Tasmania's employment growth has been disappointing given the wider state economy's strong performance, according to new analysis.
It also said better using older workers would be crucial for future jobs and economic growth.
Not enough of the extra residents being added during a period of stronger population growth were "showing up as extra jobs", Deloitte Access Economics said in its latest quarterly Business Outlook report.
"Indeed, even with a period of stronger (economic) growth, the state's unemployment rate hasn't seen much of a downward shift."
Deloitte said the divergence between economic and employment growth relate dto improving productivity.
" ... a shift towards higher productivity industries is part of the story," the report said.
"Agriculture in particular is playing a role here, with high value exports bringing in more dollars than jobs.
"Amid all the good news of the moment - and there is plenty - participation rates remain a real concern.
"They haven't lifted much over the course of the recent purple patch and remain well short of the national average."
It said that must change if Tasmania was to reach its economic potential.
"With an older population than that of the the bigger states, Tasmania will need its older workers to shoulder a bunch of the load when it comes to greater workforce participation," it said.
Deloitte said Tasmanian incomes had improved significantly compared to mainland incomes in recent years.
"Tasmanian household disposable income per capita was 83 per cent of the national average as recently as 2014, and now that ratio sits at 93 per cent," it said.
It said factors which had gone right for Tasmania included faster population growth, ageing having positives as an economic driver (helped by the ramping up of the NDIS) and growing Asian demand for travel, foreign education and "clean and green food".
Deloitte said Tasmania's economy had had a "beautiful run" and it wasn't over yet.
"But some fundamentals remain fragile and, all in all, we expect a gradual return to regular transmission following what has been an exceptionally good run," it said.
"The state's growth may therefore be slowly headed back towards where it usually sits, a little below national rates."