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NSW well placed for the next boom
Home-grown growth sectors to play to NSW’s strengths
24 March 2014: New South Wales is superbly placed to cash in on the nation’s next boom via the ‘Fantastic Five’ sectors of agribusiness, gas, tourism, international education and wealth management, as well as benefiting from new opportunities, particularly relating to health and an ageing population. 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.
NSW Managing Partner of Deloitte, John Meacock, said: “Not only are global markets shifting, but so too is the nature of the Australian economy, and both these big drivers of future prosperity are changing in ways that play to NSW’s strengths.”
In fact NSW is ahead of the nation in more than half of the new super-growth sectors identified by Deloitte – meaning the state is well placed for future prosperity.
And if a new airport in Western Sydney gets the nod, there will be the potential to unlock even more prosperity through its impact on tourist flows and regional development, unwinding some of NSW’s lost market share within Australia as the destination of choice for world travellers coming to our shores.
“Our analysis shows the potential for NSW to make the most of the trends transforming the nation over the next two decades. It won’t be easy, but the state is in a great position to make these opportunities count,” continued Mr Meacock.
The latest analysis from Deloitte identifies new growth clusters (see table below). The largest of these is at the heart of the collision of megatrends such as rising life expectancies, rising relative health care costs and tightening public sector health budgets. That is where the biggest opportunities lie – both nationally and for NSW.
Opportunities in sectors such as residential aged care, retirement living and leisure, community and personal care, and preventative health and wellness will be at the head of the pack in terms of growth for NSW.
There will also be growing demand for new products from the finance sector amid both a surge in the assets of older Australians, and the need for them to finance greater health and lifestyle spending. Similarly, as Australia’s largest financial centre, Sydney will see much of the coming growth in the finance sector as trade flows lift to accommodate rising demand from emerging Asia.
Even better, some of the best new opportunities for NSW also happen to be in lower-risk areas where the state can build on its traditional strengths, rather than develop new industries from scratch.
Mr Meacock noted that: “These new growth opportunities also play to NSW’s strengths. For example, Sydney is Australia’s financial hub, with nearly a third of jobs in the Sydney CBD in the finance sector. This means the ability to sell into rising trade flows as well as new products to suit an ageing population could translate into substantial growth for the state’s economy.”
NSW is also a leader in information and communication technology (ICT), and parts of this sector will grow to provide new technologies and systems to fuel the next boom as Australia looks to meet surging demand for our exports from emerging Asia.
While clean coal technology remains elusive – at least at low cost levels – its potential to boost the value of NSW’s huge thermal coal reserves is considerable. Ongoing environmental concerns surrounding coal are increasingly hampering the sector’s growth, but if advances in technology are able to address those concerns, renewed demand for coal could lift the fortunes of the state’s mining sector.
Mr Meacock added: “The benefits of affordable clean coal technologies to NSW would be nearly one-and-a-half times what they are to the nation as a whole.”
Finally, Deloitte examined smaller growth pockets where the ability to sell into world markets has the potential to turbocharge growth. Here the best opportunities for NSW lie in adapting to rapid technological change. The latter will see notable opportunities for NSW to build on emerging high-tech industries such as medical research and the digital delivery of health services, combining high skilled manufacturing with the insights of the state’s research community.
The upcoming boom in the ‘Fantastic Five’ sectors is set to be three-and-a-half times larger than the mining sector in NSW, while the rest of the DG25 will also play to the state’s strengths.
“With such opportunities on the horizon, NSW should start preparing now to maximise the benefits of coming booms both in our region and here at home,” Mr Meacock said.
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. A companion media release considers the national impacts of the DG25. However, Deloitte has also extended the analysis to each state.
NB: See our media releases and research at www.deloitte.com.au
Last Updated: Tuesday, 25 March 2014
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