There are indications of a transition towards a more sustainable, innovative, and globally connected economic landscape for the city.

Sydney's position as a financial hub is bolstered by a skilled workforce and a robust regulatory environment. Other positive developments include the establishment of a major tech hub near Central Station, the shift towards a circular economy, and innovation driving growth in the technology, finance, and education sectors.

However, the city is not without its challenges. Inflation in Sydney is higher than the national average, driven by rising rents, education, and insurance expenses. 

This persistent inflation problem, combined with higher interest rates, is escalating living and business costs. Negative interstate migration is another worrying trend, with people leaving Sydney for more affordable areas, taking their talent and economic contribution with them.

Sydney must address these challenges to ensure its continued prosperity and prevent a loss of talent.

Read more about Sydney’s economy >

Addressing Sydney’s chronic undersupply of housing

With demand for housing rising ahead of wages, Sydney urgently needs high-density residential developments. Existing homeowners are enjoying an increase in their asset values, entering the market has become a significant challenge, particularly for young people and families.

The city is investing in infrastructure, with projects focused on meeting the needs of its growing population. 

Projects such as the expansion of public transportation networks, like the Sydney Metro and light rail extensions, are underway. Additionally, smart city initiatives are being developed to use technology to enhance urban living.

However, competition between the infrastructure and construction sectors for labour and materials is also impacting the housing affordability crisis. 

Further details on Sydney’s infrastructural developments and plans to address housing affordability in the full report >

Its commitment to new technologies and innovative policies is propelling the city's growth and global competitiveness.

Sydney is an attractive place to operate a business because it offers easy access to investors, customers, and suppliers. But the city’s high costs are a competitive disadvantage for the businesses that operate within it.

To solidify its position as a global business destination, Sydney needs a comprehensive strategy, including economic diversification, affordable housing, and robust environmental management.

“You have to be in Sydney if you're basing a business in Australia”. ~ Colin Jowell, founder, BillWill

Sectors poised for expansion

In Sydney, several sectors show strong potential to expand in the next few years. Here's what's on the rise: 

The City of Sydney has outlined ambitious targets in its environmental strategy for 2021-2025, including:

1. Achieve net zero emissions by 2035

2. Reduce greenhouse gas emissions by 70 per cent by 2030 from a 2006 baseline.

3. Ensure 50 per cent of electricity demand is met by renewable sources by 2030.

Sustainable development and urban planning practices

The City of Sydney aims to become a smart city, with urban development plans which prioritise future-focused and sustainable initiatives. The council already only buys renewable energy and is installing rooftop solar on council buildings. 

In terms of public transport, the council is dedicated to creating a city that promotes walking, cycling, and public transport, as well as electrifying high-impact transport fleets and establishing a network of electric vehicle charging options. Planning controls are also being introduced to facilitate easy electric vehicle charging for new developments and to retrofit charging options in existing buildings.

Moreover, many Sydney businesses will be required to adhere to mandatory climate-related disclosure regulations for significant enterprises and financial entities. These regulations are aimed at ensuring that large companies annually report on their financial risks, opportunities, plans, and strategies associated with climate change. 

Download the report for valuable insights into Sydney’s sustainability strategy >

Consequently, the skills required for work are also evolving. To stay competitive in the global job market, Sydney residents are acquiring new knowledge and skills.

In terms of preparing for future employment, educational institutions and training centers in Sydney play a crucial role. The city is home to several high-quality universities and institutions that offer career training and conduct research. These institutions provide a wide range of courses to help students and working professionals stay ahead in their respective fields.

Enhancing Sydney's talent pool through education

The city of Sydney is home to several world-class universities, making it a popular destination for international students. Although many students returned to their home countries during the COVID-19 pandemic, Sydney's higher education sector is now welcoming overseas students once again. Sydney has the potential to further enhance its higher education system to remain appealing to international students.

Moreover, there is a need to focus on developing skills in both traditional and green manufacturing sectors. Migration could help address these skill gaps, but it's also important to provide greater emphasis on training local individuals through TAFE courses and apprenticeships.

Enhancing Sydney's talent pool through education

As technology keeps getting better, Sydney is going to need people with certain skills more and more by 2030. 

Here's what will be in high demand: 

• With technology becoming increasingly integral to our lives, it's essential for everyone to be proficient in using digital tools, interpreting data, and staying updated on new technological advancements. 
• Critical thinking and problem-solving skills will continue to be crucial, even as automation displaces certain types of work. 
• Innovation and creativity will continue to be valuable skills, helping businesses grow fast and stay ahead. Being flexible and resilient to change and overcoming challenges. The world is constantly changing, so it's important to adapt when things don't go as planned.

Sydney's tourism and hospitality sector is a key part of the city's economy, attracting millions of visitors with its landmarks, cultural offerings, and dining experiences. The city invests in arts, culture, and creative industries through funding for galleries, theatres and public art.

Policies have been implemented to improve visitor experiences, promote Sydney globally, and ensure sustainable growth through infrastructure investment and marketing campaigns. However, the sector faces challenges such as staffing issues and the need for better workforce training and job quality.

The industry's reliance on a mix of local workers, international students, and working holidaymakers creates staffing challenges due to labour source fluctuations.

 Additionally, there's a need to address concerns about workforce training, job quality, and balancing a competitive business environment with fair working conditions.

Tackling these challenges is crucial for the continued success of Sydney's tourism and hospitality sector, ensuring its appeal to visitors worldwide.

Learn more about how Sydney is making sure to stay at the top of everyone's travel list >