Geography HSC Notes

Ecosystems at Risk
Ecosystems and Their Management
Biophysical interactions which lead to diverse ecosystems and their functioning:

- Ecology refers to the study of organisms and their relationship to one other, as well as their
connection to their surroundings
- An ecosystem is “the dynamic (constantly changing) complex of plant, animal and micro-
organism communities and their non-living environment as a functional unit”
- Keystone species are species on which an ecosystem is highly dependent upon (often with
many connections on a food web or the only type of producer)
- Bio-indicator: an organism whose status in an ecosystem is analysed as an indication of the
ecosystem's health
- Five levels of interaction:
o Organism (an individual of a species)
o Population (a group of organisms from one species)
o Community (all the populations within a particular area)
o Ecosystem (a community or species along with their non-living environment)
o Ecosphere or biosphere (sum of all Earth’s ecosystems)
- Productivity of ecosystems:
o Productivity is the rate at which biological matter (biomass) is produced by an
ecosystem or part of an ecosystem – this can be measured in biomass (mass of new
living matter produced in an area in a period of time) or energy flows (amount of
energy in kilojoules in an area in a period of time)
o Places with low relative productivity include deserts (both hot and cold), rock,
tundra and open ocean, and these areas are typically devoid or contain little plant
life. Areas with high relative productivity are all located in the tropics – tropical
rainforests, tropical savannas and tropical estuaries
o Food webs shows energy and nutrient transfer through an ecosystem, starting with
primary producers (or autotrophs), and moving up trophic levels to reach
decomposers such as bacteria and fungi
o Energy is lost with each trophic level through various means, such as heat, cell
activity and movement – the energy transfer from one level to the next is only 10%
efficient
- Nutrients:
o Important nutrients in the environment include carbon, hydrogen and oxygen, and
other nutrients required by plants include nitrogen, phosphorus, potassium, calcium,
magnesium and sulfur
o By having too many nutrients in an ecosystem, normal nutrient flow in aquatic
ecosystems is damaged, resulting in eutrophication (where algal blooms occur and
block light flow for other organisms)
- Biogeochemical processes:
o Water cycle: Evaporation and evapotranspiration to the atmosphere, precipitation
moves this water to the ground, water then finds its way back to the ocean through
surface runoff and groundwater
 o Carbon cycle: Plants get carbon from the atmosphere through photosynthesis,
respiration releases carbon into the atmosphere, carbon can be buried in the
ground, humans can also release carbon into the atmosphere through industrial
activity
o Nitrogen cycle: Nitrogen-fixing bacteria convert atmospheric nitrogen into usable
ammonia, plants use this ammonia, and animals also eat plants for nitrogen, other
bacteria then convert this nitrogen through a series of stages, where it eventually
goes back into the atmosphere
o Phosphorous cycle: Erosion from phosphate rocks flows into waterways, animal
waste and excretion flow into the cycle, phosphate is absorbed back into phosphate
rocks
- Bioaccumulation:
o Is the non-biodegradable build-up of synthetic chemicals, radioactive chemicals and
toxic compounds in the food chain, can have devastating impacts on an ecosystem
o Affected species can have reduced breeding capacity, weakened body functioning
(to the point where it is vulnerable to parasites and other diseases), or may die from
poisoning directly
o Become more concentrated at higher trophic levels
o Example: Royal National Park coal mine leak into the Hacking River
- Trophic cascade:
o This is when there is up-down change to an ecosystem which descends through
trophic levels
o For example, when wolves were first introduced to Yellowstone, they caused a
reduction in deer and coyote numbers (as wolves prey on these animals), resulting
in a higher level of primary producers and scavengers
o Consequently, the ecosystem became more stable as predatory animals were kept
in check, and species at lower trophic levels like ravens, squirrels and highland
vegetation flourished
o Deer avoided certain areas of the park where they could be easily hunted, triggering
mass plant growth which stabilised rivers and greatly benefited marine species

Vulnerability and resilience of ecosystems:

- Vulnerability is the susceptibility of an ecosystem to natural or human-induced stress

- Resilience is the ability of an ecosystem to withstand natural or human-induced stress
- Dynamic equilibrium refers to the function of ecosystems over time – productivity, trophic
structure, and number of species remain at a continual state of balanced change
- Vulnerability:
o Location:
 An ecosystem can be vulnerable if it is in an extreme part of the world, for
example the Sahara Desert or the Andes Mountains, because organisms
living in these places are highly specialised and adapted, so small changes in
conditions can cause the ecosystem to collapse
 For example, the Minnamurra Forest (a temperate rainforest near Kiama)
close to urban development, surrounded by farms which increase pollutants
entering the catchment, and has led to significant weed infestation (like
lantana) which infests a large area in the forest
o Extent (size):
  The smaller the extent of an ecosystem, the greater its vulnerability, as
changes can quickly spread and cause damage, especially if this small area
contains a high-density of organisms.
 For example, in the Minnamurra region, the remnant forest has an area of
around 160 hectares – this is smaller area of a much larger forest, so threats
spread more easily throughout the whole region
o Biodiversity:
 Greater genetic diversity means that members of a species will have the
ability to use favourable genetic “traits” to aid their survival during stress
events – because of this, the ecosystem will lose less organisms and can
rebound more easily (a rainforest is more resilient than a wheat field due to
genetic diversity)
 For example, the Minnamurra ecosystem is threatened by non-endemic
species which have invaded the forest and created monocultures
(environments where one plant species dominates totally)
o Interdependence (linkages)
 This refers to the complexity of an ecosystem’s food web (another term for
this is “linkages”). Because each organism in an ecosystem with high
interdependence will have multiple predators and food sources, the removal
of one predator/prey will not have a significant impact on the functioning of
the ecosystem, increasing its resilience
- Resilience:
o

o This process demonstrates a stress on an ecosystem which impacts its “ecosystem

property”. When the stress occurs, this ecosystem property falls because of reduced
ecosystem production, and the amplitude measures how far an ecosystem has fallen
 from its original state. The ecosystem can then recover following the cessation of
this stress, and this is measured in elasticity. However, as a result of the stress, the
ecosystem is unable to return to its original production – this difference is calculated
as malleability.
o Ecosystems with higher resilience are those with greater biodiversity (like
rainforests) and the presence of stress dependant organisms like eucalypts

Impacts due to natural and human stress:

- Natural stress example:

o The Kangaroo Island bushfires (2019-2020) were a catastrophic natural impact,
being the largest bushfires recorded in the island's history and also causing the most
devastation.
o The impact of the Kangaroo Island bushfires is that certain species such as the
eucalyptus tree and acacia were completely removed from the ecosystem. These
trees provided habitats for the koala and other species, so as a result, their
population declined in the ecosystem.
o The bushfires of Kangaroo Island had significant impacts on the biophysical
interactions of the ecosystem, as the burning of the she-oak trees which are the only
food source of the glossy back cockatoo, has led to the species size dramatically
decreasing, hence, reducing energy flows within the ecosystem.
o Moreover, the bushfires directly led to the death of numerous organisms like the
mouse-sized dunnart, which after extinction, causes a trophic cascade, with prey
numbers rising and predator populations dwindling due to food web interactions.
o The carbon cycle was also affected as more carbon dioxide was released by the
burning of trees. This caused the resulting area to have a hotter climate, and
contributed to the greenhouse effect globally.
- Human stress example:
o The deforestation in the Amazon Rainforest is a catastrophic, human-induced stress
due to a growing need for wood to produce furniture and farmland to produce
energy.
 o Deforestation due to humans has caused areas of the Amazon Rainforest to be
negatively impacted in terms of biophysical interactions. Keystone species such as
the Agouti rely on Brazil nut trees for energy. However, as a result of deforestation,
their habitat is lost and there is a decrease in the Agouti population due to difficulty
to find these nuts.
o Regarding nutrient cycling, the Amazon is often referred to as the “lungs” of the
Earth, storing carbon dioxide and converting it into oxygen through mass
photosynthesis, but because of deforestation, CO2 is being released into the
atmosphere from the trees and soil. This has impacted the energy flow of the
ecosystem because trees are being cut down – this means that less energy is flowing
through the region and less organisms are able to be sustained. In the past 20 years,
researchers estimate that the Amazon released 20% more oxygen than it absorbed.
o As a result of dam-construction in the Amazon (brought about by Brazil’s demand
for hydroelectric power), the hydrosphere has flooded important terrestrial
ecosystems, and mobile marine animals like fish and eels have been physically
restricted in their movement across rivers.

The importance of ecosystem management and protection:

Genetic diversity:

- Ecosystems rich in genetic diversity have greater resilience, and as a result, are able to
recover more easily from naturally and human-induced stress
- Communities with high genetic diversity can survive change because there are usually some
organisms that are able to withstand this change
- If these favourable traits are genetic, they will be passed down to the next generation
(survival of the fittest), as opposed to organisms with unfavourable traits who do not reach
adulthood
- Loss of genetic diversity through human intervention is referred to as the “opportunity cost”
of development
- Evolutionary extinction is approaching one species per day, largely a result of human
activities, leading to a fall in genetic diversity

Utility value:

- All living and non-living things in the Earth’s ecosphere have either an existing or potential
utility value or usefulness
- Therefore, the loss of a species prevents humanity from accessing a future source of food,
medicine, chemicals or other materials
- Important food crops in the developing world are at risk (such as potatoes from Peru), and
these vital resources can only be protected by preserving the environments in which they
grow
- In addition, plants provide us with medicines that are used to cure human diseases, such as
hyascine (a plant extract) which is used to treat motion sickness and stomach illnesses
- The better value is to keep the ecosystem or species in its natural state as opposed to
exploiting its resources

Intrinsic value:

- Ecosystems are endowed with their own intrinsic and ethical value; that is, they have a right
to exist irrespective of their utility value
 - Intrinsic value recognises that the environment provides the inspirational, spiritual and
aesthetic needs of many people, including activities such as bushwalking, trekking and
birdwatching
- The links between Indigenous people and the environment is particularly strong, for
example, Aboriginals had the view that they were part of the environment
- These ecocentric beliefs govern hunting and food-gathering activities, as well as song, dance,
storytelling and art

Heritage value:

- Heritage value refers to “natural features consisting of physical and biological formations or
groups of such formations, which are of outstanding universal value from the aesthetic or
scientific point of view”
- Education plays a vital role in developing public support for heritage
- Examples of heritage sites include the Blue Mountains

The need to allow natural change to proceed:

- Ecologists argue that humanity has an ethical responsibility to ensure that nature’s
evolutionary process continues unimpeded
- To achieve this, we should design conservation areas that are large enough to allow
evolutionary processes to occur and have accurate boundaries
- We should consult Indigenous peoples before making these areas, and surround these well-
managed zones with “buffer areas” of limited human activity

Evaluation of traditional and contemporary management strategies:

- Management approaches:
-

- Evaluation criteria:
o Ecological sustainability: Using, conserving and enhancing the Earth’s natural
resources so that ecological processes, of which all life depends, are maintained and
the total quality of life, now and in the future, can be increased
o Sustainable development (improving human quality of life while supporting and
maintaining ecosystems): this involves four concepts
  Intragenerational equity (the present, developing world has a right to food,
clothing, shelter, etc.)
 Intergenerational equity (present generations should not resources in a way
that depletes them for future generations
 The precautionary approach (lack of scientific certainty should not be used
as a reason to delay environmental measures, as we should always err on
the side of caution)
 Biological diversity (which is essential for Earth’s ecosystems and their
cultural and aesthetic value)
- Traditional strategy evaluation (firestick farming):
o Cultural burns are a traditional method of controlling vegetation and animal species
through burning (typically in a managed way) of bushland. This improves the state of
the land and reduces overall bushfire risk in the hotter parts of the year – therefore,
cultural burns are conducted in the cool and dry season.
o This strategy is highly effective at managing the environment and reducing the risk
of future bushfire activity. Firstly, traditional burning does not damage the landscape
(unlike hazard reduction burns) because it is “cool” in nature and mainly burns in the
lower parts of the ecosystem. In addition, the burns remove weeds and other
infestations from the landscape – this land clearing allows smaller and more
secluded plant species to “see” the sun and thrive.
o By decreasing the fuel load without burning and the soil and surrounding landscape,
not only does traditional burning mitigate the ferocity of bushfires, but also ensures
that following a catastrophic event, the environment is resilient and can bounce
back. For example, after the Tathra bushfire in 2018 (where much of the landscape
was scarred and trees burnt) a 3.5-hectare section of land, which was traditionally
managed by Indigenous Australians, was seen flourishing with native grasses and
other vegetation only 6 months following the event.

