Economic Development

Changes in global and local economic development are altering consumer behavior in communities and influencing how urban systems respond to these shifts. Planners may want to use these trends as input for their long-range and current planning processes, to practice strategic foresight during community visioning processes, for scenario planning, or simply to inform future decision-making.

Trend Timeframes

The trends are structured in three timeframes, which indicate the urgency of planners' action:

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Surging Post-Pandemic Entrepreneurship

Recent studies conducted by economists from the University of Maryland and the Federal Reserve have revealed a significant and potentially long-lasting increase in the number of Americans launching businesses during and following the pandemic. These new ventures cover a wide spectrum of industries, including restaurants, dry cleaning services, and high-tech startups.

Applications to start new U.S. businesses surged to the highest level in two years in June 2023, despite high interest rates and an uncertain economic outlook, according to a Commerce Department report. The post-pandemic surge in new business creation could have significant consequences not only for the Americans who are starting these businesses but also for their former employers. Additionally, this trend has important implications for government policy and the overall resilience of the economy. Though start-up activity and employment have fallen as a share of the economy since the 1980s and a handful of large firms increasingly dominate industries, the nation's leading researchers in the study of post-pandemic economic dynamism suggest that the pandemic may have broken those trends.

Creator economy

The emergence of second-and third-generation social media platforms has catalyzed the substantial growth of an economy centered around independent content creators. This "creator economy" encompasses a variety of fields, including vlogging, writing, educational content, skill building, and gaming. Supported by third-party tools and services that facilitate aspects such as video production and financial management, this economy enables content creators to establish reliable revenue streams. The creator economy is now a significant global industry, valued at $250 billion. It employs tens of millions of workers, serves hundreds of millions of customers, and even has its trade association and work-credentialing programs.

In the U.S., this impact is particularly evident in the case of YouTube. The video platform supported approximately 390,000 full-time jobs in 2023, a figure that is four times greater than the number of employees at General Motors. This statistic underscores the substantial potential of the creator economy to continue disrupting traditional industries, highlighting its significant role in the modern economic landscape.

Femtech

There is a growing market for digital health technologies geared towards women, or FemTech. Popular examples of FemTech include menstruation tracking apps and newer innovations like biodegradable and flushable at-home pregnancy tests. Funding for the FemTech industry, which began in the 2010s, was slowly on the rise until the pandemic hit in 2020, and by January 2022 investments had skyrocketed. Privacy and surveillance concerns — especially after the U.S. Supreme Court overturns Roe v. Wade, which prompted warnings to women in pro-life states to stop using menstruation tracking apps, could be a disruptor to this burgeoning market. However, FemTech's growth shows that gender considerations in health care are becoming a social priority.

New Twists on E-commerce

The ratio of e-commerce sales to all retail sales is increasing, a trend accelerated by COVID-19. Demand for brick-and-mortar retail space is decreasing, resulting in smaller multiplier effects from retail sales in local economies. New Urbanism identifies key factors fueling the growth of e-commerce, including affordability, customer convenience, easy accessibility, and competitive market conditions. Despite these drivers, there are obstacles hindering e-commerce from entirely replacing traditional retail. These include the decrease in social interactions between buyers and sellers due to online shopping, negative impacts on local economies caused by the dominance of e-commerce, and potential regulatory challenges encountered when e-commerce businesses establish substantial local footprints.

Live shopping, a novel e-commerce model in which brands sell products via livestreams on digital platforms, often collaborating with influencers, is transforming consumer engagement with products and brands by focusing on real-time interaction. In the U.S., live shopping is projected to generate $32 billion in sales this year. Furthermore, as the retail sector embraces an omnichannel strategy, social selling has become crucial in the interaction between sellers and buyers. Urban planners are advised to monitor the effects of these and other emerging e-commerce trends on local economies, transportation systems, and urban development patterns.

Everything as a service

Many industry sectors are transitioning their offerings towards subscription services and the concept of "as a service." For example, car manufacturers are expected to make more revenue with continuous updates of digital services than with selling actual cars.

The "as a service" movement is also affecting planning-related sectors. Mobility as a Service (MaaS) is becoming an ever more popular concept to optimize transportation, as is procurement as a service when it comes to public-sector vendors. Planners need to understand these concepts and their benefits but need to also make sure they are implemented equitably.

Reduction of Brick-and-Mortar Stores

The growth of e-commerce has led to a decrease in physical retail spaces, particularly impacting large commercial formats like shopping malls and department stores, and big-predicts that around 50,000 retail stores in the U.S. may shut down by the end of 2027 due to the rising dominance of e-commerce, increased borrowing costs, and consumer spending cutbacks due to inflation.

