The importance of regional export development and a specialised local supply chain on the development of Australia's regions

The nature of the relationship between industry specialisation and employment growth is uncertain. We use regression analysis to examine the effect of changes in forward and backward industry linkages, and of changes in the spread of each of these linkages, on regional competitive employment effects. The study utilises census data from 2006 and 2011 of 46 Australian non-urban regions and the results suggest that regional industry specialisation in firms that export from the region, or in firms that supply to local firms exporting from the region, will have a positive impact on the region's employment. This finding is supportive of smart specialisation policies which are in keeping with a market approach to regional development.