Urbis acknowledges the Traditional Custodians of Country throughout Australia and their connections to land, sea and community.

National

City Leaders

Survey

National City Leaders Survey

Urbis’ 2022 National City Leaders Survey is Australia’s first survey of senior executives from the nation’s most important city-shaping organisations. It offers a bellwether of sentiment around the issues likely to influence government and industry priorities in years to come.

A blurred diverse crowd fills an urban path.

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OVERVIEW

The last two years fundamentally transformed urban life in Australia. As the COVID-19 pandemic unfolded, so too did our sense that no two experiences were alike. Each of our states and cities had to face its own unique challenges.

A motorway wraps into a central Sydney Suburb. The cars are represented in a time-lapsed blur of headlights.

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Confetti falls on a cheering crowd under blue light at a concert.

Many Australians felt isolated, cut off from their cities and communities, and often their loved ones, during this time. The pandemic also exposed and exacerbated longstanding structural inequalities, while accelerating trends that could forever change the operating environment of our cities.

For city leaders, this was a time of swift action, not only in response to the pandemic. Many of our cities began to pay the high cost of climate change, with extreme rainfall and floods along the east coast, just two years after the country’s most destructive bushfires. At the same time, cities are competing for the same pool of resources needed to both drive innovation and technology-based economies and develop new high-value, high-growth industries to underpin future growth.

Against this cascade of challenges, Australia’s city leaders began to ask us what their counterparts were thinking during this time. In early 2022, Urbis set out to capture what is top-of-mind for Australia’s most influential city shapers.

We initially met with 40 executives from government, business, academia and third-sector organisations in face-to-face interviews where we identified eight consistent challenges that informed a broader online survey completed by more than 100 city leaders nationwide. The survey unlocks insights into the emerging new paradigm for Australian cities and society.

As Australian cities emerge from the COVID-19 crisis and set their sights on perhaps more profound urban challenges, Australia’s first national survey of city leaders shows that the imperative to look beyond the short term and take decisive action has never been stronger.

It’s clear that the cities that will emerge best from the pandemic are the ones that provide affordable housing, working and cultural space, a myriad of cultural offerings, walking, cycling and excellent late-night public transport, green, cool calm streets, laneways, small bars and late-night activity.

Councillor clover moore

Lord Mayor, city of sydney

A purple filtered photo of a busy urban pedestrian crossing at night.

Leadership
Outlook

With Australian cities disproportionally impacted by COVID-19, leaders are starting to engage more deeply with the idea of sustainable and inclusive growth. Globally, the role of cities in addressing these critical development challenges is beginning to take shape.
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In this context, Urbis invited the nation’s city leaders to tell us how they think our cities will perform over the next two years, across economic, environmental and social dimensions. Near-term sentiment can serve as a proxy for how leaders assess the capacity of our institutions to transform the systemic conditions that create and sustain vulnerabilities in our cities. Here’s what we found.

Aggregated responses

City-level responses

Public versus private sector responses

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City leaders are optimistic about near-term economic and environmental performance for their cities but less so about future social outcomes

While 43% of leaders expect economic outcomes to improve and 42% anticipate improved environmental outcomes, only 22% of city leaders expect social outcomes for urban dwellers to improve, with 30% of leaders expecting conditions to worsen. Nineteen per cent and 12% of leaders expect worsening conditions for economic and environmental outcomes respectively, while net sentiment is positive for the environment (+30%) and the economy (+25%) but negative for social outcomes (-7%).

A face-masked woman inspects fruit at the supermarket.

_{Figure 1}Leadership outlook for Australian cities

Do you believe the performance of your city in terms of overall economic, environmental and social outcomes will improve, stay the same, or worsen over the next two years?

Percentage (%) of all respondents

Improve | Stay the same | Worsen

Economic | Environmental | Social

43 | 42 | 22

38 | 46 | 48

19 | 12 | 30

Net Sentiment

Source: Urbis 2022 National City Leaders Survey

Despite the relative optimism around Australia’s urban economies, new risks to growth have emerged since we surveyed leaders in the first quarter of 2022, increasing already high levels of complexity and uncertainty in our cities. At the time of writing, many analysts and economists fear that rapid interest rate rises to tame inflation could lead to significant housing downturn, constrain business investment, hurt consumer confidence and increase the likelihood of a recession in Australia.

While net sentiment around environmental performance is positive, findings later in the survey highlight an imperative for cities to act on climate change and sustainability, and a significant gap between current challenges and our preparedness to address these. We suspect positive sentiment is due to broader signs of optimism across Australia, with political leaders finding common ground on and directing more resources towards climate change and sustainable development challenges than ever before.

In contrast, many leaders expect our performance on social outcomes to deteriorate in the near term. This, combined with expectations of improved economic conditions, underscores the persistent inequalities we see in Australian cities and society. What role do our cities play in reinforcing economic and social divides?

