Australia could fall out of the world's 20 largest economies as the mining boom winds down, a new report warns.

The report by accounting and consultancy firm PricewaterhouseCoopers (PWC) analysed how the world's economies could look in 2050.

It predicts Australia, which was ranked the 17th largest economy in the world in 2011, will lose its position within the top 20 economies by 2050.

According to the report, Australia will slip to 18th position after being outranked by Saudi Arabia in 2030, and then lose its position in the top 20 two decades later to the likes of Vietnam and Nigeria.

PWC's consulting economics and policy leader, Jeremy Thorpe, said Australia was on course to slip behind developing countries, including Bangladesh and Iran, because they were growing in population and becoming more urbanised.

"We're in danger of falling out of the G20 in large part because other countries are growing in population and they're going through that urbanisation cycle," he said.

"We are on a slippery slope to global irrelevance, if you consider the size of the economy as the ticket to play.

"It just puts pressure on us to have a long-term plan to be productive and to be innovative and to compete on a world scale even though we are smaller."

He said Australia must move away from dependence on mining and invest more in science and technology.

"We really need to have a long-term plan for innovation and that probably means investing in STEM: science, technology, engineering and maths," he said.

"We really need to see that as the future jobs for our children."

Western economies to rely on emerging markets

According to the report, the world economy is projected to grow at an average rate of just over 3 per cent per annum from 2011 to 2050, doubling in size by 2032 and nearly doubling again by 2050.

PWC's 20 largest economies in 2050 1. China 2. United States 3. India 4. Brazil 5. Japan 6. Russia 7. Mexico 8. Indonesia 9. Germany 10. France 11. United Kingdom 12. Turkey 13. Nigeria 14. Italy 15. Spain 16. Canada 17. South Korea 18. Saudi Arabia 19. Vietnam 20. Argentina

China is projected to overtake the US as the largest economy by 2017 in purchasing power parity (PPP) terms, and by 2027 in market exchange rate terms.

India is then predicted to become the third "global economic giant" by 2050, and Brazil is predicted to move up to 4th ahead of Japan.

The report said both China's and India's success would be in part due to their increasing involvement in developments of information communication technology, biotechnology and nanotechnology.

It warned the long-term growth trends posed many opportunities and challenges for businesses in the UK and other western economies, like Australia's.

"China, India, Brazil and the other emerging markets highlighted in our study will become not just low cost production locations but also increasingly large consumer markets," the report said.

"At a time when trend annual growth is projected to be no more than around 2 per cent in the advanced economies, companies seeking growth will need to look increasingly to these emerging markets."

As such, it said deeper understanding of foreign rules, regulations and customs will prove vital in the future.

GDP growth predictions see climate warm by 6 degrees

The report said governments around the world would also face challenges regarding energy use and climate change.

"As our analysis shows, a 'business as usual' approach based on our GDP growth projections could see global warming of 6 degrees Celsius or more in the long run," the report said.

"The UN's 2 degrees Celsius objective seems increasingly out of reach given the lack of progress on decarbonisation since 2000," it added.

It suggested a "more plausible and affordable 'gradual greening' scenario" may help to offset the effects.

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