The Age of Wi-Fi
Throughout history, periods of time have sometimes been given labels that tended to identify predominant cultural, sociological, or ideological themes. The 18th and 19th centuries were frequently called the Industrial Age, and the 20th century, especially the last half of it, was often dubbed the Information Age.
The continual pushing of the technological envelope and the marvels that are being produced might eventually lead someone to identify the era in which we now live as the Wi-Fi Age.
Not many people would have imagined just a few short years ago that you would be able to travel across the US and keep in instantaneous touch with the folks back home. The cell phone, of course, made that idea a reality—one that is practiced daily by millions.
Over the past few years, technological advances associated with the Internet have further expanded opportunities and methods for communication. Nowadays, anyone with the proper Internet provider, computer, and a wireless card can link up with people, check messages, visit websites, and stay informed about news happenings around the world. Many times, this can be done while walking down the street or sitting in a hotel, coffee shop, or just in your car.
The popularity of wireless Internet or wi-fi networking is growing exponentially, and more than 64,000 pay-for-use wi-fi locations have been installed worldwide. In the US, Texas ranks 2nd in such locales with more than 1,800, which represents about 7.12% of the nation’s total. The most popular sites for pay wi-fi include hotels, resorts, restaurants and cafes, and retail stores, but they are also located in libraries, marinas, health clubs, hospitals, and office buildings.
Houston has nearly 300 pay sites and is ranked only behind New York City, Chicago, San Francisco, and Seattle. Other cities in the Lone Star State with approximate numbers of wireless locales include Austin (250), Dallas (200), San Antonio (150), and Fort Worth (50). Many other communities are in the process of creating myriad kinds of wi-fi networks.
The approach drawing the most enthusiasm is the development of free wireless hotspots. Texas is 3rd in the number of these kinds of Internet opportunities, behind California and Illinois. Among the major US cities, Austin ranks 4th in the number of free wireless sites. Houston places 8th, and Dallas is 18th in free wi-fi locales.
Although the average amount of time Americans spent online at home last year dropped 2%, worldwide Internet growth was 36.3% in 2004. The largest numbers of in-home Internet procedures involved communication and content searches.
With the advances we are seeing today in high-speed Internet, expectations are that usage of the computer and special hand-held devices to “stay in touch” will rise significantly in the days ahead. Some 51% of Americans who use the Internet now have broadband, and Texas has over 2 million subscribers.
Years from now, when wi-fi has become as “American as apple pie” and communication from any place we travel to almost any place on the planet via the Internet is commonplace, we might wonder how we were ever able to get along without it.
posted @ 09:42 AM CST [link]
Friday, June 17, 2005
Long-Term Economic Outlook for US and Texas is Positive
While there may be some bumps in the US and Texas economies over the next several years, I am very optimistic about the long-term prospects for continued positive expansion. In a previous column, I described key underlying factors driving future growth in the economy. Given those conditions, here are my latest projections for the US and Texas economies.
Looking at the years from 2004 to 2030, I anticipate that our nation’s real gross domestic product (inflation adjusted) will achieve a 3.39% compound annual growth rate (CAGR). This per annum climb compares favorably with the 1984 to 2004 per annum hike of 3.14%.
The US population will probably increase by some 75.1 million over the long term, reflecting a yearly growth rate of 0.88%. Wage and salary employment for the years from 2004 to 2030 should see a 1.24% annual hike and reach 180.9 million.
According to the projections that I recently prepared for my annual long-term forecast, the Lone Star State will likely exceed the pace of growth in the US over the 2004-2030 timeframe. Real gross product (RGP or output) is expected to rise 3.55% annually; population will expand 1.69% yearly, and employment is predicted to increase at a 1.60% per annum rate.
As in the past, the bulk of the long-term economic growth across the state will be evidenced in the metropolitan statistical areas (MSAs), with the six major metros accounting for the vast majority of the total gain. Of the $1.10 trillion RGP growth projected from 2004 to 2030, the larger MSAs will generate about 80.12% of the increase, while the 21 smaller metros provide 12.42%.
Leading the group will be the Dallas metro accounting for 28.52% of the state’s total growth, followed by Houston, 25.64%; Austin-San Marcos, 8.41%; Fort Worth-Arlington, 8.38%; San Antonio, 7.16%; and El Paso, 2.00%.
A population gain of 12.34 million is predicted across the state from 2004 to 2030, with the six major metros responsible for about 72.03%. Expected increases include Houston—2.76 million; Dallas—2.51 million; Fort Worth-Arlington—1.20 million; Austin-San Marcos—1.12 million; San Antonio—0.99 million; and El Paso—0.31 million.
