Washington likes to play guessing games with the economy, placing bets on certain industries by supplying them with luxurious tax giveaways or no-fault loans. But the jobs of the future are at the mercy of giant, global forces that are largely out of our control. To get a feel for the known unknowns, I spoke with Bruce Katz, director of the Brookings Metropolitan Policy Program, on the metaforces driving the next economy. He named four.
Global Demand. In the 20th century, the United States was the world's top producer and consumer. But as China and India join the global middle class with a combined population eight times the size of the U.S. (and that's not to mention their fast-charging cousins, like Brazil and Indonesia), the new slogan for successful companies will be "Go East Young Man." Firms that can open overseas wallets will see the highest gains in productivity, wages and growth.
Low carbon. Clean energy isn't just an environmental crisis. It's a business opportunity, and an economic game-changer. Oil is a scarce resource in a world with rising need for fuel and electricity, and the countries and companies who develop the most simple, affordable and useful alternative energies will find extraordinary demand for their product. A low carbon economy means more than "green jobs" like building caulkers and turbine researchers. It also includes IT specialists to monitor those buildings' energy usage, bioscientists who find new ways to turn waste into energy, and even financial firms who specialize in capitalizing the most promising projects.
Innovation. This is one of the major questions underlying every economic idea that comes out of Congress and the White House: Where are the next great ideas coming from, how can they make Americans more productive, and how can we make sure that those ideas are conceived, developed and capitalized in America? This is a question with a thousand possible answers, which is another way of saying it is a question with no answer. But Katz is optimistic. "I think we're in a period of rapid technological acceleration," he says.
Demographics. As revolution burns in Egypt, news reports remind us that the kids are the kindling. Nearly one in four people living in the Middle East is between 15 and 24. Meanwhile, the developed world suffers from the opposite problem. One of out four people in Japan is over 65. In the U.S., 75 million baby boomers in a population of 300 million are hurling toward retirement. The fastest growing jobs for low-skilled labor (the majority of jobs in the U.S.) are in personal home and health aides. Is it worthwhile for a productive economy to dedicate a big chunk of its human capital simply to keeping old people alive? The aides and the elderly would respond with a firm: YES. But that's not keeping some companies from finding ways to make pills and bots that can do a home aide's work better, cheaper, and 24 hours a day. "The Japanese are more innovative about aging," Katz says. "They see this great need."