Adventure tourism, offshore longline and rack aquaculture, specialist agriculture and horticulture, fishing, landscape construction services, and recreational retailing have been identified as opportunities to diversify the South-West economy.
The findings were released by the Bankwest Curtin Economics Centre in its report Future-proofing the WA economy: A roadmap to industrial diversification and regional growth.
Report co-author and BCEC director professor Alan Duncan said the report contributed an important new evidence base to inform the state's diversification strategy.
The report maps a pathway for the state's decision-makers to ensure every Western Australian benefits from the opportunities presented by new and developing industries.
It found new opportunities in the South-West could create 7,750 jobs and contribute $769 million to the WA economy.
Looking at all of WA, new sectors included defence, lithium, big data and tourism that could create more than 163,000 in WA within the next five years.
Professor Duncan said the South-West already had a strong and distinct proposition from its combined strengths in tourism, horticulture, agriculture and viticulture.
He said the strategy to developing the South-West's economy was about refining and enhancing the product to already existing offerings.
"There are still opportunities, for example in tourism there is a real opportunity for the South-West to refine and further enhance its products through niche or partner tourism offerings," he said.
"The South-West is in a super position in that regard."
Professor Duncan said aquaculture was another strong opportunity in the region which was currently localised and lacked coordination.
He said opportunities could be achieved by pulling together aquaculture or fresh produce from agriculture to secure better access to international markets.
"To be able to capitalise on this growing market, the Asian market in particular wants fresh and ethically sourced produce."
Mr Duncan said WA's economy was more volatile than other states because of its reliance on resources and had the largest concentration of industries, being mining.
He said one of the biggest factors creating volatility in WA's economy was that a big share of the market faced external pressures like price fluctuations and trade wars,
"It has an impact it feeds through to volatility in jobs and regional jobs, it is really quite impactful," he said.
Professor Duncan said building an effective regional development policy was something that needed to be evidence-based and founded on a coherent and integrated strategy between the regions and state.
"There is really such a strong knowledge base in the regions that really should be brought on board to develop a regional development strategy," he said.
"The strategy needs to be informed by a credible base for particular sectors, it cannot just be about picking winners, it needs to be about identifying those industries which have a strong, sustainable long term growth."
Professor Duncan said infrastructure and connectivity were key to a diversification strategy and more so for regional diversification strategies.
"Connectivity could be transport or digital connectivity," he said.
"Securing connectivity as a foundation for incubation growth of new businesses was the same in any area of regional WA."