Top business destinations

Iconic attractions, such as Sydney Harbour Bridge, keeps tourist numbers high

The sixth largest country in the world and bigger than all the countries of Western Europe put together, Australia’s 22.5 million people have plenty of space to grow into.

Consider that you could fit more than 31 United Kingdoms into Australia, and yet the latter is home to only a third of the population, and you get some idea of just how vast and sparsely populated great swathes of the ‘island continent’ is.

In light of this, considerations like the level of local competition and demand, and proximity to large conurbations, key suppliers and transport hubs, while always important, carry even more weight if you’re choosing a business for sale in Australia.

Sixty percent of the country’s population is concentrated around the mainland state capitals of Sydney, Melbourne, Brisbane, Perth and Adelaide. The most populous states are South Australia and its eastern neighbour, New South Wales.

Tasmania’s Hobart aside, all of Australia’s state capitals can credibly claim to be internationally competitive, affluent cities, with dynamic, diverse economies with advanced infrastructure. Many towns emanate from these hubs offering lower living costs and a more laidback lifestyle, but just enough proximity to the capitals’ large consumer markets, facilities and resources.

Unless you’re brave enough to pitch up in say, Somerset in Queensland, 1,057km from the nearest city and 2,713km from the state capital, here are the five major conurbations.

Sydney and New South Wales

Australia’s largest and most populous conurbation (4.5 million inhabitants) is the best city in Australia to do business, according to a 2007 table of the top 50 world cities to do business in.

The Mastercard Centers of Commerce Index placed Sydney at a lofty 14th in the world, while last year it was ranked third in Asia and 22nd in the world for innovation by 2thinknow.

The state capital of New South Wales accounts for around a quarter of Australia’s GDP and ranks as the second wealthiest city in the world in terms of per-capita purchasing power. As in the rest of the developed world, manufacturing has declined rapidly in importance since the 1980s, a gap filled by property and business services, retail, health and community services, to name a few industries.

The city is blessed with iconic architecture like the Sydney Opera House and Sydney Harbour Bridge, which help attract nearly three million international visitors a year.

Australia’s financial and economic hub also draws in huge numbers of economic migrants, particularly from the UK, China and New Zealand

Sydneysiders, as the city’s inhabitants are known, enjoy a high quality of life according to Mercer’s 2010 Quality of Living index, which ranks Sydney at 10th in the world. Australia’s financial and economic hub also draws in huge numbers of economic migrants, particularly from the UK, China and New Zealand.

New South Wales’ biggest export is coal and related products. Agriculture also accounts for a sizeable proportion of GDP, with the state home to one-third of the country’s sheep, one-fifth of its cattle and one-third of its pigs. There are 40,200 hectares of vineyards and the state produces 99% of the country’s rice.

Melbourne and Victoria

Melbourne, the state capital of Victoria, recovered from the global financial crisis better than any other Australian city, evidenced by its creation of more jobs during 2009 than the next two fastest growing cities, Brisbane and Perth, combined. And among Australian cities, Melbourne was beaten only by Sydney in the world’s top 50 cities for doing business, and ranked higher than Sydney in the innovation stakes, achieving 19th place in 2thinknow’s rankings.

Melbourne, has a keen rivalry with the neighbouring state’s capital, Sydney, whose population is only 500,000 larger. Melburnians will therefore be pleased to know that their city ranked higher than Sydney on two liveability indexes, third to Sydney’s seventh for the Economist rankings, and ninth to Sydney’s twelfth on Monocle Magazine’s.

Melbourne’s diversified economy excels in finance, manufacturing, automotive, IT, logistics and transportation, research and development and education. Tourism is also a huge contributor to revenues, with around eight million tourists visiting the city every year. In 2008 it even surpassed their great rivals, Sydney, in terms of the total money spent by domestic tourists in the city.

Home to Australia’s largest and busiest seaport, Melbourne handles more than $75bn worth of trade every year and 39% of the country’s container trade. It also boasts the world’s largest tram network and four airports.

