The Innovation Economy: New Opportunities and Risks in the Evolving Business Cycle Dr. Bill Conerly...
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Transcript of The Innovation Economy: New Opportunities and Risks in the Evolving Business Cycle Dr. Bill Conerly...
The Innovation Economy:
New Opportunities and Risks in the
Evolving Business Cycle
Dr. Bill Conerly
for
Regional Economic Forecast &
Innovation Expo
December 11, 2014
2011 2012 2013 2014 2015 2016-1
0
1
2
3
4
5
World Economic GrowthIMF forecast
an
nu
al
pe
rce
nt
ch
an
ge
2011 2012 2013 2014 2015 2016-3
-2
-1
0
1
2
3
4
U.S. Real GDP Growthp
erc
en
t c
ha
ng
e
Average of other forecasts
Nov-11
Feb-1
2
May
-12
Aug-12
Nov-12
Feb-1
3
May
-13
Aug-13
Nov-13
Feb-1
4
May
-14
Aug-14
Nov-14
0
5
10
15
20
25
30
Risk of RecessionWall Street Journal survey
pe
rce
nt
November: 12%
U.S. Economy: Major Sectors
,
Sector 2015-16 Outlook
Consumer spending Spending grows w/ income
Housing construction Stronger in 2015-16
Non-res construction Light growth
Bus. Capital Spending Strong
Exports Moderate growth
Federal Gov’t Cuts in goods, services(but entitlements grow)
State & Local Gov’t Slow growth
2011.01
2011.02
2011.03
2011.04
2011.05
2011.06
2011.07
2011.08
2011.09
2011.10
2011.11
2011.12
2012.01
2012.02
2012.03
2012.04
2012.05
2012.06
2012.07
2012.08
2012.09
2012.10
2012.11
2012.12
2013.01
2013.02
2013.03
2013.04
2013.05
2013.06
2013.07
2013.08
2013.09
2013.10
2013.11
2013.12
2014.01
2014.02
2014.03
0
1
2
3
4
InflationConsumer Price Index
% c
ha
ng
e 1
2 m
on
ths
2011.01
2011.02
2011.03
2011.04
2011.05
2011.06
2011.07
2011.08
2011.09
2011.10
2011.11
2011.12
2012.01
2012.02
2012.03
2012.04
2012.05
2012.06
2012.07
2012.08
2012.09
2012.10
2012.11
2012.12
2013.01
2013.02
2013.03
2013.04
2013.05
2013.06
2013.07
2013.08
2013.09
2013.10
2013.11
2013.12
2014.01
2014.02
2014.03
2014.04
2014.05
2014.06
2014.07
2014.08
2014.09
2014.10
2014.11
2014.12
2015.01
2015.02
2015.03
2015.04
2015.05
2015.06
2015.07
2015.08
2015.09
2015.10
2015.11
2015.12
2016.01
2016.02
2016.03
2016.04
2016.05
2016.06
2016.07
2016.08
2016.09
2016.10
2016.11
2016.12
0
1
2
3
4
5
6
3-month T-bill
30-year mortgage
Interest Rate Forecastp
erc
en
t
2007
.01
2007
.08
2008
.03
2008
.10
2009
.05
2009
.12
2010
.07
2011
.02
2011
.09
2012
.04
2012
.11
2013
.06
2014
.01
2014
.08
0.0
500.0
1000.0
1500.0
2000.0
2500.0
3000.0
Federal Reserve Stimulus$
tri
llio
ns
Rural & Urban Issues
• Fewer location-specific jobs
Farming, forestry, fishing, mining
• Most folks like cities
• Much work can be done anywhere
Offshoring
Labor cheaper, but rising
Cost of quality higher
Regulation more lenient
Overseas markets growing
Onshoring or Reshoring
Labor cheaper, but rising
Cost of quality higher
Regulation more lenient
Overseas markets growing
Onshoring or Reshoring
Labor cheaper, but rising
Cost of quality higher
Regulation more lenient
Overseas markets growing
More flexible:
Quantity & specs
Quality cheaper to attain
Great for low labor content
The Nutshell
Most likelyStronger growth in 2015-16Higher interest ratesStable inflation
Rural communities levelUrban areas expanding
Opportunities through innovationCustomization