exclude areas from this index.
In most cases [In]Sight relies on data from national agencies, particularly the ABS. This
means that we use the best and most reliable data available across the index.
Nevertheless, accurate measurement for sparsely populated areas is challenging, even
for our national statistical agencies.
Data for areas with only a few hundred people or less should be used with some
caution.
The RAI recommends that users of data on small area seek to confirm the current
situation and recent trends in small communities by engaging directly with local
institutions in the area.
[In]Sight User Guide – January 15
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[In]Sight 2014 User Guide
Spatial Boundaries in [In]Sight
[In]Sight provides data based on the primary administrative boundaries used by
Australia’s three levels of government.
[In]Sight provides data for each of the 564 LGAs in Australia.
[In]Sight 2014 is based on LGA boundaries as of September 2014. The most significant
changes from 2013 include:

The inclusion of data for Douglas, Livingstone, Mareeba and Noosa in
Queensland and revised data for Cairns, Rockhampton, Sunshine Coast and
Tablelands as a result of de-amalgamations in Queensland. In some cases where
data cannot be disaggregated, these LGAs are allocated the result from the
amalgamated LGA;

The inclusion of data for West Daly and revised data for Victoria-Daly resulting
from the creation of the West Daly LGA in the Northern Australia;

The inclusion of data for Greater-Geraldton following the merger of GeraldtonGreenough and Mullewa LGAs in Western Australia;

Roebourne in Western Australia has been renamed Karratha in 2014.
Boundaries have not changed.
[In]Sight 2014 provides data and rankings for 60 regions including 52 RDA regions that
are aligned to State regional development boundaries and eight State and Territory
regions that sit within the national RDA structure (see www.rda.gov.au for more
information).
Data and rankings have been included for eight new regions in 2014:

Data and rankings for Mid-West and Gascoyne regions in Western Australia
consistent with the State Regional Development Commission Structure (together
these regions comprise the Mid-West Gascoyne RDA region);

Data and rankings for the three Tasmanian regions – North, Tasmania – North
West and Tasmania – South (together these regions comprise the Tasmania RDA
region); and

Data and rankings for the three Northern Territory regions - Northern Region,
Northern Territory - Big Rivers Region, and Northern Territory - Central Australia
Region (together these regions comprise the Northern Territory RDA region).
These spatial boundaries make [In]Sight usable for the widest range of applications in
regional development across Australia.
[In]Sight User Guide – January 15
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[In]Sight 2014 User Guide
Calculating [In]Sight Rankings
[In]Sight has been developed as a series of independent indices rather than one index
with a single rank for each region. [In]Sight includes 20 separate indices comprised of:

An LGA index for each of the ten themes which compares the performance of all
LGAs to each other; and

A Region index for each of the ten themes which compares the performance of
all Region’s to each other.
LGAs are ranked from 1 to 564 and regions are ranked from 1 to 60. Rankings are
applied at the theme level and also for each indicator. The ranking approach is used to
clearly demonstrate the relative position for each region across each of the themes and
indicators. This ensures that users can identify the relative position of a region as well as
the status of each measure.
No overall index of competitiveness combining the ten themes is included. This approach
reflects both the difficulty in meaningfully aggregating relative performance across such
a wide range of themes.
This approach also encourages users to concentrate on the nuance of each region’s
competitive position. Each LGA and Region will have a mix of both competitive strengths
and challenges that will shape its competitive position.
Indexation Methodology
Indexation in [In]Sight involves the indicators in each theme being transformed to
provide a composite index score for each LGA and, separately, for each region.
Indexation is necessary as there are no common units or scales across the indicators
within the themes. Indicator data may be represented in dollars, persons, incidence rates
or other forms of quantity and volume depending on the competitiveness factor
measurement used.
An indexation approach enables these different measures to be combined into an
overall assessment of competitive position for each theme.
Several methods of transforming indicators to enable indexation are available. [In]Sight
uses the common ‘min-max’ method of rescaling which is based on the following formula:
NX 
xi  min( x)
max( x)  min( x)
This transforms the indicator data (x) into scores with a range from zero to one (i.e. the
most competitive region receives a score of 1 and the least a score of 0). This approach
does not change the relative position of indicators in the distribution and it is
straightforward and transparent.
It is noted though that this transformation rewards higher values. A very good result on a
few indicators is more advantageous to a region’s ranking than a larger number of
average scores.
[In]Sight User Guide – January 15
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[In]Sight 2014 User Guide
Outlier Adjustment in the Theme Rankings
Given the tendency for the ‘min-max’ normalisation approach to favour very high values,
the ‘Tukey’ method has been used to reduce the influence of positively ranked outliers on
the theme rankings in [In]Sight.
This method identifies outliers within indicators as values beyond an upper or lower
fence value. Outliers in the data set were identified using the following formula:
If higher values lead to higher rankings for an indicator:
Upper fence = indicator mean + (3 x indicator interquartile range)
Outlier = any indictor value > lower fence
If lower values lead to higher rankings for an indicator:
Lower Fence = indicator mean - (3 x Indicator interquartile range)
Outlier = any indictor value < lower fence
An adjusted normalised score is then calculated by excluding the outlier values. Outlier
values are given the maximum value of 1 in the adjusted score. This adjusted score is
then used for the purposes of theme ranking.
The effect of this adjustment is to increase the spread of values in the adjusted
normalised score without impacting on the relative distribution of non-outliers. This
prevents an outlier in one indicator from unreasonably influencing the location’s position
within the theme ranks.
Based on the average of the normalised scores for each indicator in the theme, LGAs
and regions are then ranked in descending order. A higher average score translates into
a higher ranking.
No weightings have been applied in the formation of the [In]Sight indices.
This simple approach to indexation is preferred by the RAI to more complex methods
(such as principle components analysis). The benefit is that it enables the relationship
between indicator data and the theme ranking to be understood by users. This is
important for [In]Sight where all of the data and rankings at the indicator level are
made available to users.
Additional notes on index rankings:

