Thursday, October 1, 2009 9:00 PM CDT
At Effingham business expo, speaker predicts future economic trends
By CARL WALWORTH, Editor and Publisher
cwalworth@jg-tc.com
EFFINGHAM — Available water, research and rich soil are assets Illinois may leverage in years to come, business leaders heard at an area expo on Thursday.
The current downtown should be viewed as an opportunity to lead as a recovery develops, Richard Judd also said, while acknowledging significant changes afoot in the economic ways of the world.
Judd is a professor emeritus at the University of Illinois in Springfield who has spoken and written about the economy for many years. He was the keynote speaker at a business-to-business expo at the Thelma Keller Convention Center, the first regional expo in five years in the Effingham area.
Some of Judd’s remarks at the opening session echo what others are saying about the likely future direction of the economy. He said, for example, that job growth is likely in clean energy, government and health care sectors, and said education is doing quite well, too.
The Western region of the country is most ready to move forward in the clean energy area, he said. But the West also faces water shortages that must be addressed.
Judd said Illinois is one of five states with enough capacity to export water, and that it’s likely that such exports will be developed.
Flat land and rich soil also are natural assets in Illinois, he said. Another key resource in the state is research at places like the Fermilab near Chicago, the University of Chicago and the University of Illinois. Such research potentially will lead to significant developments that could spur economic activity, according to Judd.
As for the world economy, Judd said the trend toward gross domestic product — the value of all final goods and services — moving increasingly to Asia is poised to accelerate. The United States currently has about 25 percent of the world’s GDP. In 2030, Judd said forecasts are that the United States and Europe combined will have 33 percent of GDP, while Asia will have 53 percent of world GDP.
“Our future cannot be what our past has been,” said Judd, noting the past has been to add consumption and debt. “We must increase savings and we must work with other countries, whether we want to or not.”
Judd said many firms are restructuring to control costs and become more productive, and government needs to do the same sort of restructuring so that public sector productivity improves. Otherwise, the financial demands of government will become even more difficult to negotiate, particularly if policymakers don’t balance any revenue increase initiatives with corresponding cuts, he said.
Judd agrees that promotion of small business and entrepreneurship is vital to the future. He said the best future prospects are owning your own business, or being at the top or bottom of more traditional work structures. He said middle management will continue to sustain job losses.
One obstacle to owning a business, Judd said, is insufficient venture capital and Angel investing to fund the risky kinds of businesses. Many of the businesses ultimately fail, but those that succeed generate the kinds of innovations that will be vital in the future.
China is welcoming those with ideas, he said, and thus it’s more likely that innovation will be developed in China.
Another trend Judd noted is that job losses are hitting men more than women. He said of 7 million lost jobs since December 2007, 5 million were positions held by men. Of job gains since December 2007, women filled 79 percent of the jobs created in health care, and 94 percent of new jobs in government.
Judd said that companies that have led coming out of past downturns have done four things: lowered debt, controlled operating costs, diversified and expanded into new markets.
“We’re in a slow and fragile economy,” Judd said. “When it’s bad times, there is opportunity.”
The daylong expo featured booths from area firms as well as presentations designed for local business owners. Norma Lansing, the executive director of the Effingham Chamber of Commerce, said she was pleased with the expo and the support it received from businesses.
Contact Carl Walworth at cwalworth@jg-tc.com or 238-6822.
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