In consulting with clients, DECON First has learned that long run forecasts are as accurate as politicians’ promises. Rather DECON First works with clients to identify current emerging trends in society, knowledge, culture, industry, government, and economic structures that represent business opportunities for tomorrow.
Given rapidly changing technology and global conditions, it is nearly impossible to generate accurate long run projections. For example, despite having a fine economist and the most recent and accurate data, the Delaware Department of Labor (DDOL) has not had great success in its required long run projections of employment.
In June of 2005 the DDOL predicted that by the year 2012 Delaware would have 478,550 total jobs (excluding the self-employed). The actual total in 2012 was 419,500. In April of 2007 the Dept of Labor predicted that by the year 2014 Delaware would have 477,700 total jobs, compared to the current total of 436,600. In June of 2008 the Dept of Labor predicted a total of 479,300 jobs by 2016. Who could have anticipated the widespread impacts of the residential mortgage bubble bursting?
Following, according to DECON First, are some of the major emerging trends and the impacts they are already having in Delaware.
– The increasing impact of technology, creating more opportunities for people to communicate, learn, work, and do business
– The increased market share of retail electronic sales stalling retail trade job growth and sales at traditional brick and mortar stores
– Electronic transmission of credit transactions reducing the need for labor in the credit card industry
– Internet banking, ATMs, depositing checks by cell phone photo reducing the demand for employees in depository banks – Reduced demand for less skilled workers and increased demand for educated workers, especially in computer systems and design
– Growth in regional distribution centers moving Internet purchases from producers to consumers
– The demographics of a growing elderly population
– Financial services growth in portfolio management, investment and brokerage services
– Healthcare growth in nursing and residential care facilities, home care, rehabilitation centers, EMT services – Lower current income with higher wealth means slower growth in state personal income tax revenue
– Increased dependence of the healthcare industry on Medicare
– Increased labor force participation among seniors
– High level of volunteering among seniors
– House remodeling to accommodate less mobility
– Increase in home delivery services…groceries, medications, prepared meals
– More user fees and tax breaks based upon ability to pay rather than age
– The expanding gap between the haves and the have NOTs
– Rising demand for rental housing as the home-ownership rate falls
– Rising out of wedlock births among population with a high school education or less due to less earning power
– Pressures on public schools from less stable children from single parent households
– Falling labor force participation among those with less education due to falling real wages and lack of a career path and meaning in service jobs
– Soaring enrollment in Medicaid, food stamps (SNAP), disability, welfare
– Growing market shares for price sensitive outlets such as warehouse stores and fast food restaurants.
– Using higher volume to compensate for lower prices.
– The exploding cost of government, with a continuing inability to pay for these costs from current income
– Extraordinary levels of Federal and local government debt, including pensions, guarantees an increase in taxes…that will reduce consumption spending
– Cuts to be made in government entitlements and social services
– Increased rent seeking (who you know rather than what you can produce) as the scope of government spending and regulations expands…growing corruption among public officials
Delaware businesses may not be able to know what the state’s unemployment rate will be six months from now, but they can restructure to take advantage of the opportunities available in these and other major emerging trends.
DECON First uses economics to strengthen Delaware business. This is accomplished by providing accurate, objective, and relevant analysis of the economy, coupled with best practice recommendations that deliver new customers. The detailed analysis for the Indicators above is found in the DECON First monthly Delaware Economic Review (www.deconfirst.com). Direct questions to info@deconfirst.com