Case studies of ecosystems:

Towra Point Nature Reserve (TPNR):

Spatial patterns and dimensions: location, altitude, latitude, size, shape and continuity:

- Is an inter-tidal wetland
- Located 16km South of Sydney CBD, within the Sutherland Shire
- Listed as an important wetland and protected as RAMSAR convention as a wetland of
importance
- Situated on the Kurnell Peninsula, with a latitude and longitude of 34.00S, 151.10E
- Altitude is less than 5m above sea level
- 604ha in size (nature reserve) and 386.5 ha in size (Ramsar site)
- Shape of an elephant’s trunk
- Towra Points supports habitat that connects it with surrounding green areas like Kamay
Botany Bay National Park, Royal National Park, Georges River National Park, Taren Point
Shorebird Community and Heathcote National Park
- Shorebirds like the eastern curlew forage along the Georges and Port Hacking rivers, but due
to a lack of suitable habitat elsewhere, return to Towra Point to roost, so in absence of
connectivity, species viability would diminish
- In addition, the connectivity between saltmarsh, mangrove and seagrass habitats at Towra
Point is critical in maintaining species of fish and crustaceans
Biophysical interactions:

- Weather and climate:

o Mean daily temperatures in winter vary from 6.2 to 17.0
o Mean daily temperatures in summer vary from 18.4 to 26.2
o High temperatures in conjunction with low rainfall, high winds and low humidity
cause increased evaporation rates and therefore increased soil salinity
o Extended periods of these conditions can stress the flora and fauna
o Rainfall is a critical process in the ecosystem to recharge groundwater, offset surface
and soil salinity levels, transfer nutrients and replenish soil moisture content
o Rain is the primary freshwater source for TNPR because it is surrounded by saltwater
in Botany Bay, with around 1100 millimetres of rain per year
o While most saltmarsh species can survive under highly saline environments, rainfall
is critical for nutrient transfer and seeding growth
o Water temperature affects the solubility of oxygen and can affect the psychological
processes of species such as fish
o Water temperature varies between 10 and 27 degrees
o Natural stress event: Due to its coastal location, TPNR is subject to storms of varying
duration and intensity throughout the year
o Thunderstorms are usually of short duration and highly daily rainfall occurs in
summer (3 times a month) than winter (1 time a month)
o Other storms occur 4 to 5 times a year, and contain strong winds and rough, high,
seas, and these storms usually persist for a number of days
o A number of severe storms occurred in May-June 1974, August 1974 and June 1975,
with waves recorded up to 7.8 metres off Botany Bay
o Wave movements in Botany Bay caused significant erosion to Towra Beach and
subsequent saltwater intrusion into Towra Lagoon
o It has been suggested that dredging for Sydney Airport’s third runway, which
changed wave patterns in Botany Bay, was a factor in this erosion
- Sedimentation (geomorphic):
o Sediments in the Botany Bay region are of the Holocene period and consist of
marine sand, mud and biogenic material
o Accretion and erosion of sediment is a critical process at Towra Point because it
changes the geology, morphology and topography of the area, which affects the
distribution and abundance of plant and animal species
o Climate and human-modifications can also impact the movement of sediments
o Towra Point was formed from the accretion of Aeolian sediment from the Kurnell
Peninsula
o Tide and wave action has moved much of the sediment from Quibray Bay around
Towra Point and towards the Elephants Trunk
 o
o Some sediment is deposited in the low-energy areas of Weeney and Woolooware
Bays
o Seagrasses colonise non-vegetated seabeds in low-energy areas
o They need light penetration and are thus found to a depth of 3 metres in Botany Bay
o They are a highly productive species and are effective in trapping sediment
o Mangroves are formed when sediment with high organic matter is stabilised
o Mangroves are also highly productive and trap sediment, and over time, they reduce
the frequency of tidal inundation of freshwater wetlands
- Wave action (hydrological):
o Winds and storms from the southeast have the biggest impact on Botany Bay and
increase the intensity of waves, especially in low-lying areas such as Towra Point
o Following the construction of Sydney Airport’s runways and development of Sydney
Port, the direction of waves was changed by dredging in the north and north-east
areas of Botany Bay and by expansion of hard surfaces on the northern shoreline
o This means that waves hit the southern shore of the bay with higher frequency and
intensity
o Increased wave energy at Towra Point has caused major damage at Towra Beach
due to erosion and vegetation recession
o In 1974, erosion (in conjunction with severe storm activity) resulted in the intrusion
of sea water into Towra Lagoon, which is a diverse freshwater body
o This was harmful for freshwater species such as the golden bell frog, as the water
became brackish (slightly salty)
o Mudflats, which are formed by the accretion of sediment in low-energy areas, are an
important food source for shorebirds and fish
o However, increased wave action has eroded these mudflats and thus removed this
food source
o In addition, this erosion (because of wave action) leads to higher turbidity in the
water, reducing the amount of light available to seagrasses underwater, with
impacts on energy flows

Nature and Rate of Change:

- Nature is “the what”: what the ecosystem is like, regarding type, processes, species and
functioning, typically before any changes have occurred
 - Rate is how fast and at what rate the ecosystem is changing, and this includes causes of the
change, data/statistics showing the change, and the effects of the change on the nature and
functioning of the ecosystem
- Sedimentation:
o Changes prior to 1974 have altered natural sedimentation processes and caused
ongoing erosion at Towra Beach, as well as the development of Towra Spit at the
end of the elephant’s trunk
o Towra Spit Island with continue moving in a south-westerly direction at around 25
metres per year, while wave patterns could cause up to 40 metres of erosion at
Towra Beach
o Prior to human alterations, natural sand movement in Botany Bay was in a south-
easterly direction, but now (due to changes in the depth and shoreline of Botany
Bay) sand is moving in a westerly direction
- Biogeochemical cycles:
o Critical nutrients to Towra Point are inorganic and organic forms of nitrogen and
phosphorus, and these have increased over time due to catchment land use
practices and changing hydrological processes since settlement
o Estimated loads of total nitrogen have approximately doubled since settlement and
total phosphorus and suspended sediment loads have almost tripled
o Towra Point, despite its high levels of nutrients, is at a low chance of experiencing
eutrophication due to the well-flushed nature of Botany Bay, but low-energy areas
like Woolooware Bay are at higher risk

Human Impacts:

- Dredging:
o Is the excavation of material from the bottom of a seabed, by scooping out mud,
weeds and sand, usually done for purposes like reshaping land or deepening a
harbour
o Results in the short-term destruction of animals, vegetation and microbial
communities that live in the dredged sediment, as habitats are physically swept
away
o Reduces capacity for nutrient cycling, primary production and habitat provision and
can have flow on effects up the food web, with reduced energy flow in the
ecosystem
o This is because suspended sediment in the water column blocks light, reducing
photosynthesis and stops the ability of primary producers to harness the Sun’s
energy
o In addition, dredging can increase tidal area, wave height and water velocity,
resulting in bank erosion
o Eroding banks threaten mangroves and other mudbank communities and can lead to
increased turbidity
o Finally, dredge spoil needs to be deposited somewhere, so it often smothers existing
habitats and contaminates resources which move and bioaccumulate through the
food web.
- Sedimentation:
o Urban expansion throughout the Botany Bay catchment, mainly along the Georges
River, has increased the sedimentation rate and load entering the waterway via
 runoff from roads and other impermeable surfaces, sewer overflows, and runoff
from rural lands and development
o The increased accretion around Towra Point provides increased area for seagrass
and mangroves to colonise, however dredging creates decreased water flow in some
pockets, leading to higher turbidity and reduced tidal flushing
o In addition, the types of industries surrounding the catchment include heavy
industry and development, so chemicals like arsenic and chlorine enter the sediment
and damage habitat at Towra Point
o With human-induced light changes caused by dredging, seagrasses have become
limited in their habitat, and have disappeared from deep-dredged areas
o This change in sediments has altered the species composition and richness of the
benthic organisms.
o Dredging and hard surfaces (like the airport runway) have impacted sedimentation,
with an increase in the erosion rate of Towra Beach on the eastern side and a rise in
the accretion rate of the Elephants Trunk on the western side of Towra Point.
o In June 1974, following dredging and severe storms, the largest freshwater lagoon at
Towra Point, Towra Lagoon, was inundated by sea water, changing the ecological
character of that habitat.

Traditional and contemporary management practices:

- Traditional (The Towra Team):

o Towra Point is in the Gweagal clan of the Dharawal nation, and this Aboriginal
community has a strong association with Botany Bay that spans tens of thousands of
years
o The Towra Team consists of members from the La Perouse Aboriginal community
o They undertake activities such as bush regeneration, the Discovery Program (an
Aboriginal education group), and little tern monitoring
o The majority of their management practices are directed towards the conservation
of both flora and fauna, because the local community has lost connectivity with the
area since British settlement
o Currently, they are working to restore the Kurnell dune forest (a threatened species)
to levels seen before British settlement
o The Towra Team is a great way for struggling Indigenous youth to connect with their
culture and assist the environment at the same time
o They also manage Towra Island to ensure there are no illegal fishers or visitors
- Contemporary (Friends of TPNR):
o In TPNR, contemporary management practices, led by volunteers and rangers, have
helped to reduce weed levels - around 90 to 95% of Prickly Pear and 95% of bitou
bush has been removed
o The weed removal program aimed to reduce the area of land in TPNR dominated by
weeds such as the bitou bush, increasing the potential for native species to
regenerate. On the basis of bushland rehabilitated, the program was a successful
contemporary management strategy.
o Firstly, there has been clear and visible success with weed removal in TPNR, with a
lantana-free corridor linking the two shorelines of the nature reserve. The cleared
area was then replanted with tubestock, a native species of plant, by club scouts
aiming to complete their conservation badge. By removing the lantana understory, a
 wide range of native seedlings were given another chance at survival (as previously,
the lantana choked competing vegetation) – this allowed the native bushland to
regenerate and recover. Thus, the weed removal strategy was a successful
management strategy when looking at bushland rehabilitation.
o Another strategy involves managing access to the park – this includes putting up
signs, installing barriers and issuing fines for inappropriate behaviour

Kosciuszko National Park:

Spatial patterns and dimensions: location, altitude, latitude, size, shape and continuity:

- Kosciuszko National Park is located in the southeast of Australia, and entirely in the state of
New South Wales
- Mt Kosciuszko is the highest point in the national park at 2228 metres above sea level, but
elevation varies to a lowest of 400 metres in the extreme south-east of the ecosystem
- The national park has a size of around 6900km squared, with its coordinates ranging
between 35° 43' S to 36° 53' S and 148° 12' E and 148° 45' E.
- Continuity in the ecosystem is average to above-average, as vast areas of land have been left
uninterrupted by human life except for Perisher and Thredbo which contain hotels and ski
resorts which provide a barrier to wildlife movement

Biophysical interactions:

- Weather and climate:

o Kosciuszko National Park is the coldest area in the country, and this is because of the
environmental lapse rate, (temperature decrease at a rate of 6.5 degrees Celsius per
100 metres), so at its highest elevation of 2228 metres, temperatures are reduced
by 14 degrees
o A latitude of around 36° S means that the park is located at the southern end of the
Australian continent, placing it directly in the firing line for Antarctic weather
systems and cold fronts
o As a result of these two factors, Kosciuszko National Park (at Mt Kosciuszko) has cold
winters ranging from -7 degrees to -0.3 degrees with 104 millimetres of rain (in July)
that mostly falls as snow. In January, the temperature ranges from 6 to 16 degrees
with 102 millimetres of rain – rain is highest in winter, and the total annual rainfall is
around 1500 millimetres
o This dynamic of weather and climate leads to an overall productive ecosystem,
especially at lower elevations. Transpiration is a major form of water loss across
Australian ecosystems, but in Kosciuszko National Park low temperatures ensure
that most of the abundant precipitation that falls enters the natural world. River
discharge and water storage through ice also add to productivity in the region by
distributing water at predictable times following snowmelt. There is plentiful
montane vegetation, such as the Alpine Ash, up to around 1500 metres above sea
level as a consequence of high precipitation and mild temperatures, however the
height and frequency of vegetation reduces abruptly at 1500 metres and 1800
metres (to species such as low-growing Snow Gums), as summer temperatures fall
to levels insufficient for tree growth. Hence, the cooler climate of the upper-
mountain region means that this part of the ecosystem is substantially less
productive than lower elevations, because energy flows are reduced by limited
photosynthesis.
 - Geological history (geomorphic)
o Unlike the geological history of other mountain ranges such as the Rockies and the
Himalayas, the Australian Alps were not formed by the collision of continental plates
– rather, they formed because of upward movement during the breakup of
supercontinent Gondwana around 130 million years ago. This was caused by magma
travelling upwards through the lithosphere and propelling the Earth’s surface into a
high plateau. Erosion in the following millions of years meant that this plateau is
now a long, thin and modest mountain range that traverses the east coast of
Australia
o Another difference between the Australian Alps and other mountain ranges is
steepness (gradient). The Australian Alps are known for their relatively flat gradient,
while on the other hand the Himalayas rise abruptly from the low plains of
Bangladesh and India. These differing landscapes can be explained by Kosciuszko’s
geological history – continental splitting (the process by which the Australian Alps
formed) has less force than the collision of tectonic plates, creating a smoother
uplift.
- Soil formation (geomorphic)
o Soil formation in other mountain ranges is hindered by glaciation that removes soil
through snow and ice, so because of this, they are mostly rocky (like the Rocky
Mountains) and steep. Nutrients in an ecosystem are less readily absorbed into soil
at lower temperatures, meaning that soil quality in alpine regions like Kosciuszko
National Park is poor.
o The soil in this ecosystem is at high risk of damage, usually caused by strong winds,
low temperatures and frost, and this can cause further erosion of soil that is
exposed to the outside elements. Despite these deficiencies, alpine soil is abundant
in humus (which can store and release large quantities of water), consequently, the
soil in Kosciuszko National Park is crucial for distributing snowmelt and triggering
summertime plant growth in the ecosystem.

