Is there any place in the world as magnificent as Adelaide during festival season? Some animating spirit takes over and the city is packed with thousands of people getting their minds turned inside out by art.

Usually on a Sunday night in the Rundle Mall, you can hear the tumbleweeds rolling past (my colleague Adam Brereton wrote of his frustration at not being able to buy cigarettes on a Sunday night), but in February and March you have to push through the crowds.

Bunk Puppets promote their new Adelaide fringe festival show, Tink Tank, to delighted/terrified children. Photograph: Steph Harmon/The Guardian

Around every corner is something weird and exciting: what looks like a naked human pyramid; a sword swallower who is also juggling fire; a doorway that leads to a crowd participating in a Jacobean immersive theatre production.

Enter a pop-up croquet club or the Botanic Gardens to find kilometres of fairy lights, as well as live music, roving performers and an old-fashioned circus freak show. The weather is warm and someone in a bow tie in a little stand under a tree is mixing a delicious cocktail. Going to bed before midnight feels like a dereliction of duty.

There’s a cluster of festivals during late February and into March – the Adelaide festival, the Adelaide fringe, Womadelaide, the Biennial and Adelaide writers’ week – which has nothing less than a transformative effect on the city.

The festivals also have a transformative effect on the state’s economy. In a report released last month by Festivals Adelaide, the festivals delivered $210m to the state’s economy in 2014/15 – an increase of 16% on the previous year.

There’s the money from ticket sales – more than a million tickets were sold, according to the report – but there’s also the rest of it: the hotel rooms, restaurants and taxis, plus the couple of days many tourists tack on at the end to explore the Clare Valley or McLaren Vale regions, shipping crates of wine back home.

Last year 52,000 interstate and international visitors came to Adelaide in “Mad March”. In the same year, 800,000 people came through the Garden of Unearthly Delights, according to the founder and creative director, Scott Maidment. Many of the garden’s visitors were locals and everyone has a lovely time.

But what happens to Adelaide when the party’s over?

After the curtains close, so does the economy

Outside of Mad March, South Australia threatens to top the league table no one wants to be on: that of worst-performing state.

The latest State of the States report, released quarterly by CommSec, shows that South Australia is on track to having Australia’s worst economy thanks to an increasing jobless rate.

The report revealed that Tasmania – currently the worst-performing state – was showing “better momentum” and its jobless rate had fallen to near four-year lows; meanwhile, South Australia had good population growth but its jobless rate stood at a 15-year high.

Once the bedrock of the state, the manufacturing industry is evaporating. In 1985 about 100,000 people were working in manufacturing in South Australia. In 2013 that figure had fallen to 74,000 and is still dropping; as Malcolm King wrote in an opinion piece in the In Daily, this has a run-on effect for the transport and warehousing sectors, too.

The CommSec report said South Australia lacked “a growth driver”. As CommSec’s chief economist, Craig James, told the ABC: “Most states get their momentum from somewhere, might be Western Australia [from] the mining sector, NSW and Victoria at the moment are getting it from their house sector, but South Australia is really finding it hard to find that X factor.”

As manufacturing and construction wind down, could that “X factor” be the creative industries?

The Garden of Unearthly Delights in Adelaide attracted 800,000 visitors last year, many of whom were locals. Photograph: Steph Harmon/The Guardian

Could the city’s fortunes be found not in emulating Sydney or Melbourne – which are surging ahead in terms of population growth – but in taking inspiration from cities like Austin or Portland in the United States, which have carved out their own niche based mostly on supporting local creatives and celebrating the “weirdness” of the city?

Send in the small bars

Jane Howard, 27, grew up in Adelaide and – at least for now – it remains home.

The writer, who contributes to Guardian Australia, Kill Your Darlings and the Lifted Brow, says Adelaide is the perfect place for baby boomers that came of age in the 1970s, when a progressive government led by Don Dunstan made it the most exciting city in Australia. For a time.

