SmartCompany’s Developing an Entrepreneurial Australia Roundtable came up with 10 multi-billion dollar industries of the future. JAMES THOMSON talks to IBISWorld’s general manager Rob Bryant about the next two sectors that will take off: Education and Ser
As part of SmartCompany’s Developing an Entrepreneurial Australia Roundtable, we asked IBISWorld general manager Rob Bryant to nominate the 10 multi-billion dollar industries of the future.
We then asked our panel of 17 entrepreneurs and experts to try and identify the niches within these sectors that Australian businesses can exploit.
In the third of a five-part series, James Thomson looks at two more of the 10 big industries of the future – education and outsourcing of chores.
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If you are already operating in one of the two sectors next nominated as multi-billion dollar industries of the future, we’d love to hear from you about the opportunities and barriers that exist. Send your feedback here.
Education was one of the biggest focuses at SmartCompany’s Developing an Entrepreneurial Australia Roundtable. Nearly every participant – from SmartCompany publisher Amanda Gome to Carmen’s Fine Foods chief Carolyn Creswell and Intrepid Travel founder Darrell Wade – talked about the need to improve Australia’s education infrastructure by building closer ties to industry and the global education sector.
Gome, Creswell, Wade and RMIT professor Kosmas Smrynios also discussed the opportunity to use technology in education. This could include the increased use of technology in a classroom or lecture hall setting and the broader use of online education tools for Australia’s decentralised society.
Key statistics, 2006
Products and service segmentation
Major market segments
The increased use of technology and particularly online education will create plenty of opportunities for education providers and IBISWorld forecasts that this division will grow at an average annual rate of 4.2% during the five year period to 2011-12. Fluctuations in government policy, changes in population and retention rates of secondary and tertiary students will all affect revenue growth for the period.
Looking at particular sectors of the industry, revenue in the preschool subdivision is expected to decline over the period as a result of increased competition from childcare centres, which can provide similar services in a more convenient format.
The shift towards globalising education will see increasing levels of competition between the domestic and international players, particularly in the higher education sector. This trend has seen the University of Melbourne adopt a new education model to better compete internationally.
IBISWorld also nominates a number of factors that will affect the performance of the education sector. These include:
- Age group (5-15). Changes in population, particularly in the age range between five and 15 where education is compulsory.
- Education retention rates – secondary schools. The education industry is affected by the retention rate of students attending secondary school. An increase in the number of students deciding to continue studying beyond the compulsory age of 15, effectively increases class numbers, demand for teachers, facilities required etc.
- Funding (federal) – tertiary education. Federal government funding is given to most industries within this sector.
- Funding (state) – primary and secondary education. State governments contribute some funding to most education operators within this sector.
6. Personal, household & hospitality services – outsourcing chores
IBISWorld general manager Rob Bryant believes most of Australia’s multi-billion industries of the future will stem from outsourcing by countries, governments, businesses and, primarily, households. And there is nothing that time-poor modern consumers like outsourcing more than household chores.
The list of household chores that have been outsourced in the last decade is long and growing longer by the day. What started with lawn mowing and garden maintenance has moved on to include cleaning, antenna installation, painting, rubbish removal, pool care, car washing and pet care.
Key statistics, 2007
Products and service segmentation
Major market segments
IBISWorld forecasts that this division will grow at an average annual rate of 2.8% over the five year period to 2012-13. Key factors that will influence revenue in this period include fluctuations in the level of real household disposable income, the level of household outsourcing, the availability of leisure time by Australian consumers and the level and growth in population.
The growth in the outsourcing of home chores will have spillover effects on other industries too. As disposable income levels increase and more manual tasks are outsourced, consumers will have more free time, leading to increased demand for other services such as entertainment.
But beware – in difficult economic times, the outsourcing of chores can become a luxury that fewer consumers can afford. Entering this industry means being prepared to ride out economic cycles.
IBISWorld also nominates a number of factors that will affect the performance of the chores outsourcing sector. These include:
- Leisure and recreation – total time available. The overall level of leisure time available to consumers will determine their demand for services which are outsourced such as gardening, etc.
- Level of household outsourcing – total. Changes in attitudes and lifestyles favouring contracting out various services such as gardening and lawn mowing services.
- Population growth rate. The overall level and growth of population in Australia influences a range of industries in this division such as funeral directors, interest groups etc, and also the demand for corrective centres, hairdressing, beauty salons and so on.
- Real household disposable income. The level of real household disposable income influenced the demand for a range of services provided by industries in this division. A decline in income levels may reduce expenditure on personal services, (particularly hairdressing and beauty salons, etc).