If you asked the average person to list all the things that drive economic growth, “Wall Street” (or some variation) would probably be right at the top. But while that may be true to a certain extent, it’s equally valid to point out that hidden gems drive that 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 proves that the economy is changing positively, provided that 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 reliant on things like Wall Street, and that it will have more to do with the new frontiers that are cropping up all around us all the time.
1. Video games are ready for prime time
Video games, once a niche form of entertainment that used to be considered an afterthought or a “fun escape” for many people, now generate billions of dollars. More than three billion people play video games across the globe. In the U.S. alone, the video game industry has more than tripled in size over the last decade. According to one recent study, the annual growth rate of video games, in general, is expected to hit 8.76% between 2024 and 2027. The global market will be worth about $363 billion at that time.
Modern technology and the expectations of audiences haven’t just reshaped video games. They’ve left an indelible mark on the entertainment and media landscapes as a whole. Virtual worlds like Fortnite are home to digital marketplaces, each with its own virtual economy. This has blurred the lines between “play” and “commerce” in a big way. Over the last several years, eSports tournaments have become incredibly popular as well, drawing record-breaking viewership and sponsorship opportunities. The global eSports market is anticipated to hit $4.3 billion in revenue by the end of 2024. Between 2024 and 2028, that number will grow roughly 7% yearly.
How the Demand for Video Games is Growing
The Entertainment Software Association has been tracking the rising demand for video games throughout 2023. Interestingly, they discovered that the top video games of the year outperformed the top movies of the year at the box office. They also tracked the rising demand for games across the 2023 holiday season and found 72% of kids were likely to ask their parents for video game-related gifts.
Video games have existed for a long time, and their appeal has reached the point where it is cross-generational. The first kids who grew up with the earliest video game systems now have more disposable income than ever and are having children of their own. This means that as impressive as the above numbers are, they’re only going to get stronger over the course of the next decade.
By acknowledging 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 harness the burgeoning 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 foster job creation, talent attraction, and economic growth without excessively favoring singular projects over sustained development efforts.
2. Fintech is changing loan processing
The housing industry is also going through something of a tech-driven revolution, particularly in the United States. There’s been a lot of buzz about the technology behind more efficient and sustainable homes these days. However, there’s been less buzz about where the real impact is: loan processing.
Many financial technology companies now offer solutions to help empower loan officers as much as possible. Not only do they embrace concepts like automation to help streamline processes and free up valuable time, but they also create a more efficient, more competitive mortgage market as well. The easier it is to approve a loan, the easier it is for people to get them. This increases competition in the market, which is ultimately better for both consumers and professionals alike.
This also helps to inject capital into local communities where it can have the biggest impact. It helps boost homeownership rates, which is good for both specific areas and the whole country. The more people there are who buy homes and live in an area, the more economic activity there is. People bring in jobs and spend money, which makes it all a better place for everyone. This also goes a long way toward fueling construction and related industries.
How Fintech is Improving Processes
One example of a company that is doing well in this space is Canopy Mortgage. They offer user-friendly technology that makes the loan process as simple as possible for everyone involved. Applicants can upload essential documents from mobile phones, tablets, or computers. They can see their loan progress 24 hours a day, seven days a week, to ensure they’re always in the loop about what is happening.
Once that information is in the system, it can be tracked as easily. Because everything is so straightforward and is easily shared securely, this also frees up the valuable time of loan officers. This way, they can focus on those matters that truly need their attention. All this, and they have a highly competitive structure that allows them to offer great rates and low fees.
Canopy Mortgage is just one example of a company that is making an impact in this space, but rest assured that there are many more. This will especially be true as FinTech companies begin to pay more attention to the housing market as its prominence increases over the years.
3. The Era of the Rooftop is Upon Us
Speaking of the housing market, no list of the “hidden gem” drivers of economic activity would be complete without a mention of rooftops. They’re something that most people don’t think too much about. But, this is a trend that has actually been building for quite a while.
As populations continue to grow, the need for housing becomes pressing. More homes are built, which slowly but surely chips away at the amount of available green space in an area. For a while, this level of urbanization wasn’t that big of an issue. But with recent studies indicating that a lack of green spaces in cities leads to higher mortality overall and worse child development, it has become clear that something must be done. This is before you even get into the major push for sustainability that we see countless examples of.
How Rooftops are Contributing to Economic Growth
Enter rooftops. What were once quirky green experiments are now the perfect example of just how far thinking outside the box can truly 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 become the leading rooftop farming and intensive green roofing business operating anywhere in the country today. It utilizes rooftops to help build green spaces. Additionally, as a business, it also hosts educational programming, events like weddings, and more.
These types of farms have also gone a long way toward creating local food economies. In the case of Brooklyn Grange, it has increased access to locally grown produce in New York City. Other rooftop farms are cropping up worldwide, particularly in highly populated areas and major cities. But more importantly, these rooftop projects also help reduce a community’s reliance on industrial agriculture. There is 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 to generate an enormous amount of revenue for those involved. This inevitably leads to economic growth since they also create jobs and offer sustainable food options to communities that may not otherwise have access to them. They do this all within the same urban environments that people have come to depend on. Unlike the urbanization that took away the green spaces in the first place, rooftop farms aren’t eliminating anything at all. They’re simply taking what was already there and building upon it instead of taking something away that you might never be able to return.
Economic Growth Found In Unexpected Places
In the end, these are just a few of the many examples of how industries that most people are still not paying nearly enough attention to are driving economic growth. On the surface, sectors like video games and loan processing seem vastly different. But the through line is clear: they help to 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 cropped up over the course of the last 20 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, the revenue generated by in-app purchases in gaming is expected to hit $249.9 billion as soon as 2027.
From a new generation of empowered borrowers to rooftop harvesters and everyone in between, these are perfect examples of how the financial landscape’s future is being reshaped, albeit quietly. They also collectively go a long way toward proving that innovation and community will always win out in the end. They will bear fruit if given enough resources and time — even if it starts to happen in the places you least expect.
Featured Image Credit: Photo by Christina Morillo; Pexels; Thank you.
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