Tuesday, April 09, 2002
Engines for Economic Growth for the ‘Oughts -Despite the possible oil price hikes, I’m looking for the rest of the decade to have fairly good growth. Economic growth will either require more people working or the existing workers to be more productive. Look for productivity to be the driving factor, but we should continue to see a trend of older Americans working longer and retiring later. This will make promotion slower for younger workers, as their elder’s won’t be getting out of the way. As seniors stay healthier longer, they’ll want to work some to stay active and the economy may need them to retire a bit later to ease the burden on the rest of society. We may need to look at immigration as a way to help support the Baby Boomers as they hit retirement age. Bringing in a crop of younger immigrant workers will help reduce the worker-to-retiree ratio and also help bring in a crop of service and health-care workers willing to work modest jobs looking after Granny. While I don’t have a crystal ball or a word of knowledge to tell what the next decade will bring, there are a number of on-the-horizon technologies that could drive the economy for the rest of the Oughts (what I’ll call this decade-the last decade was the Nineties, what’s this one?) as the PC helped drive the 90s. I’ll take a stab at looking at a few. Desktop computer technology has been fairly well exploited, so I don’t expect the PC industry to be the driving force it was in the 1990’s. I’d look instead to see innovative applications of automation to help improve productivity. One intresting application that’s come up the last few years is automatic billing of tolls, where cars will get scanned as they pass through the toll plaza and the toll put on the driver’s tab, not having to stop to pay the toll. Another innovation that’s made it to our local Meijer’s is self-service checkouts, where the shopper scans the items themselves and pays for it through either vending-style cash receivers or pay-at-the-pump-style charge card sliders. This system will allow one cashier to oversee four checkout lines, saving big money over time. Wireless communication between cash registers, vending machines and smart phones or PDAs will be another way to make transactions easier. People would move through lines faster if the could type in an acceptance over their cell-phone rather than pull out cash. Such Pocket Pals could also double as keyless entry devices for homes and offices as homes become more automated. They might also double as Walkmen, as MP3-style music and satellite radio and TV become more common. It will be interesting how this area comes out, but there are a lot of applications that are very feasible. Also, broadband delivering Internet TV video will come of age someday-it’s been a year away for five years and that year will eventually come. Health Care will be another growth industry. With new cures coming on line, we’ll spend a higher percentage of our GDP on health care. This will cause a lot of politics to be heated. Medicare taxes and monthly premiums will wind up going up. Companies will be forced to raise copays or lower salaries to meet the higher costs. However, if these new treatments make life longer and better, spending extra on them may well be worth it. Nursing care and other gerontology outlets will be a touchy subject, as the Baby Boomers will be having more age-related problems-the companies that provide unique solutions to those problems will do very well. I’m expecting an overhaul of the auto industry in the next decade. New energy sources, such as fuel cells and electric motors are coming on line, and I’d expect some early commercial uses of autopilots (at minimum a crash-protection breaking system) by the end of the decade. GPS systems and satellite radio will become more standard. I wouldn’t be surprised to see one of the US Big Three to assume room temperature by the end of the decade, as these developments might leave an unprepared company in the dust. Biotech will be another growth industry. This will go hand-in-hand with the health-care sector, as new drugs and new drug delivery systems will be brought on line. Nanotech might be a factor as well, as new surgical techniques using nanobot surgeons could be developed to repair arteries or attack cancer cells without cutting the patient open. There will be an ongoing fight with people fearful of some of the genetic tinkering involved, but the development of better crops and better drugs will be an irresistible lure. Power Generation will be a sleeper industry. Look for power cells, wind and solar power to become a larger factor in electricity production as the decade progresses. This should result in a major alteration in the electric utility business. There might be more ugliness as this market deregulates as people will fight over how to get rid of the big energy mastodons and who’ll get to eat the sunk costs. Terrorism, Luddites and lobbyists from losing industries might get in the way of this change, but there are a number of avenues for growth that should keep the US perking along.
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