Twitter   RSS   Email  
 
Home
Admin

 How the Global Economy is Dependent on Christianity


 Why America May Never Recover From the Recession


 Save Money Homeschooling


Alternative Energy Revolution and the Future of the Economy

By: Steve Johnson

6/23/2008 - 68 Comments

The economy is under a lot of stress. Foreclosures and bankruptcies are everywhere. As people get desperate, they will be looking for new markets creating new jobs.

As the stock market drifts downward, adding to the hardship created by the housing market decline, the question of how long this is going to last becomes more of a concern. The previous two recessions both lasted less than a year, giving many leaders confidence to talk about the coming rally – which always seems to be right around the corner.

The entire world is hoping for a rebound of the US economy as the effects are being felt around the world as many nations are already suffering from quickly rising food and energy prices. The primary cause of world-wide inflation is due to the weakening of the dollar, which can be mostly attributed to US Federal Reserves’ monetary policy and financial manipulations. But, the US monetary policy has also saved the financial markets from a major collapse that would have caused much more financial distress if they had not intervened. For example, the Fed saved Bear Stearns from bankruptcy last month.

America is still hoping for the best, putting their faith in the financial system that has revived the US economy many times in the past.  The entire world has their faith in America and faith in America is hard to shake. In fact, even if we are headed for a depression, faith in America will remain – and rightly so.  America is the most innovative place in the world. Innovation may have been weak over the past decade as perhaps we have gotten a bit lazy enjoying our booming economy, while outsourcing everything that looked like work. But now the world is desperate for innovation as rising prices are holding many economies hostage.

Peak Oil

The ‘peak oil’ theory is highly debated, but the idea is that the world supply of oil has peaked and will only decrease into the future.  Peak oil or not, it’s not likely that oil prices will go down and here is why. The US can't reduce its demand by very much because the entire economy is built on consuming the current supply. At most, America would be able to cut back 5%. Mean while, the rest of the world is consuming more and more oil as China and India's middle class continues to grow as their economic growth rates are running at 8-12%. Then there are the supply problems with OPEC and the fact that few new oil fields are being discovered. The fundamentals of supply and demand will continue to support high oil prices. If you throw in the weakening dollar, oil prices will perhaps continue to rise for years.

The new economy is now upon us with 70’s style inflation and very slow growth (otherwise called stagflation). These economic conditions will force new innovation. As soon as the foreclosures and bankruptcies level off and America realizes that we have lost our houses and toys, she will awaken desperate to rebuild. We are on the verge of an ‘Alternative Energy Revolution’, similar to the industrial revolution of the 19th century that drastically changed agricultural, manufacturing and transportation.

The politicians are already planning to invest billions into new alternative energy sources to help reshape the economy as the world transitions away from cheap oil. 

Agricultural

The US has some of the best farmable land in the world and as energy costs continue to climb and the world population continues to grow, food prices will only go higher.  The high quality of food produced in the US will also help support higher prices, bringing more money into the country.  Farming will once again become a vibrant (highly profitable) industry. 

Manufacturing

The competition of the global economy has shifted labor intensive jobs from the US to nations with larger populations of unskilled labor. This shift has freed up US workers to focus on research and development of new ideas.  Over the past 20 years, the US has become a knowledge producing economy - selling ideas and inventions to improve productivity around the world.  US innovations are behind the increase in productivity around the world with advancements in technology, medicine, manufacturing, agriculture, transportation, education, national defense and many others.

The slowing of the US economy will create the perfect opportunity for a revival of the US manufacturing sector.  As the value of the dollar falls against the currencies around the world the US manufacturing sector will become more profitable as our products become cheaper to export.  At the same time, layoffs from the slowdown will free up US labor. But, because of the high cost in moving equipment and management, existing manufacturing infrastructure will probably not be moved back to the US.  The US labor pool will still be much lower than emerging nations like China and India.  It is much more likely that the growth in manufacturing will primarily be with new product development in new markets, while existing products continue to be manufactured elsewhere. 

'Green Energy' and 'Save the Plant' – are most likely to be the hottest new markets.  Israel, who has been developing ‘water filtration systems’ for many years, has already projected an increase in sales from 2 billion to 10 billion over the next few years, as the need for clean water continues to climb around the world.  Former Vice President Al Gore, who won the peace prize in 2007 for his efforts to promote the environmental changes needed to address the coming effects on the planet, will create a lot of momentum for the industry.  He also joined a venture capital group that invests in new companies that are building technologies aimed to reduce carbon dioxide emissions.  Gore will continue to bring a lot of political attention to the market, which will drive new legislation to help emerging companies in the ‘green’ industry.  As energy prices continue to climb and natural disasters increase, this industry will be propelled by public consensus. 

