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The Future Economy

Avatar photo by Casey Woods, Executive Director | August 25, 2015

Are you (and your business) prepared?

Part of the Economic Restructuring point requires us to “look ahead” for future economic trends based on social, technological, environmental, governmental or demographic projections.  That’s not an easy job, but it is necessary for businesses and community strategies to intersect with future economic changes rather than simply react to them.  We have some REALLY big potential changes coming in the future, and while we can’t predict the outcome or impact of each “shift”, we can discuss potential change points and start the discussion process so businesses and organizations have time (and a strategy) to adapt.  And, while I’m sure some will say “that won’t impact me”, I think that people might be surprised by the impact some trends may have on them…
1.  Tech will continue to impact the job market – Over the next twenty years, it is anticipated that 9.1 million jobs will be replaced by technology and 50% of the entire job market will be “entrepreneur based”.  The jobs that do grow (like robotic repair/design, electrical engineers, mechanical engineers, etc.) will require a level of technical sophistication.
2.  Entrepreneurship goes from “niche” to absolute necessity – As technology ascends and the job market shifts, entrepreneurs will be the only commercial group that can effectively take advantage of changes.  Markets with “micro-bubbles” that form and then are replaced by continually improving technology will highlight rapid changes.  Entrepreneurial groups that can travel from specialty site to site without being tethered to a location for short, but very intense workloads, or entrepreneurs that can continuously adapt their business model with unique products and services (especially those that are experienced based) will win.

3.  Self driving vehicles will change city design – Before you think “this is science fiction”, the first vehicle with a truly “self driving feature” is due by Cadillac in 2017.  By 2030, self driving cars are estimated to be the norm.  And, for all of those that say “I’ll never”, wait until some of your friends invite you into a vehicle where you can all face each other, mess around on-line, take a nap or get work done and see what you think. The self driving car ramifications for city design are huge.  Massive parking lots for businesses aren’t really necessary if you have a built in valet.  Vehicle ownership might look more like a “time share” or an automated Uber service.  The ability to ride to work while working (or sleeping) may extend the range in which live from their primary job, which would require communities to attract residents in a completely different way.  Some communities are even anticipating that self driving cars will change the way communities are funded; many communities currently receive a good portion of their funding from traffic violations which will invariably decrease with automated systems.  Travel based technologies have a tendency to have pervasive and lasting changes on the populace, community design and commercial applications in ways that are sometimes hard to anticipate.

4.  Integrated technology will change marketing – Right now, there are cameras in larger cities with eye and face recognition technologies that can literally alter the advertisements being shown as you are walking down the street to appeal to your individual tastes.  As data collected from individuals intersecting with media and their surroundings improves, entirely new ways to target potential consumers will emerge based on their predispositions.  This “surgical” approach to market intersection, and the ability to understand/reach-out to your target consumer will define success for a future generation of businesses.
5.  If you aren’t an effective entrepreneur, you better have a defined (and needed) trade, or the ability (and degrees) that make you useful – As technology, area demographics (due to increased mobility) and trend change more rapidly, hierarchical businesses and organizations will be replaced by those that can quickly pivot to take advantage of opportunities or mitigate risks.  If half of the economy is made up of entrepreneurs, what happens to the other half?  Robotic repair specialists, technical repair professionals, designers, engineers, scientists and others needed to physically build, repair, maintain and grow the emerging infrastructure needed for the new economy will be in high demand.  These jobs will require a level of sophistication and continual education to maintain relevance, but will have much higher pay scales than the jobs they are replacing.