City leaders from smaller capital and regional cities are more optimistic about future performance than their big city counterparts

Leaders from cities most impacted by COVID-19 restrictions are less positive about near-term economic performance, with sentiment lower among leaders from Sydney (+22%), Melbourne (+4%) and Brisbane (0%). Leaders from Perth (73%) and smaller capital and regional cities (58%) share a more positive outlook. Sentiment on economic performance among Perth leaders is especially bullish – 75% believe it will improve over the next two years.

Unlike leaders from other cities, in Perth no respondents foresee worsening performance. This reflects the relative strength of Western Australia’s economy, which performed strongly during the pandemic and is poised for growth over the next two years. Similar sentiment sits with leaders from smaller capital and regional cities, many of which benefited economically from internal migration during the pandemic.

A view of the water and Gold Coast Skyline at dusk.

_{Figure 2}Leadership outlook for Australian cities

Do you believe the performance of your city in terms of overall economic, environmental and social outcomes will improve, stay the same, or worsen over the next two years?

Percentage (%) of respondents by city

Improve | Stay the same | Worsen

Sydney | Melbourne | Brisbane | Perth | Small Cap/Reg

Economic

39 | 33 | 23 | 73 | 67

44 | 37 | 54 | 27 | 25

17 | 30 | 23 | 0 | 8

Environmental

39 | 37 | 38 | 45 | 58

50 | 48 | 31 | 55 | 42

11 | 15 | 31 | 0 | 0

Social

6 | 15 | 23 | 27 | 58

56 | 56 | 46 | 36 | 33

39 | 30 | 31 | 36 | 8

Net Sentiment

Economic Environmental Social

Source: Urbis 2022 National City Leaders Survey

Conversely, almost one-third of leaders from Melbourne believe their city’s economic performance will deteriorate over the next two years. No doubt, this reflects the profound impact of COVID-19 and Melbourne having spent more days in lockdown than any other city in the world. Melbourne’s economy is forecast only to return to its pre-COVID-19 output by 2024.

When it comes to environmental outcomes, similar differences play out. Around half of all leaders from Perth and smaller capital and regional cities expect improvements in the near term, while sentiment in other major capital cities is weaker but remains positive. That said, leaders from Brisbane have a more subdued outlook for their city than those in Sydney and Melbourne, with close to one-third anticipating poorer performance on the environment in the near term.

The outlook on social performance varies significantly between leaders from cities of all sizes. Net sentiment for the nation’s four largest cities is negative, particularly for Sydney (-33%) and Melbourne (-15%), while smaller capital and regional cities are overwhelmingly positive (+50%). We suspect the extent and severity of COVID-19 lockdowns in our major cities – and the impact this had on amplifying already entrenched social and economic inequalities – may have influenced these leaders’ perceptions of near-term performance.

The pandemic has been a huge disruption, but Australia’s future is still a nation of cities attracting people and investment in equal measure. Shaping our cities for a successful future remains one of the nation’s most important tasks.

ken morrison

chief executive, property council of australia

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Public sector city leaders are more upbeat about how their cities will perform across all three measures

While net sentiment is marginally higher among public sector leaders on both future economic performance (+29% vs +24%) and environmental performance (+35% vs +26%), a significant disconnect between expectations on social outcomes remains. Public sector leaders are far more optimistic, with overall net sentiment standing at +12% compared to -20% in the private sector. Over one-third of government and institution leaders believe their city’s social outcomes will improve over the next two years, whereas only 13% of leaders from the private sector share such optimism.

Three adult professionals discuss work in a glass booth,

_{Figure 3}Leadership outlook for Australian cities

Do you believe the performance of your city in terms of overall economic, environmental and social outcomes will improve, stay the same, or worsen over the next two years?

Percentage (%) of all respondents: public vs private sector

Improve | Stay the same | Worsen

Public | Private

Economic

47 | 41

35 | 41

18 | 17

Environmental

50 | 37

35 | 52

15 | 11

Social

35 | 13

41 | 54

24 | 33

Net Sentiment

Economic Environmental Social

Source: Urbis 2022 National City Leaders Survey
University and not-for-profit leaders account for 10% of public sector respondents

These disparities underscore fundamental differences between sectors, such as ownership, motives, and the goods and services they provide. Another differentiating factor is where their financial resources come from and how significant the incentives are to be more efficient and productive.

Each sector’s priorities and objectives are also shaped by different drivers. Leaders in the public sector typically focus on providing goods and services to benefit the public and upholding the values of the government of the day, while private sector leaders are more focused on providing goods and services for a profit and maximising shareholder wealth.

Additionally, leaders in the public sector often have access to different information and data sources which may in turn shape what they believe to be the main priorities and challenges facing our cities. Differences in motivation, incentives, objectives and information can impact how leaders view city-shaping across sectors.