Regions with the same measurement for an indicator are given the same ranking;

Three regions - Tasmania RDA, Northern Territory RDA and Mid-West Gascoyne
RDA - have not been given rankings as sub-regions for these areas are included
and ranked in the region index (for example Mid-West RDC and Gascoyne RDC
are included in the rankings and together comprise the same area as Mid-West
Gascoyne RDA); and

Locations with more than 25 per cent of indicator value missing have not been
allocated a theme rank.
[In]Sight User Guide – January 15
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[In]Sight 2014 User Guide
Ranking System Limitations
For many indicators there is a simple competitiveness relationship where more or less is
clearly a more competitive position. For example having a greater percentage of the
working age population participating in the economy or more mineral reserves clearly
improves competitiveness.
However for some [In]Sight indicators there are also potential challenges involved in
having a very high or low score. These indicators include:

Economic diversification does not take into account the benefits of specialisation
and limitations to growth that may flow from having firms spread across many
sectors;

Dominance of large employers does not take into account the limitations for a
region’s economy that may result from having no large employers that bring a
diversity of jobs, more management positions and greater capacity for growth
and innovation;

Population turnover does not take into account the challenges that may arise in
very stable communities where no new people join the population, bringing new
skills, energy and networks;

Youth and senior dependency does not account for the possible social costs of
having communities where there are few or no older or younger people;

Population density does not take into account the costs of congestion that can
arise in very densely populated areas;

Timber resources uses an employment measure which does not take into account
whether this employment is based on sustainable use of forest resources; and

Fishing and aquaculture uses an employment measure which does not take into
account whether this employment is based on sustainable use of aquatic
resources.
The RAI has not adjusted rankings in these indicators to reflect these possible costs that
may counter the primary competitive benefit being measured by [In]Sight.
In most cases the relative impact of these costs compared to wider competitive benefits
flowing from the factors cannot be measured. As a result, the ideal level at which a
region is most competitive cannot be identified to enable adjustment of the ranking
approach.
Users of [In]Sight and particularly those LGAs and regions with very high scores and
ranks in these indicators are encouraged to consider the relative costs and benefits of
these factors in the economy as part of a more detailed analysis.
[In]Sight User Guide – January 15
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[In]Sight 2014 User Guide
Data Review and Checking Processes
[In]Sight has been subject to a thorough review and checking process to ensure the data
and indices are correct and consistent with the methodology. The indicator and theme
data review process in 2014 included:

preparation and review of descriptive statistics for each indicator to examine
data distribution, missing values, and outliers;

preparation of correlations to check the consistency and relevance of indicators
within each theme;

all derived data is compared against similar information available from the
Australian Bureau of Statistics (ABS); and

systematic internal review of all calculations to ensure accurate transformation of
data and calculation of theme scores and rankings.
The RAI is confident that these processes have produced an accurate set of indicators
and theme scores for each LGA and region.
If a user identifies possible errors or inaccuracies, please contact the RAI office on
(02) 6260 3733 or [email protected] and we will review the issue
immediately.
Data Revisions 16/1/2015
Since the release of the updated Insight data in late November 2014, a number of
revisions have been made to the published data.
These revisions address a number issues arising out of the update of the web tool,
including:

display of large currency values;

display of missing data values as zeros;

inclusion of additional data and improvements to providing estimates at
boundary levels where data is not available directly also drove changes to
indicator scores and overall theme rankings; and

A number of minor data processing errors were identified and corrected.
Adjustments to reporting of some data to improve consistency with publicly available
statistics, particularly those provided by the Australian Bureau of Statistics, have been
applied.
Specific changes in this release include:
Economic Fundamentals
Correction to display error of large data values in business turnover and non-residential
building approvals (previously displaying as ‘n/a’)
[In]Sight User Guide – January 15
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[In]Sight 2014 User Guide
Labour Market Efficiency
Wage/Labour costs value and rankings display error corrected for 55 Regions.
Business Sophistication

No revisions.
Human Capital

Correction to display of access to tertiary and technical / further education
indicator data;

No change to indicator or theme rankings.
Infrastructure & Essential Services

Access to allied health services – Ranking revisions; no data change

Access to GP services – data and ranking revisions (formula correction)

Theme scores (formula correction)
Institutional Foundations

Revised ‘presence of major organisations’ indicator data for several deamalgamated LGAs in Queensland.
Innovation

Inclusion of additional data points for Research and Development Managers

minor resultant changes to indicator and theme rankings
Technological Readiness

No revisions.
Demography

No revisions.
Natural Resources

Re-calculation of theme scores and rankings arising from the exclusion of
unreliable water resources indicator data.
Further updates
The RAI is working to access additional data sources to improve the ability of regions to
get a snapshot of how they compare in terms of competitiveness nationally.
Users are encouraged to revisit Insight regularly to access further [In]Sight developments.
[In]Sight User Guide – January 15
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[In]Sight 2014 User Guide
End Notes
OECD (2012) Promoting Growth in All Regions. Paris: OECD; OECD (2009) How Regions Grow. Paris:
OECD
ii Rodríguez-Pose, A (2013), ‘Do institutions matter for regional development?’, in Regional Studies
i
[In]Sight User Guide – January 15
PAGE 31
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