Growth in the 21 smaller MSAs will probably total approximately 2.5 million over that period with the McAllen-Edinburg-Mission MSA accounting for 20.34% of that increase.
Some seven out of every 10 new jobs added over the long term in Texas are projected to be located in the larger metros. By 2030, about 69.69% of all employment in the state will be in the major MSAs. Currently, these areas provide about 68.47% of all the jobs in Texas.
The major metros and expected number of new jobs added from 2004 to 2030 are: Dallas—1.18 million; Houston—1.05 million; Fort Worth-Arlington—453,900; San Antonio—448,400; Austin-San Marcos—419,000; and El Paso—135,700.
Forecasts for other major economic indicators suggest that retail sales in Texas should achieve a 5.47% CAGR over the long term, and real personal income (by place of residence) is likely to see per annum expansion of 2.93%. Retail sales annual hikes in the state’s metro areas are projected to range from 5.03% (Killeen-Temple) to 5.71% (Dallas).
In spite of continued concerns and challenges, the long-term outlook for the US and Texas is very positive as underlying factors for sustained growth are favorable. Business cycles are inevitable, and may cause unexpected fluctuations. Even so, the overall economic pattern is forecast to be one of gains in output and employment in virtually all industrial sectors over the 2004-2030 timeframe.
posted @ 09:40 AM CST [link]
Friday, June 10, 2005
If At First You Don’t Succeed . . .
After an intense 140 days marked by moments of high drama, moments of bitter acrimony, moments of economic absurdity, and the sad and tragic death of a joyful and capable young member, the Texas Legislature adjourned its 79th Biennial Session. While many worthwhile things were accomplished, the signature issues of public school finance and property tax relief remained unresolved.
It was an interesting ebb and flow. As the debate began, the public overwhelmingly wanted lower property taxes and an end to our “Robin Hood” redistribution plan. As various proposals came forward, however, the polls began to show that maybe the current system wasn’t so bad after all (it is, by the way). As soon as the Session concluded, voters were wondering what happened to their tax cuts. The fickle electorate can be terribly frustrating for elected officials.
Voters also indicated in one survey that they preferred a property tax cut without an increase in other taxes (duh! who wouldn’t?!). The extra money would presumably come from spending cuts, which is easy to talk about and difficult to achieve. Despite the rhetoric on some fronts, the State budget is very, very lean.
I have been around this issue a long time. During 1973-1974, when I was a senior at Baylor, I wrote my honors thesis on “Financing Educational Reform and Refining Educational Finance.” It was one of the hottest topics of the day. A few years ago, I went back and read it to see if I had some particularly brilliant idea as a 20 or 21-year-old. I didn’t!
What we have just witnessed is a classic demonstration of the old adage that “The only good tax is an old tax.” When you start swapping one tax for another, you immediately create winners and losers. The losers get motivated and organized very quickly and make life difficult for all. Politics and campaign money also get involved.
In this instance, the House came up with a plan that included a broad business tax and a relatively large sales tax increase. The Senate approved a larger (but slightly more efficient) business tax and a smaller rise in the sales tax. At the end of the day, the two sides couldn’t pull it together.
In theory, this task is easy (or at least straightforward). I regularly measure the efficiency, equity, and growth potential of alternate taxes. Broad-based, low-rate business taxes score very well on the measures. If you started from scratch to build an economy in a laboratory, you could do a lot worse than to put a business activity tax in place (ultimately, no matter who you levy a tax on, the vast majority are paid by individuals).
Texas is, of course, neither nascent nor experimental. We have an existing tax structure that has evolved over many decades as a result of thoughtful legislation, shifting priorities, political clout, last-minute maneuvering, and sheer randomness. As a result, billions of dollars have been invested based on certain expectations regarding tax liabilities. In such an environment, change will almost inevitably be incremental and will always be tough. We have seen this difficulty in numerous failed efforts.
The major opportunity to provide property tax relief, education reform, and a substantial net tax reduction is casino gaming. Such an initiative would also bring billions of dollars and thousands of jobs to economies around the state. In fact, no sooner had the gavel come down in Austin than facilities in neighboring states again expanded their offerings to lure more Texans across the border to support schools in other states. To date, expanding Texas gaming options has failed due to political considerations, but it remains the only obvious pot of money to be had without a tax increase.