A colourful night-lit tunnelled walkway with people strolling through.

Grand Challenges
for australian
cities

During our initial exploratory interviews, we quizzed leaders about the biggest challenges facing their cities. Eight challenges consistently emerged:

The impacts of COVID-19
Crisis management
Climate change and sustainable development
Economic growth and competitiveness
Technological disruption
Population and demographic changes
Inequality
Urban governance

To pinpoint the challenges chief among city leaders at this time, we asked survey participants to nominate the top three for their city.

Aggregated responses

City-level responses

Public versus private sector responses

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Maintaining economic growth and competitiveness is a top challenge for two-thirds of city leaders

Seventy per cent of respondents include maintaining economic growth and competitiveness in their top three challenges. Just over half of all city leaders list managing population and demographic changes (55%) and tackling climate change and delivering sustainable development (52%) in their top three most significant challenges, while 48% cite adapting to changes post-COVID-19. The sizable gap between these and the other four challenges underscores their significance to city leaders.

An office building alight at night with yellow fluorescents and employees.

_{Figure 4}Biggest challenges for Australian cities

Do you believe the performance of your city in terms of overall economic, environmental and social outcomes will improve, stay the same, or worsen over the next two years?

Percentage (%) of all respondents

70 | 55 | 52 | 48 | 27 | 20 | 18 | 10

Source: Urbis 2022 National City Leaders Survey

It is not surprising that such a high number of city leaders identify maintaining economic growth and competitiveness as a top challenge. Navigating continued global macroeconomic shocks and localised economic impacts are ongoing challenges. Similarly, significant shifts in migration between capital cities and regional areas present new challenges, alongside the threat of climate change and uncertainty around the long-term impacts of COVID-19.

Only one-third of leaders identify reducing inequality as a top challenge – a relatively low weight, given the observations made around expected social outcomes. Leaders perceive other challenges will be more significant in the near term.

Our analysis of capability advantages and gaps in The Task Ahead suggests Australian cities have a capability edge on governance, crisis management and navigating technological disruption, which may explain why leaders perceive these challenges as less significant.

Looking ahead from the Covid 19 pandemic, all Australian cities will face the opportunity, and challenge, of retaining and enhancing our unique lifestyle proposition. The quality of our environment, cultural diversity, access to housing, and the curation of a thriving economy will be the factors for success in the coming decade.

Councillor Krista Adams

Deputy Mayor, Brisbane City Council, Councillor for Holland Park and Civic Cabinet Chair for Committee for Economic Development and the 2032 Olympic & Paralympic Games

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Eighty per cent of leaders from Brisbane and more than 90% from Perth cite maintaining economic growth and competitiveness as their biggest challenge

There are noticeable differences between city leaders in the weight they give to the top challenges facing cities. Leaders from Brisbane and Perth place greater weight on managing population and demographic change, relative to leaders in Sydney and Melbourne.

Although city leaders from smaller capital and regional cities see maintaining economic growth and competitiveness as a major challenge, their biggest concern is managing population and demographic changes, which close to 70% of those leaders list in the top three.

_{Figure 5}Biggest challenges for Australian cities

Which of the following do you believe are the three biggest challenges your city will need to focus on over the next two years?

Percentage (%) of respondents by city

Sydney

Melbourne

Brisbane

Perth

Small Cap/Reg

Maintaining economic growth and competitiveness

Managing population and
demographic changes

Tackling climate change and delivering sustainable development

Adapting to changes brought about by COVID-19

Reducing inequality

Ensuring effective governance

Responding effectively in a crisis

Navigating technological disruption

Source: Urbis 2022 National City Leaders Survey

Tackling climate change and delivering sustainable development is a top three challenge for all cities except Perth, with 45% of leaders from Brisbane and 60% of leaders from Sydney, Melbourne and smaller capital and regional cities sharing this sentiment. Only 27% of Perth’s city leaders identify tackling climate change and delivering sustainable development as one of their biggest challenges.

Governance is seen as a more significant challenge for leaders in our major cities, which reflects the increasingly complex and multi-layered governance environment these city leaders must navigate. Leaders from smaller capital and regional cities appear confident in existing government structures and mechanisms, with not one identifying ensuring effective governance as a top challenge, compared with 40% of city leaders in Brisbane.

Private sector leaders place greater emphasis on economic growth, population and demographic change, and governance relative to their public sector counterparts

Differences also exist between sectors. While private sector leaders place greater emphasis on the challenges listed above, their public sector peers emphasise the significance of climate change and adapting to changes brought about by COVID-19. The biggest disparity between sectors relates to economic growth, with 80% of private sector leaders identifying this as a top challenge compared to 59% from the public sector – perhaps due to economic performance being linked to the private sector.