This projection of store closures is based on the expectation that e-commerce's share of total retail sales will grow from the current 20 percent to 26 percent by 2027. According to UBS's analysis, for every 1 percent increase in the proportion of sales made online, approximately 8,000 physical stores are expected to close. This trend underscores the significant impact of digital shopping on traditional brick-and-mortar retail outlets. Planners should understand what this means for the economic health of their communities and what the potential options are for innovative and alternative uses for vacant large-scale commercial sites.

Growing numbers of distribution and fulfillment centers

The growth and proliferation of distribution centers are central to the rapid order fulfillment models of companies like Amazon. As these companies seek to reduce delivery times to within the same day (or even within hours), planners can expect to see distribution centers in their communities and should be prepared for the particular challenges of design, access, and local economic impact that they may pose.

The January 2020 issue of Zoning Practice and "What to Do When an E-Commerce Warehouse Comes to Town" from the April 2021 issue of Planning are resources that explore the discrete land-use implications and the long-term impacts of distribution and fulfillment centers on communities.

Urban agriculture and local food systems

The global movement towards urban agriculture is gaining momentum in the U.S. This shift towards growing food within city environments and prioritizing food justice calls for significant changes in how cities use resources and manage land. Recent research by scientists from the University of Florida has provided a comprehensive guide on how communities can expand urban agriculture to enhance well-being and reduce food insecurity on the local level.

This shift is driven by a desire to combat climate change, promote healthier lifestyles, and foster social equity. Urban planners and community members need to be cognizant of these evolving local food systems. Understanding these changes is crucial for planning and implementing potential land use adaptations that can support and sustain urban agriculture initiatives. These developments not only reshape urban landscapes but also contribute to the environmental, health, and social objectives of communities.

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Ethical Consumption

Among individuals and consumers, awareness is growing about the links between lifestyle and climate change. However, while the markets for sustainable lifestyle products are booming, these products tend to be targeted at wealthier consumers, limiting their long-term impacts on emission reductions. Land use decisions, availability of sustainable transportation systems, and the design of the built environment can play a role in shifting behavior and lifestyles towards more sustainability as well.

Notable in this context is the increasing adoption of secondhand goods as a conscious lifestyle choice. Spurred by pandemic-induced supply chain issues, rising inflation, and the growth in digital resale and peer-to-peer platforms, higher-income and younger populations are joining lower-income groups in purchasing used items, from clothes to furniture and even plants. This market is projected to reach $325 billion by 2031, underlining the growing interest in more sustainable consumption patterns mainly led by Gen Z.

Global Food Insecurity

From 2019 to 2022, the global food insecurity crisis has escalated dramatically, with the number of affected individuals surging from 135 million across 53 countries to 345 million in 82 countries. This crisis disproportionately impacts developing nations more than industrialized ones. It is projected that food demand will increase by approximately 60 percent by 2025, exacerbating the situation.

In regions like the U.S. and Europe, the crisis manifests mainly as unequal access to nutritious, high-quality food, predominantly affecting the economically disadvantaged. Additionally, climate-related disturbances to crop production are becoming more frequent in places like Texas, Georgia, Spain, and Italy. Concurrently, the U.S. is rapidly losing valuable farmland to expanding urban development.

Tech Hubs

The Biden administration's Tech Hubs program is driving the creation of technology centers throughout the U.S. This initiative targets transforming 31 areas into world-class innovation hubs, aiming to bridge regional economic disparities and spur tech-centric growth, especially in areas traditionally known for industry. With an investment of $500 million, the program is designed to elevate both urban and rural metro areas into centers of tech innovation, with a focus on sectors such as quantum computing, biotechnology, and clean energy.

Central Ohio is one of the regions already advancing under this initiative. Significant commitments from major companies, including Google, and the development of semiconductor manufacturing facilities are indicative of the program's impact. These investments are not only transforming these regions into dynamic tech hubs but also fostering innovation and generating new job opportunities.

RESHORING MANUFACTURING JOBS

The U.S. is experiencing a boom in manufacturing fueled by a strong dollar, a desire by many companies to simplify logistics and on-shore their production, the availability of skilled workers and raw materials, and crucially, a series of enticing legislative actions from the federal government. This is especially notable in high-growth fields such as electric vehicle production, wind and solar, and semiconductor production. For planners, the manufacturing resurgence could be especially impactful in places experiencing high rates of growth and economic development (for example, Georgia), as well as regions such as the Rust Belt, which retains a historic manufacturing base and has had some recent success in attracting new investment.

The manufacturing sector has added nearly 800,000 jobs since early 2021, reaching employment levels not seen since 2008 and exceeding the peak of the previous business cycle for the first time since the late 1970s. But workforce challenges persist: as of March 2023, there were still 693,000 open positions in this sector, and according to some estimates there may be around 2.1 million unfilled manufacturing jobs by 2030.

