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In 2022, the Australian Bureau of Statistics forecasted that the country’s population of 26 million was set to reach between 34.3 and 45.9 million by 2071.

Understanding Australia’s Evolving Population Landscape

July 19, 2024

In 2022, the Australian Bureau of Statistics forecasted that the country’s population of 26 million was set to reach between 34.3 and 45.9 million by 2071. 

As Australia gears up for a significant population increase in the coming years, SME businesses can expect to encounter both challenges and opportunities. This projected population growth promises an expanding market and signals the need for businesses to adapt to these shifting economic conditions.

Demographic Shifts

The population boom will likely place increased pressure on infrastructure and the environment, particularly in Australia’s major cities where over 70% of the population lives. Australian cities are already under high demand for housing, schools, and healthcare services, and this is only set to intensify. 

In contrast, areas of rural Australia are facing their own set of challenges with many remote areas struggling to attract residents, influencing the types of services and industries in these areas. 

Despite high levels of immigration, Australia faces a shortage of skilled labour, especially in care-related sectors. A study from the University of Sydney projects that by 2050, Australia will need an additional 285,800 workers in fields such as aged care, disability services, and mental health support. 

However, these challenges also open the doors to potential business growth opportunities. An increasing population may drive consumer demand, boost key sectors like housing and healthcare, and create new opportunities for businesses to grow.

Population Growth and Housing Demand

The rising population is contributing to rising housing demand and prices across most Australian cities. This creates opportunities for multiple sectors. 

The construction industry stands to benefit from increased projects for residential developments. Investors can capitalise on appreciating property values in high-growth areas, while governments need to focus on urban planning and infrastructure to support new developments. Urban planners and community developers have the chance to design sustainable, inclusive communities, and non-profits can ensure the implementation of affordable housing initiatives.  

A Diverse Talent Pool

Australia’s growing and diverse population offers small businesses access to a talent pool with varied skills, backgrounds, and educational experiences, crucial for filling skills gaps in technology and healthcare. 

Digital skills may be vital for businesses looking to enhance their online presence and keep up-to-date on digital developments. By adopting targeted recruitment and inclusive hiring practices – like providing candidates the option to work remotely and adopting blind recruitment processes to mitigate unconscious bias – businesses can stay competitive in a changing market. 

Thriving in a Growth Economy: Strategies for Business Success

To thrive in a growth-driven economy, businesses could consider these practical strategies: 

Innovation and Technology: Leverage new technologies to meet the expectations of a growing, tech-savvy population. For example, businesses could consider a mobile app to enhance customer accessibility, or integrating AI chatbots on their website to offer real-time customer support. 

Skilled Workforce Development: SMEs can create specialised trainings or offer apprenticeship programmes to attract candidates from less-traditional educational backgrounds. There’s also the option of collaborating with educational institutions to create tailored training courses addressing specific skill gaps within their industry. 

Targeted Products and Services: By conducting market research, businesses may be able to identify underserved customer segments or niche markets they haven’t yet tapped into. SMEs can then adapt their products and services to meet these different demographics, ensuring their offerings stay relevant.

There is also a range of government initiatives aimed at supporting business growth, such as: 

Research & Development Tax Incentive: offsets some of the costs of research in eligible fields for businesses in Australia. 

Export Market Development Grants: this scheme, run by Austrade, financially assists businesses that are exporting or planning to export products or services by covering marketing and promotional costs in international markets. 

Small business grants: a range of grants and funds are available for small businesses across Australia. Use the government’s “grants and programs finder” tool to learn more. 

These initiatives are designed to assist businesses in expanding their operations and staying competitive. 

Population growth in Australia presents opportunities for small businesses to transform challenges into advantages by adapting to market shifts.

This information is for general information purposes only. The information contained herein does not constitute financial or professional advice or a recommendation. It has not been prepared with reference to your financial circumstances or business and should not be relied on as such. You should seek your own independent financial, legal and taxation advice as to whether or not this information is appropriate for you.

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