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RE: Where will growth come from?


RE: Where will growth come from?
by flynn23 at 2:18 pm EDT, Jun 16, 2009

Rattle wrote:

Decius wrote:
In the early 90's recession I'll bet everyone on MemeStreams could have predicted a telecom boom. Three and more years ago MemeStreams was predicting a housing crash. If there was an opportunity for growth, you'd think someone here would be tuned into it. I'm not. With gas prices back to normal I don't see the boom in green technologies and urbanization that many people imagine. Political will doesn't create economic opportunity. It comes from pent up demand. The only thing I think we have pent up demand for right now is retirement savings.

I don't completely disagree with the sentiment

Neither do I. But I wish more people would consider alternative ways of dealing with our problems.

but I do not think it is wise to dismiss the whole green technology thing.

Agreed. Although I don't think those are necessarily good investments anymore. The government is going to spend an awful lot of money nudging us in this direction and the homebrew market is already there. It's the 21st century dammit. We need to be doing this just because it's more efficient and advances a lot of other production techniques (materials science, production and distribution efficiencies, etc). As the old world passes, a new world will fuel some growth. Not unlike replacing all your cassettes and vinyl with ceedees. But the ROI's on these stocks and the general dollars spent will be poor, since we're basicaly borrowing very expensive money to pay for all of this stuff.

Gas prices might be down, but I'm still thrilled I own a Prius because it's making my bottom line much better than it would be if I still had the SUV. No one who bought a hybrid during $4.00+ gas regrets it now.

I dunno about that. I think EV's will become a very large component of the market, but we're in very infantile stages of this market (even though they've been around since the dawn of automated transportation!). The Prius is perhaps the ugliest and poorest engineered car on the market, despite the fact that it has high owner ratings and a lot of gizmos. It does not advance the market as much as it takes advantage of a marketing zephyr. Considering the price premium for a new hybrid, you're much better sticking with your already purchased vehicle.

Furthermore, it will be technology and products we will make money off selling overseas. Unlike the housing boom, it will not be a solely domestic effect that only gets reflected in the financial companies.

I agree with this to some degree. I think trade policy should not be afraid and should not be protectionist. But I do think that there's some room and capacity for continuing to make real things in our own backyard. Services and processes are what the US economy is best at. And exporting those will be the key to economic prosperity in the future. Teach the world. But it's important to keep capability and knowledge of how to build things, otherwise, we're cruising for disruption by other growing economies.

If the new products and technology we create don't follow the standard boom-bust cycle it would be a good thing. It isn't that far fetched of an idea that the technology leaders would be the first to figure out that the big-bang theory of new market opportunities isn't as desirable a model as steady and reliable growth, even if it's slower. Slow is the new growth model.

dunno about that. Investment chases large returns. Large returns are created when your growth rate is faster than something else's. Fast growth rates are created when there's an arbitrage of supply and demand. That gets created when a market has pent up demand and little supply. That happens in the services space when you can compete on quality, outcomes, or providing an experience that cannot be achieved in other ways. It also comes when you dump a tremendous amount of customers into a market, ie Africa. If Africa would stop being subsidized by douches, then it could develop into a very sizable and dynamic market for a lot of things that the south east Asians don't really care about anymore.

Or another way to look at it: We really don't have a choice. When it comes to energy, we've got to squeeze the stone. Anyone who isn't hip to the fact yet, will be within a decade or so. If you think the housing and tech bubbles were tough suds, just wait until the century long energy bubble starts to bust.

That's true and it will be ugly. I do think that "growth" will be fueled by the conversion from fossil fuels to more sustainable sources, but that's a 20+ year migration and I have a hunch that we don't have that much time to play with. It'll get ugly.

But before that happens, you have other problems that will crop up. Namely the access to clean water. Access to affordable health (not just health care). Access to affordable security. And quality education. These are not just western problems now either. These are global problems. There will be opportunities in all of these for growth. But given the rising ability of ivory tower institutions' ability to scuttle innovation in their favor, I doubt any real solutions to these problems will have a chance to flourish. So returns on these investments will be apparitions and the respective markets will continue to suffer.

RE: Where will growth come from?

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