If the business and financial communities think a lot has changed in the past few years, it’s nothing compared to changes predicted for the future.
That was the presentation made Monday to the Rotary Club of Jacksonville by Maureen McAvey, executive vice president of the Initiatives Group of the Urban Land Institute.
McAvey, who was visiting from Washington, D.C., previewed a study conducted by ULI to identify trends in business growth and related trends on a national and global scale.
“We are in an era of incredible change. It’s equivalent to when we went from an agricultural society to an industrial society,” McAvey said.
The single most influential factor is globalization, she said. The boundaries between the countries of the world began to open 30 years ago with the exchange of capital. In the past 10 years, the workforce also has globalized.
“At first, it was just labor. Now it’s medicine, accounting and law,” said McAvey.
“I believe we are just at the beginning of a change that will last 20-30 years. We have to rethink everything we do,” she said.
Technology also has caused a great shift in how the world and everyone in it does business. McAvey gave as an example the recent political revolutions in the Middle East.
“The ‘Arab Spring’ wouldn’t have happened without cellphones and technology. It allows everyone to have instant information,” she said.
Universal access to information over the Web brought another reality.
“Privacy is gone. Sooner or later, information comes out,” McAvey said.
America’s population demographics also are changing to a new reality that will have far-reaching effects on business and the economy, she said.
Two groups are gaining market share: the “baby boomers” and the “Gen Ys” also referred to as the “millennials.”
“The boomers are just now turning 65 – it’s 81 million people who represent 27 percent of the population,” said McAvey.
The population segment of ages 16-33 is becoming the largest single demographic group in U.S. history, projected to include more than 85 million members, she said.
In addition to native-born Americans, that group will be bolstered by immigrants who come to America to be educated, and then remain in the country after starting a job or a family, said McAvey.
Another trend embraced by the youthful demographic group is to live at home longer.
“When the Great Depression generation came back from World War II, they were experienced in making life decisions. They grew up early. Now, the 20-25-year-olds didn’t rebel against their parents and they’re still living at home,” McAvey said.
“They have their own room, a car, a TV and a refrigerator. Why would they leave home?” she said.
The number of people living in multigenerational households is also expected to increase, with people sharing living space with their children and their parents, who have either lost a spouse or can’t support themselves on government retirement benefits.
ULI also forecasts a major shift in the housing market. With the virtual elimination of new construction in the past few years, a predicted increase in demand will have great effects.
“We will be 6 million housing units short and prices will go up due to the shortage,” said McAvey.
ULI projects that in 15 years, about 63 percent of people will own a home, compared to the peak of 70 percent before the recent economic recession.
The “anchor institutions” for the future, she said, will be health care and education.
“They largely can’t go offshore. They can and will remain in the U.S. They need capital and a friendly business climate,” McAvey said.
In terms of venture capital investment, she said the U.S. still has an edge, but that’s not guaranteed to be the case forever.
“When we look at the world picture, the U.S., despite our population compared to other countries, still spends more money per capita on research and development than other countries, but we’ll be outpaced by 2020 and we can’t allow that to happen,” McAvey said.
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