If we asked the average person to list all the elements that drive economic growth, “Wall Street” (or some variation) would probably be at the top. But while this may be true to a point, it’s equally valid to point out that hidden gems drive the same growth in some of the most unexpected places.
Paying closer attention to some of these hidden gems creates an opportunity to better understand how far we’ve come and where we might be headed. It shows that the economy is changing positively, as long as you know where to look for this evidence. It’s also a positive sign that this new level of economic growth will continue, that it will be less dependent on things like Wall Street and that it will have more to do with the new frontiers that are continually popping up around us.
1. Video games are ready to debut
Video games, once a niche form of entertainment that for many people were considered an afterthought or a “fun escape,” now generate billions of dollars. More than three billion people play video games worldwide. In the United States alone, the video game industry has more than tripled in size over the past decade. According to a recent study, the annual growth rate of video games, in general, is expected to reach 8.76% between 2024 and 2027. At that time the global market will be worth approximately $363 billion.
Modern technology and public expectations have not only reshaped video games. They have left an indelible mark on the entertainment and media landscape as a whole. Virtual worlds like Fortnite host digital marketplaces, each with their own virtual economy. This has blurred the lines between “gaming” and “commerce” much more. In recent years, eSports tournaments have also become incredibly popular, attracting record-breaking spectators and sponsorship opportunities. The global eSports market is expected to reach $4.3 billion in revenue by the end of 2024. Between 2024 and 2028, that number will grow by approximately 7% annually.
How the demand for video games is growing
The Entertainment Software Association tracked the growing demand for video games in 2023. Interestingly, it found that the best video games of the year outperformed the best films of the year at the box office. They also tracked the growing demand for games during the 2023 holiday season and found that 72% of children are likely to ask their parents for video game-related gifts.
Video games have been around for a long time, and their appeal has reached an intergenerational level. The first children who grew up with the first video game systems now have more disposable income than ever and have children of their own. This means that, as impressive as the above numbers are, they will only get stronger over the next decade.
By recognizing the long-term, high-paying employment potential of video game development and the growing popularity of the video game industry as a whole, states can strategically position themselves to capitalize on the growing power of this evolving entertainment sector. Incentivizing the video game industry through tailored tax incentive programs, similar to successful models seen in regions like Quebec, can boost job creation, talent attraction and economic growth without overly favoring individual projects over to sustained development efforts.
2. Fintech is changing loan processing
The real estate industry is also going through something of a technology-driven revolution, particularly in the United States. There’s a lot of talk these days about the technology behind more efficient and sustainable homes. However, there is less interest in what the real impact is: loan processing.
Many financial technology companies now offer solutions to help empower loan officers. Not only are they embracing concepts like automation to streamline processes and free up valuable time, they are also creating a more efficient and competitive mortgage market. The easier it is to approve a loan, the easier it will be for people to get it. This increases competition in the market, which is ultimately beneficial for both consumers and professionals.
This also helps inject capital into local communities where it can have the greatest impact. It helps increase homeownership rates, which is good for both specific areas and the entire country. The more people who buy homes and live in an area, the more economic activity there is. People create jobs and spend money, which makes everything a better place for everyone. This also goes a long way in fueling construction and related industries.
How Fintech is improving processes
An example of a company that is doing well in this space is Canopy Mortgage. They offer user-friendly technology that makes the lending process as simple as possible for everyone involved. Candidates can upload essential documents from mobile phones, tablets or computers. They can see the progress of their loan 24 hours a day, seven days a week, to ensure they are always up to date on what is happening.
Once information is in the system, it can be tracked just as easily. Because everything is so simple and easily shared securely, this also saves loan officers valuable time. This way, they can focus on those matters that truly require their attention. All this and they have a highly competitive structure that allows them to offer great prices and low fees.
Canopy Mortgage is just one example of a company that is making an impact in this space, but rest assured there are many others. This will be especially true as FinTech companies begin to pay more attention to the real estate market as its importance increases over the years.
3. The era of roofs is upon us
Speaking of the real estate market, no list of the “hidden twins” driving economic activity would be complete without mentioning rooftops. They are something that most people don’t think too much about. But this is a trend that has actually been developing for quite some time.
As the population continues to grow, the need for housing becomes urgent. More homes are built, which slowly but surely reduces the amount of green space available in an area. For a time, this level of urbanization wasn’t much of a problem. But with recent studies indicating that a lack of green space in cities leads to higher overall mortality and poorer child development, it has become clear that something needs to be done. This is before we even get into the big push towards sustainability of which we see countless examples.
How roofs contribute to economic growth
Enter the rooftops. What were once bizarre ecological experiments are now the perfect example of how far thinking outside the box can really take you. Urban farms like Brooklyn Grange are now growing (no pun intended) into full-fledged businesses. Brooklyn Grange was originally founded in 2010 and has since grown into the leading rooftop farming and intensive landscaping company operating everywhere in the country today. Use roofs to help build green spaces. Additionally, as a company, it also hosts educational programs, events like weddings, and more.
These types of farms have also done much to create local food economies. In the case of Brooklyn Grange, access to locally grown produce in New York City has been increased. More rooftop farms are popping up around the world, particularly in highly populated areas and major cities. But more importantly, these rooftop projects also help reduce the community’s reliance on industrial agriculture. There’s nothing against industrial agriculture – it’s just that the last few years have shown us exactly how quickly things can become problematic when the large global supply chain is unexpectedly disrupted.
Overall, these farms help generate a huge amount of income for the people involved. This inevitably leads to economic growth as they also create jobs and provide sustainable food options to communities that would otherwise not have been able to access them. They do all this in the same urban environments that people depend on. Unlike urbanization that took away green spaces in the first place, rooftop farms aren’t eliminating anything at all. They’re simply taking what was already there and building on it instead of taking away something that you may never be able to give back.
Economic growth found in unexpected places
Ultimately, these are just a few of the many examples of how sectors that most people still don’t pay enough attention to are driving economic growth. At first glance, industries like gaming and loan processing appear very different. But the common thread is clear: They help highlight a versatile economic expansion that can happen virtually anywhere. And it can happen at any time if the conditions are right.
When the first virtual marketplaces appeared over the last twenty years, few could have predicted what they would become. Initially many were skeptical: who would want to pay real money for digital goods and services? Today, revenue generated from in-app purchases in games is expected to reach $249.9 billion by 2027.
From a new generation of empowered borrowers to rooftop pickers and everyone in between, these are perfect examples of how the future of the financial landscape is being reshaped, albeit quietly. Plus, collectively, they go a long way towards demonstrating that innovation and community will always win in the end. They will bear fruit if given enough resources and time, even if they start happening in places you least expect it.
Featured image credit: photo by Christina Morillo; Pixels; Thank you.
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