Today, the U.S. economy looks very different than it did hundreds of ago. While railroad stocks dominated in the 19th century, industries within technology and healthcare have grown substantially in recent years. As dynamics continue to shift, what will be the fastest growing industries of the future?
In this infographic from New York Life Investments, we uncover the industries projected to see the fastest growth rates over the next decade.
What Are the Fastest Growing Industries?
The U.S. economy is growing. From 2019 to 2029, total industry output is expected to rise by more than 20%.
Output is the value of final goods and services, as well as intermediary sales that are not typically included in GDP. In this case, output is based on chained 2012 dollars, which is a method of adjusting real dollar amounts for inflation over time using 2012 as a base year.
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Below, we count down the fastest growing industries from 2019 to 2029, according to projections from the U.S. Bureau of Labor Statistics.
#5: Outpatient Care Centers
This industry is defined as facilities where the patient is not required to stay overnight, such as:
- Mental health and substance abuse centers
- Family planning clinics
- Dialysis clinics
- Multidisciplinary clinics
As patients demand more convenient and less expensive care, the popularity of outpatient care centers has grown. Advances in medical technology, such as minimally invasive surgeries, also allow for same day release. Here is what projected growth looks like for the industry.
However, investors may want to consider that health care leaders say implementing information technology (IT) is their greatest challenge.
#4: Computer System Design & Related Services
Companies that primarily provide IT expertise fall within this industry. Here are some examples:
- IT consultants
- Programming services
- Video design
- Web page development
The growth of e-commerce and digital marketing will likely contribute to the industry’s success. For instance, U.S. e-commerce climbed by 32% in 2020. Buoyed by these trends, computer systems design companies are expected to have a compound annual growth rate exceeding 3%.
On the other hand, investors may want to watch for the high capital costs some IT companies could incur to upgrade outdated platforms.
#3 Oil & Gas Extraction
This industry includes companies involved in the preparation of oil & gas, up to the point of shipment from the producing property. Some examples are:
- Integrated oil & gas companies
- Drilling contractors
- Exploration & production companies
As inflation rises, extraction companies may benefit from higher prices and wider profit margins. The industry is expected to have the third highest growth rate over the next decade.
However, investors may want to consider the growing traction of sustainable investments. While oil demand isn’t projected to peak until 2035, the shift to clean energy may cause long-term challenges for the industry
#2: Information Services
Businesses that supply, search for, or publish information fall within this industry. Some examples are:
- News syndicates
- Internet publishing
- Broadcasting
- Web search portals
Consumption of trusted news brands is growing, and paid subscriptions are increasing in richer Western countries. In addition, Google has committed at least $1 billion to license content from publishers for its News Showcase product. Here’s what potential growth looks like for information services companies.
On the other hand, ad revenue is falling in some segments. Investors researching this industry may want to consider platforms that are diversifying their revenue streams.
#1: Software Publishers
Topping the list of the fastest growing industries is companies that design, install, and provide post-purchase support for software. Some examples are:
- Cybersecurity
- Graphic design
- Operating systems
- Customer relationship management
Amid remote work and e-commerce growth, software enables companies to connect with employees and customers. The industry is projected to have a compound annual growth rate of almost 5% from 2019 to 2029.
At the same time, the industry has relatively low barriers to entry. Investors may want to watch for competitors, which can pop up anytime and threaten existing companies’ market share.