By Simon Herrmann, Amy Lomas, Ro Antao, and Tom Gunson

Australia’s next boom won’t come from how much we dig or ship—but from how we meet human needs

Insight
9 minute read
April 30, 2025

For the first time in modern economic history, Australia’s prosperity could hinge less on what it digs up, grows or builds—and more on how it reconfigures traditional industries into entirely new forms of value.

As megatrends such as climate change, advanced technologies and demographic shifts reshape the global economy, business leaders are facing unprecedented pressure to challenge their business models, offerings, and capabilities.

The real competitive edge will belong to those who can redefine industries around human need, not historical advantage.

This seismic shift isn’t just about productivity or technology—it’s about a global rethink of what industries even are. And for Australia, this means trading the ‘lucky country’ mindset for something more radical: the designed economy.

Australia’s industrial mindset has long been shaped by the fortunes that lie underfoot—iron ore, coal, gas, and gold. But as a global industrial reconfiguration gathers pace, driven by megatrends including advanced technologies, climate change and fracturing geopolitics, a very different kind of resource is emerging as the key to long-term growth: the ability to reimagine industries as we know them.

We believe the winners of tomorrow won’t be defined by how well they compete within the boundaries of their industry, but by how boldly they transcend industry lines to meet evolving human needs, such as how we move, make and build things; how we feed and care for ourselves; and how we fuel society.

This reconfiguration of industries is where we see the next wave of growth. Our new research, Value in Motion, reveals that more than AUD $11.1 trillion (USD $7.1 trillion) in global value could be unlocked in 2025 alone as megatrends force global economies to shift from legacy industry models to fluid, interconnected value chains organised around human needs—what we call ‘domains of growth’. More than 40% of that value could be generated in the Asia Pacific region.

Navigating the global economic shift

This complete structural transformation of the global economy will create both exciting growth opportunities—and significant uncertainties—for business leaders.

That’s because the pace and trajectory of this transformation will be shaped by how decisively businesses worldwide embrace AI and accelerate decarbonisation.

Our economic analysis shows that rapid and responsible AI deployment could supercharge productivity, boosting global GDP by nearly 15% more than projected over the next decade, offsetting the economic challenges associated with climate change.

But if progress stalls, the world could face a productivity slowdown or even a net economic contraction, especially in resource-reliant countries.

For Australia, this poses an existential question. Can we—a country whose wealth was built on extraction, exporting, and traditional finance—shift fast enough to compete in an economy where value is increasingly intangible? Or will we be outpaced by countries that turn sustainability and digital intelligence into the next great industrial engines, effectively ushering in a new Intelligence Age?

The ‘great reconfiguration’ is here: Is Australia ready?

A seismic shift is underway. The ‘great reconfiguration’ is a fundamental transformation of the global industrial system into broader, deeper value pools—and it’s already here. In this new world order, innovative technology combinations give rise to products and services centred on emerging human needs. In other words, businesses are no longer defined by what they produce, but by the problems they solve for humanity.

We’ve already seen companies like Apple, Microsoft and Amazon move beyond their original industries, expanding into finance, healthcare, and AI. This trend will only accelerate as more companies seize emerging opportunities—and value—across multiple sectors.

Globally, investment is flooding into areas where new economic frontiers are forming. Our research shows the ‘how we build’ domain, for instance, could be 33% bigger, in real terms, than the sum of traditional building activities today, worth up to USD $13.8 trillion by 2035. 

The ‘how we care’ domain will be worth up to USD $9.3 trillion by 2035, while the domain ‘how we fuel and power’ will be worth almost USD $6.2 trillion.

The value of the Build domain could grow to nearly $14 trillion by 2035.

In Australia, the great reconfiguration is already visible in pockets:

Mining giants are extending their focus to critical minerals, investing heavily in clean energy and infrastructure to decarbonise their production, while automation and AI will redefine extraction, safety, exploration and efficiency, which is crucial in a high-labour-cost environment.

Healthcare is evolving from episodic care to a continuous wellbeing approach. Hospitals are becoming data hubs, while healthcare companies are exploring business models focused on prevention, not just treatment. To this end, healthcare organisations are investing in technology platforms and wearables that combine biomedical research with real-time AI diagnostics, enabling proactive, decentralised health management. Meanwhile, remote sensors and AI-assisted technologies such as fall detectors, movement habits, wearables, and companion bots are being used in aged care settings to enable virtual care.

Financial services providers are embedding services into broader digital ecosystems, shifting from being providers of traditional financial products to platform enablers, stepping out into spaces like retail and travel. Meanwhile, banks are partnering with carbon emissions platforms to help farmers reduce net emissions.

Telecommunications companies are moving from bundling customer wireless, home broadband and entertainment services towards ‘super-serving’ customers across sector boundaries with subscriptions and digital commerce in entertainment, education, embedded finance, smart home services, and digital health and wellbeing.

Retailers are partnering with technology platforms to expand into telehealth. This trend allows retailers like supermarkets to offer consultations via video and phone, leveraging technology partnerships to improve accessibility to healthcare via grocery apps and online marketplaces. 

However, despite these pockets, companies reinventing to capture new domains of growth are the exception, not the norm in Australia. The bulk of our industry—particularly small and mid-sized businesses—is still shaped by traditional sector lines.

