Are life-changing innovations a thing of the past in the United States? While today’s technology seems to advance in leaps and bounds, one economist believes it won’t change the fabric of the average American’s life the way inventions like electricity, indoor plumbing and the elevator did in the 20th century.1
Yes, the internet is an amazing resource, and smartphones are nearly ubiquitous, but in terms of economic growth and productivity, they have not contributed as much as you might expect. Social media and infinite sources of information actually may serve to reduce our productivity both at home and at work.2
Nearly everyone can think of ways innovations have increased productivity, whether it’s looking up information online rather than consulting the library or using modern kitchen appliances that make cooking prep and cleanup much easier. However, this increased technology and efficiency may not translate to any improvement in one’s financial situation. While technology and online tools can allow you to better monitor your finances, please feel free to contact us for help in assessing your current retirement income strategy. As an independent financial services firm, we help people create retirement strategies using a variety of insurance products to custom suit their needs and objectives.
Today, two of the fastest-growing industries in the U.S. are construction and computer systems design.3 While both of these disciplines certainly have the capacity to improve people’s lives and productivity, they are not likely to present the quantum leap of, say, refrigeration.
One industry poised for rapid growth is satellite manufacturing. While costly in its upstart, prices are likely to align with greater demand for navigation, transportation management, disaster management, military intelligence and telecommunication applications.4
Some say the advancement of automation will replace jobs, but proponents are quick to point out that automation can help the American workforce become more productive. Amazon is a good example of a company that has embraced automation yet continues to offer more new jobs.5
What’s interesting is that while we measure economic growth on a national scale, contributions are not balanced. Certain regions, states and metropolitan areas contribute more substantial gains to the U.S. growth rate than others. For example, the labor force in Massachusetts is currently growing at the fastest rate in the country, having added 300,000 more jobs in the past 10 years. This is primarily because the state is home to a variety of strong and growing industries such as health care, financial services, high-tech manufacturing and higher education.6
And while controversial in its mix of documented and undocumented workers, the Latino population is considered a major contributor to U.S. GDP. Between 2010 and 2015, the Latino workforce increased by about 2.5 million while non-Latino workers shrank by about 4,000. This may be explained in part by the willingness of this demographic to pursue a higher education. Latino college graduates grew by 40.6 percent in that same timeframe, compared to 13.6 percent for non-Latinos.7 Economists tend to agree that the better educated the workforce, the higher a country’s economic growth prospects.
1 Knowledge@Wharton. Feb. 3, 2016. “Are America’s Best Years of Innovation Over?” http://knowledge.wharton.upenn.edu/article/dazzling-yet-disappointing-why-u-s-growth-productivity-will-underperform-the-past/. Accessed Sept. 4, 2017.
3 Mary Ellen Biery. Forbes. April 9, 2017. “The 10 Fastest-Growing Industries in The U.S.” https://www.forbes.com/sites/sageworks/2017/04/09/the-10-fastest-growing-industries-in-the-u-s/#56fdb5471ef2. Accessed Sept. 4, 2017.
4 Business Insider. Sept. 4, 2017. “Satellite Bus Market Worth $13.64 Billion USD by 2022.” http://markets.businessinsider.com/news/stocks/Satellite-Bus-Market-Worth-13-64-Billion-USD-by-2022-1002306432. Accessed Sept. 4, 2017.
5 Steve Cousins. TechCrunch. Sept. 4, 2017. “Can robots help the U.S. get its economic mojo back?” https://techcrunch.com/2017/09/04/can-robots-help-the-u-s-get-its-economic-mojo-back/. Accessed Sept. 4, 2017.
6 Shira Schoenberg. MassLive.com. Sept. 4, 2017. “Study: Massachusetts has fastest growing labor force in US.” http://www.masslive.com/politics/index.ssf/2017/09/study_massachusetts_has_fastes.html. Accessed Sept. 4, 2017.
7 Mark Bloomfield. The Hill. Aug. 14, 2017. “Look to Latinos to drive US economic growth.” http://thehill.com/blogs/pundits-blog/economy-budget/346464-latinos-could-lead-us-out-of-economic-malaise. Accessed Sept. 4, 2017.
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