Regional Australia is undergoing considerable change, much of which is driven by global market forces. Some of the key drivers of change include the emergence of Free Trade Agreements (FTA) phyto-sanctions, demands for quality assurance and improved environmental management, demographic changes and lifestyle factors. These changes have embedded regions in a highly competitive global economy. Now regions as opposed to States are regarded as the economic drivers of the nation’s economy. The global connectivity and competitiveness of the region is paramount to their long term economic sustainability (Blakely 2004).The challenges these global trends and drivers are placing on regions is compounded by such issues as an aging workforce, sea change and lifestyle choices (ABS 2004) and the perennial issue of attracting and retaining services and professionals (SCORD 2004) as well as the more insidious issues such as climate change (IPCC 2001).The capacity of regions, their communities and enterprises to survive and thrive in today’s competitive environment was initially thought to be totally dependent on their social, economic and environmental capital (Cavaye 1997). Today, however leadership, innovation, creativity, connectivity and business acumen are emerging as the key ingredients for success and sustainability.This paper explores the issues influencing the competitive status of Australian regions and examines the role that leadership can play in ensuring the ongoing competitiveness of our regions in a rapidly changing global environment. The paper also discusses the benchmark work of McKinsey (1994) on the competitive status of regional Australia and examines pathways towards achieving a more sustainable and globally competitive regional development.