The building industry is improving, visitor numbers are increasing and so too is the amount they're spending, he told a Launceston Chamber of Commerce function on Thursday.

Dairy and beef production promises to grow and Tasmania's agriculture industry is well-placed to take advantage of free trade agreements with China, Japan and Korea.

But Mr Eslake is quick to point out that a more prosperous future is not one that will fall into our lap and there are plenty of areas that need improving.

Tasmania has a less productive workplace than other states, with people working fewer hours than their mainland counterparts.

When you crunch the numbers and realise that the disparity equates to about 20 days of work a year, or an entire month, it is easy to see why Tasmania lags behind other states.

Part of that lower productivity can be ascribed to an older population but mostly it is the state's lower educational outcomes that are the reason.

Tasmania's percentage of people with university degrees is below the national average and the state has the highest rate of people with no post school qualifications.

As Mr Eslake says, this matters, because the evidence clearly shows that the more education a person has, the more likely they are to be employed and be productive.

Excuses such as having a higher rate of socio-economic disadvantage are spurious because the educational outcomes are below the national average across all levels of society.

Tasmania has a great story to tell and it must diversify its economic base. It can no longer rely on the volume production of commodities based on price without sacrificing wages or safety.

The future depends on the production and marketing of goods and services that are highly differentiated and that people will pay a premium for.