“My dad likes to say that Adelaide was built for his generation,” she says. “If you’re a baby boomer, there’s so much for you here. A lot of the rhetoric used is from the Don Dunstan era, without acknowledging that the state has lost a lot of its progressive tendencies since then. People are resting on the laurels of the past. Most of the cultural institutions are from that time – they are all 42 years old.”

Meanwhile, thousands of aspiring young people leave for bigger opportunities in Melbourne or Sydney each year. Census data, collated by the Adelaide University demographer Prof Graeme Hugo, showed 59,222 people left the state between 2006 and 2011 – 9,000 more than those who came to South Australia over the same period.

But it’s not all decline and fall.

Howard reckons Adelaide has become a more interesting city to live in since the city’s liquor licensing laws were loosened. It’s pocket change to get a small bar licence compared with what it once cost.

In a depressed Melbourne during the 1990s, the emergence of a small bar scene was seen as a return of vital signs. A thriving night-time economy and revitalised CBD followed. Could the same pattern of recovery happen in Adelaide?

South Australia is really finding it hard to find that X factor Craig James, CommSec

Fifty-three small bars opened in Adelaide last year, with Restaurant and Catering SA saying local growth is “unprecedented”. Another 17 are expected to open this year.

“It’s changed the feel of the whole city,” Howard says. “People are out more. It’s more vibrant than it’s been for years.”

Farrin Foster, the 29-year-old editor of Adelaide’s CityMag, also praises the bar-led recovery: “There’s a very slow change happening. I became an adult at the right time in Adelaide. A wave of people around my age are staying and starting their own thing.”

That “thing” has entrepreneurship in its DNA. It may include a jewellery design business, or Pedi cabs made from steam pressed bamboo and aluminium.

One needn’t look far for evidence of Adelaide’s creative boom; this year’s Adelaide fringe festival featured a record-breaking 1100 events. Photograph: Steph Harmon/The Guardian

“The vast majority of people my age who have started a business have opened a small bar,” says Foster. “It makes sense because we are a wine region – though everyone seems to be launching a gin label at the moment.”

Lockout laws in other states have a knock-on effect, even if it’s just a matter of perception. As Sydney and now Brisbane restrict night-time entertainment, other cities that are less regulated, like Melbourne and Adelaide, get a reputation for being more fun, and more open to people going out late without an externally imposed and premature ending to the night.

But in order to get the buzz when you barhop, and to get the jobs that give you the money to buy the drinks, there needs to be enough people in town.

If only that festival magic could stretch beyond March.

Send in the clowns

Rob Brookman, Adelaide born and bred, has worked for four decades in the arts, including as the artistic director of the Adelaide festival and as founder of Womadelaide. He’s currently the chief executive of the South Australia Theatre company. He thinks it’s impossible to extend the energy produced by the festivals year-round.

“People find it hard to remain in love 12 months of the year – you can only be ecstatic for a short period,” he says. “The phenomenon of the audience coming out at unprecedented levels in February and March – you cannot sustain that for 12 months. And one should not want to or hope to; there is something glorious about a month where culture takes centre stage. You want people to feel like it’s something special.”

Instead, he says, festival season “acts as a great calling card for the city”.

Brookman believes Adelaide should make urban areas more dense, as a way of replicating that festival season buzz that creates more opportunities for businesses.

So what should city planners do?

Scott Maidment founded the hugely popular Garden of Unearthly Delights, a carnival space that runs during festival season. He says the low density, layout and geography of Adelaide would allow for some elements of festival season – including pedestrian zones, central hubs like the Garden and pop-up venues – to run outside of February and March. “The government could support this by not having too many hoops to jump through,” he says.

The Garden of Unearthly Delights’ founder, Scott Maidment, says some elements of festival season could run all year through. Photograph: Andre Castellucci/The Garden of Unearthly Delights

Maidment says Adelaide is equal to the great festival cities, like Avignon in France and Edinburgh in Scotland. “Adelaide is much more of a festival city than, say, Hobart,” he says. “It’s very easy to navigate because it’s on a grid and the festival is part of the culture here. People save up their money all year and a taxi driver can tell you what shows to see. In Sydney you can’t take over a city with a festival.”

