The [In]Sight study was compiled by the Regional Australia Institute (RAI), a research organisation and think tank.

The study split the country into 60 regions and, using data from the Australian Bureau of Statistics, measured their competitiveness.

This was done by ranking each region in 10 different categories – including Innovation, Human Capital and Economic Fundamentals.

‘‘Competitiveness looks at the fundamental things our economy’s built on,’’ RAI deputy CEO Jack Archer said.

‘‘Often we talk about a particular industry or we talk about what’s happening in unemployment. What competitiveness allows us to look at is the broader foundations for the economy in each place.’’

Out of the 60 regions, the Illawarra is ranked second for infrastructure and essential services (which includes access to education and schools and the quality of roads and rail lines).

It also ranks seventh for human capital – which relates to education and skill levels - and 12th for demography, which is the size and composition of the population.

However, the region is ranked 43rd for labour market efficiency and 56th for economic fundamentals (which includes things like wages and labour costs).

Given the region was strong in areas such as the education and skill levels of the population, Mr Archer said these poor rankings indicated a potential that had yet to be unleashed.

‘‘This probably does reflect that the region is in transition from one industry structure and finding its feet in a new one and we haven’t quite worked that out yet,’’ Mr Archer said.

‘‘We’ve got the fundamentals to be successful but how we translate that to more jobs and more investment is the challenge for the region.’’

Mr Archer said the Illawarra should have some ‘‘real confidence’’ about its future because of its strengths in those core areas.

‘‘I think overall the results show that the Illawarra is doing very well, particularly given the big transition that’s happening in the region,’’ Mr Archer said.

‘‘It shows there are really strong fundamental strengths across aspects of competitiveness in technology, infrastructure, and human capital that you can leverage to find those new sources of growth to replace some of the industries that have been contracting in the region recently.’’