Human impacts:

- Introduction of brumbies:
o In early European history, horses (called brumbies) were introduced to Australia for
assistance with farm work, and natural growth ensured that some animals were able
to escape into the wild and become feral. Brumbies have resulted in a trophic
cascade in the Kosciuszko National Park ecosystem – they trample on and damage
vegetation, expose soil and increase tree death by chewing bark.
o The destruction of primary producers has changed the ecosystem’s productivity, as
fewer organisms can be sustained at higher trophic levels and overall productivity
diminishes. These changes impact the functioning of the ecosystem – for example,
after brumbies destroyed large amounts of vegetation in the park, scientists have
observed lower levels of rock wallabies who rely on this plant growth for survival.
- Climate change:
o Since the beginning of the 20th century, annual temperatures in Australia have
increased by almost 1.5 degrees, and rainfall has declined by 20% in south-eastern
Australia since 1990. Therefore, the rate of change for the average thaw has been 2
days earlier per decade, and maximum snow depth has decreased by 10% since the
late 1960’s.
 o The results of this human-caused change are overwhelmingly negative because
species are facing extinction as changes impact Australia’s last true alpine
ecosystems. The critically endangered pigmy-possum, which relies on winter snow
cover, is expected to lose nearly all its bioclimatic range with just 1 degree of future
warming as rising temperatures disrupt hibernation cycles.
o Finally, unlike alpine flora in the Northern Hemisphere that have shown an ability to
change in accordance with rising temperatures, plants in Kosciuszko National Park
like the Snow Aciphyll are failing to adapt.

Traditional and contemporary management practices:

- Traditional:
o It is estimated that the Australian highlands were inhabited by Indigenous
Australians for 21000 years, and throughout this period they managed the land in a
way that was ecologically sustainable.
o This management strategy involved the use of the natural resources for food,
medicine, tools and clothing. Importantly, tribes in the area were nomadic (similar
to local peoples in other countries) and developed a spiritual connection with the
land that persists today.
o The environmentally-friendly strategies employed by Indigenous Australians fall
under the criteria of “conservation”, which “involves the planned use of natural
resources in an effort to minimise waste and environmental damage”. An example
of this “conservation” is how Aboriginal tribes from all over south-eastern Australia
congregated in the mountains during the summer months to feast on Bogong moths
– this was ecologically sustainable because Bogong moths are only in abundance
during warmer weather, so the Indigenous Australians used natural resources
without threatening native fauna.
- Contemporary:
o In response to the brumby crisis, John Barilaro (the former NSW Leader of the
National Party) ignored pleas by his environmental minister Mark Speakman to
reduce brumby populations by 90% in 20 years – instead, he passed a bill that
outlawed the culling of any brumbies. This management strategy is not ecologically
sustainable and has been criticised by scientists and environmental groups.
o The policy is an example of “utilisation”, where the interests of brumby advocates
are placed above concerns for the natural environment.
o The plan ignores intergenerational equity, as by protecting (through legislation) the
most dangerous threat to Kosciuszko’s ecological integrity, Barilaro is guaranteeing
the ruin of the environment for future generations

Urban Places
Urban Dynamics
The urban dynamics of change:

Suburbanisation:

- Suburb: an urban area surrounding and connected to the central city – some are residential
but have their own commercial centres
- Suburbanisation (process): the movement of people, employment and facilities away from
the inner city
 - Urban sprawl: the continuous, and often unplanned, outward growth of an urban area
- Morphology: the functional form and character of an urban environment
- Urban morphology: both the functional form and character of the urban environment, for
example building types, streetscapes and land-use patterns
- Timeline:
o Suburbanisation commenced with the introduction of trams and the development of
the rain network
o Until the 1970s, people worked in the central city but lived in the suburbs
o The suburbanisation of commerce intensified during the 1960s and 1970s, resulting
in a complete restructure of the metropolitical economy, shown by the development
of large, regional shopping centres
o This was closely followed by the suburbanisation of employment, such as
manufacturing or services
o These multifunctional urban cores are known as mini-cities or edge cities, as they
have their own economic and cultural activities
- Edge cities:
o A relatively large urban area situated on the outskirts of a city, typically beside a
major road
o Self-sufficient urban entries with their own economics and cultural activities
o Most compete with the CBD for economic activities
o Examples: Parramatta, Chatswood, Campbelltown, Liverpool, Bondi Junction
- Places include Ingleburn, Marsden Park and Wetherill Park
- Example: Sydney
o Suburbanisation in Sydney is the result of railway lines, the growth of automobiles,
the movement of manufacturing to the suburbs, the “ideal” of a quarter-acre home,
high birth rates, and immigration, where migrants often formed ethnic communities
like Cabramatta or Harris Park in the suburbs.
o Early on, railway lines that radiated from the city centre, the growth of automobiles
(that provided infilling between railways and permitted further outward growth),
freeways and population growth
o Young, married couples (especially those with future plans for children) often move
to outer suburbs because of cheap land and house packages, allowing them to
purchase their first home with relative financial ease.
o The main impacts of recession and economic reform (namely deregulation) has
contributed to the suburbanisation of manufacturing in Sydney
o Centrifugal forces for manufacturing in Sydney – those directed away from the
centre (expensive land, limited space, congestion, abundance of space in the
suburbs, lower land taxes)
o Centripetal forces for manufacturing in Sydney – those directed towards the centre
(good railway/highway access, variety of services)
o Sydney’s population will grow by 40000 people per year

Ex-urbanisation:

- Ex-urbanisation is a process whereby people, usually those who are quite affluent, move
from the city to rural areas but continue to maintain an urban way of life, either through
long-distance commuting or technology
- They live in the urban periphery (outer edge of the city) and are functionally linked to the
urban area
- Exurbs are also known as bedroom suburbs, commuter suburbs or dormitory suburbs
- Exurbia is located in the peri-metropolitan region around Sydney, that is, the area bounded
by the furthest extent of commuting to metropolitan jobs
- Examples include Camden, Picton, Windsor, Lithgow, Bowral-Mittagong and Gosford
- Example: Bowral-Mittagong
o Travel time to Central is 2hrs 10min
o Land-use includes rural farms, residential areas, industrial areas near Mittagong and
parks (akin to a small Sydney suburb)
o Services like hospitals and higher education require travel to centres like Sydney or
Wollongong
o Median age is 52 (higher than Australian average)
o Average of 1.9 children per family
o Marked decrease of population between ages of 20-40, indicating that people move
to Sydney to work, before returning to their family after accumulating wealth
o Reasonably high percentage (25.1%) with Bachelor’s degree or higher
o Social structure:
 Median weekly household income is $1299
 Median monthly mortgage repayments are $1950
 Top ancestries are English, Australian, Irish, German and Scottish (indicating
a European feel)
 Social structure with wealth and inequality is influenced by ex-urbanisation,
with richer newcomers, who purchase mansions or large houses, competing
with poorer, generational farmers
o Changing economic character:
 Introduction of mobile phone technology and influence of COVID-19 meant
that people are working from home at higher levels
 Greater investment in Bowral area through economic growth, as property
investors in Sydney and Canberra have more money to spend
 Land use in the area is changing, as working farms are being sold to
investors who may develop resorts or properties
 Ex-urbanisation has brought commercial development as new residents seek
lifestyle similarities to the city
 A strong “café culture” has developed in Bowral, stimulated by tourist and
residential growth
 New, richer owners that come from the city are able to rejuvenate
collapsing farms by focusing on long-term investment growth, rather than
year-to-year survival
 The Shire aims to keep its self-employment rate at over 70%, as it does not
seek to become a “dormitory suburb” of Sydney
o Culture of place:
 The Bowral area now has a richer, more luxury vibe because of wealthy
residents and investors due to ex-urbanisation
 Landscapes and homes have been renovated and recovered because of
money provided by ex-urbanisation
  However, some heritage buildings are at risk due to commercial
development, and the Shire makes it a priority to minimise this
“unacceptable pressure” on its heritage
 Over-optimistic predictions about economic and population growth have led
to high vacancy rates in some new developments
o Growth:
 There are around 10,000 people in Bowral, an increase of 25% in just 5 years
between censuses
 The population of Wingecarribee Shire has increased by a similar percentage
 In future, the council intends to retain its “sense of place”, by maintaining
scenically attractive destinations
 The council predicts that clean water will be the most important natural
resource issue
 In addition, to maintain ecological sustainability, the council will integrate
walking/cycling tracks, public transport and clean energy into housing
developments and construction

Counterurbanisation:

- Urbanisation is the increase in percentage of people living in the city

- Counter-urbanisation is the reversal of the rural-large city movement associated with
urbanisation
- It is a result of decentralisation, where services and employment move to the regions
- While the developing world was experiencing urbanisation, the developed world was
experiencing counter-urbanisation
- Example: Sydney
o Sydneysiders are moving to regional NSW, Regional Queensland, Brisbane,
Melbourne
o Explain factors that push people to leave:
o 73% left due to cost of living
o 59% left because of housing costs, for example due to a recession in 1991 people left
for cheaper housing
o 52% were upset with traffic and commute times
o A recent wave of counter-urbanisation has resulted from the pandemic. During
COVID-19, many workers operated from home, reducing the need for close-to-city
living. This quieter lifestyle appealed to many city-dwellers who were disillusioned
because of high house prices, congestion, lockdowns (which mainly impacted major
cities) and cost of living. However, experts believe that this wave of counter-
urbanisation will be short lived as a result of inadequate infrastructure in rural areas.

Decentralisation:

- Decentralisation is the dispersal of activities and people from large urban centres to smaller
urban centres and rural communities
- Decentralisation is an official government policy in Australia
- Incentives include cheap land, grants, low-interest loans and transport subsidies
- In Australia, decentralisation largely occurred due to government policy, for example, low-
interest loans, transport subsidies and cheap land.
- Example: Evocities
 o Four of NSW’s leading regional cities have combined to form “Evocities”. The Evocity
campaign encourages people to live, work and invest in these regional areas. Pull
factors include affordable housing, cleaner air, reduced transport times,
employment opportunities and lifestyle.
o Current four Evocities: Albury, Bathurst, Dubbo and Tamworth

Consolidation:

- Urban consolidation refers to policies that encourage higher population densities in

established suburban areas, usually through planning regulations allowing more dwelling
units on a given area of land
- It aims to increase population in middle to outer suburbia, as well as improve housing choice
and opportunities
- Sydney’s population is 5,367,206 at a density of 433.8 persons per square km
- Advantages: Prevents urban sprawl and the spreading out of services in a city, avoids issues
such as car pollution (1 in 4 children in Western Sydney has asthma) and expenses related to
low-density sprawl
- Disadvantages: Reduces quality of life for a large number of Australians, who (due to rising
house prices) are forced into small, two-bed apartments or studios, the infrastructure of an
area may collapse under pressure (with overcrowded public transport or leaking sewage),
hurried and improper development can lead to faults and structural damage – 97% of
buildings in NSW have at least one defect, causing major losses for homeowners
- Example: Parramatta (doubles as edge city)
o Brief History:
 1860 - Rail line extended to current Parramatta Station
 1913 - Parramatta High School opens
 1975 - Westfield complex opened as the largest shopping complex in the
Southern Hemisphere
 1978 - Westmead Hospital opened
 2020 - Parramatta Square opened and National Australian Bank relocated to
the square
o Population Size/Density:
 Size: 26000 people
 Density: 3719 people per square km
 Growth: 40% since 2006
 Median age: 31
 Median weekly income: $1739
 Parramatta has B4 and B3 Zoning (high-density mix of business and housing)
 B4 - high-density residential housing as well as retail, business and
community uses, live-work environment
 B3 - extensive commercial and high-density residential development,
commercial-residential
o Relevant planning policies:
 Urban consolidation has been prevalent in Parramatta due to the planning
and introduction of Parramatta Square. These regulations occurred after an
influx of population growth which drove more businesses to the area. In
addition, Officers have worked with stakeholders and the general public to
 promote a higher socio-economic level in the community. This includes
charities that aid the homeless with food or aid in receiving job placement.
o Growth, development and future trends:
 Roughly 41,000 more people will live in Parramatta in the next 5 years
 Light rail is set to be in Parramatta in 2023
 Parramatta Square will bring easy access to Western Sydney University
(education), National Australia Bank, Library, Mixed use recreation, and
Australia’s largest commercial office tower (further economic growth)
o Sustainability:
 There have also been 900 solar panels installed during the year 2018.
Furthermore, the general population is being educated on improving
sustainability due to the Inaugural Business Environmental Expo being held
annually.

