The Australian economy is constantly changing, with new industries emerging to replace the old. Mark Beyer looks at the forces driving change and identifies sectors with high growth prospects.
THE task of identifying WA’s future industries can seem daunting. After all, the number of new industries with high growth prospects is potentially endless.
The industries profiled on the following pages are not meant to be a definitive list. What they provide is an insight into the demographic, technological and environmental influences that are creating new commercial opportunities.
In some cases, these influences are local. The salination of vast tracts of the Wheatbelt, for instance, is a local environmental problem that has triggered a massive investment in tree farming.
In other cases, it is global influences that are creating local opportunities. An example is the emergence of new aquaculture ventures, which only makes sense in the context of the growing worldwide imbalance between supply and demand of wild fish stocks.
China is emerging as a growing influence on the world economy and WA is not alone in feeling the impact. One of the big opportunities out of China is the forecast rapid growth in the number of Chinese tourists coming to this country.
Australia’s ageing society – and the relative affluence of many over 55s – will affect many industries.
“The ageing population represents a fundamental change in the Australian economy’s structure,” according to consulting group Access Economics.
“It is the spending habits of mature consumers that will define growth markets in the years to come.”
The growth of two-income families and the trend towards smaller households will also have a profound impact.
“In this social and economic environment, the next big thing is clear,” Strategic Economic Solutions’ Kim Houghton said.
“The big growth areas are in highly personal, highly skilled, one-to-one services.
“Individuals and households will do what businesses have done and outsource what used to be core activities.”
This includes activities such as gardening, cooking and pet care, as well as child and aged care, personal fitness, massage and counselling.
Mr Houghton said there already had been growth in these fields, especially in terms of new business formation.
Corporate advisory group Port Jackson Partners has put these influences into a broader context by defining Australia’s three horizons of growth.
‘Horizon one’ has Australia’s mature businesses, including much of the resources sector, most of the agricultural sector and many of the formerly tariff protected manufacturing industries.
These industries remain important but in a national context they are in relative decline.
Downstream processing of natural resources, such as the gas-to-liquids projects proposed for the Burrup Peninsula, will help to sustain the contribution of this sector.
‘Horizon two’ includes the service economy that has driven much of Australia’s growth.
The service sector, including communi-cations, recreation, health and education, personal and business services and hospitality, accounts for more than three quarters of Australia’s jobs.
There has been substantial change within many of these service industries.
In retailing, for instance, the likes of Harvey Norman, Flight Centre and Bunn-ings Hardwarehouse have developed highly productive business concepts.
“Australia is reaping the benefits from these horizon two growth businesses and industries,” Port Jackson’s David White said.
“Australia’s horizon three industries are the key to sustaining strong economic growth over the long term.
“Two of the more important themes driving ‘horizon three’ industries are the information economy and biotechnology. Businesses in these industries will be knowledge, not asset, based.”
Rob Newman, a director of Perth-based venture capital firm Foundation Capital, is constantly assessing new investment opportunities and new technologies and therefore has a good insight into horizon three industries.
Within the IT sector, Mr Newman sees wireless communication as a promising growth industry. He is confident that a wide range of applications will emerge as the speed of wireless data communication continues to improve.
Within the broad field of biotechnology, he believes the relatively new discipline of bio-informatics, involving the application of powerful computer analysis to biological and genetic data, holds great promise.
Biotechnology also features in CSIRO’s short-list of research priorities for WA. It intends to expand its biotech research, with plans for a Biotechnology Centre for Food and Health.
CSIRO also plans to expand its minerals processing research, with a doubling of its 60-strong team of researchers over the next decade.
Its chairman, Ms Catherine Livingstone, said one of CSIRO’s success stories was its “important role” in helping refine Rio Tinto’s revolutionary Hismelt iron process.
Ms Livingstone has also foreshadowed increased research into the future of the mining industry.
“We can sit back and watch as our world-class minerals industry declines in the coming generation, or we can recognise the trend and try to turn it to our advantage,” she said.
“CSIRO has already developed world leading exploration technologies that have helped locate gold deposits.
“The challenge now is to develop technologies to locate other precious metals that may be buried in WA, such as platinum, chromium and vanadium.
The emergence of new industries and technologies has had a big impact on the jobs market, and further changes can be anticipated in future.
The table below shows, not surprisingly, that computing professionals have been one of the fastest growing occupations of the past 15 years.
Several other professions also ex-perienced rapid growth, including project administration, marketing and HR, accounting and sales management.
None of these professions matched the rapid growth of special care workers and childcare workers – trends that reflect the ageing of our society and the growing involvement of women in the workforce.
Low skilled service jobs such as waiters, sales assistants and cleaners also grew substantially.
© Business News 2018. You may share content using the tools provided but do not copy and redistribute.