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Ten Trends Impacting Economic Development and Commercial Real Estate

By Dean Whittaker

As 2011 draws to a close and we look ahead to 2012, we begin to wonder what the New Year will bring. Here are a few collective observations from friends, colleagues, and clients engaged in economic development and commercial real estate.

1. Work – becomes more complex, requiring higher skill levels with far fewer workers needed to achieve the same level of output. Thirty percent of work will be done in home offices. Work moves to the people. The focus will become having meaningful work to do that can be done in a globally competitive way.
2. Talent – those with in-demand skills will determine where companies locate based on their choice of where to live (or in other words, living first, working second). The zero-sum talent pool becomes obvious to all as the demand for skilled workers goes through the roof. Education gets “called to the principal’s office.” Business demands education to be reinvented, not just reformed with more of the same.
3. Education/Training – knowledge vs. skills – college degrees decrease in value as the return on investment is questioned and importance of certification of skills grows. Training and Education move on-line, driven by demand, convenience, and lower cost. Those with degrees go back to school to learn skills to be employable.
4. Communication –– social media’s one-way broadcast approach to communication will be used for personal communication with email and discussion groups used for professional connections.
5. Transportation – consumers shift toward “buying it local” as that movement gains momentum. Internet retailing may cause an expansion of warehouse distribution and a reduction in retail space. There will be an increase in retail vacancy. The electric vehicle gets off to a slow start, disappointing battery manufactures.
6. Energy – inexpensive, abundant natural gas from shale shifts the location of chemical manufacturing and cost and location of electrical generation, therefore, increasing environmental concerns over the impact on water resources.
7. Finance – money moves globally using text messages, cell phone NFC payment, PayPal, and other bank alternatives as they grow in transaction volume. Micro loan and crowd funding begin to have an impact on startup funding pending authorizing legislation currently blocked by the investment banking industry. Banks become re-capitalized and can now afford to foreclose on non-performing assets. Europe remains a mess. China bails out Greece and Italy.
8. Technology – cloud computing and storage becomes the norm rather than the exception. The iPad, and iPhone lead the drive for ubiquitous mobile computing. Websites become data-driven web apps. Cyber-warfare becomes an increasing concern with data security and vulnerable financial and communication networks at the top of the list.
9. Entertainment – YouTube and Social Media begin to max out as they hit the limit of our discretionary time available, and television viewership continues to decline.
10. Others – Cultural influences shift from the U.S. to China and India. Relevance advertising becomes more frightening in its profiling accuracy of us. The information bubble envelopes us as we become more homogeneous in our thinking.

So, it’s on to 2012. Thank you for your readership. If you find our newsletter of value, please tell your friends by passing it on. May the New Year bring you prosperity and joy.

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