Moreover, heavy investment in conference facilities has helped the city become a major destination for exhibitions and events.

The steady decline of the manufacturing industry, which remains Victoria’s biggest income producer and employer, leaves Victoria vulnerable. Finance, insurance and property services help pick up the slack.

Perth and Western Australia

With most of the population clustered around the eastern seaboard, a glance at a Map of Australia might lead the ignorant to surmise that Western Australia is a rural backwater. But while the sparsely populated state has only has one city in the top 20 for population, ‘Sandgropers’, as Western Australians are called (after a burrowing insect prevalent in the region), enjoy a higher per-capita income than any other state’s residents, a A$500 per week median income compared to a A$466 national average.

1.7 million of Western Australia’s 2.2 million inhabitants live in the capital, Perth, for whom 4,000km distance from Australia’s two largest cities doesn’t hamper it noticeably. The explanation lies in its rich abundance of minerals and petroleum, demand for which has soared along with China’s inexorable rise.

Western Australia is thus more capital intensive and produces a higher gross domestic product per person ($70,009 against a $54,606 national average) than all other Australian states.

Barley, peas, wool, lamb and beef are major agricultural exports. In Perth, finance, insurance and property industries have mushroomed, while the smattering of towns throughout Australia’s largest state draw income from tourism, mining and, on the coast, fishing.

Western Australia overtook Australian Capital Territories to become the best performing state economically in the first quarter of 2010 thanks to a resurgence in mineral and petroleum prices. Rapid growth has led to skills shortages, so immigrating entrepreneurs could find Western Australia the most receptive state to new arrivals.

Brisbane and Queensland

Like Western Australia, Queensland’s impressive economic growth is buttressed by revenues from vast mineral deposits. There’s more to ‘the Sunshine State’ than mining, however.

Other major industries include IT, financial services, higher education, aerospace, petroleum refining, stevedoring, paper milling and metalworking, while the state government has endeavoured since the late 1990s to foster growth in the technology and science industries.

A smaller proportion of Queensland's population lives in the capital city than any other mainland state, 46% versus a 64% national average. Brisbane, nevertheless, is the third most populous city in Australia with two million inhabitants and the largest Australian economy between Sydney and Singapore.

Steady economic growth has fuelled an above average influx of economic migrants in recent decades, and 21.7% of Brisbanites are now foreign-born, most commonly in the UK, New Zealand and South Africa.

Brisbane is also the 16th most liveable city in the world, according to the Economist’s 2009 rankings. The city is a popular tourist destination in its own right, but also acts as a gateway to the rest of Queensland, which a growing number of tourists have flocked to over the last couple of decades.

Adelaide and South Australia

Australia’s fifth largest city (population 1.28 million) is a planned city, with wide, multi-lane roads constituted in a commonsense grid layout, circled by an attractive green ring of parks known as Adelaide Parklands.

But while Adelaide, which used to be known as the ‘20-minute city’ because commuters could travel from the city centre to the suburbs in 20 minutes, has inevitably fell victim to the blight of congestion like all modern cities, it nevertheless, it remains more easily navigable than most.

Situated in the heart of the country, South Australia is ideally located for east-west and north-south routes. Major industries include manufacturing, defence technology, agriculture (producing wheat, wine, wool and sheepskins), fishing, machinery, automotive, and petroleum products.

Long before the rest of the advanced world descended into financial turmoil, South Australia had to slash public spending when the state bank collapsed in 1992. The austerity measures worked, however, and the state has since recovered its AAA+ credit rating.

Admittedly the deficit has ballooned once again following the 2009 global financial crash after a few years of surplus, but deficit levels as a percentage of the state's annual output are nowhere near their 90s nadir.

One major concern for Adelaide is its ageing population. 26.7% of Adelaideans are aged 55 years or older, against a national average of 24.3%, while only 17.8% are aged below 15 compared to the national average of 19.8%.