What is Economic Growth

Economic growth is defined as the increasing capacity of the economy to satisfy the wants of its members according to Wikipedia.  Wikipedia goes on to state that lowered costs through increases in productivity increase demand for goods and services.

The US has almost always relied on consumer led growth to drive the economy.  However, with household wealth declining and painful de-leveraging still needed its more likely that the US will have to look to other drivers of growth.

By now one would think that US consumers have all the goods they could possibly need or want. For instance, there were over 35 million flat screen televisions sold in 2009.  By 2010 roughly 115 million households have televisions with 55% of total US households having more than 3 television sets.  There are now more TVs per household on average than people per household.

Nielsen Report

So where should we look to for growth?  Energy and energy conservation products seem like a good bet.  A McKinsey report concludes the US economy has the potential to reduce annual non-transportation energy consumption by roughly 23 percent by 2020, eliminating more than $1.2 trillion in waste—well beyond the $520 billion upfront investment (not including program costs) that would be required.

Mckinsey