How Melbourne beat out Sydney to become Australia’s creative hub

This week Crikey is taking a look at the Sydney/Melbourne rivalry. Is Sydney’s golden age as Australia’s premier city over? Read part one here.

The way you know Melbourne is cool these days? It’s not just the dozens of cranes on the horizon, urgently swivelling steel to house the relentlessly growing population. It’s not just the way major Australian TV series (Offspring, MasterChef) are set in the city. It’s the way that Melbourne souvenirs have evolved.

No longer just tacky fridge magnets to give to your grandma, Melbourne paraphernalia is pitched at hipsters. An Aqua Profonda print, a subtly Melbourne-themed tote bag or a hoddle-grid wall hanging are all as welcome in the life of a sophisticated urbanite as a souvenir from Berlin or Shanghai.

While Sydney retains its lead in the high institutional culture of opera, Melbourne leads the nation in the domains of food and street art and live music. How did the dowdy, drear, suburban Melbourne of the 1990s turn itself around, leaving Adelaide, Perth and Brisbane in its dust, and challenging Sydney for the title of Australia’s boldest city?

Part of the answer is that it simply decided to. In the early 2000s, the state government of Victoria embraced the idea of Melbourne as a creative city. The academic influence of urbanist Professor Richard Florida was in ascendance, and his ideas about the economic power of the “creative class” were heard in the offices of premier Steve Bracks.

Florida in Melbourne

In 2005, Florida came to Melbourne, and spoke about how economic growth was being driven by a congregation of a certain kind of professional — not just artists and bohemians, but a class of knowledge workers who could work anywhere.

“An increasing number of creative types will begin to congregate in Melbourne, which will further increase the capital of the region, which will further attract creative types and grow the native creative population, and so on and so on, in an extremely beneficial virtuous cycle. I wouldn’t be at all surprised to see Melbourne emerge as one of the defining global creative centres of the 21st century,” he said.

The state government chose not to leave such an evolution to chance. It made major investments to nudge Melbourne in this direction. The 2007-08 budget — made by knowledge workers who themselves count as members of the creative class — threw money at Melbourne’s cultural status.

“We will invest $63 million to enhance Victoria’s status as the nation’s cultural capital, including a new Arts in the Suburbs program, Australia’s first centre for books and ideas at the state library and further funding for Melbourne’s newest cultural icon, the Melbourne Recital Centre — due to open in 2009,” treasurer John Brumby told parliament in his budget speech in 2008, UNESCO designated Melbourne as a “City of Literature”.

The prestigious and influential Grattan Institute — a public policy think tank based in the Melbourne suburb of Carlton — was funded at the same time, and has substantially contributed to the impression of Melbourne as an intellectual hub.

The backlash

By 2017, Richard Florida was on the receiving end of a backlash for his ideas. His instructions for attracting the creative classes could not work everywhere. And the fierce competition to attract enough members of the creative class led to a smaller group of “winner cities” than he imagined. San Francisco is the archetype, with a booming economy and exclusionary housing prices.

Melbourne was also in this subset of winner cities which were able to transform themselves into magnets for those who could choose where to live. So why did Melbourne fall on the right side of the line?

One explanation is the core city infrastructure of Melbourne — the geometry and connectivity that make it, quite simply, successful at the core function of a city. Cities are about putting lots of people in close access to each other, and they thrive when they unleash agglomeration economies — the overflow benefits that come when people live in proximity.

Melbourne could put people into proximity because it has three things Sydney arguably lacks:

1. A sufficiently strong public transport system, where trains run deep into the suburbs and the decision to tear up the trams was never taken.
2. Flat topography allowing a grid system and a single CBD that leaves nobody in any doubt about the economic centre of gravity. The “Postcode 3000” program that boosted the population of Melbourne’s CBD reinforced its centrality, both by day and by night.
3. A city centre comprised of land not water. Sydney’s harbour is a charming thing for tourists to gaze upon and an ideal place to moor one’s yacht. It was vital to its original settlement. But cities thrive on proximity and connection. All that water in the middle of Sydney impedes proximity and connection. Solving that involves expensive bridges, tunnels and ferries that Melbourne doesn’t have to build.

Melbourne’s abundance of well-connected space has meant lower house prices than Sydney, which has, in turn, made it an easier choice for the creative class to choose to live in.

That drives higher population growth, which drives ever higher economic growth. Another prominent American urbansit Harvard Professor Edward Glaeser says that bigger the city, the higher the agglomeration economies and the faster it grows.

In this telling, Melbourne’s growth into a bigger city than Sydney over coming years is likely to be an unstoppable juggernaut. But locking that in will require further investments — not just in creative institutions, but also in the basic connectivity functions of a city. You can’t just print pictures of trams on tote bags; you need to fund them to run swiftly and smoothly too.