By Jim Mikula, President/CEO
We often talk about the changes in our community, and typically, we refer to the changes in past tense. Looking at change in the rear-view mirror is easy, and it’s even easier to blame today’s problems on changes that have occurred. This is emblematic of the notion of the “the good old days,” which may very well have limited value on the present or the future. This got me wondering about switching the conversation about change to a future tense. Part of looking at future change is certainly looking at the past, particularly, to identify major influences on change.
One concept that has helped me to understand change better is the idea that there are two major types of change: cyclical and structural. Cyclical changes are temporary in nature, although a cyclical change can last for years such as the inflationary cycle we are currently experiencing. As the word cyclical implies, these changes dissipate or reverse, such as when employment improves as the economy recovers from a recession. Nature also has cyclical changes, and we all know the cycle of drought and rain here.
Structural changes are long-lasting, often permanent and irreversible. They involve fundamental shifts in the economy, culture, information or other major forces on a large scale. These changes are often driven by technological advancements, globalization, or shifts in consumer preferences. I will also add that the changes caused by extended droughts on agriculture have caused and may cause more structural change here and globally.
Another influence on change is population growth or decline. Texas’ population has grown by 1.7 million from 2022 to the end of 2024. The breakdown of migration is surprising: 45% international migration, 30% domestic migration, 25% natural population increase. Texas’ overall population is now over 31 million.
A current structural change with a global effect is growth and use of Artificial Intelligence, AI. This change will also have a significant impact on Texas. The Texas Association of Business, state chamber of commerce, forecasts that $1.8 trillion will be invested in Texas AI companies. Texas GDP was $2.7 trillion in 2023. AI’s influence on communications, business and industry, education and everyday life is vast. This growth will also have an impact on the use of electricity. MIT Technology Review simply states that “Ai is an energy hog.”
What will the impact of continued population growth, extended periods of drought and AI have on Fredericksburg? There are no clear answers yet, but there are some assumptions that can be made. The growing population and economy of Texas should continue to support the tourism sector. The expansion of AI could strain our suppliers of electricity. As for extended droughts, it is likely there will be a negative impact on the historic cornerstone of our economy, agriculture.
Change also brings opportunities. One potential opportunity is learning how to use AI to improve the products and services of our tourism sector companies. AI can be used to learn more about our visitors and tailor what we offer. We can also improve our marketing efforts to effectively target new tourist audiences who will spend more or visit during the week vs weekends. Adversity, such as continuing drought, can lead to innovative ideas that solve problems and create new products.
We will continue to monitor the changes across Texas and major metroplexes to learn what trends or changes are headed our way, and you should, too. The Chamber will also stay in contact with our state officials about legislative initiatives that will affect our community.
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