The idea that rural towns are in decline has been repeated so often that it can overshadow the reality: many are thriving, diversifying, and creating unique economic identities. A McKinsey study on rural America highlights six factors that drive successful investment in infrastructure, support for small businesses, access to education and training, encouragement of innovation, strong social services, and collaboration between sectors.

Australia’s rural communities face challenges, from long distances to climate pressures, but they also share opportunities with their global counterparts. By looking closely at examples from every state and territory, both the wins and the struggles, we can see what strengthens the rural Australia business opportunity and where lessons can be applied.

State and Territory Case Studies with SBAAS Reflections

New South Wales – Orange and Broken Hill

Orange has transformed into a significant food and wine tourism destination. Developing a strong regional brand, hosting popular festivals, and investing in digital connectivity have created steady visitor demand and supported local producers.
SBAAS reflection: This success was built on strategic branding and infrastructure investment. Over time, complementing this with off-season visitor experiences and export strategies for local products could help reduce seasonal fluctuations and broaden income streams.

Despite having a vibrant arts community, Broken Hill faced economic hardship when mining slowed. The challenge came from reliance on a single industry and the absence of an equally strong secondary economic driver.
SBAAS reflection: A more gradual diversification plan alongside mining could have softened the impact. Supporting creative industries, renewable energy, and niche manufacturing earlier may have preserved employment and slowed population decline.

Victoria – Bendigo and Mildura

Bendigo has used its heritage architecture, arts scene, and strong transport links to Melbourne to revitalise its economy. Investment in cultural attractions and tourism has supported a steady flow of visitors and new residents.
SBAAS reflection: The focus on culture and infrastructure has worked. In the long term, pairing these strengths with industry clusters in food production, technology, or education could help maintain momentum and reduce vulnerability to tourism cycles.

Mildura is a powerhouse of agriculture, but it faces water scarcity that threatens growth.
SBAAS reflection: Water security is a critical issue for the region. Expanding investment in water-efficient farming technologies and diversifying into crops and products less dependent on high water usage could help protect its long-term agricultural viability.

Queensland – Toowoomba and Winton

Toowoomba has become a transport and logistics hub, boosted by the Toowoomba Bypass. Its food processing and export sectors have also grown.
SBAAS reflection: The infrastructure investment is a strong foundation. Building partnerships between logistics operators, exporters, and local producers could help capture more value locally and expand the reach of regional goods.

Winton built a reputation for its dinosaur tourism and festivals, but heavy reliance on visitors meant the pandemic had a severe impact.
SBAAS reflection: Winton’s creative use of its history is inspiring. Alongside tourism, encouraging remote work facilities, creative studios, or educational programs linked to palaeontology could provide new revenue streams and reduce future vulnerability.

South Australia – Clare Valley and Port Augusta

Clare Valley has cultivated a premium wine brand and works collaboratively through local events and tourism marketing. This has strengthened both visitation and small-business growth.
SBAAS reflection: The cooperative approach is a model worth emulating. Further building export channels for boutique producers and introducing non-seasonal attractions could help maintain yearly income.

Port Augusta experienced a sharp downturn when coal power stations closed. Transitioning into renewable energy projects is underway, but the gap between closure and new investment has created economic strain.
SBAAS reflection: The shift toward renewables is promising. Starting retraining and industry diversification programs earlier could have reduced the adjustment period and retained more residents during the transition.

Western Australia – Karratha and Collie

Karratha has worked to improve liveability by adding schools, hospitals, and cultural facilities, helping attract families and long-term residents.
SBAAS reflection: These investments lay the groundwork for stability. Fostering growth in service sectors and supporting small hospitality and retail businesses could ensure that more economic benefits remain in the community.

Collie is moving from coal to tourism and manufacturing, but the change has been gradual and uneven.
SBAAS reflection: Community engagement in shaping the transition plan could help increase support and participation. Establishing clear timelines and milestones also sustains confidence in the process.

Tasmania – Huon Valley and Queenstown

Huon Valley transformed its apple-growing heritage into a thriving gourmet food and tourism sector. By combining agricultural exports with visitor experiences, it has built a reputation for quality.
SBAAS reflection: This balance of export and tourism is a strong model. Developing cooperative marketing campaigns for local producers could help open more interstate and international markets.

Queenstown saw a steep decline after mine closures. Tourism has grown, but limited infrastructure has slowed its ability to capitalise on its unique landscape fully.
SBAAS reflection: Investment in transport, accommodation, and digital infrastructure could make Queenstown more accessible and appealing to more visitors without compromising its character.

Northern Territory – Katherine and Nhulunbuy

Katherine has maintained a steady role as a service hub for agriculture, tourism, and defence.
SBAAS reflection: Its diverse base provides resilience. Strengthening links between these sectors and promoting cross-sector opportunities could further increase economic stability.

Nhulunbuy struggled after the alumina refinery closed, with replacement industries slow to develop.
SBAAS reflection: Planning for alternative industries before closures occur is key. Early tourism, marine services, or renewable energy development could have made the transition less abrupt.

Australian Capital Territory – Rural ACT Villages

Villages like Hall and Tharwa use farmers’ markets, artisanal goods, and events to attract visitors from Canberra.
SBAAS reflection: These grassroots initiatives are influential community builders. Extending their reach through e-commerce and online promotion could help sustain sales between event days.

Patterns and Insights

Across all examples, successful outcomes were supported by early investment, industry diversity, and strong branding. The struggling towns often relied heavily on one sector, faced sudden economic shifts, or lacked infrastructure to support new opportunities.

Rural Australia business opportunities grow strongest when strategies are forward-looking, locally led, and supported by targeted investment. SBAAS’s In these contexts, it works alongside communities to strengthen existing efforts, prepare for change, and connect local ambition to broader markets.

Turning Lessons into Action

To capture the rural Australia business opportunity, regional communities can focus on:

• Investing early in infrastructure that supports both economic and community needs
• Supporting small businesses with funding, training, and collaborative marketing
• Aligning education and training with local industry needs
• Encouraging innovation while respecting local identity
• Strengthening social services as a foundation for growth
• Building partnerships across government, business, and community

The story of rural Australia is not one of inevitable decline. It is one of potential, resilience, and opportunity. By learning from what has worked and what has been challenging and building on local strengths, communities can thrive in a changing world.

If you are a regional council, business leader, or community group looking to strengthen your local economy, SBAAS can work with you to develop strategies that build on your successes and prepare for the future. Book an appointment today or visit our About Us page to learn more.

Sources

Small towns, massive opportunity – Unlocking rural America’s potential. McKinsey & Company.
https://www.mckinsey.com/institute-for-economic-mobility/our-insights/small-towns-massive-opportunity-unlocking-rural-americas-potential

Manufacturing in rural America – A plan for K-12-industry partnerships. McKinsey & Company.
https://www.mckinsey.com/institute-for-economic-mobility/our-insights/manufacturing-in-rural-america-a-plan-for-k-12-industry-partnerships

Rural Economic Mobility. McKinsey & Company.
https://www.mckinsey.com/institute-for-economic-mobility/our-insights/rural-economic-mobility

Who is Rural America? McKinsey & Company.
https://www.mckinsey.com/institute-for-economic-mobility/our-insights/who-is-rural-america