But one criticism of forecasting that sticks a bit better is that we are too focused on the short run.
Making the call about the economy in the next few months is important for bankers, speculators,
and many businesses, certainly. But for countless other institutions and communities, the real
question is where we will be in the next ten years, not the next ten months. Armed with that
knowledge, we can take steps to cope with whatever changes are on the horizon.
Where will the central Indiana economy be in the year 2011? On its face, that's an almost
impossible question to answer. The number of events -- economic, political, environmental, and
technological -- that can occur between now and then is so large that any precise forecast will be
made laughably inaccurate. But there are long term trends evident in the evolution of our
economy. Asking where those trends might take us in a ten year span is more than just dart
throwing. It's the basis for prudent planning.
One trend that is undeniable is the increasing productivity of the American workforce. For
almost every kind of physical product you can imagine, we produce more today with less people.
That trend has, in turn, spawned two processes with important implications for Indiana. One has
been the decline, in relative terms, of the goods-producing side of the economy as an employer.
The other has been the rise in demand for new products and services, especially in health care,
fueled by technology and the prosperity stemming from greater productivity.
These trends are starkly evident in the official U.S. long term projections made for some
industries that are important for Indiana. According to the Bureau of Labor Statistics, of the 20.3
million new jobs expected to be created in the U.S. economy in the next ten years, all but 45,000
will be in the services producing side of the economy. Health services, computer and data
processing, temp help, and retail trade by themselves account for 45 out of every 100 of total new
jobs.
Central Indiana, including Indianapolis, Muncie, Bloomington, Kokomo and Lafayette, is
expected to evolve in this direction faster than the rest of the state. By the year 2011, the fraction
of workers with jobs in manufacturing is expected to fall below 13 percent, compared to the 20
percent in manufacturing in the remainder of the state.
What's taking up the slack? Employment in health services outside hospitals is expected to grow
by more than 75 percent over the next 10 years. Computer and data processing services will
double. Also growing fast will be lower paying jobs in residential and lawn care, child care, and
recreation.
If this projection is accurate, that means that the only way that central Indiana, or any other area,
can add workers in its major goods-producing industries, including pharmaceuticals, motor
vehicles and fabricated metals, is to acquire them at the expense of some other part of the
country. That's a good reason to protect and nurture the jobs we already have, but also a wake-up call for those who are still trying to grow their communities by chasing smokestacks.