Moving South Australia to Eastern Standard Time (EST) would place the state on an equal footing with Sydney and Melbourne in terms of attracting vital foreign investment, according to Business SA.

The peak business group cites an academic study supporting the view that “time zones had a significant effect on the location of foreign direct investment”.

Business SA has long supported the adoption of EST and a report it commissioned in 2008 by the SA Centre for Economic Studies estimated an annual financial gain to South Australian businesses of $569 million from moving to EST.

In its formal submission to the State Government on a possible time zone change, Business SA says “we must support businesses in South Australia to be able to grow and prosper”.

“Whilst we want to maintain our own identity and character here in South Australia, it is important that our local businesses are able to compete on even footing with those from NSW or Victoria,” the submission says.

“A study published in the Journal of International Economics (2007) and cited in South Australia Centre for Economic Studies report in 2008 highlighted that time zones had a significant effect on the location of foreign direct investment.

“They suggest that the reason foreign investment is impacted by time zones being closer aligned (or being the same time zone) is that foreign direct investment relies on closer managerial communication.

“When time zones are aligned, communication between parties encounters less barriers and hence the promotion of foreign direct investment.

“This study highlights the opportunity for South Australia around investment in our state should we move to EST. The study also reinforces the anecdotal evidence that Business SA hears from our members with regards to miscommunications in between and within businesses due to time zone differences with the eastern states.

“Increasingly South Australia is competing with interstate businesses and governments for the location of head offices and big international conferences, all of which help to grow our economy, and it is vital that there is no barriers to investors choosing South Australia.

“We need to build sustainable local industries and ensure that there are jobs for our children and we can do this by ensuring that local businesses are operating in the best business environment.

Business SA notes feedback from its members that “there is likely to be financial benefits as well as day to day operating benefits” from the adoption of EST.

“These operating benefits include the reduction in simple misunderstandings, such as conference call timings, which in the broader picture could translate into financial gains,” it says.

“Business SA strongly supports South Australia moving to EST.”