While festivals drive tourism (and create jobs – Festivals Adelaide claim they generated 790 full-time or 7,800 casual equivalent jobs last year), the state government needs to address how the city will attract a more stable, permanent population of bright young things.

Says Brookman: “The state and its population [seem to] have worked out that heavy industry will not have a big future in South Australia. There is a lot of thinking about the way a creative capital city could be [achieved by] a multifaceted approach, including cheap housing, a good place to live, good wine and fresh food.”

Howard says rents in Adelaide are “significantly cheaper” than Melbourne and Sydney, “about half for the equivalent place”. It costs about $110 a week for a room in a share house in central Adelaide, she says, compared with about $300 a week in Sydney. Good cycle paths means “a lot of commuter cyclists, which also cuts down on transport costs”.

Lower costs are attractive to artists, and other members of the creative classes – particularly those working to establish themselves.

Brookman agrees: “What we are seeing is a greater retention of good artists, rather than the automatic route of heading to Melbourne or Sydney. There are a lot of young people making a go of it here – the live contemporary music scene has really picked up over last five or six years. There’s a lot of encouragement by the government … We’ve built the alleyway culture and the live music culture is really strong.”

The Australian premiere of Pina Bausch’s Belken (Carnations) opens at Adelaide festival on 9 March. Photograph: Oliver Look

Christie Anthoney, CEO of Festivals Adelaide, says the festivals provide a networking opportunity for emerging Adelaide artists that are not necessarily available to their bigger city counterparts. The scale, serendipity and discovery elements of the festivals means relationships spring up unexpectedly between performers and their audience.



Adelaide is more vibrant than it’s been for years Jane Howard, arts writer

“Creative culture drives the scene here,” she says. “It’s an affordable place to live and there’s a connectivity among the arts community. But there are restrictions – you have to make your own way quite significantly. We are not seeing federally or at a state level a significant increase in arts funding – but there is more of a start-up culture in Adelaide.”

Keep Adelaide weird

So the rents are cheap, the artists are staying and the night-life is booming. Does that mean Adelaide just has a marketing problem for 10 months of the year?

Stuart Gregor, a Sydney marketing executive, wrote a 2013 piece published in Adelaide Now that begged Adelaide to embrace its freak side: “Adelaide should give Melbourne the finger and get on with its own thing. And get weird.”

A performer from Circus Trick Tease embraces the weird, spruiking Adelaide Fringe show Straya. Photograph: Steph Harmon/The Guardian

Could the weirdness, and the darkness – Salman Rushdie once nominated Adelaide as “the perfect setting for a Stephen King novel or horror film”, and Australia’s worst serial killer operated just down the road, in Snowtown – be gathered into the central narrative and identity of the city?

Portland, Oregon has done as much, creating an identity based on good coffee, microbreweries, cycle paths, theatre, creativity and weirdness.

In Australia, the “awesome small city” vibe has worked for Hobart, whose arts and tourism sector have been revitalised in a relatively short space of time by the Mona museum.

Foster agrees: “We do have an interesting culture of intellectual property excellence in weird niche fields. There are … little advanced manufacturing businesses that lead the world in making or designing very specific things. Our editorial line at CityMag is that we are not Sydney or Melbourne or anything else – there’s no point in trying to compete in a realm that you don’t belong in.”

Foster visited Portland last year. “It’s great,” she says, “but how does anyone make any money? There’s not really an industry there.” She believes specialised industry will develop over time in Adelaide, as huge growth already takes place in the tourism industry.

Rather than thinking big, Howard says, Adelaide should think small – and do that really well.

“Adelaide has essentially had flat population growth for the past 30 years and I can’t see anything that will change that trajectory in the future. Perhaps the best thing that could happen is [if] Adelaide truly embraces its smallness and difference, and becomes a viable city for being a completely alternative proposition, rather than simply trying to play catch up with Melbourne and Sydney.”