Overall, the survey results suggest that leaders’ perceptions are closely related to the context in which they work, including factors such as their remit, area(s) of expertise and influence, interests and access to information. The relative emphasis placed on climate change and COVID-19 by leaders in the public sector also reflects the government’s central role in driving policy around these two challenges.

Two strangers stand on a tram in their face-masks, looking at their phones

_{Figure 6}Biggest challenges for Australian cities

Which of the following do you believe are the three biggest challenges your city will need to focus on over the next two years?

Percentage (%) of all respondents: public vs private sector

Public | Private

59 | 49 | 65 | 54 | 30 | 14 | 19 | 11

80 | 61 | 44 | 43 | 25 | 25 | 15 | 8

Source: Urbis 2022 National City Leaders Survey
University and not-for-profit leaders account for 10% of public sector respondents

A purple filtered photo of two business employees looking out the window of a tall glass building.

ISSUES THAT ARE
TOP OF MIND FOR
CITY LeaderS

The eight challenges identified by city leaders have become increasingly salient over the last two years. They have huge implications for our national economy, the well-being of our communities and our stewardship of the planet. But where have our cities landed after a tumultuous few years and how might we best meet the demands of the future?

Here are some highlights of what we learnt.

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COVID-19 Impacts

Have a material and lasting effect on Australian cities

The pandemic has signalled a fundamental change in how we must shape cities to remain competitive in a post-pandemic landscape. COVID-19 has also impacted Australian cities in different ways – leaders from cities that experienced more adverse and invasive effects from the pandemic believe there will be more significant long-term impacts on government budgets, travel demand, CBDs and demand for high amenity locations.

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CRISIS MANAGEMEMENT

City leaders want to see improved collaboration between government, industry and the community during times of crisis

Given Australia has experienced more than its fair share of crises in recent years, building a stronger foundation for how our cities prepare for, respond to and recover from crises in the future is crucial. There are lessons here for those operating at all levels of crisis management across Australia, with calls for more data to inform decision-making and the depoliticisation of crisis events.

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climate change and sustainable development

Transitioning to renewable energy is the top climate change and sustainable development priority for city leaders

While the agenda towards a new climate economy is growing globally, Australian cities are lagging. Our city leaders are calling for greater investment in climate adaptation strategies and resilience planning. This includes transitioning to a clean energy future and increasing sustainable transport options to better equip cities to face the changing nature of our environment.

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economic growth and competitiveness

Cities will need to diversify into high growth sectors and invest in critical skills and infrastructure to sustain economic growth and remain competitive

More leaders from smaller capital and regional cities cite skills gaps and population growth and aging as the biggest threats to economic development and competitiveness. These threats require city leaders to leverage the human capital and research base of their cities while boosting the capacity of industries to innovate and build thriving local ecosystems.

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technology and digital disruption

Technology priorities for Australian cities are clear: upskill our workforce, embrace smart city solutions and participate in the technology-led economy

As a nation, we are at a crossroads in building a strong technology economy and city leaders understand how this might impact the competitiveness of our cities. City leaders will need to pay increasing attention to the digital infrastructure and workforce capacity required to capitalise on big data, emerging tech and innovation.

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population and demographics

Creating an appropriate demographic and skills mix, managing budget constraints and sustainably accommodating growth are key population and demographic issues for city leaders

Leaders are all too aware of the fiscal implications of a changing and rapidly expanding population. Attracting the right demographic and skills mix while managing an ageing population is a major concern, particularly in light of slowing or negative population growth and continuing pandemic-influenced migration patterns that leave Australian cities and towns disproportionally impacted.

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inequality in cities

Inequality in Australia cities is being driven by housing affordability challenges, unequal access to opportunities and gaps in public policy

Housing affordability and access has been exacerbated by the arrival of COVID-19 and is now seen as the leading factor contributing to inequality in Australian cities. Added to this is inequality of access to amenities and services as well as shortfalls in urban policy. Building consensus around how to tackle inequality remains a central challenge of our time. How we respond to this challenge will determine whether our cities are able to improve living standards and intergenerational mobility now and into the future.

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urban governance

Short-term decision-making and difficulties coordinating across levels of government are holding cities back

When it comes to achieving effective urban governance, city leaders are calling for a more collaborative and strategic approach. Organisational silos and the politicising of local events are also seen as barriers to creating Australian cities that are equipped to meet the demands of the future and address global challenges. City leaders are united in their desire for cooperative and long-term focused governance.

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The findings provide timely and valuable insights into the challenges Australia’s city leaders must address. They also show us how deeply intertwined these challenges are and that there is no way to solve one without tackling others. To deal with them in a systemic way, city leaders are obliged to examine each challenge with interconnectedness as the starting point. Our full report provides further detail and analysis on the issues that are top of mind for city leaders, and where they might focus their efforts to ensure our cities realise their full potential in the coming years. The full report can be downloaded here.

