The context of the three-quarters of our continent that is desert Australia leads to some important implications. Desert Australia needs to grow to encourage self-reliant regional economic development and reduce its long-term call on the public purse. It needs to attract and retain people who can sustain the region’s services and create wealth. It competes with growing coastal regions for resources and the attention of politicians and bureaucrats. Sustainable health and education services in desert Australia, for Indigenous and non-Indigenous people alike, depend on wealth creation and its equitable distribution across the population.

Desert Knowledge faces a clear philosophical decision: should we pursue knowledge related to a predominantly welfare-driven economy, or should we rather develop ideas that might flow from transforming it into an environment with greater private investment and individual enterprise, albeit one based on natural and cultural values? Indigenous and non-Indigenous people in desert Australia seek to build livelihoods in places that they can afford and which provide them with access to a desirable range of services. They are looking for networks of settlements, regional services and small businesses across desert Australia that provide security.

Their aspirations will be compatible with national priorities if the benefit of people living in desert Australia exceeds the costs, especially if the net benefits steadily increase. The definition of costs and benefits requires close attention, but the Desert Knowledge movement supports this reality. This creates clear strategic research requirements for DK-CRC. The next section deals with the underlying logic of these requirements, followed by some detail on the resulting Core Projects.

Outcome 1: Sustainable livelihoods for desert people
Long distances to market and high transport costs dictate the production of two kinds of goods and services: those that deliver a high return per unit cost of transport (high value) and those that can only be obtained from desert Australia (place-based). Art works and knowledge about deserts are examples of high value products that are cheap to transport compared to their value. Uluru, living Aboriginal culture and wide open spaces are examples of place-based products. Even place-based products must be delivered at a price which matches their perceived value – for example, touristsmust feel their experience warrants the cost of flying in. Such products should also be strongly value-adding to retain economic benefits locally, as with bush foods which are processed locally, and must be delivered as cost-effectively as possible. The local costs of any desert product are relatively high because the cost of labour and other inputs are more expensive in remote areas, even in larger centres such as Alice Springs. We therefore have to be wise in valuing the capability of local residents to deliver this labour. This is all very relevant to the challenge of Indigenous unemployment in desert Australia, but here there are specific capacity-building and motivation issues that must be addressed as well.

Among many other related factors, the following best explain DK-CRC’s livelihoods focus:

• The most compelling competitive advantages of desert regions are to be found in their place-based natural and cultural resources, and knowledge about these.
• We must understand how to manage these resources most efficiently and effectively while at the same time creating new and diversified livelihood opportunities based on them for Indigenous and non-Indigenous people in remote settlements; this includes a number of significant institutional design, governance and skills issues.
• We must explore how to add value to major business opportunities by increasing the value, and therefore long-term profitability, of their products.
• We must support the wide range of smaller desert business opportunities, which individually do not warrant targeted research, to deal with these issues in a more generic way.

This leads to three Core Projects (CPs). One targets the understanding of livelihoods in remote locations, whilst the other two address actual business opportunities, both for major industries warranting their own focus, and for more general small business:
CP1: Benefiting Australia through livelihoods from desert resources aims to understand how to value and capture the value of managing public goods, such as natural and cultural heritage, including the appropriate institutional arrangements. This project maximises national benefits by targeting better investment in remote areas.
CP2: Key industry opportunities in remote areas aims to lift remote area industries, in particular bush products, 4WD self-drive remote tourism and smarter pastoralism3.
CP3: Supporting the emergence of small business in desert Australia aims to understand and overcome the constraints on remote businesses and to make small businesses more resilient, profitable and able to engage with the wider economy, with an emphasis on Indigenous involvement.
(Note: some additional livelihood opportunities emerge from work in CP4 and CP5, and from an understanding of regional financial flows in CP6).

Outcome 2: Viable remote desert settlements, particularly remote Indigenous communities
Services in desert Australia are fragmented across state borders and sectors. This increases the cost of living in the desert even further. Because service delivery to desert Australia is a low priority for most service delivery agencies, they impose models that suit areas with denser population. As a result services are driven by supply rather than demand. For example, housing must meet east coast standards rather than local community needs, education prepares for life in cities, not remote communities, etc. Although there are exceptions, this ‘deficit’ approach to ‘service need’ is pervasive. Instead of people living in remote areas being able to balance lifestyle priorities and demand for services openly, they must accept expensive, yet often ineffective service delivery.

One major consequence is intensifying political debate about the costs and consequences of services in remote settlements, aimed mainly at Indigenous communities, but actually just as applicable to mining, tourism and pastoral remote settlements, as well as larger services centres such as Broken Hill and Alice Springs. This debate lacks balanced data on the costs and benefits of these settlements. It also ignores significant technological opportunities that could improve the match of services with demand in desert settlements, lowering costs, increasing benefits, reducing public expense and creating additional desert livelihood opportunities.
These issues inform Desert Knowledge CRC’s settlements work:

• We must understand what factors determine the viability of remote settlements of differing size, remoteness and social characteristics.
• We must find out which forms of governance and institutional structure most clearly express demand in these settlements, thereby reducing demand for inappropriate services
• We must explore which technical options make those services for which there is demand most cost-effective
• We must identify business solutions that help communities to use these services and that may in themselves create additional jobs in communities

This leads to a further two Core Projects, one to understand what makes settlements viable, and the other to seek technical and social solutions for better service delivery in the future. These projects will consider settlements from very remote and small to service centres like Kalgoorlie and Alice Springs, but most attention will be paid to Indigenous settlements: Household livelihoodsSettlement/ communityRegion (with settlement-scale resolution)‘Desert’ Australia (with regional resolution)

CP4: What makes desert settlements viable4? aims to help communities to understand what would make their settlement more viable and to inform the debate about the viability of remote settlements. The pre-conditions for a sustainable remote community include the institutional and governance frameworks that most clearly express demand for services.

CP5: Demand-responsive access to services for settlements aims to improve access to better services and reduce the public costs of these. This includes non-welfare approaches to facilitating access to services, reducing costs and increasing efficiencies, models for business and institutional structures, and for policy and investment responses.

Outcome 3: Thriving desert regional economies
Since Desert Australia is vast and sparsely populated, there is low critical mass in business activity and in local markets. There is a Catch-22: individual small businesses cannot reach out to an external market. More than elsewhere, private investment needs to be networked, and public investment needs to facilitate this. Furthermore, there is little capacity across this huge diverse region – 70% of the continent – to understand what the future population movements, economic flows, or resource and cultural limitations could be for different regions. In short, we do not know enough about the dynamics within and among different regions. Yet this understanding is critical to public investments which create thriving regional economies that are much stronger than the sum of their dispersed and precarious parts.

This informs a single final core project which aims mainly to understand how individual regions function as a network of settlements and businesses with movement of people and resources among them. It also seeks to establish the direction and causes of population changes and other factors for the whole of desert Australia (see diagram for these different scales):

CP6: Desert regions as integrated systems aims to facilitate regional economic development. This includes understanding a desert region as an integrated system, designing a thriving sustainable region, and projecting future trajectories of different desert regions.