Ms Gillard has told an international summit in Melbourne that Australia's dollar and terms of trade are likely to remain high for the foreseeable future.
She says that means Australia will need to develop goods and services which offer distinctive value to Asia's rapidly growing middle class.
Ms Gillard says Australia has the potential to become the region's food superpower, just as is a minerals and energy giant.
Correspondent: Joanna McCarthy
Speaker: Julia Gillard, Prime Minister of Australia
MCCARTHY: Julia Gillard says her recent visit to Singapore caused her to reflect on how much the country had changed since the second world war.
GILLARD: Singapore is now a powerhouse of Asian growth - a hub for investment, education, transport and regional diplomacy. Since 1942, its population has grown from 1 million to 5 million. Their living standards today are, on average, more than ten times higher and average life expectancy has increased by almost thirty years. Today's Singapore would have been unimaginable in 1942.
MCCARTHY: Ms Gillard says it's a story that symbolises the rise of Asia. And she says, there's more change to come.
GILLARD: By 2030, China and India alone are forecast to account for 35 per cent of global energy demand. The number of internet users in Asia and the Pacific tripled between 2005 and 2011, from 344 million to more than 1 billion. Every day, the number of people living in Asian cities grows by more than 120,000. As Prime Minister, I want Australians to understand what all this change will mean for our nation and for them. Adapting to the Asian Century requires a response from every level of our society.
MCCARTHY: Last year, the government commissioned a White Paper to look at the challenges and opportunities of Asia's rise.
Julia Gillard says Australia needs to understand that other countries are also competing for the spoils of the region's growth.
And structural change in the Australian economy - the so called 'two speed economy' generated by the mining boom - mean Australia's dollar and terms of trade will remain high for the foreseeable future. Business, she says, will need to adapt.
GILLARD: They will not do that by simply doing more of the same, or by slashing costs and quality. They will need to offer products and services with distinctive value, based on real areas of competitive advantage. Indeed, the 21st century business model is likely to be very different from the successful business models of the last quarter of the 20th century. In some cases, Australian businesses will be able to access large Asian markets through export, including through regional supply chains. In others, the business opportunities will be secured by establishing enterprises, including business partnerships, in Asian countries.
MCCARTHY: The Prime Minister cited two examples. The merger of Australian law firm Mallesons with Chinese firm King and Wood - the first alliance of a Chinese and Western law firm in the world. And GM Holden's deal with a Chinese-owned carmaker to design and engineer two new cars to be made in China.
Ms Gillard's also keen for Australia to become the region's food bowl:
GILLARD: Just as we have become a minerals and energy giant, Australia can be a great provider of reliable, high quality food to meet Asia's growing needs. In doing this, we are not just an exporter of commodities, but a partner in growing international markets and a provider of higher value products and services for the global food industry.
MCCARTHY: But Ms Gillard says Australians need to become more Asia literate if they're to take advantage of the region's growing markets.
GILLARD: Australia already possesses great specialist expertise in Asian culture, history and geography through our universities, and leading firms. And we have a dazzling array of Asian-Australian communities living here, with many different linkages across the region. We need must broaden and deepen these ' Asia relevant capabilities' across the whole of Australian society.