What’s more, Australian companies aren’t showing much urgency to move. PwC’s 28th Annual Global CEO Survey revealed that only one in three CEOs report competing in at least one new sector in the past five years. Meanwhile, nearly three quarters (74%) of Australia’s CEOs believe they can stay on their current path and be economically viable for more than 10 years (compared to 55% of global CEOs).

But change is happening rapidly. Our analysis shows that the pressure for businesses to reinvent is at or near a 25-year high, putting into context the US$7.1 trillion in revenues slated to shift between companies in 2025. This suggests it will take a fundamental shift in mindset for Australia to lead in the industries of tomorrow.

So, the question for Australian companies is this: Are we ready to seize the value that’s in motion right now?

Three possible futures: How will our economy be redrawn?

At the heart of PwC’s research are three possible global economic growth trajectories through to 2035. Each of these scenarios is defined by the pace and success of AI adoption and the rate of global decarbonisation efforts.

The modelling for Asia Pacific shows the gap between the best and worst-case outcomes could be 13 percentage points in regional GDP, depending on how these forces play out.

Three scenarios for growth - Asia Pacific

In the optimistic scenario, AI is deployed at scale and governed responsibly, unlocking a wave of productivity and innovation across sectors. Decarbonisation is pursued aggressively, supported by coordinated investment, public trust, and international cooperation—a growth premium worth trillions. We describe this scenario as a ‘trust-based transformation’.

For Australia, this would present a historic opportunity to make a step change in productivity, and tilt our economy towards being more agile and innovative.

To create the conditions for this ‘trust-based’ transformation, we need to continue to be proactive in developing principles for the ethical use of AI. Australia’s (relatively robust) regulatory framework governing AI may have slowed deployment in the near term, but it’s set us up for greater levels of AI adoption in the longer term. In the same vein, we need to develop AI-as-a-service (AIaaS) in a measured way to balance data privacy with innovation. This requires industry, government and the not-for-profit sector to come together to jointly progress principles, standards, protocols and high-benefit use-cases. A big ask. But the faster we build on these frameworks, the faster we can achieve real and substantial gains in productivity. Climate action, meanwhile, must become business as usual, focusing on abatement outcomes.

The mid-case scenario sees patchy progress. AI adoption occurs, but with uneven impact across sectors and regions. Decarbonisation continues, but falls short of the pace required to meet global climate goals. Productivity gains materialise, but more slowly. Economic growth is sustained; however, the window for transformational change narrows. We describe this as ‘tense transition’.

For Australia, such a scenario would likely reinforce existing inequalities between fast-moving firms and those left behind. Some industries would reconfigure, but many would continue operating under outdated assumptions. Meanwhile, mixed trust in AI could limit the extent to which AI is integrated into the fabric of business strategy, curbing innovation and value creation. This is a significant risk for Australian companies given that nine in ten Australian CEOs say AI adoption is central to achieving their company’s business strategy in the next three to five years (PwC’s 28th Annual Global CEO Survey). Under this mid-case scenario, the need for climate action is clear, but Australia remains off target to hit 43% emissions reduction by 2030.

In the pessimistic scenario, trust in AI collapses—due to misuse, or mistrust—limiting its economic impact. Climate action falters, worsening physical and financial risks. Productivity stalls, and the economy could experience a net contraction by 2035. We describe this as ‘turbulent times’.

In this environment, Australia’s heavy reliance on traditional exports and carbon-intensive industries becomes a liability, exposing it to both demand shocks and geopolitical instability. Here, trust in AI is minimal, overregulation stifles agility, and productivity continues to fall, taking Australia’s overall standard of living with it. Meanwhile, climate inaction means physical climate risks have a greater impact on Australia’s economy as event shocks.

The imperative is clear. Just recently, our CEO Survey revealed only a third of Australia’s CEOs have a high degree of trust in AI (below the global average), while local CEOs also feel less exposed to tech disruptions, suggesting a lower level of AI maturity within Australian organisations than the global average. At the same time, Australia is lagging when it comes to realising revenue from climate-friendly investments despite these investments being linked with stronger financial performance.

In short: Australia has ground to make up.

Our collective call to action

This research reveals a stark reality: the future won’t be won by scale or legacy advantage—it will be won by agility. For Australia, the next decade must be defined by strategic reinvention. The economic upside is vast, but so too is the risk of falling behind.

If we look to the upside, we have more to gain than most—we have the combined pressures of an especially tight labour market; a dramatic shift in our working age population; vulnerability to the physical climate risks of fire, flood, storms and heat; and significant growth in human services demand—primarily aged, health and disabilities care.

Collectively these forces mean boosting growth and unleashing productivity is a critical part of the equation. That means being a leader in our approach to AI and domain-based innovation, not a laggard.

For business leaders, this begins with re-evaluating the markets you’re currently in, identifying what unmet human needs your organisation can address, and then turning global megatrends like AI into your competitive edge.

Companies will thrive over the next decade through cross-sector partnerships, IP and capability sharing—and accelerating AI roadmaps beyond compliance.

Australia has the raw ingredients to lead in this new era, but leadership will depend on adopting a mindset that seizes the opportunities ahead while managing the risks. The next wave of growth won’t come from what we make or ship, but from the value that comes from meeting human needs.