A shoe-less child wears a face-mask sitting on a public bench in school uniform.

ability to meet
future challenges

We asked city leaders to identify the three challenges they believe their city is best able to address. The findings offer insight into areas of relative strength as well as highlighting areas where cities might need to focus additional skills and resources.

Aggregated responses

City-level responses

Public versus private sector responses

yes

City leaders are most optimistic about their cities’ ability to maintain economic growth and remain competitive

While maintaining economic growth and remaining competitive is a top challenge for two-thirds of city leaders, 64% of city leaders also see this as the challenge their city is best able to address. This is closely followed by 59% of leaders who see adapting to changes due to COVID-19 as a top three strength and 49% of leaders who believe their city can respond effectively in a crisis.

At the lower end, only 25% of city leaders see managing population and demographic changes as a challenge their city is best able to address, while barely 12% feel confident their city is ready to reduce inequality. These low numbers perhaps reflect the magnitude of such broad, complex and ever-evolving challenges.

Two cyclists pass on a man-made bridge alongside a cliff.

_{Figure 7}Challenges Australian cities are best able to address

Which three of the following challenges do you believe your city is best able to address?

Percentage (%) of all respondents

64 | 59 | 49 | 32 | 30 | 28 | 25 | 12

Source: Urbis 2022 National City Leaders Survey

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Sheep dispersed around a muddy body of water.

City leaders’ optimism about the ability for cities to address the top three challenges reflects existing strengths and capacity, which is unsurprising given Australia’s economy has remained remarkably strong and competitive over the last two years, despite COVID-19 and other shocks. While most leaders believe our cities are well prepared to maintain economic growth and remain competitive, confidence is higher in Sydney (72%) and Melbourne (68%) – home to the most diverse, globally connected and technology-driven economies.

City leaders from Brisbane and smaller capital and regional cities are more confident in their cities’ ability to respond effectively in a crisis

Australian city leaders are largely unified in their confidence around our cities’ capacity to adapt to changes brought about by COVID-19 but more pronounced differences lie in perceptions around their cities’ capacity to respond effectively in a crisis. It’s possible the ongoing legacy of severe lockdowns and/or border closures may have tempered crisis response sentiment among leaders from Sydney (39%), Melbourne (43%) and Perth (36%).

A late afternoon view of Brisbane City, the river, and the highway.

_{Figure 8}Challenges Australian cities are best able to address

Which three of the following challenges do you believe your city is best able to address?

Percentage (%) of respondents by city

Sydney

Melbourne

Brisbane

Perth

Small Cap/Reg

Maintaining economic growth and competitiveness

Adapting to changes brought about by COVID-19

Responding effectively in a crisis

Ensuring effective governance

Navigating technological disruption

Tackling climate change and delivering sustainable development

Managing population and
demographic changes

Reducing inequality

Source: Urbis 2022 National City Leaders Survey

These results also suggest that tackling climate change and delivering sustainable development may pose a significant challenge for Brisbane relative to other cities, with Queensland particularly vulnerable to the effects of climate change, as we discussed earlier. That said, leaders from Brisbane (54%) are the most confident in their city’s ability to ensure effective governance, which if translated into practice, would position the city well to mobilise resources and capital to address vulnerabilities and leverage existing strengths.

Apart from Brisbane, fewer than one-third of leaders from major cities identify managing population and demographic change as a relative area of strength, with only 9% of leaders from smaller capital and regional cities confident in their cities’ ability to address this challenge. These findings likely reflect the enormity of the task confronting leaders in smaller capital and regional cities, who are currently grappling with significant unplanned migration due to COVID-19’s impact on work and housing choices alongside long-term demographic change.

The biggest challenge that we face as a nation and a society is the entrenched inequality that has been exacerbated – and to some extent revealed by COVID.

Susan Lloyd Hurwitz

Chief Executive, Mirvac

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Public sector city leaders believe our cities are well positioned to govern, respond to crises and address climate change – more than leaders in the private sector

Conversely, leaders from the private sector believe our cities are more capable of addressing population and demographic change (30% compared to 18%) and inequality (20% compared to 3%). These findings are particularly interesting, given private sector leaders’ perspectives on near-term social performance.

While private sector leaders appear to share more confidence in our cities’ ability to address inequality, they don’t necessarily foresee improvements in social outcomes, as outlined earlier. This disparity may stem from a capability gap when it comes to addressing social inequality – that is, the challenge presented by systemic and worsening inequality is greater than our capacity to address this perennial issue.

A flooded street with stalled cars and pedestrians.

_{Figure 9}Challenges Australian cities are best able to address

Which three of the following challenges do you believe your city is best able to address?

Percentage (%) of all respondents: public vs private sector

Public | Private

64 | 55 | 55 | 42 | 30 | 33 | 18 | 3

65 | 61 | 46 | 26 | 28 | 24 | 30 | 20

Source: Urbis 2022 National City Leaders Survey
University and not-for-profit leaders account for 10% of public sector respondents

A purple filtered photo of two cyclists on a nature bridge path.

