Technological change will continue at an incredible pace. However, many people still question whether society’s investment in computer technology always provides the advertised productivity benefit. Improvements have occurred in some manufacturing industries and in the technology sector itself. It is more difficult to make the argument that technological changes have made jobs in the service sector more productive.

Technology’s benefits have not been fully realized. There is a significant lag between the time of technological invention and its full incorporation by society. For example, technology is yet to cause any change in the basic organizational structure of business. Business organizations have yet to make profits operating over the internet. People continue to work in the same offices, in the same locations. While technology has provided some additional options, it has not engendered profound change.

Technology has not always delivered on its promises. Marketers may tell us that we are only one or two pieces of hardware or software away from the technological solutions we envision. In reality, effective technological solutions for business and home are further down the road. Yet the potential for improvements in our lives and businesses are evident. The Next Economy is where technological benefits will actually occur.

If the virtual world has a temporal home, it is certainly the Bay Area. Yet even in its own home, the electronic economy will not stifle the region’s economic diversity. The Bay Area also represents finance, tourism, education, and research. Furthermore, a diverse economy provides stability and growth.

Network computing has provided employment growth in the 1990s to match the employment growth of the beginning of the personal computer era in the 1970s. Companies manufacturing computer hardware, peripheral devices, and the mechanisms that form the infrastructure of network computing have recently fueled the region’s recent economic expansion. We look at this as a short-term trend because the Bay Area generally benefits from new technologies. As a technology becomes more mundane and widespread, employment growth migrates to lower cost areas. Employment in our region, a high-cost area, is based on high levels of productivity growth that in turn reduce the level of job growth. New products will be created and new industries will form, but they are likely to be extensions of recent technological changes, and as a result will have a smaller impact on the region. Continued reliance on technology and innovation will also require us to maintain a highly educated workforce.

Life expectancy is greater in the Bay Area than generally in the U.S. Differences in life expectancy appear to be attributable to the racial/ethnic mix of the Bay Area’s population, and healthier lifestyles. We will also see an older population in this region.

While the future is positive, a variety of challenges remain. The high cost of housing in the Bay Area is a significant economic factor for our region. The high cost of living encourages people to make long commutes from less expensive areas, and residents will have to work more. While we may be able to maintain a highly educated workforce, we must also ensure that people with a variety of occupations and income levels can find opportunities in the Bay Area.

Understanding the Projections

PROJECTIONS 98 is an extensive analysis of the regional economic and demographic conditions. Considerable effort has been expended in formulating models, developing assumptions, and collecting information from local governments about anticipated developments.

Among the key assumptions used to create these projections are that local governments’ plans, policies, and regulations affect the use of land. Local development policies reflect city, county, and service district intentions regarding development and the provision of urban services. Land use information is updated continuously as part of our forecasting process.

Although such policy information is a key input assumption in ABAG’s forecast, PROJECTIONS 98 is not, in and of itself, the policy of any given city, county, or district.

The projections process includes extensive local participation and review. After the preliminary numbers are created, local governments review the projections, which are modified where appropriate. After the local review process, ABAG’s Executive Board members receive a report on adjustments made based on local government input, and the Board formally adopts the projections.

PROJECTIONS 98 presents the most recent estimates and forecasts of employment, population, and households for the period 1995 to 2020. National economic growth conditions, the relative competitiveness of the region’s economy, and the ability of the region’s land supply to support managed growth are considered in these forecasts.