See your future… be your future—this advice from the movie Caddyshack may evoke laughter in many thinking of the actor Chevy Chase providing guidance to a young caddy in this 1980s film but understanding future trends has a major impact on economic development. Demographic and economic changes coming matter to local and state policy makers, business leaders and economic development officials seeking to survive a global economy. Five trends will drive the economic success of local and state economies in the coming year. This trends include:
- Domestic Energy Production
- Assault on Economic Development
- FDI Growth
Automation is not a new topic. It has been making America’s manufacturing industry the most competitive and productive in the world but it is also played a large part in dropping the number of manufacturing jobs in the U.S.. About 9% of the US workforce is in manufacturing and this total has dropped from over 30% in the 1950s. By 2035, 47% of U.S. jobs might be at risk due to advances in computers, automation, and artificial intelligence. Robot industry experts estimate the average fast food establishment will switch 1.2 workers from counter service to other tasks as remote order taking, delivery by robotic applications grow with the tipping point in 2020
Restaurants, like the retail banks use of ATMs reducing the need for bank tellers, will become less of a job source. E-commerce purchases over trips to the mall will create Grayfield Malls and driverless cars and trucks will transform our roadways and eliminate Ms of transportation related jobs.
The importance of the Millennial generation will continue. Millennials are the largest population pool in America right now.
This large pool of workers is a substantial economic asset for the nation and regions are battling to retain and attract this generation much more focused on quality of place. Millennials like mixed use development patterns, are prone more to walk, bike or take an uber than drive their own car. Big towns and small looking to recruit this generation need to revitalize their Downtowns into walkable, mixed use developments where people can live, work and play.
America remains in the Age of Energy. While low oil and natural gas prices have slowed domestic energy production, the explosion of shale oil and natural gas is making America energy independent and creating a substantial opportunity to access reliable and cheap energy to retain and attract energy intensive companies in heavy manufacturing and technology industries where the cost of energy is a major factor when deciding where to locate.
A disturbing trend driven from the politics of the left and the right are attacks on economic development organizations. The Speaker of the Florida House is attacking Enterprise Florida and legislation actually passed the House that would eliminate the organization. Economic development organizations should watch these developments closely, develop economic development strategic plans to justify the use of tax incentives and to build stronger connections between companies and elected officials.
Finally, a major new growth opportunities lies in attracting Foreign Direct Investment (FDI). China, who spent two decades sucking out American manufacturing jobs, now is shifting production and manufacturing facilities to the United States. In fact, in 2016, China’s FDI in the U.S. was up 359%. China’s manufacturing economy is the size of the American manufacturing economy. Rising wage rates and an economic slow-down coming to China are driving Chinese money to the stability and strength of the U.S. economy. Regions looking to grow should be sowing the seeds for a Chinese invasion.
Trends cannot be stopped but can be prepared for. Communities adopting strategies to capitalize on these trends will be the economic leaders for the next several years.