By Matt Wade
Five industries are poised to drive Sydney’s economic future, with new forecasts showing finance, biotech, digital-tech, advanced manufacturing and clean energy could add a million new jobs in the city by 2050.
Sydney has consolidated its position as the largest economic engine in the country during the past decade and accounts for one-fifth of national economic activity, a new report by the Committee for Sydney think tank says.
AstraZeneca staff Penny George and Geraldine Murphy at the firm’s Sydney production plant.Credit: Louise Kennerley
But it warns that the city must be more strategic and well-planned to maximise its economic potential.
“We must identify the industries in which we have clear advantages and that will take Sydney into the second half of the 21st century,” it says. “We need to plan for them, invest in them and nurture them.”
Sydney’s economy has transformed into a knowledge-driven services powerhouse during the past three decades. The city has a far higher concentration of workers in professional services, financial services and information media and telecommunications than the rest of Australia.
But a lack of economic diversity still poses a threat; coal, for instance, made up 36 per cent of the value of the state’s exports in 2022-23.
“In a world rapidly trying to decarbonise, having one-third of total export revenues coming from a carbon-intensive commodity presents an extreme economic risk,” the committee’s report says.
The committee calls for targeted policies to boost five priority sectors: financial services and fintech, biomedical technologies and life sciences, digital technologies, advanced manufacturing and net zero/clean energy technology.
These sectors now employ 21 per cent of workers in Sydney. But if that share could be lifted to 31 per cent over time, the report estimates those five industries would add 1 million high-value jobs in the city by 2050.
Report co-author professor Eric Knight, from Macquarie Business School, said rapid technological change has made long-term strategies to support the economy more important.
“You’ve got to be planning what the Sydney economy will need in 2035 or 2040,” he said. “How is the technology going to evolve? What might be the gaps in our planning across business and housing? We need to anticipate those and then respond to them … so you have to have a blueprint.”
AstraZeneca’s Macquarie Park headquarters is part of Sydney’s biotech sector. It is also involved in advanced manufacturing.
Penny George, the firm’s director of corporate affairs, said global pharmaceutical firms such as AstraZeneca bring “a unique combination of research, scientific know-how and manufacturing infrastructure”.
But the company’s high-tech Macquarie Park production plant, which exports to 10 countries, is not operating at full capacity.
Inside the AstraZeneca manufacturing plant at Macquarie Park. Credit: Louise Kennerley
“A company like AstraZeneca is already playing a role [in Sydney’s economy], but it could play a greater role,” George said.
The committee’s report says well-targeted industry policies could boost strategically important sectors like biotech and deliver more high-value jobs.
Interventionist government policies to promote specific industries are becoming more prevalent across the world. The committee’s head of policy and report co-author Jeremy Gill warns key Sydney sectors will be likely to face more international competition as a result.
“Cities and countries around the world are targeting key industries and Sydney risks getting left behind if we aren’t doing the same,” he said.
The committee’s report says universities will play an increasingly important role driving innovation and growth in the city economy.
“Often when people think about the universities it’s just about students, but it’s the research that’s also critical,” said Knight.
The report calls on the state government to develop a clear economic development strategy for Sydney, including plans to nurture local innovation districts.
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