In Competition and Complexity: Business Trends in the Year of the Fire Horse, Asialink Business (supported by the University of Melbourne and the Department of Industry, Science and Resources) paints a clear picture: 2026 will be defined by faster change, sharper competition and deeper engagement with Asia. Based on a survey of 370 Australian businesses, the report finds that Asia remains the engine room of global growth, but operating there is becoming more complex.
For the Australian VET sector there are important skills opportunities and implications in this report. The capabilities Australian businesses need to compete in Asia are capabilities the VET system is already delivering, and with work underway by some Jobs and Skills Councils on AI and qualifications reforms, there are newer capabilities which the sector can be delivering in future.
AI stands out as the number one growth driver in the report, nominated by 45% of businesses surveyed. Across China, India and Singapore, governments are investing heavily across the entire “AI stack” – but there are differences across these key countries which the report describes as: “China is positioning itself as a global leader and rival to the US; India is developing an AI support ecosystem at scale; Singapore is a nimble, early-mover with strong government and private sector backing.” And Southeast Asia’s digital economy is also accelerating, with projections it could exceed US$2 trillion by 2030.
AI and digital capability are no longer niche specialisations. They are becoming baseline workforce skills.
Consumer demand across Asia is another powerful driver, cited by 41% of respondents. “Asia-Pacific remains the world’s fastest growing consumption region and is on track to surpass North America as the world’s largest source of private consumption by 2035.”
For the VET sector, this signals growing demand for export-facing capabilities: supply chain management, advanced manufacturing, food and agribusiness quality systems, clean energy technologies, and services aligned to Asia’s consumer markets. It also reinforces the importance of Asia capability: language skills, cultural literacy and market understanding.
The green transition ranks relatively low as a perceived opportunity in 2026 for survey respondents, “this suggests that Australian businesses may be underappreciating longer-term sustainability-linked investments.”
For VET providers, this may also be a warning sign: if businesses are underestimating green growth now, workforce planning could lag behind demand. Skills in renewable energy installation, grid modernisation, energy efficiency, battery technologies, and critical minerals processing will underpin long-cycle growth across the region.
On the challenges side, competition, regulatory complexity and geopolitical risk dominate. Businesses with international operations are particularly alert to compliance, trade rules and shifting policy settings. This has implications for VET provision (in accredited and potentially non-accredited offerings). Graduates working in businesses engaging with Asia increasingly need not just technical proficiency, but regulatory literacy, risk management awareness, supply chain resilience thinking and the agility to adapt business models.
The report’s emphasis on diversification, moving from China-centric models to broader “Asia portfolios – and differentiation across different Asian markets, also suggests demand for broader regional knowledge rather than single-market expertise.
Finally, despite concerns about slowing global growth, key Asian economies are forecast to outperform global averages over the next five years, including India (6.4%), Indonesia (5%) and China (3.9%). Nearly 80 cents of every dollar earned from Australian merchandise exports comes from Asia.
For many VET providers the opportunities are strategic and Asia should not be seen as optional. As AI, digital trade, advanced manufacturing and clean energy reshape the region, the competitiveness of Australian businesses will increasingly depend on the quality, adaptability and Asia-readiness of their VET graduates.