We should not forget that scores of dedicated and capable public servants have devoted thousands of hours to this issue. For this effort, they should be commended, not criticized. Out of all this sweat, we can only hope there are the seeds of a permanent solution that can be implemented in a timely manner. We owe the current and future students of Texas nothing less.
posted @ 09:38 AM CST [link]
Friday, June 3, 2005
Looking Ahead
I recently prepared my long-term forecast for the US and Texas economies. This is the twenty-fourth year I’ve analyzed the underlying conditions in the nation and state using my econometric models in order to form projections of future growth. After an extensive review of thousands of data series, I can tell you that (in a nutshell) we’re looking good. There are certainly situations that bear watching, but most of the signals I’m seeing today are clearly positive. Here are some highlights from our soon-to-be-released forecast; watch for further specifics in the weeks to come.
The US economy is poised for advancement, and its position in the global arena is encouraging. Demand for US goods and services is growing, and modest expansion in employment is continuing. Increases in productivity are being maintained. Long-term growth will be sparked by a number of factors. Key aspects of these favorable expectations include the following.
Business conditions are projected to improve across a spectrum of industries ranging from core manufacturing to services as worldwide demand rises. As a result, employment gains are likely to continue in most sectors, with increasing productivity allowing for growth in corporate earnings without undue inflationary pressures.
Inflation is expected to remain relatively low through the forecast horizon. Although energy costs will put upward pressure on prices throughout the economy, globalization and enhanced productivity will likely mitigate these conditions and contribute to price stability. Interest rates are anticipated to experience limited hikes as the Federal Reserve works to control inflation in the near term. However, no dramatic action is expected, and rates will likely edge up in the decades to come.
Technology will continue to be increasingly and extensively incorporated into business activities, improving efficiency, enhancing productivity, and allowing for the development and production of advanced goods and services.
On the downside, several factors could have a dampening effect on future expansion. First, given strong growth in worldwide demand for petroleum products and supply constraints, energy prices are expected to remain at relatively elevated levels over the forecast horizon. These high prices will eventually work their way through the economy. High prices and US dependence on events in turmoil-stricken areas of the world illustrate the need to enhance America’s capacity to produce fuel through such means as improving technology for extracting fossil fuels from domestic oil and gas fields and developing renewable energy sources.
Another issue involves funding for healthcare. Many Americans struggle to obtain and afford healthcare coverage. At the same time, many healthcare suppliers are strained to provide care to the growing numbers of persons without insurance. Quality healthcare is essential to long-term prosperity and quality of life. Proposals have surfaced which aim to solve this problem, but implementation will prove difficult and costly.
High budget deficits and trade imbalances are likely to be around for a while. Excessive budget deficits can crowd out investment in the private sector. High trade imbalances can leave the US vulnerable to currency fluctuations, inflation, and interest rate increases. These risks appear manageable at the moment.
Turning now to the outlook for Texas, the state was somewhat slow to come out of the recent recession. Nonetheless, the pace of expansion has improved, and the state now stands to be a growth leader. There have been significant changes in the Texas economic landscape over the past few years, as the Lone Star State has increased economic diversity. Proactive economic development efforts such as the Texas Enterprise Fund have contributed to rising interest and created myriad opportunities, and the state now leads the pace in new corporate locations and expansions.
The job market is experiencing widespread gains, and the near-term outlook for hiring is good. Higher education is significantly impacting the state’s economy, with increases being achieved in the number of skilled and trained workers. The large and growing pool of potential employees will serve as a competitive advantage for the state over the long term.
One source of growth is international trade. Texas is now the leading state in terms of export volumes; as economies around the world continue to develop, Texas will benefit from enhanced demand for its products. The housing market is also contributing to prosperity, and is expected to continue to do so over the long term, though real estate cycles are likely.
Technological advances and more efficient uses of resources have effectively increased business operations and overall productivity. In addition, high-tech activity continues to expand, with research and development in emerging fields escalating; new facilities and programs are aggressively being promoted and will serve as future sources of growth.
Rising energy demands and elevated prices of petroleum are proving advantageous for various segments and geographic areas. Renewable energy development is expected to provide much-needed stimulus to many areas of rural West Texas.
One sour note for several communities is the upcoming round of military base closures; these areas stand to lose thousands of jobs. Over time, these facilities will likely find productive uses, but short-term disruptions are inevitable. Moreover, growth in Texas business activity is inextricably linked to performance of the national economy, and any slowdowns in US expansion will affect the Lone Star State.
All in all, I remain very optimistic about the decades to come. The underlying structures of the state and national economies are sound. In addition, the right things are happening to help ensure long-term prosperity. Key corporate locations and expansions, for example, are helping solidify Texas’ position at the forefront of the next wave of technology. As I said at the outset, we’re looking good!
posted @ 09:35 AM CST [link]