Urban decay and renewal:

- Urban decay is the deterioration of the built environment, where urban infrastructure falls
into a state of disrepair and buildings are left empty
- Until the mid-1960’s, Sydney’s inner-city underwent urban decay, and this involved the
deterioration of manufacturing areas like Marrickville and Newton
- Major factors that contributed to the decline of inner-city manufacturing include changes in
production technology, the development of freeway networks and deregulation (which
introduced overseas firms with better technology)
- Example: Oxford Street
o Initially, Oxford St was the only major shopping centre in the Paddington (and
surrounds) area, so it consequently attracted young, spend-happy individuals from
inner Sydney. However, increased competition in the form of developed, well-
managed malls, such as Pitt St or Bondi Junction, caused the departure of national
retailers from Oxford St.
o In addition, a strong Australian dollar and landowners demanding high rents led to
unsustainable financial situations for business owners, leading to urban decay.
o As a result, the current economic character of Oxford St (dark windows, for-lease
signs and 89 shops closing down) is a contrast to its former state of blasé and
success.
- Urban renewal is the redevelopment of urban areas (active in Sydney since the 1960s)
- Gentrification is the renewal of inner-city residential precincts, for example when homes in a
state of disrepair as a result of age are purchased and refurbished
- The process is a product of preference of people for access to employment and
entertainment in and around the CBD
- Example: Barangaroo
o Barangaroo, which is located just on the west of the Sydney CBD, was a former
industrial port that fell out of favour due to its small size and lack of transport
connections. This led to urban decay where the port had to be decontaminated, and
then left alone to decay further without any development. Throughout the 21st
century, the site underwent a transformation – instead of economic activity being
focused on shipping, construction and loading, Barangaroo is now the centre of
commercialisation, business and tourism. Over 50% of the precinct is publicly
accessible, and the area has an “open” feel with green space, and a range of cafes
 and restaurants. Barangaroo is an important site because of its immense Aboriginal
history (it was a fishing and hunting site) as well as its colonial history as an industrial
port, and it will continue to maintain relevance following its redevelopment as
Sydney rebounds from COVID-19.

Urban village:

- An urban village is a distinctive residential district comprising of a clustering of people with a

common culture and forming an identifiable community
- Example: Hurstville
o Ancestry:
 The dominant ancestry in Hurstville is Chinese, with 49.4% of the population
(or 16403 people) – this is almost ten times the average of NSW as a whole.
Other common ancestries include English and Nepalese.
o Country of birth:
 In Hurstville, 36.9% of people were born in China, indicating that many
Australian-born Chinese residents identify with Chinese ancestry – this is 13
times the NSW figure of 3.1%. In addition, in Hurstville there are more
people in born in China (10996) than Australia (8279 or 27.8%).
o Birthplace of parents:
 83.6% of people surveyed had two parents born overseas, with China (47%)
being the top country of birth for the both the father and the mother.
o Religious affiliation:
 42.7% of Hurstville residents reported no religious affiliation, nearly double
the NSW average. There were significantly less Catholics compared to the
state average, but four times the number of Buddhists and Hindus.
o Language:
 Compared to the NSW figure of 26.5%, Hurstville had 79.7% of households
that spoke a language other than English. The top responses were SE Asian
languages like Mandarin and Cantonese (50.1% in total), followed by Nepali
and Arabic.

Spatial exclusion:

- The protection of luxury lifestyles, which has resulted in restrictions on spatial access and
the freedom of movement of other urban dwellers, for example high security suburbs (gated
communities)
- Despite growing affluence, society is characterised by fear and insecurity, so gated
communities are a solution for the affluent, and are characterised by gates, walls, guards
and CCTV cameras
- Advantages of living in a gated community include greater security, as the entrances to living
places are typically protected by guards and checkpoints. In addition, the inside of these
properties is filled with CCTV cameras improving residential safety. Privacy is also another
advantage, as residents can escape the unpredictability of outside life and live in peace.
- Disadvantages are primarily focused on the lack of connectivity with the outside world, for
example, how those in gated communities feel a sense of isolation within their “bubble”. It
can be hard to order deliveries, host social gatherings and interact with people outside of
the gated community. This has a greater impact on children, whose development may be
restricted as they grow up in an isolated community.
 - Example: Macquarie Links
o Located in southwestern Sydney
o An estate developed over the last 20 years with 14 stages of houses, 3 stages of
villas and 1 apartment strata
o Was never built with the intention to become a gated community, however
residents took it upon themselves to improve security
o However, crime in general is on a downward trend – in the period from 2000 to
2013, the number of break-ins more than halved and motor vehicle thefts
experienced a similar decline
o One researcher speaks about a “girl on a Razor scooter” watching other kids play
outside her Macquarie Links, showing that young individuals may feel lonely and
experience developmental setbacks

Results of the urban dynamics in a large city of the developed world (Sydney):

Social structure:

- Average age:
o Northern Beaches and Upper North Shore are above 43 years old (retiree area)
o Average age for the Macarthur area is less than 30
o Average age for the area around Parramatta is less than 30 years old
o Places in the lower Blue Mountains have an average age of around 40
o Eastern Suburbs averages around 37 years old
- Public transport access:
o Eastern suburbs have higher access to transport
o Parramatta area has higher access to transport
o Macarthur region does not have reliable access
- Hospitals:
o Parramatta, Westmead and St George have the most access to hospitals
o Northern and NW Sydney have lower access to hospitals
- Wealth:
o North Shore and the northern half of the Eastern Suburbs are richer (average
taxable income of over $45000)
o Liverpool and Bankstown area has less than $22000, making the region of the
poorest in Sydney
o In the western suburbs, richer postcodes are located to the north, in places like
Hornsby and Castle Hill
- Ethnicity:
o See Hurstville in Urban Village
- Example: Point Piper and Yennora
o Point Piper is different from Yennora when looking at median income – the former is
one of the richest places in Sydney with $3644 a week, while Yennora’s median is
just over a fifth of this, at $749 a week. This can be visually seen through comparing
properties in Point Piper (“pristine white mansions”) and Yennora (“corrugated scrap
yards”). In addition, those in Point Piper are far better educated, with 46.4%
attaining a Bachelor degree or higher, compared with 8% in Yennora. The jobs in
Yennora are mainly focused around manufacturing and construction, however in
 Point Piper, the top 3 industries of employment are law, real estate and finance
(generally higher paying jobs).
o One advantage that Yennora has is public transport, as it has its own railway station
with semi-frequent services to the city. On the other hand, there are no train
stations and limited bus stops near Point Piper, likely because most residents work
from home or use luxury cars for transport.

Changing economic character:

- Suburbanisation has led to manufacturing in more rural areas such as the outer suburbs of
Sydney, meaning that warehouses are now less prevalent in places like Ultimo and
Banksmeadow.
- Due to factors such as cheaper land, better traffic connections, reduced congestion and
better expansion opportunities, manufacturing shifted away from the inner-city. In addition,
the nature of manufacturing was affected, as high-tech machinery and environmentally-
friendly methods were needed to coexist with residential settings.
- Regarding residential land, railways were the initial method in which population growth
occurred outside of the CBD. When new motorways and freeways were then built, they
provided “infilling” between railway lines and generated additional corridors of residential
growth. For example, the M5 has helped growth in the Liverpool and Campbelltown area, as
there are easier connections to these areas from across Sydney.
- Factors that have contributed to the revival of inner-city commercial activity include strong
economic growth in and around the CBD, rising incomes, the increase in the population of
the CBD, and international tourism.

Culture of place (VIVID Sydney):

- Architecture: Skyscrapers (One Central Power, International Towers, Sydney Tower),

Museum of Contemporary Art
- Streetscape: Lighting, people, playgrounds, Ferris wheel
- Heritage architecture: Sydney University, Harbour Bridge and Opera House, Customs House,
Queen Victoria Building
- Noise: People talking, live music, cars, dining sounds
- Colour: Rainbow, red and blue lights on buildings
- Street life: Dancing, drinking, eating, observing
- Energy and vitality: Vibrant, upbeat, excitement, invitational
- Lifestyles: Families, couples, tourists

World Cities
The nature, character and spatial distribution of world cities:

- Urbanisation – the process of economic and social change in which an increasing proportion
of the population of a country or region live in urban areas
- Urban growth – the net increase in the population of an urban area
- Pull factors: Employment opportunities, promise of higher living standards, entertainment,
medical facilities, educational opportunities
- Push factors: Landlessness, desertification, war and civil disorder, lack of educational
opportunity, lack of medical facilities
- Nature:
 o A large city that has outstripped its national urban network and become part of an
international global system
o Centres of political power, world trade and communications, leaders in banking and
finance, stage, world entertainment and sporting spectacles, the headquarters of
NGOs and tourist meccas
o They are command centres in the borderless domain of the new global economy
- Character:
o Technological developments in transport and communications (airports like LAX, fast
internet)
o A move away from protectionist economic policies (often referred to as trade
liberalisation)
o Deregulation of financial markets
o New economy (like e-commerce)
o Outsourcing of business-related services and key stages in the manufacturing
process
o Transnational corporations (Accountancy, banking, advertising, law)
 Accountancy: EY (London), KMPG (Amstelveen), PWC (London)
 Advertising: Grey Group (New York), LOWE + Partners (London), Ogilwy
(New York), Publicis Groupe (Paris)
 Banking: BNP Paribas (Paris), JPMorgan and Chase (New York), NatWest
(London)
 Legal: Baker and McKenzie (Chicago), Skadden (New York), Linklaters
(London)
o Global market for lifestyle-related commodities – cultural integration, world media
networks (like CNN and SBS)
- Spatial Distribution:
o Most are located on the continents of Europe and North America (New York and
London) (richer continents)
o Western Europe and East Asia (wetter climates compared to the deserts of Inland
Asia)
o Mostly developed countries (since they have larger GDP’s per capita and more
wealth/influence)
o Western and Northern Hemisphere (more people, larger landmass)
o Located on the coast (access to ports which was vital in the era of shipping)
 o

o
o (Growth of world cities in Asia like Mumbai and Hong Kong)

The role of world cities as powerful centres of economic and cultural authority:

- Economic authority:
o Command and control centres for organising the global economy, like international
capital (NYSE and London Stock Exchange)
o Preferred location for finance and specialised service firms – law, accounting,
advertising, etc.
o Advanced hubs for telecommunications technologies and infrastructure – fibre
optics, Wi-Fi and airports
o Sites of production and new innovation – ICTs
o Markets for products and markets innovations
o International media – News Limited, BBC, Reuters
o Sporting events
 o Role of TNC’s in world cities
 Economic powers
 Business decision-making
 Corporate strategy development
o World stock exchanges:
 NYSE, NASDAQ, London Stock Exchange, Hong Kong Stock Exchange,
Shanghai Stock Exchange
o Global 500 Headquarters:
 Walmart (US) = rank 1, State Rank (China) = 2, Amazon (US) = 3, Apple (US) =
6, Toyota (Japan) = 9, Volkswagen (Germany) = 10
 Most in USA (New York City), West Europe and East Asia
o Case study:
 New York City: New York is the most economically powerful city in the
world, with a GDP of $2.1 trillion Australian dollars in 2021 – it often ranks in
the top 2 on the world city hierarchy. It has the most Fortune 500
companies of any city and contains the largest central business district in
terms of economic output. As a result of this power and openness to foreign
investment, international business is attracted to New York and wealth flows
through this world city. Because of the presence of two large stock
exchanges (NASDAQ and the NYSE), New York exerts significant control over
the worldwide share market, with 1 in 10 jobs in the city associated with the
securities sector. The sheer number of transnational corporations either
headquartered or based in New York (2720 companies with more than 100
employees) leads to high level economic decision-making, where the
decisions made in the city impact the lives of consumers across the globe.
- Cultural authority:
o Powerful centres of cultural authority (museums, art galleries, universities) and
cultural leadership (film festivals, theatres, orchestras, operas)
o World cities generate and spread ideas and values, and influence specific cultural
processes
o Global spectacles
o Coverage of major events (and their host cities) seen courtesy of globalisation and
its respective telecommunications technology
o International sports coverage – the Summer Olympic Games
o Art galleries, dance, film festivals, museums, opera, orchestras, research, sport,
theatres, universities
o Case study:
o New York City:
 The cultural aspect of New York crucial to the city’s function as a world city,
firstly, because having a respected cultural sphere can bring investment and
tourism dollars, but also because it adds to the overall heritage and artistic
value of the area. There are more museums and ballet, opera and theatre
companies than any other city in the U.S, with “Broadway” representing the
highest level of theatre in the world (as well as London’s West End).
Alongside colleges like Columbia University, these creative institutions
attract tourists/students and consequently set trends across the world, for
example, New York was the origin of abstract expressionism (an art form
 known as the “New York School”). 7 of the largest media conglomerates
headquartered in NYC, most prominently “The New York Times”, all of which
inform readers and sway opinions internationally.