THE TASK AHEAD

To get a handle on the task ahead for city leaders, we then analysed the extent to which the perceived magnitude of the eight challenges – identified by city leaders at the outset of the survey – aligns with the preparedness of our cities to address those challenges. The results of the analysis provide an indication of where cities are likely to have a capability advantage, or where there is a risk of a capability gap.

Aggregated responses

City-level responses

Public versus private sector responses

yes

Cities are likely to have a capability edge in crisis management and navigating technological disruption, but potential gaps when it comes to tackling climate change and managing population and demographic change

Areas of advantage include responding effectively in a crisis (+33%), navigating technological disruption (+23%), adapting to changes brought about by COVID-19 (+15%) and ensuring effective governance (+15%). Areas likely to show a capability gap include tackling climate change and delivering sustainable development (-34%), managing population and demographic changes (-29%), reducing inequality (-18%) and maintaining economic growth and competitiveness (-5%).

A birds-eye-view of a public building with solar panels on the roof.

_{Figure 10}
Capability advantages and gaps for Australian cities

The difference between a city’s ability to address a challenge and the significance of that challenge provides an indication of potential capability advantages and gaps.

Percentage (%) of all respondents

33 | 23 | 15 | 15 | -5 | -18 | -29 | -34

Source: Urbis 2022 National City Leaders Survey

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A flooded parkland parallels a dry town centre.

The recent wave of natural disasters across Australia strengthened our cities’ ability to effectively manage crises and prepare for similar events in the future. So too, Australia’s response to COVID-19, recognised as one of the most effective in the world. Similarly, the impact of COVID-19 led to the accelerated uptake and integration of new technologies throughout government and industry. But Australian cities need to capitalise on these perceived advantages if we’re to compete successfully in the global race for technological leadership.

City leaders also appear confident in our existing governance structures, despite perceiving the challenges revealed earlier in our survey results. If these challenges are addressed through a more strategic and collaborative approach, Australian cities could capitalise on this advantage across multiple domains.

On the other hand, numerous risks threaten to undermine these advantages. Among them, major changes to our nation’s population, which is both ageing and is forecast to more than double in size by the end of this century. Our cities also face increasing pressure to shoulder the burden of growth while maintaining our existing quality of life and protecting the environment within the context of a changing climate.

There is also concern about our cities’ ability to meet future skills needs as well as underinvestment in the critical economic infrastructure required to grow our nation’s capability and maintain existing levels of wealth. Linked to this is the challenge of managing growth while addressing entrenched social and economic divides, keenly felt in our most populated cities where inequality remains a perennial challenge.

Our cities and regions need to be re-shaped to reduce inequality and repair our planet. Now is the time for long term thinkers and leaders to replace those who wish to trade away equality and the ecosystem in their pursuit of short-term profit or political gain.

david williams

Planning Institute of Australia

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Smaller capital and regional cities are likely to have a significant capability gap in managing population growth and demographic changes

The most pronounced capability gap is the challenge of managing population growth and demographic changes, particularly for smaller capital and regional cities (-64%) and for Perth (-45%) and Sydney (-39%). This gap is closely followed by tackling climate change and delivering sustainable development, with noticeable gaps evident in responses from city leaders in Brisbane (-46%), Sydney (-39%), smaller capital and regional cities (-36%), and Melbourne (-33%).

The risk of a capability gap around reducing inequality is most pronounced in smaller capital and regional cities (-36%), Sydney (-28%) and Melbourne (-11%). Yet the risk for Brisbane and Perth is neutral (0%), suggesting a more favourable near-term outcome.

Brisbane and Perth were also the only cities identified as being at risk of a capability gap around maintaining economic growth and competitiveness (-31% and -27% respectively), despite strong sentiment around Perth’s economy. Other notable areas at risk of capability gaps include ensuring effective governance for Melbourne (-7%) and adapting to changes brought about by COVID-19 for Perth (-9%).

Two kids take an interest in what an adult is holding in a bush forest.

_{Figure 11}Capability advantages and gaps for Australian cities

The difference between a city’s ability to address a challenge and the significance of that challenge provides an indication of potential capability advantages and gaps.

Percentage (%) of respondents by city

22 | 22 | 22 | 28 | 11 | -28 | -39 | -39

33 | 30 | -7 | 4 | 4 | -19 | -11 | -33

31 | 8 | 23 | 23 | -31 | 0 | -8 | -46

27 | 27 | 36 | -9 | -27 | 0 | -45 | -9

55 | 18 | 27 | 36 | 0 | -36 | -64 | -36

Sydney Melbourne Brisbane Perth Small Cap/Reg

Source: Urbis 2022 National City Leaders Survey

Nonetheless, numerous capability advantages do exist among Australian cities – advantages underpinned by the historic strength and attractiveness of our cities as incubators of talent, innovation, prosperity and opportunity. The biggest capability advantage is in our cities’ ability to respond effectively in a crisis, with the greatest advantage seen in smaller capital and regional cities (+55%), followed by Melbourne (+33%) and Brisbane (+31%). Similar yet slightly less pronounced advantages are also evident around navigating technical disruption, adapting to changes brought about by COVID-19 and ensuring effective governance.