Planning and infrastructure development are significantly influenced by this manufacturing resurgence, which is being led by the transportation equipment and food manufacturing sectors. Land use and zoning adjustments will be needed to accommodate the construction of new facilities being built in locations ranging from deserts to resort towns. The influx of manufacturing jobs is also driving housing demands, shaping the housing landscape in areas experiencing manufacturing growth.

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Factory in a Box

The advancements in additive manufacturing, notably in 3D and 4D printing, are paving the way for the development and prototyping of fully operational and autonomous mobile factories, known as "Factory in a Box" (FIAB). These compact, mobile technologies use additive manufacturing to quickly produce and locally deliver products. Analysts highlight the versatility of FIABs in various contexts, including the on-site production of equipment (potentially even more FIABs) and supplies, particularly useful in addressing urgent supply chain issues.

A notable project recently explored the use of FIABs in post-disaster scenarios, demonstrating its capacity to swiftly manufacture and distribute essential goods. The implications of FIABs could be far-reaching, potentially causing significant shifts in traditional manufacturing processes. However, it's important to note that these developments are still in the early stages of prototyping and will depend on considerable advancements in 3D-printing technologies and materials. As these technologies continue to evolve, the potential of FIABs in various fields, including emergency response and manufacturing, is likely to expand significantly.

Resilient Agriculture

Conventional agriculture has been transformed by automation, robotics, and AI, which aid in tasks like weeding, crop health assessment, and pest detection. Despite these technological advancements, they may not be sufficient to combat the effects of rapid climate change. Scientists are exploring how crops have historically adapted to climate shifts, aiming to accelerate their evolution to keep pace with current climatic changes. This is where CRISPR (clustered regularly interspaced short palindromic repeats) technology comes in, which differs from controversial GMOs by allowing selective DNA modifications to speed up natural evolutionary processes without introducing foreign genes.

CRISPR technology not only enhances crop resilience to climate change but also holds the potential to modify crop growth conditions; reduce reliance on pesticides, fertilizers, and water; and extend the shelf life of produce. Beyond agriculture, CRISPR is being used to genetically alter insects and pests that damage crops. While most experiments are still confined to labs, the U.S. government has approved the release of CRISPR-modified mosquitoes in Florida and California, with further trials planned in greenhouse settings.

Vertical Farming

Urban areas, consuming nearly 80 percent of global food production, are increasingly turning to urban farming to bring food production closer to consumption centers. This concept is not new, but it's evolving with technological advancements enhancing efficiency and sustainability. A significant trend in this area is vertical farming, where plants are grown in stacked layers, mostly indoors. This market is expected to reach $34 billion by 2033. Leading the way is Singapore, with its 30 by 30 initiative to produce 30 percent of its nutritional needs locally by 2030.

The U.S. government, recognizing the importance of local food production, has allocated $40 million since 2020 for urban farming projects under the Urban Agriculture and Innovation Production grants program. The program's popularity is evident from the doubling of applications between 2022 and 2023. Technological innovations in vertical farming aim to make it a sustainable alternative to traditional agriculture, focusing on crops that require less space and no pollination, like herbs and leafy greens. Challenges such as limited space, high energy use, pest control, and effective water and light management are being addressed with advancements in robotics, AI, and even electricity-boosted crops. Additionally, the shift towards hybrid work models has opened up possibilities for converting empty office spaces into urban farming sites, reimagining the future of urban centers with integrated fresh food production.

Synthetic Agriculture

The shift towards synthetic meat is partly driven by the need to find sustainable alternatives to the cattle industry, a major contributor to global greenhouse gas emissions. Yet, the sustainability of synthetic meats is uncertain. Their current production is water- and energy-intensive, and there are concerns that mass production could lead to more greenhouse gas emissions than traditional cattle farming. Like urban farming, synthetic meat production still faces challenges in reducing its energy and water usage. Several brands of lab-made synthetic beef, chicken, and fish have now received approval in the U.S. and other countries. One company has even successfully created a meatball from an extinct mammoth.

The future of the synthetic meat market remains uncertain. While some argue that the peak of plant-based meat popularity, exemplified by products like Beyond Meat, has passed, others point to legislative actions like Italy's ban on lab-made meat to protect its traditional meat industry and public health. Meanwhile, innovations such as precision fermentation are emerging, offering dairy alternatives without cows and potentially reshaping the dairy industry. Other futuristic agricultural methods include regenerative ocean farming and desert and arctic zone farming Additionally, innovative approaches like generating protein from air are being explored for long-term space are being explored for long-term space missions, enabling crews to produce food from their breath.

Evolution of the Space Economy

The private space sector is expanding beyond its initial focus on sending satellites and experiments to low-Earth orbit, leading to the growth of a more diverse and formalized space economy. As defined by the Organization for Economic Co-operation and Development (OECD), the space economy encompasses a wide array of activities and resource utilization that delivers value and benefits through space exploration, understanding, management, and use. Currently, the global space industry is valued at approximately $500 billion. With the broadening of uses and applications in space, analysts project that this industry could potentially exceed $1 trillion by 2040.

