Australia has an opportunity to exploit a growing trillion dollar market for clean goods and services, a new report into the growth of the sustainable business sector has found.
The Next Boom: A surprise new hope for Australia’s economy?, launched today (Tuesday) in Melbourne by the Future Business Council, found that sustainability was best viewed as a business opportunity rather than a cost, particularly in light of Australia’s ailing mining sector and a desperate need to diversify the economy.
However to realise the benefits of a clean economy, reforms will be necessary, the report warns.
“Australia has a once in a generation chance to become one of the world’s leading producers of clean goods and services,” Future Business Council executive director Tom Quinn said. “This is the tech boom of the twenty-first century.”
While Australia has had a well-documented boom in solar, the report found there were a number of other sectors experiencing rapid growth. For example, certifications of Green Star buildings have grown by 116 per cent a year; hybrid vehicle sales are growing 165 per cent a year; and the issuance of climate bonds has doubled.
There were three major drivers of the boom, the report found: consumer preference, government policy and environmental necessity. The success stories could be replicated in other sectors across the entire economy, the report said, however government policy needed to be strengthened to allow the clean boom to continue.
“The boom in demand for solar, LED and compact fluorescent lighting, and water efficient products – from toilets to taps – is a direct consequence of government actions. We want to see more of this,” Mr Quinn said.
The report found Australia has natural advantages that make it well-placed to exploit the emerging clean product and services space, including:
- a highly educated and innovative workforce
- advanced education and research facilities
- good levels of capital availability
- latent manufacturing potential
- access to abundant renewable resources
- proximity to Asia
- the increasing viability of long distance service provision due to advances in technology
Regulatory inconsistencies and policies protecting old business models, however, were called out as “hampering innovation and strangling new investment”.
“Outdated policies are costing Australia the ability to prosper from the next boom,” Mr Quinn said.
“Smart reforms are needed to give local industry a competitive advantage and support businesses competing for a share of the next boom.
“The window to capitalise on this boom is closing fast. Australia must move quickly to secure a lead.”
Recommendations from the report include:
- Make “Made in Australia” the global mark of sustainability excellence
- Remove market barriers to new business models and lift product standards
- Introduce market mechanisms and boost investment in innovation, science and research