The challenges of the past two years have greatly strengthened our cities’ ability to address unforeseen crises – events such as the global pandemic and devastating natural disasters. A combination of decisive and direct action, using and/or adapting existing governance structures and embracing the transformative power of technology has meant that we reshaped how cities respond to such threats.

Private sector city leaders perceive greater risk of a capability gap in maintaining economic growth and competitiveness

While the general trend between sectors is consistent, our analysis points to a clear difference in how leaders view their cities’ economic growth and competitiveness. Public sector city leaders hint at a slight capability advantage (+3%), whereas private sector leaders suggest a potential capability gap (-13%). This result likely reflects business sentiment in the context of ongoing skills shortages, supply chain disruptions and increased operating expenses.

Two cyclists cross paths on a manmade bridge spanning along a lush cliff.

_{Figure 12}
Capability advantages and gaps for Australian cities

The difference between a city’s ability to address a challenge and the significance of that challenge provides an indication of potential capability advantages and gaps.

Percentage (%) of all respondents: public vs private sector

39 | 24 | 27 | 3 | 3 | -27 | -33 | -36

28 | 22 | 7 | 22 | -13 | -9 | -24 | -33

Public Private

Source: Urbis 2022 National City Leaders Survey
University and not-for-profit leaders account for 10% of public sector respondents

Public sector leaders perceive greater capability advantages when responding to crises (+39% compared to +28%) and ensuring effective governance (+27% compared to +7%) while private sector leaders see greater advantage in our cities’ ability to adapt to changes brought about by COVID-19 (+22% compared to +3%). These results appear linked to the roles and priorities of sectors, the public sector often charged with managing crises and to a greater extent, urban governance.

The COVID-19 response involved both sectors – government provided health, policy and regulation guidance, while the private sector navigated market-oriented challenges such as staffing, supply chain constraints, customer engagement and new ways of doing business.

While there is broad agreement between sectors on our cities’ capability advantages and gaps, the challenge for Australia’s city leaders is to find ways to address these perceived gaps and leverage existing advantages – a quest that inevitably requires leaders across all sectors to work more strategically, collaboratively and innovatively.

three big moves
to drive positive
and lasting change

Australian cities face numerous economic, environmental and social challenges that are transforming the context within which city-making occurs. The actions city leaders take today are critical to shaping a better tomorrow and the results of this survey offer valuable insights into how we can achieve this.

Shift your thinking

Focus on purposeful system-level change

Unlock collaborative capabilities

Our survey points to numerous capability advantages – how we respond to crises, navigate technological disruption, adapt to a post-pandemic world, and achieve effective governance – which can be leveraged to position our cities for ongoing success. But there are capability gaps that threaten to undermine these advantages and will need to be carefully managed if we’re to realise a more prosperous future for all.

Foremost among these is our ability to address two big existential and societal threats – climate change and inequality. Making progress on these challenges demands new ways of thinking, doing and collaborating that acknowledge their complex and interconnected nature. It also requires us to search for the ‘unthinkable’ and explore and evolve solutions that cannot be found in entrenched ways of seeing the world. We believe there are three big moves that Australian city leaders should embrace to drive the positive and lasting change we need to face the challenges of the future.

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1. Shift your thinking

The accelerating pace of change, increasing uncertainty and systemic and nested urban issues point to a new paradigm for cities – a paradigm that demands we embrace new ways of seeing and doing. City-shaping in the 21st century has fundamentally changed and traditional approaches no longer hold the key to solving our most intractable challenges.

If we’re to succeed, we need to ask better questions and embrace new perspectives and practices. This inevitably means adopting a deeper and more comprehensive understanding of the complexity of the real world and adopting a holistic view of cities as integrated and dynamic social, ecological and technological systems.

A man in business casual works on his laptop at a shared or home office.

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2. Focus on purposeful system-level change

Within this new paradigm, we need to explore novel ways to tackle systemic challenges. We also need a new agenda for cities – one that reorients priorities to take full advantage of opportunities and tackle challenges in an integrated manner. System transformation happens when interconnected changes to technology, business models, policies, practices and social norms are designed to alter the components and structures that cause the system to behave in certain ways.

Green growth, for example, merges the need to tackle the impact of cities on the earth’s natural systems with an imperative to maintain economic growth, develop future skills, address pervasive inequalities and embrace game-changing new technologies. These actions are the building blocks of wholescale systems change – but we also need a ‘North Star’ for our cities that provides a reference point for the future and guides the actions of government, business and civic leaders.