The operations of global networks:

- Alpha (very important world cities that link major economic regions and states into the
world economy): London, Tokyo, New York
- Beta (important world cities that are instrumental in linking their region or state into the
world economy): Sydney, Toronto, Madrid
- Gamma (world cities linking smaller regions or states into the world economy, or important
world cities whose major global capacity is not in advanced producer services): Dallas,
Santiago, Rome
- World city hierarchy is determined by interconnections within and between world cities and
other cities
- Flow of capital, information, goods/services, and people indicate relationships between
world cities
- Net transfer of capital from developed economies to developing economies, resulting in a
decrease in manufacturing and an increase in services in developed nations and an increase
in manufacturing for developing nations
- Connectivity: a measure of the flows of information, knowledge, and direction between the
international office network of global service firms (referred to in shipping and submarine
cables)
- Shipping:
o Most of global shipping routes are in the Northern Hemisphere, with peaks in the
Northern Atlantic and Pacific Oceans. There are many corridors of ships, for example
between London and New York, while there is high ship traffic in canals like the Suez
Canal, which provide quick shortcuts between cities like Mumbai and Rome.
o The spatial distribution of global shipping is because the majority of world cities are
located in the Northern Hemisphere, and in addition, are on the coast with easy
access to ports and docks. Some shipping hubs are especially useful because they
are strategically located between major trading partners (Singapore is a hub
between China and India/Europe).
o Economic authority: Ships transport crucial goods like oil, furniture and electronics,
so as a result, hubs of marine activity will have more economic power and influence.
In countries like Australia, domestic ports are often reliant on large, international
ports located in Sydney (Port Botany), increasing economic dependence on these
world cities.
o Cultural authority: The cultural authority from shipping is focused on tourism and
luxury cruises, for instance Fiji records a gain of around $110 million (pre-COVID)
from its cruise industry. However, cruises do not travel long distances meaning that
their global impacts are limited, evident by observing only passenger vessels on
shipping maps and how they tend to “hug” the coastline.
- Submarine cables:
o Submarine cables are mostly located in the Northern Hemisphere, with the highest
number of connections between the East Coast of the USA and the United Kingdom
(New York and London). In addition, there are many cables that cross the Pacific
 Ocean between the West Coast of the USA and Eastern Asia, to world cities like
Tokyo, Shanghai and Singapore.
o This is because the Northern Hemisphere contains the vast majority of world cities,
and because these cities are interconnected, submarine cables carry large amount of
online traffic to communicate digital information.
o Economic authority: Submarine cables are important because they carry the details
of financial information, money transfers and online investments (like trading on
overseas stock markets). This gives the cities involved significant economic
authority, as they are able to control the movement of capital across the world, as
well as profit from taxation when money is moved through their operations. For
example, the Western world was able to cut Russian banks from SWIFT because of
the economic authority they had in the banking sector.
o Cultural authority: In addition, submarine cables transmit culturally important
information, in the form of live sport, movies and TV shows, and news/media
content. The many cables that connect the USA with the rest of the world (especially
Europe) have assisted in the global spread of professional sporting leagues like the
NBA and NFL, while shows like “Squid Game” have spread across the world with
massive success (elevating South Korea in the global environment).

The relationships of dominance and dependence between world cities and other urban centres and
the changing role of regional centres and the demise of the small town:

Dominance and Dependence:

- Refers to the interaction between world cities and the other urban centres in proximity to
them
- World cities, whether they be characterised as Alpha++, Beta or Gamma, are sites of world
accumulation
- Dominant world cities have:
o Technological dominance and innovation
o Financial dominance in the production and distribution of goods and services on a
global scale
o The cultural influence that arises from world cities is widespread, as is the level of
strategic decision making
- On the other hand, urban centres have:
o Functions that show dependence on the world cities
o Accumulation and the production and distribution only on the national scale
o Technology shows a lower degree of research and development
o A limited cultural influence with some political control
o Example: Perth financial system is dependent on Sydney’s ASX
- Hierarchy of world cities indicates that there is a level of dominance emulating from New
York and London, as they have a disproportionate concentration of top-level headquarters
of the financial, industrial, commercial and producer services centres
- Many of the large TNC’s that account for nearly 70% of the international trade are
headquartered in those cities
- The main financial transactions in shares, bonds, loans and foreign currency are dominated
by London, New York and Tokyo
- Sydney, as a major world city, has 27 head office locations for Australia’s 50 largest
corporations – Melbourne has 16, Brisbane Perth and Adelaide have less than 3 each
- Sydney is the principal financial centre as countries like Japan prefer to locate trading,
marketing and financial companies there
- The USA presents clear trends of dominance and dependence, for example major world
cities like Chicago have dependent urban places like Minneapolis, Milwaukee and Kansas
City
- In the UK, London acts as a centre of dependence for other major cities across the nation,
especially for financial transactions, like Birmingham, Newcastle and Manchester
- Sydney over smaller cities/towns:
o Larger cities like Sydney and Melbourne exhibit dominance over smaller centres like
Bathurst and Parkes because they control the exports of regional towns – a supply
chain issue or delay at Port Botany would have dramatic implications on farms in
Forbes. This can be seen as a widespread “web” of links in the wool map which close
in on Sydney (2 kilotons in Forbes to 101 kilotons in Port Botany), indicating that
decisions made in bigger cities can have major impacts on rural areas. In addition,
smaller towns are reliant on the internet, airports, manufacturing, company
headquarters and international links that world cities have.
o Sydney is dominant over other cities like Broken Hill, because it is the centre of
transportation and a hub of airplane traffic. As a result, residents in regional NSW
are forced to visit Sydney and pay for transport in the city, contributing to Sydney’s
economy and foot traffic. For example, there are no direct flights from Albury to
Mudgee – a traveller must transfer at Sydney Airport to complete the journey. Large
cities are also more internationally connected, so goods and services that are
purchased in regional centres are dependent on Sydney for delivery and distribution.
- HSBC (London over Sydney, Sydney over smaller cities/towns)
o HSBC is the second-largest bank in Europe with over $2 trillion in assets,
headquartered in London, UK. This means that even though the company has offices
in other urban centres (64 countries, in cities like Sydney and Paris), the London
headquarters represent the highest level of decision-making for the company.
Furthermore, HSBC has primary listings on two share markets – the Hong Kong and
London Stock Exchanges, showing how secondary offices are dependent on these
world cities. Finally, urban centres like Perth and Adelaide are reliant on Sydney for
HSBC services (banking, financial services) as the Australian head office is in
Barangaroo.
- London over Sydney:
o London is dominant over Sydney as it has more global connections, as well as a
higher population with a greater economic output ($800 billion vs $130 billion). In
addition, international media networks like the BBC are broadcast in Australia, while
Australian news outlets like the ABC are limited to a domestic sphere. Many
businesses such as HSBC are headquartered in London, meaning London is dominant
as they’re decisions impact Sydney directly (i.e if they reduce employees that
directly affects Sydney workers). London is also dominant as many Sydney citizens
watch things such as BBC news, the Premier League and TV shows such as Mr Bean.
o Sydney is dependent on London for its global investments such as through the
London Stock Exchange. Sydney also depends on London for employment through
companies such as HSBC, as well for trade such as the exports of beef. In addition,
 we are dependent on the British coming to Sydney for tourism and migration, in
order to fill our population demands.
- Sydney over Dubbo:
o Sydney is dominant over Dubbo as it supplies goods and services through airports
and shipping ports, contains the headquarters of TNC’s which influence the
economy of regional Australia, has major transport links (Sydney Airport and Central
Station) and is the source of internet connections across the world.
o Dubbo is dependent on Sydney for its airport, and companies (TNC’S) which are
owned in Sydney or have headquarters there such as McDonalds and Bunnings. It
also depends on Sydney for goods and services such as machinery most of which is
made in Sydney and transported to Dubbo. Dubbo also relies on Sydney for internet
which comes to Sydney via underground submarine cables and is then given to
Dubbo through NBN. Dubbo also relies on Sydney for international travel (tourism)
such as through Sydney’s International Airport or through cruise terminals.

The demise of the small town:

- The ABS defines small towns are those with populations between 1000 and 19999
- Reasons why small towns have declined:
o Young people are leaving for better employment opportunities
o Small towns are reliant on industries like agriculture and mining, which are volatile
and subject to international economic conditions
 Mining once dominated Tasmania’s west coast (like in the town of Zeehan),
but once the industry collapsed, the town became deserted and now there
is only one isolated service station – population in 1900 ten times what it is
currently
 The loss of jobs at Harden abattoir affecting lamb producers following the
US lamb tariff decision
o The number of people who work at farms has declined, either due to financial
struggle or automation
 The loss of several hundred jobs in the Aberdeen abattoir in the Hunter
Valley
 The closure of the Heinz Watties cannery in Eden, resulting in the loss of jobs
and income to the town
o Banks continuing to close branches in small towns
o The “sponge city” phenomenon in places like Dubbo where regional centre growth is
occurring at the expense of surrounding towns, as the centralising trends of the
services sector mean that gains are distributed in favour of regional centres instead
of smaller towns
o A decline in commodity prices (affecting farms), the escalating out-migration from
rural centres due to a decline in services
o Out-shopping, where residents of smaller towns shop at regional centres like Dubbo
- Perspectives:
o Small town decline is inevitable (a consequence of globalisation)
o Small towns should be assisted for equity purposes (a fair standard of living)
o Government policy has led to the decline of small towns (focusing on major cities)
o Communities can turn their economies around themselves
- Present-day challenges:
 o The limited or declining growth of many smaller, inland towns, particularly in the
wheat-sheep belt
o The rapid population growth in some coastal locations, largely associated with
retirement and tourism, which draws people away from inland regional centres
o The steady growth of the major regional centres which are increasingly absorbing
government and private sector services, often at the expense of surrounding smaller
centres (sponge-city effect like with Dubbo and Narromine)

The changing role of regional centres (Dubbo):

- Over the last 20 years, larger regional centres such as Dubbo, Wagga Wagga and Albury have
continued to grow as their economies have diversified and they have developed as key
service centres for their regions.
- Dubbo’s grew by an astounding 56.5% in the period from 1976 to 1997, with further growth
of 0.6% in the ten years after that. However, this development has negatively impacted
surrounding communities, as employment and wealth are drawn away from these areas. For
example, between 1976 and 1997 the population of the Warren area northwest of Dubbo
fell by 17.4%, with a further drop of 9% ten years later. This population decline can lead to
the demise of rural towns with derelict businesses, abandoned farms and mass
unemployment. Interestingly, towns to the south and east of Dubbo, such as Mudgee (51.8%
growth), have not suffered as a result of Dubbo’s rise – this may be due to their wetter
climate and position closer to Sydney.
- Dubbo’s changing role is evident in its employment structure – the majority of Dubbo’s
employment is in the primary and secondary industries, typical of a non-urban, regional
centre. 10% of workers are engaged in financial services, with nearly half employed in the
wholesale/retail sector, highlighting Dubbo’s role in providing services to the rest of country
NSW. Other sources of employment include the abattoir (employing 700 workers) which is
the largest enterprise in the town, indicating that the town still depends on some of its rural,
farm surrounds.

Mega Cities
The nature, character and spatial distribution of mega cities in the developing world:

- Refer to push and pull factors in world cities

- Focus on the developing world
- Nature and Character of Mega Cities:
o Very large agglomerations of more than 10 million people
o The UN lists 18 mega cities of the developing world circa 2011: Delhi, Mexico City,
Shanghai, Sao Paulo, Mumbai, Beijing, Dhaka, Calcutta, Karachi, Buenos Aires,
Manila, Rio de Janeiro, Moscow, Istanbul, Lagos, Cairo, Guangzhou, Shenzhen
o While urban centres in Europe, North America and Japan are growing slowly, the
opposite is true with the developing world
o There were only 2 megacities in 1950 (London and New York), but in 2000 there
were 25, with 19 of these in developing countries
o By 2050, there are projected to be 50 megacities in the world
o The size of a megacity is not correlated with its economic, cultural and political
importance, with highly populated cities like Dhaka (23 million) having less influence
than cities such as London (9 million)
 o Problems associated with megacities are a result of overurbanisation, where there
are more residents than the economy can support
o In many developing countries cities are growing two or three times faster than the
overall population
o In developed countries, manufacturing has provided mass employment for a
growing population, but this does not occur in megacities of the developing world
o Most megacities have international and national functions, but unlike world cities,
they have a large informal economy (in Dhaka this accounts for 65% of all
employment)
o In recent years, the percentage of the population employed in manufacturing has
increased, as the labour-intensive processes of TNC’s spread to developing countries
in order to take advantage of low wages
o Globalisation has caused a steep divide between the wealthy and non-wealthy in
megacities, as the rich retreat to walled, well-resourced communities, while the
poor live in derelict slums or shantytowns with little planning
- Spatial Distribution of Megacities:
o The majority of the world’s megacities are located in South and Southeast Asia, in
countries such as India (5), China (8) and Indonesia – these countries have had
historically large populations
o Megacities were first located in the developed world, however, their growth over
the late 20th and early 21st century has been almost entirely in the developing
world
o Continents: Europe, Asia, North America
o Mostly located in the Northern Hemisphere, due to larger landmasses and higher
populations
o Growing number of megacities in Africa, such as Lagos and Cairo
o No megacities in Oceania

