Good news growth options for SA’s future: Deloitte report
Health and aged care, ICT and food processing potential growth pockets.
24 March 2014: South Australia’s growth prospects will be boosted by increasing opportunities in health and aged care, ICT and food processing, as well as the super-growth sectors of agribusiness, gas, tourism, international education and wealth management. More importantly, these growth pockets are mainly in high job creating areas of the economy.
New research from professional services firm Deloitte has identified 25 sectoral hotspots, the ‘Deloitte Growth 25’ (DG25), with the biggest potential to lift Australia’s prosperity over the next 20 years.
The full release of Positioning for prosperity? Catching the next wave, the third in Deloitte’s Building the Lucky Country series, analyses growth prospects across all major parts of Australia’s economy and identifies some growth hotspots for South Australia.
A companion media release considers the national impacts of the DG25. However, Deloitte has also extended the analysis to each state. Deloitte’s initial analysis, focussed on just one fifth of the economy, found that whereas South Australia had missed out on many of the benefits of the initial phase of development in emerging Asia, it was well-placed to make the most of a set of coming opportunities in the ‘Fantastic Five’ super-growth sectors of agribusiness, gas, tourism, international education and wealth management.
For example, the initial exploration completed in the Arckaringa Basin suggests there may be an enormous shale oil gas opportunity in the area surrounding Coober Pedy. And mining-related construction won’t be going away, with rich mineral deposits such as the country’s largest iron magnetite resource on the Eyre Peninsula.
In the full report, Deloitte’s latest analysis has now sifted through the remaining 80% of the economy – after the current growth wave of mining and the ‘Fantastic Five’ – to identify 19 new growth pockets (seen in the table below).
South Australia Managing Partner of Deloitte, Jody Burton, noted: “While South Australia has had to grapple with some bad news of late – such as the foreshadowed closure of Holden’s manufacturing operations at Elizabeth – the domestic-based sectors that Deloitte ranks as having the highest growth potential in the nation are a larger part of the local economy than they are of Australia’s as a whole.”
In particular, Deloitte’s new report identifies a growth cluster at the heart of the collision of megatrends such as rising life expectancies, rising relative health care costs and tightening public sector health budgets. This group contains the biggest sectoral opportunities – both nationally and for South Australia.
Moreover, some of the best opportunities for South Australia are in lower-risk areas where the state can build on some of its existing strengths, rather than develop new industries from scratch.
This will result in a number of sectors leading the pack in terms of South Australia’s growth, such as residential aged care, retirement living and leisure, community and personal care, and preventative health and wellness.
In fact while ageing is on the one hand a growth challenge for South Australia, too many people forget that it is also a massive growth opportunity for the state, with increasing demand for convenient access to a range of health and other services.
Yet while South Australia’s biggest growth areas will be linked to caring for older people, its most exciting growth drivers will be in newer opportunities.
For example, there will be potential in medical research – where the state is already an acknowledged leader – as well as in the manufacturing of medical devices geared to enable the digital delivery of healthservices. This mix of new technologies with new markets could also lead to new opportunities for the South Australian economy, particularly leveraging its experienced ICT sector.
There may also be the potential for renewed strength in food processing – think of the state’s wines and boutique foods – which is projected to see a recovery in what was once a bastion of manufacturing in the state. Although this will be dependent on the deregulation that has underpinned New Zealand’s rise as a global food processing powerhouse, South Australia has the core potential to follow suit.
Deloitte has also identified smaller hotspots where the ability to sell into world markets has the potential to turbocharge growth.
These are the sectors with the most to gain from new approaches and new technologies and include new ways of making the most of ocean resources, ranging from farming algae tomake so called ‘green oil’ to harnessing the power of wind and waves to generate electricity.
There are also opportunities emerging in Central Australia, with potential to use next generation technologies to open new potential around solar energy generation and storage.
“With such a variety of sectors at the intersection of these new and emerging trends, future growth opportunities certainly exist for a large number of South Australia’s small and medium enterprises – businesses that are the lifeblood of our state’s economy,” said Jody Burton.
NB: See our media releases and research at www.deloitte.com.au
Last Updated: Friday, 21 March 2014
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