6.  Knowledge will continue to double.- The amount of knowledge on planet earth continues to double every twelve months.  Think about that for a moment…  Everything that has ever been learned in the history of mankind doubles in just 12 months!  When you view things in that context, it is easy to see why we need to work to transform our economy in such a way that it encourages innovation.  When we try to project highly specific products built within industries 20 years from now, it almost seems laughable.  Twenty years ago did we ever imagine that mobile applications for smart phones would be an industry?  How about genetic manipulation of viruses as a viable medical treatment option?  My point is that we have to build the systems that allow our opportunities to take root, and provide the resources to help each opportunity to grow.
7.  Traditional funding for social systems will be harder to come by – Have you met too many people that like paying taxes?  As pressure to repair/replace infrastructure mounts and the pressure to maintain funding for large governmental areas that require ever improving technology continues, and as people struggle to adapt their economies to keep up with rapid changes, social systems will most likely lose out.  We’ve seen several states start to pull funding for arts, health initiatives, community based initiatives and a host of other non-governmental funding that wasn’t directly related to infrastructure or economic development.  If people can form private funding streams, consolidation models or work to build up preexisting foundation assets, existing social systems could provide a community competitive advantage.  However, too many social systems (or those of the wrong type) could discourage the mobility and training necessary for long term success.
8.  The climate, and energy, will provide both challenges and opportunities – Sea level rise and climate change now look like something we can only hope to mitigate, while living with their inevitable consequences.  Fossil fuel supplies will continue to decrease, and methods of obtaining hard-to-reach fossil fuels will continue to rise in costs.  The changing coast line will alter some population centers and impact some existing businesses that will obviously need to relocate.  Fuel costs will change community density requirements and the location of warehousing/large scale production facilities closer to major population centers.  Integrated solar panels will impact grid systems and some code requirements while decreasing overhead costs for high energy usage facilities, while smart states will take advantage of natural wind and solar resources to generate power.  Those states highly dependent on coal and oil for their economic success may have long term economic issues.

9.  Small scale manufacturing will create more niche items and artisan goods – We are already seeing “batch manufacturing” with 3D printing and some C & C operations.  Design and technical skill, when coupled with the decreasing price and increasing quality of printers will enhance 3D batch manufacturing over time.  Products like you see at Studio 11 or Rhinestones and Rust are hard to reproduce on an industrial scale.  Radius obviously makes their own beer and the Sweet Granada makes their own chocolate confections (although climate change can impact agricultural commodities).  Businesses that can create and effectively market unique items that are resistant to margin based strategies (cutting margins to compete on the basis of price) will have a greater degree of suitability.  Things that can easily be converted into data and sent on-line will have a low survival rates (sound, video, computer programs) except in niche markets (think of music stores that are almost completely gone now, except for a few “vintage” operations).

10.  How communities & states invest and advocate will determine “winners” and “losers” – When we’ve seen areas that struggle, the communities that find ways to continually invest in things important to attracting and keeping residents (like education, entrepreneurship and infrastructure) typically grow their economies.  Those that shrink investment in critical areas whither.  Economies are made of people, and communities that understand ways to give themselves realistic competitive advantages to improve (and then actually fund those innovations) will win in comparison to those communities that simply watch their demographics slip while refusing to change course.

The old Chinese saying “may you live in interesting times” was considered both a blessing and a curse.  And, depending on how your business, organization, community, or you as an individual adapts to coming changes, upcoming shifts could be considered an opportunity or a threat.  Businesses and organizations can’t live twenty years out, because we’ve got a lot of changes between now and then, but communities have to plan far in advance.  Organizations are right in the middle from a planning time perspective, and finding ways to innovated beyond a new fundraiser, event or print material is pretty tough for most organizations, but innovation is necessary to intersect with opportunity.  When you look
to your future, how will you thrive?
See this article and MUCH more in this week’s Emporia Main Street E-newsletter!

About the Author

Casey Woods, Executive Director

Before accepting the director position in March of 2009, Casey worked in both retail and agricultural jobs in the family businesses. A lifelong resident of the Emporia Area, Casey was a ten year volunteer for Emporia Main Street prior to his appointment as director. During that time he served as the board president and chair of the Economic Vitality Committee.

Casey also serves as a partner in PlaceMakers, LLC, a consulting firm that routinely works with both large and small communities, and their businesses, to promote sustainable economic growth through community and economic development practices. Casey consults with businesses, organizations and communities to understand their market capacity and fill vacant spaces. He has been involved in two projects that included crowdfunding as a part of their overall business funding strategies, Radius Brewing and Twin Rivers Winery & Gourmet Shoppe.


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