The challenges of living in mega cities such as housing, traffic infrastructure, water and power
supplies, sanitation services, employment, and other social and health issues:

- Employment:
o High levels of underemployment and unemployment
o 20-25% of urban adults in developing cities are without regular work, resulting in
urban poverty and social exclusion
o Jobs are a way for citizens to not just earn an income, but to form an identity and
participate in the community
o 25% of the urban population in developing countries live in absolute poverty
o Because there are limited jobs in the formal economy, citizens create their own
employment within the informal sector, which involves providing cheap
goods/services for the urban poor
o However, due to the large supply of labour, there exists poor working conditions,
low wages and child exploitation
o Microcredit loans have been used to alleviate urban poverty by providing poorer
residents with a small loan, in order to start a self-sustaining business that has a
regular income
o This allows them to transfer from the informal to formal economy
- Shelter:
 o Housing is a problem for many megacities in the developing world, as population
growth exceeds the rate of housing development
o As a result, the poor are forced to crowd slums and squatter settlements which have
subpar living conditions
o In Mexico City, over 50% of the population lives in slums and squatter settlements
o In Delhi, this figure is between 45% to 50%
o These residents live with the constant threat of eviction from the government, due
to aesthetic, economic, infrastructure-related or political reasons
o Solutions include site-and-service projects, upgrading projects and core housing
projects
- Water and sewage:
o Sewerage facilities in megacities are usually outdated and inadequate, which most
of the population not connected to these essential systems
o Karachi only supplied piped water to 40% of its populations (and even this is
rationed), and only 11% of Manila is connected to the sewerage system
o In addition, collected sewerage is often dumped into local waterways or left
untreated on the street, leading to a dirty and disease-prone environment
o Solid waste is also dumped into the environment (only 25% is collected in Jakarta),
and these stacks of rubbish provide a source of income for the urban poor who
scavenge for recyclable products
o This can cause accidents such as when 37 squatters died in Manila when a garbage
dump collapsed
o Building and maintaining the infrastructure for waste and sewage is beyond the
financial capacities of many megacities, so other solutions (like encouraging
recycling or pour-flush toilets)
- Health and Nutrition:
o Poverty has a huge impact on the health of urban populations, especially diseases
associated with problems in the physical environment like overcrowded housing,
open sewage and polluted water
o Overcrowding leads to tuberculosis, pneumonia and colds
o Lack of privacy leads to stress, anxiety and other mental disorders
o Food contamination leads to diarrhoea and dysentery
o Rats, fleas and the bubonic plague are also concerns in megacities
o Doctors are often in short supply and hospitals are overcrowded, leading to many
preventable deaths
o There are 4 billion cases of diarrhoea in the world every year, causing 2 million
deaths, mostly among children under 5 years of age
- Air, Water & Noise Pollution & Waste Disposal:
o Due to their large populations, megacities often have to deal with uncontrolled and
unregulated industrial pollution
o Vehicular pollution is also an issue that is exacerbated by inefficient fuel use and
road congestion
o This pollution leads to higher rates of respiratory illnesses such as lung cancer,
bronchitis and asthma
o A solution to waste disposal is “knowledge-based development”, which involves self-
governance and community self-help projects
 o For example, women in Dakar, Senegal, collect waste because only 35% is gathered
by municipal authorities
o This generates income for women who would have otherwise lived in poverty and
unemployment, as well as making the natural environment cleaner and safer to live
in
- Congestion & Transport Infrastructure:
o Mumbai’s rapid population growth has led to clogged roads and overcrowded public
transport facilities
o More passengers per kilometre are carried in this city than anywhere else in the
world
o To resolve this problem, the city launched the MUTP (Mumbai Urban Infrastructure
Project) which aims to improve the efficiency and capacity of suburban railway
services
- Responses:
o NGO and Community Groups:
 Jakarta contains a large number of informal settlements called “kampongs”
which lack basic services and infrastructure such as clean water and paved
roads
 To correct this, the government has encouraged the private sector and local
communities to become involved in the rebuilding process, by increasing the
capacity of community leaders
 As a result, kampong residents who were previously reliant on government
income are now active participants in their community and development
 In Dhaka, the SIP (Slum Improvement Project) is a local government initiative
supported by UNICEF, which attempts to improve societal and
environmental problems faced by slum dwellers in the megacity
 The microcredit part of the project (small loans for residents to start small
businesses) has been particularly successful, enhancing the economic
independence of women and families
o Financial Resources:
 Nigeria’s community banking program has successfully catered for the 69%
of people who depend on the informal economy
 These community banks cater to the credit needs of women, food sellers
and wholesalers, drivers and mechanics, some of whom own shares in banks
that improve their economic standing

The responses to these challenges such as self-help projects, community self-government,

cooperation from NGOs, urban protest and the operations of informal economies:

- Rio De Janeiro:
o Housing in Rio De Janeiro
 Rio de Janeiro is Brazil’s second largest city, with a population of
approximately 13.5 million in its greater metropolitan area
 However, its housing market cannot keep up with the growth, with a deficit
in its metropolitan area of about 500 000 units according to IPEA Brazil. This
lack of housing is a severe problem for the city, since people do not have
shelter from the elements and do not have access to clean water and
sanitation services.
  The population density of Rio is about 4 600 people per square kilometre. In
comparison, this is over twice as densely populated than Sydney, with a
population density of approximately 2 000 people/km2. Overcrowding due
to a lack of proper housing can result in issues such as the faster spreading
of diseases. For example, when the Omicron variant of COVID-19 reached
Rio, the city was seeing 20000 new cases a day within 3 weeks, with severe
health impacts on the community.
 Rio’s housing crisis has forced many of the urban poor to live in squatter
settlements, which are residential areas built illegally. These settlements
generally have inadequate infrastructure due to their illegal status – many
are built out of cardboard, scrap wood, or corrugated iron since these are
the cheapest construction materials. About 1.5 million people in Rio live in
these favelas - over 10% of the total population.
o Solution to Housing Crisis:
 The Favela Bairro Program, starting in 1995 is a self-help program for
improving the quality of the housing in Brazil. Funded with US $300 million
from the IDB, the program provides the people living in favelas with supplies
such as pipes, breeze blocks and cement. The residents then use these
materials to construct houses with better infrastructure and services such as
water, and electricity. For example, Rocinha, one of the biggest favelas in
Rio has been one of the major winners of this program. The majority of
houses are built with bricks and concrete, and 99% of them have electricity.

 In Rio de Janeiro, according to an article published by the Metropolis

Observatory, the megacity upgraded about 30 favelas with Favela Bairro.
However, this program, although it does improve the infrastructure found in
the favelas, does not help with resolving the main issue of a housing
shortage. This is because it does not create new housing fast enough to
meet the growing demand from the constant influx of people migrating
from the Brazilian countryside. Also, while the quality of the houses and
accompanying services such as sanitation and water has been improved,
about 20% of houses in Rocinha still lack plumbing with sewage running out
in the open, and water supplies being unreliable, with the water sometimes
being contaminated with sewage amongst other potential toxins.
- Delhi:
o Air pollution in Delhi
 Air pollution in Delhi is the worst out of any major city in the world, with its
PMK2.5 concentration reaching 99 micrograms per cubic metre of air in
2019 (before COVID-19 lockdowns significantly improved air quality). This
value is more than many other megacities in developing countries, such as
Jakarta, Dhaka and Mexico City, which all have levels below 70 micrograms
per cubic metre (see Figure 1). Other chemicals present in Delhi’s air include
high quantities of sulphur dioxide, nitrogen oxide, and carbon monoxide,
which can lead to further adverse health effects, as these concentrations far
exceed national and World Health Organisation standards.
  There are multiple factors that cause this choking pollution in Delhi. Firstly,
coal-fired energy plants that surround Delhi (11 operating within 300
kilometres of the city) spew pollution into the atmosphere, and government
orders for these factories to cease/clean their production have so far been
ignored. In addition, vehicular emissions, which account for 41% of all
pollution, have been exacerbated by congestion issues that impact the 3.31
million private cars in the city. Delhi’s unique geography is also a factor in
the pollution - northwesterly winds transport pollutants over the city and
temperature inversions (where cold air sinks to the surface) trap this air (see
Figure 2). Finally, farmers in Northern India often burn their crops with fire
after harvest in late winter/early autumn, creating smoke which spreads
across the Delhi region. During crop-burning seasons, this can account for
45% of pollution, indicating that solutions to minimise “stubble burning” are
important.
 This poor air quality has impacts on children, as 2 million children (50% of
the non-adult population) have irreversible lung damage that can cause
diseases such as bronchitis, asthma and lung cancer. The other chemicals
place the population at higher risk of strokes, heart attacks, and high blood
pressure, as well as worse respiratory complications from COVID-19 -
scientists have calculated that breathing in Delhi's air is equivalent to
smoking ten cigarettes a day. Around 1.5 million people died from air
pollution in India in 2019, leading to some declaring the issue a national
health crisis. The sheer amount of air pollution can also lead to schools and
workplaces being closed, which has economic and educational
consequences for the citizens of Delhi (see Figure 3).
o Solutions to air pollution:
 To address stubble burning (one of the main causes of air pollution in Delhi),
the Indian government has employed various solutions in recent years -
most of them have been unsuccessful. For example, crop burning was made
illegal in Delhi in 2015 but this ban has been hard to enforce as farmers have
significant political influence via voting, disincentivising local authorities
from taking action. In addition, local farmers have complained that they do
not receive financial assistance to dispose of post-harvest waste, so they
turn to burning as a last-resort. Finally, the government has not rewarded
abiding farmers as promised, so as a result, these landowners return to their
old, unsustainable practices. During the one-year period from 2019 to 2020,
the average farming contribution to Delhi’s overall pollution increased by
one-third, indicating that the government’s responses have been ineffective.
 Recently, state authorities have provided farmers with an organic microbial
spray to decompose their weeds and crops after harvest, with the added
benefit of more fertile land following decomposition. This solution,
developed by the Indian Agricultural Research Institute in Delhi, was found
to be highly effective in returning nutrients to the soil within three weeks.
However, similarly to past biological sprays issued by the government, high
expenses are preventing the widespread uptake of this resource. Therefore,
this solution has also been unsuccessful in relieving air pollution.
People and Economic Activity
Global Economic Activity
A description of the nature, spatial patterns and future directions of ONE economic activity in a
global context:

Nature:

- Viticulture: The cultivation and harvesting of grapes especially for use in the production of
wine
- Winemaking: The production of wine via the crushing and fermentation of grapes
- Marketing: The set of techniques used to attract and persuade customers
- The global wine industry involves two distinct activities:
- Viticulture (the cultivation and harvesting of grapes)
- Winemaking (the production of wine via the crushing and fermentation of grapes)
- Top producers: Spain, Italy, France, US, China, Germany, Australia
- Reasons: Latitude lines (which influence climate through water, soil, temperature)
- Grapes prefer temperate climates between 15 and 25 degrees
- Richer countries like Australia, France and the USA tend to drink more alcohol due to their
affluence
- Middle Eastern countries do not drink alcohol due to religion
- The Australian Wine Industry:
- Australia is the 4th largest exporter of wine (750 million tonnes per year)
- Only 40% is consumed locally
- Wine industry contributes to economy through production, employment, exports and
tourism
- $2.8 billion local market for Australian wines
- Australians consume over 530 million litres annually with per capita consumption of 30 litres
- Only 17% of wine sold domestically is imported
- Grape growing is a highly specialised agricultural system. Those managing the system need
to be skilled in all aspects of the process

Spatial Distribution:

- Latitude and temperature: Between 30-50 north or south, average temperature between 10
and 20 degrees, exceptions include altitude, proximity to oceans or other bodies of water,
and access to groundwater
- Famous wine regions: Barossa Valley (SA), Hunter Valley (NSW), Champagne (France),
Burgundy (France), Tuscany (Italy). Umbria (Italy), Sonoma Valley (California)
- New World wines originate from parts of the world which were colonised by European
powers from the 15th to 18th centuries, such as North and South America, Australia and
New Zealand. Old World wines come from traditional European winemaking countries such
as Italy and France
- In addition, the two types of wines are produced in different ways – Old World wines are
typically made from grapes grown on a particular vineyard, leading to a specific, distinctive
taste. This taste is both physically (associated with terroir) and culturally related to a place’s
geography, leading to a more exclusive, hand-crafted and intimate feel. On the other hand,
New World wines often blend grapes across regional boundaries, meaning that the wine has
varietal characteristics and is identified by variety instead of vineyard. These wines tend to
have more consistency and appeal to the demands of the mass market, especially to
 consumers who are not attracted to tradition or vintage. New World wines have significantly
contributed to the expansion of global wine consumption in recent decades, due to their
technological advancements, branding strategies and aggressive advertising
- Estate wines are usually identifiable by a single or collection of neighbouring vineyards, with
the production of wine controlled by the owner of the land. This local production means that
the wine is mostly sold through the cellar door or small wine retailers/restaurants. In
contrast, branded wines do not come from a particular vineyard, rather, they are marketed
with a “brand name” or “make”. They can be made using brought-in grapes or even grapes
from different vineyards owned by the same company

