This article is written by Andrew Wear, City Economist at the City of Melbourne.

  • The problem: How to support a city’s economy through a pandemic.
  • Why it matters: A thriving economy contributes to a prosperous, liveable and sustainable city.
  • The solution: Provide support during lockdown, reactivate the city when possible and focus on long-term growth.

Melbourne, Australia, a thriving metropolis renowned for its vibrant culture and bustling economy, found itself during 2020 and 2021 at the epicentre of one of the most stringent Covid-19 lockdowns in the world. With residents confined to their homes for a staggering 263 days, the city's economy was devastated, leaving businesses shuttered and the streets eerily empty. The City of Melbourne responded with remarkable resilience, implementing a series of innovative measures to support businesses, reactivate the city and lay the foundation for long-term economic development.

Innovative responses in challenging times

Many of Melbourne’s responses were similar to those undertaken in cities around the world (and, in fact, Melbourne proactively sought to learn from these experiences). But shaped in part by the challenging economic circumstances that Melbourne found itself in, quite a few interventions were unique and innovative, and Melbourne’s experience serves as a useful case study informing best-practice economic development in a pandemic.

In many ways, the pandemic has caused Melbourne to evolve to become a different city, perhaps even a better city.

As Covid-19 gripped the world, lockdown measures took hold and small businesses in Melbourne faced immense challenges. To mitigate the impact, the Australian government launched the ‘Jobkeeper’ programme, providing financial support to eligible businesses. The City of Melbourne complemented these efforts by offering funding support, grants and assistance to help businesses pivot to new models, such as online adaptation and outdoor dining. Additionally, cleaning teams were deployed to sanitise public spaces, and food vouchers were provided to support vulnerable international students. These initiatives showcased the city's commitment to caring for its residents and fostering a sense of community.

Bringing people back into the city

As restrictions eased, Melbourne faced the task of revitalising the city and restoring confidence among residents and visitors. The City of Melbourne orchestrated a range of activations, events and marketing campaigns to entice people back to the city. Programmes like ‘Urban Blooms’ featured large-scale floral installations, while ‘Music in the City’ enlisted buskers, including internationally renowned performers, to create an atmosphere of vibrancy. Festivals such as ‘Moomba’ were adapted to comply with restrictions, and campaigns like ‘Let's Melbourne Again’ and ‘FOMO’ encouraged locals to rediscover the city's charm. Moreover, an innovative ‘Melbourne Money’ dining subsidy programme stimulated the hospitality industry, while creative initiatives transformed vacant shopfronts and laneways into bustling hubs of activity.

Guided by a clear sense of purpose, the City of Melbourne remained steadfast in its commitment to building a better city in the aftermath of the pandemic. The adoption of the Covid-19 Reactivation and Recovery Plan in 2020, followed by the Economic Development Strategy in 2021, demonstrated a long-term focus on sustainable and innovative growth. Extensive community engagement and expert consultation shaped these plans, which encompassed aspirations ranging from a healthy and safe city to a city that is a technological and digital leader. By embracing this forward-thinking approach, Melbourne positioned itself to attract diverse, high-value jobs and ensure the city's resilience in the face of future challenges.

Economic reactivation

The City of Melbourne’s economic development efforts have undoubtedly contributed to the city’s economic reactivation. Activity levels in the city have rebounded strongly, and consumer spending is now back to 2019 levels. While office workers have been somewhat slow to return to the city, visitation to the city in the evenings and on weekends has been extremely strong. “Despite the significant challenges of Covid-19, we’ve shown our resilience and managed to strengthen our economy,” Lord Mayor Sally Capp said recently, “a promising sign for the city’s ongoing recovery and future.”

Melbourne has certainly shown that the recovery process has been one of rejuvenation and creativity, containing within it the seeds of possibility. In many ways, the pandemic has caused Melbourne to evolve to become a different city, perhaps even a better city. It’s still a work in progress of course, and it is premature to claim that Melbourne’s economy is stronger than before. But the recovery process is well underway, optimism has returned and the city now has a chance to create a thriving economic future.

Lessons learned:

  • Respond rapidly and with agility. Being prepared to learn and quickly iterate will increase the chance of success.
  • Collaborate with stakeholders and other tiers of government. Stakeholder intelligence and partnership approaches to delivery underpin a more effective response.
  • Maintain a focus on multiple time horizons. Even in the midst of the crisis, it’s important to keep at least one eye on medium and long-term economic development strategies.

The City of Melbourne was runner-up in the ‘21st Century Problem Solvers’ category of Apolitical’s Global Public Service Team of the Year Award 2022.

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