However, the space industry faces challenges, including global economic and security issues. The competitive aspect of space exploration poses safety concerns for the U.S., and its space companies are frequently targets of foreign intelligence. This industry requires specialized planning expertise and is creating new job opportunities. It is also becoming a significant player in land use and strategic planning in various U.S. communities. This influence is shaping the future of the industry and its integration into broader economic and national security frameworks.

Space-driven Innovations

NASA is funding a range of groundbreaking projects, including one that investigates using fungi to construct habitats on the Moon, Mars, and other celestial bodies. In other recent developments, the OSIRIS-REx mission brought an asteroid sample back to Earth in September 2023 to provide insights into the conditions and materials present in the early stages of our solar system, while the October 2023 launch of the Psyche mission is drawing attention to the prospects of mining metals like iron, nickel, gold, and platinum from asteroids in space. However, the viability of space mining is still being evaluated, considering factors such as the high costs of space missions, potential fluctuations in commodity prices, and unresolved legal issues regarding the ownership of extraterrestrial resources.

Beyond these scientific and exploratory aspects, the evolution of space innovations is also promoting collaboration on Earth. The establishment of the Keystone Space and Defense Innovation District in Pittsburgh underscores the transformative impact of the U.S. space industry. These innovative districts can significantly boost local economies by attracting talent, fostering innovation, and drawing investments. This synergistic effect between space exploration and economic development on Earth demonstrates the far-reaching influence of advancements in space technology and exploration.

A New Moon Race

Over the years, various entities from the U.S., Russia, India, Israel, and Japan have attempted to land machines in the Moon's southern region. NASA's Artemis III set for 2025 (and delayed later for 2026), aims to mark humanity's first return to the Moon in over fifty years. This mission is notable for its diverse crew, including the first woman and the first person of color to land on the Moon. Meanwhile, SpaceX, under Elon Musk's leadership, has announced the dearMoon Project. This mission, led by Yusaku Maezawa along with a group of artists, plans a lunar flyby towards the end of 2025.

The Moon's allure extends beyond scientific research, as both government and private sectors consider it for industrial and commercial opportunities, particularly due to its resource potential that could benefit Earth. Future lunar missions are expected to employ advanced robotics and technology, with goals extending to colonization and using the Moon as a stepping stone for further space exploration. This necessitates the development of new paradigms for off-Earth settlements. Scientists are exploring innovative solutions like using large lenses to melt the Moon's equipment-damaging dust. This approach could create stable roads and landing areas, addressing some of the environmental challenges of lunar activities.

Debris Crisis

The increasing use of space technology in everyday activities has brought with it the growing problem of space debris. This issue is particularly worrisome for planners who depend on current satellite images for various projects. The emergence of large satellite networks, such as Starlink, has both advantages and difficulties. The planned launch of thousands more satellites by various organizations heightens the risk of collisions, which could jeopardize ongoing missions and existing satellites.

A recent NASA report underscores the urgent need for efficient solutions to manage space debris. These solutions include the removal of smaller debris, adjusting the paths of larger objects to avoid potential crashes, and ensuring controlled reentry for systems designed to be reused.

Space Tourism

Space travel, once a realm exclusive to astronauts and the very wealthy, is increasingly within reach of ordinary people. This trend towards making space travel more inclusive, particularly to suborbital and orbital destinations, is highlighted by events like the 2023 Virgin Galactic tourist flight, which included a mother-daughter pair who won free tickets. Despite these advances, the space tourism industry has not grown as rapidly as anticipated, with issues such as insurance complexities being major hindrances.

Meanwhile, on Earth, cities around the world are leveraging the excitement surrounding space exploration. Launch facilities like Wenchang in China serve dual roles: they are centers of scientific progress and also tourist hotspots. These initiatives boost local economies and national pride by promoting space-themed tourism. However, this trend is not without its challenges. For example, residents of Boca Chica, Texas, have voiced concerns about the disturbance caused by SpaceX to their peaceful coastal life. Such situations raise important considerations for planners and regulators regarding the integration of space launch sites within communities and their future urban planning strategies.

Space-based Agriculture

Space-based agriculture is gaining and becoming a subject of serious consideration as a potential industry. For many years, NASA and other space agencies have been focusing on agriculture in space. This is driven by the need for sustainable food sources during extended space missions, such as trips to Mars, where astronauts would need to grow their food on board. Experimentation with various crops in low-gravity conditions has been a regular part of research conducted on the International Space Station. NASA's success in growing tomatoes on the ISS and research into Martian crop cultivation exemplify these advances.

 

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