Five years ago, I started to subscribe
to regional newspapers in Texas and along the eastern front of the
Rocky Mountains. Why? I was amazed by some of the things I saw when
on a long cross-continent cycling trip about 14 years ago and decided
to learn more. Two things struck me at the time:
- the confidence and sophistication of cities such as Lincoln Nebraska and Boise Idaho
- a remark made by a road foreman who kindly offered to take me through a rather dangerous stretch of road construction in her pick-up truck. She said that in Wyoming a woman was accepted as an equal if she proved she could do the work.
In recent months, I started to explore
the growth story of the interior of the U.S. in more detail – this
time from the perspective of a geographer. Here's the short version:
Much
of the discussion about American economic recovery and growth in
2012 focused on the usual suspects: regions on the Pacific and
Atlantic coasts and on the shores of the Great Lakes. But the best
recent economic record, as well as the best prospects for future
prosperity, are to be found elsewhere in the United States.
We
have identified four regions of the country that we call "growth
corridors." What they lack in media attention they make up
for in past performance and likely future success. Over the past
decade-and, in some cases, far longer-these regions have created
more jobs and gained more population than their counterparts along
the ocean coasts or along the Great Lakes.
The
four growth corridors are:
1.
The Great Plains region, made up of Montana, Wyoming, Colorado,
New Mexico, Texas, Oklahoma, Kansas, Nebraska, and the Dakotas
2.
The "Third Coast" stretch of counties whose shores abut
the Gulf of Mexico and which range through Texas, Louisiana,
Mississippi, and Florida
3.
The "Intermountain West," consisting of counties in the
north of New Mexico and Arizona, parts of eastern California and
western regions of Montana, Wyoming, and Colorado, as well as the
non-coastal eastern regions of Oregon and Washington and all of
Idaho, Utah, and Nevada
4.
The "Southeast Manufacturing Belt" of counties in
eastern Arkansas, all of Tennessee, and large swaths of Kentucky,
the Carolinas, Georgia, Alabama, Mississippi, and southwestern
Virginia
These
regions have different histories and different trajectories into
the future, but they share certain key drivers of economic growth:
lower costs (particularly for housing); better business climates;
and population growth. Some have benefited from the strong global
market for commodities, particularly food, natural gas, and oil.
Others are expanding because of a resurgence in manufacturing in
the United States. |
Washington DC has also experienced
significant growth but, like Ottawa Ontario, it's largely the product
of the business of government. For example, lobbyists abound ...
when in Washington last year, I heard that there are more lawyers
than school children in that town! As an investor, I'm on the hunt
for productive growth opportunities, so I'll give Washington a pass.
The Great Plains Corridor also extends
into Canada. This perspective led me eventually to invest in Rocky
Mountain Equipment.
Much of this development has occurred
over the past 15 years or so. Why have these areas prospered in
comparison with other parts of the continent?
- Outsourcing and foreign competition hollowed out many traditional manufacturing strongholds, especially in the northern tier of US states and eastern Canada.
- The business climate is perceived to be more favourable – a more welcoming attitude to growth/change, lower taxes etc.
- The tailwind created by the boom in commodities: oil and gas (especially with the advent of new technologies such as fracking); potash; agricultural foodstuffs (with the exception of livestock) has generated considerable wealth, much of which has remained in local economies and stimulated new business formation. It has also channeled foreign investment into the regions and attracted new workers who are, perhaps, more motivated than their counterparts in declining regions and willing to take on more risk.
- Housing and the cost of living relative to wages is more affordable than in many other dynamic areas of the US. Here there is a lively debate between some geographers and Richard Florida, a noted proponent of the view that knowledge workers are attracted to the amenities and lifestyle of highly urban areas, many of them along the eastern and western coasts (which generally are not performing as robustly).
I recommend highly that you read the
following report, America's Growth Corridors – America's Key to
Survival, by Joel Kotkin. He is a geographer with much to say
... and what he says is backed up by facts.
http://www.manhattan-institute.org/html/cr_75.htm#.USzP2lceHWC
The graphics shown above were extracted from this report.
In a subsequent posts, I will
investigate how this growth is taking place and potential themes to
explore by way of strategic investments in this fundamental
geographical restructuring of North America's economy.
No comments:
Post a Comment