At the end of every semester I give a lecture on what markets offer the best opportunities in entrepreneurship over the next fifty years (the working lifetime of a typical student). I will not bore you with the standard answers, such as education and healthcare. I think two opportunities that are under emphasized are:
- Urbanization
- Agriculture
In 2008 the percentage of the population living in cities passed 50% for the first time. As incomes increase in Africa and Asia over the next 20 years the percentage of urban population may approach 60-70%. Conservatively, that represents a migration of 700 million additional people into cities. Given the limited financial resources and antiquated infrastructure in most cities, cities face almost insurmountable challenges. Water, sewage and transportation will be big opportunities for innovation. Two interesting articles on urbanization are this report from the UNFPA, the UN group studying population, and this HBS Working Knowledge article by John Macomber, an HBS professor.
With increased population over the forseeable future and some estimates reaching a world population of 10 billion, the critical question is how to feed these people. Improved standards of living for those new urban dwellers will also exacerbate the situation. While just production may be an issue, where will the fuel come from to power machinery and provide fertilizer. The graphic below shows that energy efficiency in U.S. agriculture has improved significantly, but most of the improvement comes from the switch from gasoline to diesel fuel and provides no significant improvement in CO2 emissions. A .9 units of energy for each unit of food looks to me like a big opportunity for innovation.
Source: USDA
