The development of mining at Broken Hill in New South Wales in the 1880s generated new activity in South Australia, but the economy remained dependent on a narrow rural base. The local market was too small to sustain rapid development of the manufacturing industry, and economic diversification was slow to materialize. Hence, for many decades South Australia’s economic growth rate fell behind those of other parts of the continent. Its rate of population growth, once the highest in Australia, also lagged. The population retreated from outlying districts, concentrating increasingly around Adelaide. After 1921 a rising majority of South Australians lived in metropolitan Adelaide; by 1961 only 12 percent of the workforce was employed in rural industries.

Poor economic growth from the turn of the 20th century until the late 1920s was associated with worsening budget deficits, migration to other states, and then severe drought at the end of the 1920s. During the Great Depression of the 1930s there was serious distress in both city and country, and South Australia suffered worse unemployment than most of Australia. The depression threatened to extinguish the infant industrial growth that had emerged in the 1920s, and there was a particular danger that South Australia’s automobile industry would be lost entirely to Victoria. The state government intervened and offered exceptional advantages to industries that would become established and stay in the state. Recovery in the late 1930s sustained the foundations for accelerated industrialization in the Adelaide region during World War II (1939–45). Heavy industry at Broken Hill and Whyalla emerged strongly, and munitions factories were developed near Adelaide.

The growth of war-related industries was translated into broader industrialization after the war, when the economy expanded rapidly and the state adopted a vigorous immigration program. Industrialization was undertaken through a combination of private and public enterprise, the state taking over responsibility for much of the basic infrastructure of the new economy and for the attraction of external capital. Premier Thomas Playford was a vigorous salesman for the business prospects of South Australia, emphasizing its lower wage costs, cheaper housing and land prices, lower taxes, and better industrial relations. He promoted the state operation of basic utilities, including electricity (in 1946 his government took over the private Adelaide Electric Supply Company), coal supply, housing, water, schools, and hospitals. Government enterprise also promoted the rural sector by means of soil improvement with trace elements and through new settlement schemes. A satellite town at Elizabeth was created for the further development of the industrial-urban base of the state’s economy.

Between 1947 and 1954 population growth in South Australia was again faster than elsewhere in Australia. It was surprising that South Australia, a relatively small community on the southern fringe of the continent, far from the larger markets and population centres of eastern Australia, was able to sustain such a vigorous program of industrial development. But the long upswing in economic activity began to weaken in the 1970s. South Australia followed the path of many other industrial economies in the last decades of the century, and the proportion of the population employed in manufacturing fell below 10 percent in the early 21st century. There was a concurrent shift of the workforce into service activities. The government placed great emphasis on promoting high-technology growth in the economy and attracting imported capital connected with high value-added industries. Its efforts to recruit industry often emphasized the stability of the workforce and the high quality and relative cheapness of living standards.

Population history

The Aboriginal population may have been about 25,000 at the time of British colonization. Well-intentioned government policies to protect their interests were rarely given practical effect, and the combined impact of introduced diseases, loss of land, and falling fertility rates accelerated the decline in numbers. By 1860, colonial opinion fatalistically expected the Aborigines to die out within a few decades. In fact, there was a resurgence of their numbers, if not of their status and economic condition, probably assisted by intermarriage with colonists. Government policies shifted toward assimilation by the 1960s. Only then were South Australian Aborigines accorded full citizenship. Aboriginal land rights became an active political issue in the 1970s.

The white population began with large infusions of immigrants, many from the southern parts of England. South Australia’s population increased fivefold between 1844 and 1855, but the colony attracted relatively fewer Irish and Scottish than the rest of Australia. There was a secondary inflow of Germans, whose descendants faced considerable persecution and loss of rights during World War I (1914–18). New immigration programs were instituted in the 1850s and ’70s and before and after World War I. Larger inflows from 1945 to 1965 brought many immigrants from continental Europe, notably from Italy, Greece, Poland, and Yugoslavia and later from Southeast Asia. These later waves of immigration substantially altered the formerly homogeneous character of the population.

At other times population growth was disappointing. There were outflows of South Australians in the early 1850s and in the 1880s, 1930s, and 1970s and ’80s. Moreover, the rates of natural increase generally declined, and birth rates fell below national levels and eventually below the level of net reproduction. Mortality rates also have fallen, however, and South Australia’s infant mortality rate is among the lowest in the world.