I was one of two dozen financial journalists attending the White House’s first-ever Personal Finance Online Summit on Wednesday. Top Obama administration officials — including the President — gave their stump speeches on economic policies and job creation methods. (Read my article about financial tips from the president himself).
While there was admittedly plenty of politicking, a few business sectors stood out as clear winners based on White House policies and the overall direction of the American economy in the next few years. While no specific companies were named – in fact, some leaders in these industries may not even exist next year – it was clear these seven sectors are the ones that the Obama administration thinks will drive the economy forward:
Digital healthcare: Forget about your feelings over recent health care legislation or efforts to overturn the law. According to Aneesh Chopra, the administration’s chief technology officer, the real revolution in healthcare is going to happen due to new communication techniques that allow for secure sharing of digital medical records and remote doctor’s appointments. Chopra credits the “liberation of data” to creating a whole new industry regarding IT-focused medical services.
Regional banks: Elizabeth Warren has taken some shots for her all-but-assured role as the first leader of the newly formed Bureau of Consumer Financial Protection. Most notably, investors have fears over heavy-handed regulations that could undercut already weakened bank revenue. But Warren is adamant that consumer-focused competition is good for all financial stocks. “In a noncompetitive market [smaller banks] are competing with issuers who appear to be much cheaper. Community banks lost business to mortgage brokers down the street giving a much cheaper product,” Warren said. “But risk adjusted, it was not a cheaper product.” Demand from unwary consumers and a rush to keep up with the big boys not only caused the mortgage meltdown, but wound up really hurting regional banks in the long run. If Warren and her bureau get their way, regional banks will be on equal footing with the biggest banks – meaning they will lose less business to mega-banks.
Coal: Heather Zichal, a top advisor to Obama on energy and climate change, made it quite clear that coal is not going anywhere, and that “clean coal” is a crucial part of our nation’s energy future. In addition to using coal as an energy source, however, it’s also a big part of the White House’s focus on boosting U.S. exports. Zichal said that coal has a lot of potential since it’s “a resource we have in abundant supply,” and emerging markets are clearly increasing their appetite for this commodity.
High-tech education: Just as there are big digital opportunities in healthcare, technology chief Chopra outlined the value of productivity gains in the education sector that allow for remote classrooms and digital learning – not just to give better opportunities to students or to control costs, but to spur job creation and economic growth. “It’s not just a social mission – there’s money to be made,” Chopra said. “If you look at the long-term economic prospects of the country, it underlines productivity growth. Industries that have been successful in harnessing information technologies have seen big growth.” Education, however, has been left out of that equation – and if the White House gets its way, productivity gains due to new technologies will result in a boom for digital learning and online education businesses.
High-tech manufacturing: Austan Dean Goolsbee, the outgoing chairman of the Council of Economic Advisers, made it clear that the jobs created by the housing and finance bubble may never come back. “We have had an extremely deep hole, based on our unsustainable growth.” So what is sustainable growth? Manufacturing. The president’s top economist touted efforts to focus on exports and job growth in “high-tech manufacturing jobs” in all corners of the nation as a sign that this American industry is coming back – and that the White House is doing all it can to support the sector’s growth.
Nuclear energy: While outlining the administration’s clean energy plans, energy advisor Zichal reminded journalists that the Obama administration offered $8 billion in loan guarantees in February to build the first new plant on U.S. soil in nearly 30 years. Of course, this was before the Japan tsunami and resulting disaster – but when asked if there were more deals like this in the future, Zichal responded in the affirmative. Nuke plants offer “carbon free energy and provide jobs,” two issues the White House believes strongly in.
Cybersecurity: All of these industries share one common theme: innovations that rely on cutting-edge technology and digital efficiencies to provide productivity gains and significant profits. That means that the need for security in the new high-tech economy will only increase as well. The White House’s chief technology officer pointed out that entrepreneurs have risen to the occasion in cybersecurity with developments so far, so any future innovations should just be seen as the potential for more “spinoff” businesses that find a way to make things safer, faster and better for American businesses and consumers.