Future Directions:

- Sustainability: In order to combat climate change, sustainable practices are needed in the
viticulture and winemaking industry that will minimize environmental damage in the future.
Many of these sustainable practices are already being implemented by wineries like
California Wines who utilise sheep and birds to control weeds and pests instead of harmful
pesticides and herbicides which have unintended consequences to the environment such as
damaging soil and other animals. Large amounts of water are needed to grow grapes and to
avoid water wastage in the future, drip irrigation and process ponds have been incorporated
in conservation efforts. Moreover, vineyards take a large amount of land for the growth of
grapes, and this can often lead to the loss of habitat for wildlife and disrupt ecosystems.
Therefore, producers should ensure the preservation of habitat and ecosystems as a primary
factor in their choice of location for production, ensuring future sustainability of the
vineyard. Wine bottles are also being made from recyclable materials to reduce
environmental damage. Consumers also play a part in ensuring future sustainability by
preferring to purchase wines made in an environmentally friendly manner in order to
discourage unsustainable production methods.
- Technology: The wine bottle has remained roughly the same throughout the years, but, in
recent years, the advent of a flat bottle design with 100% recycled materials will aid in
reducing greenhouse gas emissions. The bottles are 83% lighter compared to traditional
glass bottles and are able to be packed in a more efficient way compared to spherical bottles
which causes cheaper transport costs and hence, cheaper wine for consumers. Furthermore,
wine labels could be digitalised in the future with QR codes which allows for accurate
tracking of data related to the specific wine bottle. For example, wine could be tracked to
add authenticity to claims of memorabilia – thus, future wine bottles will be more
economical and trackable. The production of wine will also be influenced by mechanization
through drones and robots which are used for grape pruning, erasing the need for manual
grape picking, alongside checking for grapes affected by disease and drought.

Factors explaining the nature, spatial patterns and future directions of the selected economic activity
such as:

Biophysical:

- Biophysical factors play an important role in determining the character of a wine, as the
same vine species planted in different regions can provide different tastes due to the
terroir of each vineyard
- Temperature:
o Ideal temperature is 19 degrees for white grapes and 21 degrees for red grapes
 o If average temperature is below 10 degrees, then the vines may produce grapes
that cannot be used for winemaking

o
o Cooler wines have higher natural acidity and are “greener” in flavour, with more
elegant, finessed tastes
o Hotter wines can be described as “full flavoured” with
more striking and strong tastes – they are also higher in alcohol

- Rainfall:
o Vines generally need more than 700mm of rainfall a year, however in Australia the
majority of vineyards receive less than this figure, so irrigation is used to supply
more water
o However, heavy rainfall can erode topsoil, strip ripening grapes from vines, and
spread disease within the vineyard
o The water budget depends on the rate of evaporation, hours of sunlight, aspect and
topography
- Soil:
o The nature of soil depends on the parent material and the processes of
weathering
o Soils suitable for viticulture tend to be not fertile or especially deep
o The depth of the soil is important for a vine’s development, with deep soils (with
water reserves) helping bulk wine production, and shallow, dry soils assisting
quality wine production
o Soil determines wine characteristics by changing the temperature above and
below the vine, as well as the amount of water absorbed by the wine
o In hot, dry areas, deep soil may be required to store water, while in cool, wet
areas, good drainage is needed to prevent waterlogging
- Topography:
o The elevation, incline and aspect of a vineyard is taken into account for
topography
o Some vineyards are located on undulating land to prevent erosion and reduce
water intake
o The direction a slope faces (aspect) is important for the quality and growth rate
of the fruit produced, and hotter slopes tend to drain water faster
o Temperatures also decrease by 1 degree for every 100m in elevation, leading to
lower plant growth which assists in the ripening of the grape and changes the
acidity level
o Microclimates that occur due to variations in topography can allow the
harvesting of the same grape at different locations, causing a diversity of wine
 flavours in the same vineyard (or starkly different flavours between adjacent,
Old-World vineyards)

Ecological:

- Sustainable development: A concept that suggests that economic development can proceed
indefinitely as long as the rate of use of natural resources does not exceed the rate of
replacement of that resource nor does it aversity affect the quality of other aspects of the
natural or human environments
- Ecological sustainability: The use of resources at a rate to ensure long-term availability and
quality of this resource for future generations
- Ecological problems:
o Increasing pest resistance to chemicals
o Soil compaction and erosion
o Poor water infiltration
o Low levels of organic matter in soils
o Excessive water use
o Excessive use of nitrogen-based fertilisers and nitrate leaching
- Ecological solutions:
o Ground cover crops being introduced between vine rows to prevent soil erosion,
reduce compaction and increase the amount of organic material in the soil
o Optimal fertilisation practices that reduce the amount of fertiliser used
o Leaf removal
o Management of water supply to plants through drip irrigation
o Use of biodegradable fungicides and use of biological controls
o Reduce use of synthetic agrochemicals
o Soil erosion:

 Sheet erosion occurs during rainfall, when water droplets disperse the
bonds between soil particles and transport them a short distance. These
displaced particles are now vulnerable to flowing water, which can
eventuate if the rainfall rate exceeds the soil’s drainage capacity. Rill erosion
is caused by small (under a few inches deep) but well-defined channels,
where surface runoff concentrates and detaches other soil particles. Gullies
are the next step in the sequence, and form when multiple rills combine into
larger channels. However, gully erosion cannot be fixed with normal tilling
equipment because their width is too large for usual treatment.
 Factors that contribute to soil loss include poor aggregation (low humus
content), a high percentage of silt/sand in the soil, rainfall rates, gradient of
the slope and vegetation cover over the soil.
 Cover crops are crops planted for the purpose of covering soil rather than
cultivation and harvest. Because of this shielding, the soil is less impacted by
the force of falling raindrops, allowing particles to be held in place and
minimising the effect of erosion. In addition, the crops increase the soil’s
water-absorbing capacity, leading to reduced surface runoff during rain
events. Even in periods of intense rainfall, the velocity of the runoff is
slowed as a result of the physical barriers

Economic:
- For wine-producing countries, the wine industry generates export income, employment and
taxation revenue
- There are five factors which influence economic activity within the wine industry:
o The general level of economic activity (as the level of economic activity increases, so
does demand for wine)
o Shifts in consumer demands (a shift in demand towards cheaper, quality wines have
led to innovation popular with consumers)
o The increasing concentration of retail power (retail demand for branded wine has
increased, and as a result, New World wines have entered traditional markets)
o Competition between Old and New World Wines (competition between companies
puts downward pressure on wine prices, reaching levels of substitute alcoholic
beverages such as beer)
o Branding and marketing (wine brands, such as Champagne or Taylors Wines, are
recognised internationally, boosting product sales)
- The majority of wine consumed in the domestic market is produced locally, for example,
90% of wine consumed in Australia is home-grown
- The top importers of wine typically do not have extensive viticulture and winemaking
industries, possibly due to the environmentally constrained and capital-intensive nature of
the industry
- Competitive advantage exists within the winemaking industry, allowing some producers to
sell a higher-quality or more competitively priced wine in the global market
- Advantages for European producers:
o Close physical proximity to major wine markets
o A reputation for quality based on tradition
o Ease of trade due to the accessibility of markets and the incentives provided by the
European Union
o Continuing strong demand in non-European nations, especially for more exclusive
(and expensive) labels
o However, because of the increase in demand for New World wines, this advantage
has spread to countries like Australia
- Australian wine exports grew from $200 million in 1991 to $3 billion in 2007, however since
then, it has faced the Global Financial Crisis, a high Australian dollar, increasing competition,
global and domestic oversupply and retail consolidation. As a result, the value of exports fell
to $1.82 billion in 2014.
- Tariffs are a major barrier to the export of Australian wine, especially in emerging wine
markets like Southeast Asia and India. The only way to overcome this hindrance is to
negotiate free trade agreements (FTAs).
- When an FTA was signed with South Korea in 2014, wine exports to that country jumped by
38% in value, a direct consequence of the removal of a 15% tariff
- Exports rose by 23% in the year to 2015, a result of FTAs signed with China, Japan and South
Korea
- However, China’s 212% tariff on Australian wine exports in 2020 was particularly harmful for
the industry, since China is our third largest export destination for wine
- Other trade barriers for Australian wine include differences in the rules that various
countries apply regarding wine production, labelling and composition – in order to resolve
this, authorities are working towards a standard, international rulebook
 - Even though in the domestic market, Australians are drinking less alcohol now than 50 years
ago, wine has not been impacted to the same extent as beer – it now accounts for 40% of
total alcohol consumption

Sociocultural:

- Wine tourism:
o Technically known as enotourism
o Wine tourism is all about enjoying the wine of a region and the people that make it
o It involves appreciation of wine through education at the vineyard and cellar door
o Attractions include vineyard restaurants and cafes, the landscape, cultural activities
including music festivals and art galleries
- Income:
o In the UK and USA demand is driven by rising income and changing preferences
o In Russia and China demand is driven by an affluent middle class, improving living
standards, rising disposable incomes and “Westernisation” of younger consumer
lifestyles
o French, Italian and Spanish demand for wine is declining
o In Spain, wine consumption decreases with higher level of income and education
o In the 19-24 age group in these countries, people drink spirits instead of wine
(proportion of wine drinkers fell from 24% in 1980 to 4% in 2000)
- Age structure:
o 35-to-65-year age group have the highest wine consumption
o The future of the global viticulture industry depends on younger people drinking
more wine
o Younger people prefer beer and spirits
- Consumerism and Lifestyle:
o Wine is becoming the preferred home and restaurant drink
o Young couples without children are eating out more often and spending more on
wine (Western world)
- Health:
Positive – A single 150mL glass of wine every day has proven healthy as it provides
antioxidants like resveratrol which are found in the skin of grapes, and causes a reduced risk
of heart disease and inflammation
Red wine particularly lowers risk of heart disease, stroke, diabetes, Alzheimer’s and even
cancers like colon and prostate with people drinking a glass of wine a day having a 32%
reduced risk of heart disease
Negative – When more than 1 glass of wine is consumed each day, the risk of developing
liver disease increases – also alcohol-related violence and drink driving
- Religion:
Christianity – The Bible states “drink your wine with a joyful heart”, indicating that there no
is no rule forbidding the drinking of wine and if it improves one’s happiness it is supported
It is believed that alcohol is a gift from god that makes life more joyous and therefore is
encouraged. Mainly in Western culture, wine is drunk at special occasions such as parties,
family events, festivals and even at home. However, the abuse of wine and other intoxicants
is not only deemed immoral, but also forbidden in Christianity
Islam – Consumption of wine in Islam is considered haram and impure. Although the
potential health benefits of wine are acknowledged, it is believed that the potential for sin is
greater than its benefit. It is also forbidden due to its potential to cloud one’s judgement
 which leads to unlawful behaviour – Muslim faith is founded on rational thought and good
judgement, so wine-induced memory loss can cause one to forget God or prayer. Therefore,
wine is banned in Islamic countries like Saudi Arabia.

Organisational:

- Global scale:
o International Organisation of Vine and Wine, or IOV (an intergovernmental
organisation of a scientific and technical nature of recognised competence for its
works concerning vines, wines, and wine-based beverages)
o They promote and guide scientific and technical research and experimentation
o Recommends/monitors grape production, wine-making practices, product
descriptions and marketing
o Guarantees the authenticity of vine products, protects geographical indications
(such as Champagne can only be made in France), harmonises wine regulations
across countries
o Protects the health of consumers and ensures food safety by:
 Scientific monitoring
 Guiding research into appropriate nutritional and health aspects
 Opening widespread discussion and debate about research to the medial
and healthcare profession
- National scale: Wine Australia (Australian Grape and Wine Authority), Australian Trade
Commission, Food Standards Australia New Zealand
- There has been a trend towards foreign ownership in the global wine industry, where large,
international wine corporations acquire smaller, domestic wineries. For example, Australia’s
iconic “Jacob’s Creek” is owned by the French Pernod-Ricard Group – the largest four wine
companies in Australia produce 70% of all wine (despite the presence of over 1000 local
wineries), indicating the domination of major, globalised businesses. This period of
globalisation has been characterised by mergers, corporate takeovers and an increasing
focus on profit-driven, mass-produced wines which lack a distinctive locality and cultural
influence.
- Consequently, experts believe that there is overcrowding in the wine market, where smaller,
boutique wineries will go out of business, replaced by these large wine producers. The
pattern of ownership has changed because smaller wineries can only sell directly to the
customer through cellar doors, while bigger players have supermarket contracts and can
distribute their products in bulk. The increasing demand for wine in developing and
emerging markets has also contributed to the changing patterns of control in the wine
industry, as global businesses seek to capitalise on these profit opportunities and expand
their operations into domestic markets.

