Like It or Not, Economic Growth is Step One in Job Creation

The $35-trillion world economy is not growing fast enough to provide jobs for millions of people who want them, according to a new analysis by The Conference Board.

Half of the current 2-3% average annual economic growth in the global economy is needed to provide employment for the 40 million people flooding the world?s job markets each year. But the global economy is not expanding fast enough to absorb the emerging work force. "There is simply not enough growth to go around," says Gail Fosler, Chief Economist of The Conference Board and author of the analysis.

"Among the advanced countries," says Fosler, "only the United States has been able to maintain its labor force growth, although about one half of the new labor force entrants in the U.S. are foreign-born."

The critical questions in a slow-growth world do not revolve around how to distribute economic growth or how to keep some nations from advancing too fast. "The real question is how everyone can advance faster together," notes Fosler. "Unfortunately, the issue of how to achieve higher sustainable world growth is still not being asked."

My take is that we need to remain mindful of national and global growth expectations as we gear up for local and state economic development efforts in the future. And yes, our national economy is picking up steam, and no, just an accelerated GDP rate is not the sole answer to job creation. The composition of growth also matters. We need growth that comes from a balanced mix of old and new, fast and moderate growth industries, and industries that serve local and national needs and those that aim at global markets. Ultimately for the US, our growth will be driven by innovation and our ability to build and sustain industries of scale.