An overhead view of a busy pedestrian crossing.

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3. Unlock collaborative capabilities

When we look at the emerging operating environment for cities, it’s clear we need to apply deeper insights and new combinations of skills. We need to increase our capacity for action to match the increasingly complex challenges our cities now face. We need to think about how we can build consensus and best leverage the institutional capacity of our cities and wider society to address critical knowledge gaps, harness ingenuity, mobilise resources and innovate.
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Multi-level governance that combines collective action from the public, private and community sectors with more deliberative forms of democracy is essential if we’re to unlock capacity, coordinate whole-of-system change and co-create the cities of the future. Seeking out and integrating diverse perspectives and know-how is key to mitigating the risks and capability gaps that city leaders from all sectors have identified for us in this survey.

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Australian cities have the ingredients they need to generate sustainable prosperity for all. But if we’re to unlock growth, create a fairer society and protect the life support systems of the planet, we need to be more proactive and intentional in our approach and this ought to be a national priority.

Progress on our cities’ toughest challenges will be limited without bold action from Australia’s city leaders who have what it takes to steward the purposeful, collaborative actions we need to generate positive and lasting change for all Australians.

Future State

Future State is the strategic advisory arm of Urbis. We operate at the intersection of policy and commerce to help government and business leaders improve the performance of cities and harness their potential as engines of sustainable prosperity.

James Tuma

Group Director

Kate Meyrick

Director

Matt Palmen

Director

Nathan Stribley

Director

Get the full report

National City Leaders Survey

OVERVIEW

Leadership
Outlook

_{Figure 1}Leadership outlook for Australian cities

_{Figure 2}Leadership outlook for Australian cities

_{Figure 3}Leadership outlook for Australian cities

Grand Challenges
for australian
cities

_{Figure 4}Biggest challenges for Australian cities

_{Figure 5}Biggest challenges for Australian cities

_{Figure 6}Biggest challenges for Australian cities

ISSUES THAT ARE
TOP OF MIND FOR
CITY LeaderS

COVID-19 Impacts

CRISIS MANAGEMEMENT

climate change and sustainable development

economic growth and competitiveness

technology and digital disruption

population and demographics

inequality in cities

urban governance

ability to meet
future challenges

_{Figure 7}Challenges Australian cities are best able to address

_{Figure 8}Challenges Australian cities are best able to address

_{Figure 9}Challenges Australian cities are best able to address

THE TASK AHEAD

_{Figure 10}
Capability advantages and gaps for Australian cities

_{Figure 11}Capability advantages and gaps for Australian cities

_{Figure 12}
Capability advantages and gaps for Australian cities

three big moves
to drive positive
and lasting change

Get the full report

Future State

City Leaders Survey

National City Leaders Survey

OVERVIEW

Leadership Outlook

Figure 1Leadership outlook for Australian cities

Figure 2Leadership outlook for Australian cities

Figure 3Leadership outlook for Australian cities

Grand Challengesfor australiancities

Figure 4Biggest challenges for Australian cities

Figure 5Biggest challenges for Australian cities

Figure 6Biggest challenges for Australian cities

ISSUES THAT ARE TOP OF MIND FORCITY LeaderS

COVID-19 Impacts

CRISIS MANAGEMEMENT

climate change and sustainable development

economic growth and competitiveness

technology and digital disruption

population and demographics

inequality in cities

urban governance

ability to meetfuture challenges

Figure 7Challenges Australian cities are best able to address

Figure 8Challenges Australian cities are best able to address

Figure 9Challenges Australian cities are best able to address

THE TASK AHEAD

Figure 10 Capability advantages and gaps for Australian cities

Figure 11 Capability advantages and gaps for Australian cities

Figure 12Capability advantages and gaps for Australian cities

three big movesto drive positiveand lasting change

Get the full report

Future State

Leadership
Outlook

_{Figure 1}Leadership outlook for Australian cities

_{Figure 2}Leadership outlook for Australian cities

_{Figure 3}Leadership outlook for Australian cities

Grand Challenges
for australian
cities

_{Figure 4}Biggest challenges for Australian cities

_{Figure 5}Biggest challenges for Australian cities

_{Figure 6}Biggest challenges for Australian cities

ISSUES THAT ARE
TOP OF MIND FOR
CITY LeaderS

ability to meet
future challenges

_{Figure 7}Challenges Australian cities are best able to address

_{Figure 8}Challenges Australian cities are best able to address

_{Figure 9}Challenges Australian cities are best able to address

_{Figure 10}
Capability advantages and gaps for Australian cities

_{Figure 11}Capability advantages and gaps for Australian cities

_{Figure 12}
Capability advantages and gaps for Australian cities

three big moves
to drive positive
and lasting change