Technological:

- Screwcaps:
o Cork stoppers comes from the bark of the oak trees and is viewed as the traditional,
environmentally sustainable option for wine closures, and is primarily used by Old
World wine producers in Europe. However, this method has been phased out by
many New World wineries in recent years, replaced by aluminium screw caps – as a
result, a significant tension and debate exists between the two forms of wine
closure.
 o Screwcaps have reshaped the global viticulture and winemaking industry, most
importantly through the elimination of “cork taint”, a mouldy and undesirable odour
that results from contamination in the cork closure. Moreover, screwcaps ensure
uniformity between bottles, unlike cork which can cause oxidisation and flavour
variation.
- Electronic vineyard monitoring:
o As European wine producers compete with New World wineries, researchers have
developed an electronic vineyard monitoring process, which is currently operating in
several Italian vineyards. The automated process uses sensors to check soil
moisture, air temperature and humidity levels, in order to detect times suitable for
harvesting, irrigation and fertilising. As 80% of the world’s water is directed towards
agriculture, this represents an important water saving, as grapes can be irrigated
efficiently. The harmful environmental consequences associated with excessive
fertilisers and nutrients are also minimised through the application of the
monitoring technology, as chemicals can be added at appropriate times instead of
every two weeks (as is customary). Finally, by finetuning the exact time of harvest,
the quality of the grape can be improved, leading to greater profits for wineries and
satisfaction for consumers.

Political:

- Tariffs are a major barrier to the export of Australian wine, especially in emerging wine
markets like Southeast Asia and India. The only way to overcome this hindrance is to
negotiate free trade agreements (FTAs).
- When an FTA was signed with South Korea in 2014, wine exports to that country jumped by
38% in value, a direct consequence of the removal of a 15% tariff
- Exports rose by 23% in the year to 2015, a result of FTAs signed with China, Japan and South
Korea
- However, China’s 212% tariff on Australian wine exports in 2020 was particularly harmful for
the industry, since China is our third largest export destination for wine
- Other trade barriers for Australian wine include differences in the rules that various
countries apply regarding wine production, labelling and composition – in order to resolve
this, authorities are working towards a standard, international rulebook

The environmental, social and economic impacts of the economic activity:

Environmental impacts:

- This period of growth impacts water usage for grape-growing and wine production
- Recent drought and depleted natural systems have made water a limiting factor to
production
- Broader water-related issues affecting wine industry: salinity, ecosystem health/water
cycles, runoff/erosion, water quality and groundwater contamination
- Irrigation:
o Greatest water user in vineyards
o Improvements in irrigation equipment alone won’t deliver optimal water savings
o “Whole site approach” needed for best water use, managing relationships between
vineyard and irrigation design, soil traits, climate, runoff, water quality
o Irrigation Management Strategies:
o Rate irrigation highly within the management system
 o Understand soils properly
o Design and maintain irrigation systems correctly
o Monitor all aspects of each irrigation event
o Use objective monitoring tools to schedule irrigation
o Use more than 1 tool for scheduling irrigation
o Retain control of irrigation scheduling
- Saving Water:
o Install water metres on major plant machinery to track water use performance,
identify leaks and set targets for water reduction
o Use equipment with automatic shut-off devices to eliminate water wastage
o Use high-pressure nozzles and spray devices to clean surfaces more effectively with
limited volumes of water
o Use flow restrictors to control flow rates to equipment and taps
o Sweep down surfaces using brooms, scrubbers and squeegees, rather than hosing
o Filter out organic materials before discharging water as effluent
- Byrne Vineyards:
o Automated pumping system to operate remotely
o Means that they can separate regions of the vineyard and irrigate them separately,
instead of watering the entire vineyard at the same time
o In addition, they have upgraded irrigation technology and installed moisture
monitoring to improve water efficiency
o Results in 240 megalitres of water savings per year
o 75% of water savings have been given back to the Murray River, indicating how the
environmental impacts of winemaking can be reduced to benefit local ecosystems
o Water can be applied at night remotely, meaning that there is less evaporation and
water wastage
o The infrastructure upgrade has also improved water quality, affecting the nearby
Scotts Creek Wetland which contains 450 hectares of heritage native scrub – this
improves the health of the ecosystem
o Received the 2014 Environmental Excellence Award

Social impacts:

- Health:
Positive – A single 150mL glass of wine every day has proven healthy as it provides
antioxidants like resveratrol which are found in the skin of grapes, and causes a reduced risk
of heart disease and inflammation
Red wine particularly lowers risk of heart disease, stroke, diabetes, Alzheimer’s and even
cancers like colon and prostate with people drinking a glass of wine a day having a 32%
reduced risk of heart disease
Negative – When more than 1 glass of wine is consumed each day, the risk of developing
liver disease increases – also alcohol-related violence and drink driving
- Religion:
Christianity – The Bible states “drink your wine with a joyful heart”, indicating that there no
is no rule forbidding the drinking of wine and if it improves one’s happiness it is supported
It is believed that alcohol is a gift from god that makes life more joyous and therefore is
encouraged. Mainly in Western culture, wine is drunk at special occasions such as parties,
family events, festivals and even at home. However, the abuse of wine and other intoxicants
is not only deemed immoral, but also forbidden in Christianity
 Islam – Consumption of wine in Islam is considered haram and impure. Although the
potential health benefits of wine are acknowledged, it is believed that the potential for sin is
greater than its benefit. It is also forbidden due to its potential to cloud one’s judgement
which leads to unlawful behaviour – Muslim faith is founded on rational thought and good
judgement, so wine-induced memory loss can cause one to forget God or prayer. Therefore,
wine is banned in Islamic countries like Saudi Arabia.

Economic impacts:

- In 2018, the gross wine grape sales value was $1.11 billion towards the Australian economy
- Wine is Australia’s fifth largest export industry, with around 2500 wineries having a gross
value of $6.3 billion
- Apart from revenue gained through the sale of wine, wine tourism represents a significant
benefit for the Australian economy
- For travellers that visited a winery, they spent a total of $9.3 billion during their entire time
in Australia, and were typically higher spenders than other tourists
- International wine tourists contribute to half of all wine spending in Australia
- Therefore, the glamorisation of wine (especially New World wines like Australian wines) has
led to the growth of wine tourism in Australia
- All in all, the wine sector contributes $45 billion in gross output to the Australian economy
- In addition, it supports 160,000 jobs which are mostly in regional Australia, indicating the
economic importance of winemaking for small towns such as Clare, South Australia and
regions such as the Hunter in NSW
- The wine-growing sector also has economic impacts on other sectors, like wine
manufacturing, accommodation, food and beverage services, road transport and
scientific/technical services

Local Case Study

The nature of the economic enterprise:

- Taylors Wines is a family-owned wine business located in the Clare Valley (a wine-making
region in South Australia), started by former Sydney wine merchant Bill Taylor on the 20th of
July 1969. The original vineyard was a 178-hectare plot located adjacent to the Wakefield
River, and this land is still maintained by key personnel today including Mitchell Taylor
(managing director), Adam Eggins / Chad Bowman (chief winemakers), and Phillip Reschke /
Thomas Darmody (winemakers). A key advancement by Taylors Wines was the initial
implementation of the screwcap closure, which set trends across Australia – currently, over
90% of Australian vintage wine use screwcaps to cover their products. Another innovation
involves temperature-sensor labels on bottles of wine, and this success was followed by the
“World’s Most Awarded Winery” title won by Taylors Wines in 2017.

Locational factors:

- The climate of the Clare Valley plays a major role in the location of Taylors Wines – according
to Mitchell Taylor, the climate is “better than France’s” and more suited for the production
of consistent red wine. The winery is at an altitude of 350 metres above sea level, resulting
in warm days (25-30 degrees) and cool nights (under 10 degrees) that quicken grape
photosynthesis and lead to a superior natural acid balance in the fruit. In addition,
microclimates that form due to the terrain of the Clare Valley, which consists of several hills
and valleys, assist in the production of different wine types. For example, shiraz, which can
 be adapted to warmer climates, can be grown on slopes with a westerly aspect (receiving
more afternoon sunlight), while European, cool-climate grapes like Cabernet Sauvignon can
be grown on easterly-facing slopes. Aside from climate and terrain, the soil of the Clare
Valley is another factor for Taylors Wines’ location – the area contains 11 soil profiles, from
sandy loam to shallow loamy soils, each with their own wine characteristic and flavour. In
particular, terra rossa (made up of red soil on top of limestone rock) has excellent drainage
and “rusting” clay, allowing the development of high-quality fruit.

Ecological dimensions:

- Energy use at wineries, such as Taylors Wines, is dominated by refrigeration in order to

increase flavour and acidity – this accounts for 60% to 65% of energy costs in the
winemaking process. Excessive energy consumption can have adverse impacts on the
environment associated with air pollution and climate change, so Taylors Wines aims to
maximise efficiency. Consequently, the business constructed a new refrigeration plant using
ammonium technology, which now accounts for 50% of all refrigeration leading to
substantial energy savings. Regarding land use impacts, Taylors Wines has commissioned the
Upper Wakefield Catchment NRM Community Group to improve the health of the Wakefield
River over its 7-kilometre course in the winery. This involves the removal of weeds and
planting of Indigenous vegetation along the banks of the river, benefiting biodiversity and
the aesthetic appeal of Taylors Wines. Finally, the business uses organic matter for soil
munching – this sustainable approach results in better root growth (improving water intake
and wine quality) and reduces weed growth (lessening the need for pesticides which can
runoff into the Wakefield River).

Internal and external linkages:

- The external linkage between Taylors Wines’ idea of temperature-sensors and the service of
its lead creative agency, Mr Wolf, has resulted in an extensive advertising campaign targeted
at wine consumers. After the appointment of the creative design service due to their
“exciting and fresh” thinking, an interactive website and digital campaign were developed to
educate consumers about the temperature labels. Another external linkage exists between
wine drinkers (people) and the online wine shop (a service) which Taylors Wines operates,
with the company using technology for maximum efficiency in operations, hence increasing
profit and boosting the business-consumer interaction. According to Mitchell Taylor,
technology has allowed the creation of “sophisticated forecasting models”, consequently,
customers who order online from the wine shop do not face stock shortages. Internally, an
important linkage connects Adam Eggins’ winemaking philosophy with the Visionary’
Cabernet Sauvignon 2014 (a good), named the World’s Best Cabernet in a respected French
competition. Eggins’ ideas are focused around “keeping customers front of mind”, rather
than producing wine of personal or traditional value. Because of this philosophy, Taylors
Wines is able to compete with the world’s best, leading to well-performing products like the
Visionary’ Cabernet Sauvignon 2014. The second internal linkage connects Clinton Taylor to
his ideas of sustainability at Taylors Wines. As a result of a partnership with Landcare, Taylor
has ensured the planting of 100 native trees in the wine estate – this prevents soil erosion
and promotes healthy ecosystems, because native plants attract bees, spiders and other
local fauna.

Effects of global changes:

- China’s huge 212% tariff on Australian wine exports is a global change with negative
consequences on the economic activity at Taylors Wines, as tariffs make Australian products
unaffordable for overseas consumers. For example, in 2019 the company successfully
launched a “Legacy” wine in Shanghai, however due to the tariffs, this product now exceeds
$3000 a bottle and cannot be sold in China. This issue impacts Taylors Wines particularly
because of their dominance producing red wines such as Cabernet Sauvignon, which
accounts for 97% of export value to China, while white wine areas in WA have been
relatively unaffected. Taylors Wines will need to find new destinations, like India or Thailand,
to maintain former profit levels and prevent ongoing resource wastage. Another global
change is the war in Ukraine, as well as COVID-19 lockdowns around the world, and the
combination of these factors has caused supply chain issues that adversely impact economic
activity at Taylors Wines. As the business has shifted to the online world when selling
products, large amounts of wine must be delivered to various locations domestically and
globally, so a streamlined process is essential for productivity. Because of supply chain
problems, there are a lack of containers at Taylors Wines, meaning that “two months’ worth
of orders” (according to Mitchell Taylor) are unable to be transported from the winery.
Shipping delays also hinder the ability to deliver wine, with vessels skipping Port Adelaide in
order to meet deadlines in Melbourne and Sydney, further reducing economic activity.
- Global climate change has also had a negative effect on the revenue of Taylors. Human
activity has accelerated climate change, causing more frequent extreme climatic events.
From 2017-2020, Clare Valley experienced drought, before it was hit by the 2019-20 summer
bushfires. A lack of rainfall forced Taylors to increase use of irrigation systems, driving up
manufacturing costs. The bushfires caused smoke and ash contamination in water tanks –
resulting in further resources being used for maintenance – and some of the harvest was
rejected due to the smoke’s influence on the growing process. The new generation of wine-
drinkers has also seen a shift towards healthy, low-alcohol drinks. In the short-term, this
could have a negative effect on Taylors due to its lack of low or zero-alcohol wines, however
its strong personnel and history of innovation should allow the company to adapt to
whatever consumer trends arise.