Mike Walden's You
Decide: What industries will lead growth?
Dr. Mike Walden
North Carolina Cooperative
North Carolina’s economy has gone through three
major economic periods during the last century. Like
most states, farming was the leading industry in
both production and employment in the early 1900s.
Most workers rose before dawn and went to their
fields to care for the crops or livestock.
Then came the manufacturing era. Tractors and
machinery revolutionized farming and released
thousands of workers for jobs in the growing number
of factories. Textile, cigarette and furniture
manufacturing became the mainstays of the North
peaked in the 1970s – although it’s important to
recognize that manufacturing output has continued to
go up. Manufacturing followed the path of farming.
Both have been highly productive industries using
more technology and machinery and fewer workers in
their production processes.
The third shift
was to services and a reformulated manufacturing.
Rising incomes, the two-worker household and an
aging society all combined to increase the use of
numerous kinds of services – personal, health care
and professional. The service economy boomed, and
job growth in services went through the roof.
At the same time North Carolina’s “big three” of
textile, cigarette and furniture manufacturing began
to wane. Replacing them were the upstarts of
technology, pharmaceuticals, machinery, food
processing and vehicle parts.
forward thinkers believe we are on the cusp of
another transformation in the economy. Many jobs in
the service economy are being replaced by machines,
including robots, or computer programs. So peak
growth in the service sector may be in the past.
Plus, there are ongoing changes in the world
economy, in terms of prices and preferences, which
may create opportunities for new or revitalized
Below are four economic
areas that are on many lists for being leaders in
economic growth for the upcoming decades. The big
question is how many of these will take North
Carolina along for the ride?
Technology encompasses many facets, but the most
fascinating today are in areas like information
transfer, management and analysis; robotics; micro
instruments; and 3D printing (think making a new
refrigerator to your specifications in your home).
The “digital revolution” – which some call the Third
Industrial Revolution – is the starting point for
most of these innovations, and the viewpoint is that
the boundaries of the digital revolution will
continue to expand.
Carolina has a large footprint in technology. Most
of it is centered in the state’s large metropolitan
areas near research universities. A challenge will
be to spread the wealth of the tech sector’s
expected growth to smaller cities and rural areas.
Some of this has happened with the large “data
farms” (where “cloud” storage resides) in the
western part of the state.
drilling technologies have allowed the nation to
undergo an energy revolution in the last decade, and
it’s expected to continue. However, current
estimates show North Carolina has a relatively small
reservoir of onshore oil and natural gas. The large
deposits are thought to be offshore, and, if that’s
accurate, their recovery could have a noticeable
impact on the state economy. Yet federal approval is
required, and environmental concerns to coastal
property owners and to the state’s tourism industry
are always issues.
As the world develops with a new focus on resource
efficiency, it’s expected there will be a surge for
new machinery – with everything from construction
equipment to turbines, vehicles, jet engines and
heating and cooling equipment being in demand. North
Carolina already has many of these industries. For
example, we are among the leaders of states in the
production of vehicle parts, and the Triad is
developing a reputation in aviation equipment. So
our state is well-positioned to take advantage of
growth in machinery manufacturing.
Agribusiness: North Carolina’s economy may come full
circle with agriculture. As the world adds people –
but particularly middle-class people – worldwide
diets are changing. Purchases of protein-based foods
(meats) and processed foods are increasing. Both of
these sectors are in North Carolina’s wheelhouse.
The state’s agribusiness and food-processing sectors
are currently measured in the tens of billions of
dollars of output. These numbers could rise as the
world’s consumers become more like us.
when we contemplate the North Carolina economy of
the next 50 years, we can see a future driven by
technology, machinery manufacturing, agribusiness
and perhaps energy. These might compose the next
North Carolina economy. Is it possible, is it
probable -- and what will it mean for workers,
families and communities? You decide.
Dr. Mike Walden is a William Neal Reynolds Professor
and North Carolina Cooperative Extension
economist in the Department of Agricultural and
Resource Economics of N.C. State University’s
College of Agriculture and Life Sciences. He
teaches and writes on personal finance, economic
outlook and public policy. The College of
Agriculture and Life Sciences communications unit
provides his You Decide column every two weeks.
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