This week at United Front 2010, Minnesota Economist Tom Stinson started out on a positive note. “I’ve got some good news,” he said. “The recession is over.”
“But,” (there’s always a “but” isn’t there?) he continued, “…we’re not going back to where we were.”
Where We Will Be, and Why
Stinson went on to explain to me and the 900 other nonprofit, grantmaker and government workers and representatives in the audience that the “New Normal” will most likely mean:
- Higher interest rates
- Slower economic growth
- Increasing numbers of retirees
- Less consumption; more saving
- Creative destruction/disruptive innovation will change the way we deliver services
- A shift in the balance between private and public sectors
- More uncertainty about the future
The two broad factors shaping these trends are the combination of the recession and our aging population. Research shows that the U.S. economy lost 8.4 million jobs during this recession. It’s estimated that it will take 2.5 years for Minnesota to recover its lost jobs. Unfortunately, due to the aging of our population, there’s concern that once those jobs become available again, eventually we will not have enough people to fill those positions.
Why is this a problem? Past recessions have taught us that productivity is the key to economic recovery. Traditionally growth happens when “More people make stuff, or people make more stuff per hour.” With out the people-power to drive production, Minnesota faces a shrinking tax base, coupled with a dramatic increase in demands for health services, as aging baby boomers require increased medical assistance.
The Key to Growth — Individuals and Organizations Making Better Choices
Stinson noted that although the future looks gloomy, Minnesota is fortunate in that the new economic reality plays to our strengths. Future economic growth will depend on increasing productivity without corresponding increases in the size of the labor force. The key to increasing productivity without more labor is innovation. The key to innovation? Education — something that we Minnesotans traditionally do well, but must continue to invest in.
Nonprofits, he explained, will be crucial to helping individual Minnesotans make better decisions and produce better outcomes in key areas such as:
- Creating healthier habits to reduce lower lifetime health care costs
- Reducing recidivism rates
- Improving graduation rates
Simultaneously, the very economic straits that demand nonprofits help individuals make better choices, will also demand that nonprofits make better choices too about how they deliver service.
How can nonprofits make better choices about service delivery? There are many paths to providing better service, and the methods of doing so are sometimes very unique to individual organizations. However, there are some key areas common to nonprofits where efficiencies can be found and better practices to foster innovation put into place.
I’ll be exploring some of those paths to better outcomes that I learned about at United Front 2010 in future posts.
- Cary Lenore Walski, web communications associate
Join the Conversation: Did you attend the United Front 2010 conference? What were your take-aways? How is your organization planning on doing more, better in the coming years?
[...] Stimulates Innovation More: Caring or Crisis? (Courtesy Beth Parkhill, Mentor Planet) Making More and Better Key to Economic Recovery (Courtesy Cary Lenore Walski, Minnesota Council on [...]
[...] my first follow-up post to last week’s United Front 2010, I wrote about State Economist Dr. Tom Stinson’s take [...]