Transportation

Transportation will change as the price of oil continues to climb. The US consumer will soon be unable to afford to drive to work.  The primary change will be in new technologies such as cars running on alternative energy sources.  The next generation of vehicle will be much more efficient.  The auto industry may even start creating new specialized vehicles, rather than all-purpose vehicles like the popular mini-van.  For example, a highly efficient small work vehicle designed to travel no longer than 30 miles before charging, could be very useful. 

The Internet

The Internet is the primary innovation of the information age and will continue to grow as it delivers goods and services to customers (wherever they are) at reduced marketing and advertising costs.  The Internet is an excellent facilitator of the global economy, because it has no political agenda of its own.

The Internet has quickly becoming the central platform to share information around the world and has become a major catalysis for the United States to export (sell) our knowledge – which is why the largest Internet companies have been created in the US (eBay, Amazon, Yahoo and Google).  The internet will continue to grow with a tremendous amount of potential for goods and services for years to come.

Global Fight for Talent

The top companies of the world that create entire industries from breakthrough technologies are expanding their reach for top talent across the globe.  From the United States to Saudi Arabia, countries are recognizing that human capital is crucial for future economic growth.  More and more nations will be catering to the educated with incentives like tax breaks and access to educational grants, in a move to secure the top talent of the world.  The two fundamental drivers of the 21st century global economy will be oil and skilled capital.

Education is the fundamental enabler of a knowledge economy.  Well-educated and skilled people are essential for creating, sharing and using knowledge effectively.  The United States educational system has been declining for 20 years (producing less engineers and scientist) – to the point where America has run out of well-educated people.  In the quest for more knowledge workers, the US has tapped into emerging national like India for engineers and scientist, but could still use more.

Engineers and Scientist will be in high demand for years to come, as the desperation for new inventions intensifies with the growing problems around the world like war, disease, hunger, natural disaster and shortage of water.

Conclusion

These are the industrial changes that I see coming in the next few years. Millions of jobs are being lost as crumbling industries like housing, mortgage and financial contract, just as millions of new jobs will be created in these new emerging industries.

Now is a good time to invest or find a job in the industries that will be driving the economy into the future.

Copyright © 2017 PennyJobs.com. All rights reserved.

The Hyperinflation Survival Guide: Strategies for American Businesses

The Hyperinflation Survival Guide offers strategies for business managers to keep their enterprise afloat in the midst of runaway inflation. Within this succinct little book are a plethora of sensible business strategies for American businesses. If businesses are to survive they must effectively counter and minimize the ill effects of rampant inflation and/or hyperinflation. The utmost prudence is required in managing accounts receivable, inventory, and production at such a time. A sudden inflationary economic downturn may very well bring a business to its knees leading to insolvency.

Gold: The Once and Future Money

Governments and central bankers around the world today unanimously agree on the desirability of stable money, ever more so after some monetary disaster has reduced yet another economy to smoking ruins. Lewis shows how gold provides the stability needed to foster greater prosperity and productivity throughout the world. He offers an insightful look at money in all its forms, from the seventh century B.C. to the present day, explaining in straightforward layman’s terms the effects of inflation, deflation, and floating currencies along with their effect on prices, wages, taxes, and debt.

Freedom: America's Competitive Advantage in the Global Market

Gamble argues that globalization brings far more benefits to the U.S. economy than it takes away. Gamble shows that both Europe and emerging economic powers like China and India have serious long-terms problems linked to their cultures, political structures, occasional instability, and state ownership of companies. These and other factors will eventually put a brake on the economic growth of hot emerging economies. The fundamental protections of property and free speech, a culture that promotes and rewards entrepreneurship, banking policies that make capital easily available, are still more supportive of economic growth and wealth creation than can be found anywhere else.

Seeing What's Next: Using Theories of Innovation to Predict Industry Change

This book will help to understand what new innovations with survive and which will fade away. If your investing or starting a new business, this book is a must read. Clayton argues that disruptive innovations typically introduce new benefits to a market, usually centered on convenience, simplicity, customization, or affordability.