Sunday, February 21, 2010

Demographics as Destiny


According to the most conservative estimates, the United States by 2050 will be home to at least one hundred million more people than live here today. California-based urbanologist Joel Kotkin has attempted to address what this means in his new book, The Next Hundred Million: America in 2050 (2010). This projected increase is in stark contrast to the rest of the developed world - - and, according to Kotkin, is the strongest indicator of our long-term economic strength.

Two things drive our ability to grow in stark contrast to Europe and East Asia who face the grim economic consequences of an aging population. The first is inexpensive and available land. We can add people - - because we can add people. The United States has the most productive expanse of arable land on the planet. We can add people because we have the space for them. Our other strength is tightly linked to the land advantage - - the availability of inexpensive land makes larger families more affordable. America’s continued attractiveness to immigrants combined with a high birth rate, both a function of land, means that we are less likely to suffer from “Demographic as Destiny” that will hit Japan and Europe.

Mr. Kotkin addresses our cities with several interesting ideas. He doesn’t see growth coming from the “luxury” locations such as New York, Los Angles, San Francisco or Boston - - which are all overbuilt and over-expensive. He sees the growth in the interior - - cities like Phoenix, Houston, Dallas, Charlotte, and Atlanta. Growth m0ving from the coasts back to the middle. The growth issue flows back again to land prices - - low property prices where young families can enjoy a level of comfort that would be unaffordable at the le magnifique locations. The new “cities of aspiration” will perform many of the functions as centers for upward mobility that New York and other great industrial cities once did. Over time these cities will compete with the “superstar cities” for finance, culture, and media industries and the amenities that typically go along with them. Money and commercial success has already turned Houston, once considered the ultimate backwater, into an art mecca. Similar progressions will be seen in other dynamic cities in the decades to come.

Mr. Kotkin sees a resurgence of the American Heartland. Energy issues, climate change, technology, and - - you guessed it, cheap land - - all come together as a force for future development. Pressing concerns over global energy and hydrocarbon emissions will bolster the importance of our interior regions. New sources of energy such as wind power, biomass, and even a revelation of our nuclear power industry will make our Heartland as the go to place for this transition. The other critical factor for the Heartland is the advent of the Internet and the reduction in barriers and isolation associated with rural communities. As the technology of mass communications improves, the movement of technology companies, business service, and manufacturing firms into the hinterland is likely to accelerate. According to Kotkin, this will be not so much a movement to remote hamlets, but to the growing number of dynamic small cities and towns spread throughout the Heartland.

Kotkin is also a huge fan of the suburb – not as soulless and identical, but as places of endless opportunity. Technology, allowing for the ability to telecommute combined with higher energy costs, will invigorate many of them as more and more people opt to work from or near home. All of this potential for growth feeds another of America’s great strengths - - its decentralization, which cushions us from the effects of local economic stocks.

The addition of a hundred million more residents will place new stresses on the environment, challenging the country to build homes, communities, and businesses that can sustain an expanding and ever-more-diverse society. We will inevitably become a more complex, crowded, and competitive place - - highly dependent on our spirit of innovation and entrepreneurship. Our future should not be a focus on boundaries and barriers - - it should be a focus on “Demographics as Destiny.”

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