The U.S. economy as a whole is in a state of uncertainty. Georgia, however, seems to be more in a state of possibility. Its population is growing; its GDP is $36 billion higher than it was in February 2020; it is rich in venture capital and entrepreneurship, and has spent 9 years at the top of the rankings for best states to do business. Plus, it’s nice to be home to the reigning college football national champions.
Georgia’s challenge is building on this momentum to sustain the state’s growth trajectory. Unique monthly job openings have increased since 2021 as unemployment has reached record lows. These two individually positive trends have created a 238,000-worker gap in labor supply and demand. McKinsey estimates narrowing this gap could generate up to $190 billion in incremental GDP in Georgia over the next 10 years – but it will take sustained focus on foundational enablers of employment.
Credit: contributed
Credit: contributed
Here are three areas that need to be addressed.
Healthcare
Residents 65-plus are Georgia’s fastest-growing population segment. Demand for healthcare will therefore rise — and the system is already under stress. There is a cost to doing nothing, or not enough: poor health outcomes result in $98 billion in lost economic output each year, in part because Georgians have a higher incidence of chronic diseases like diabetes and hypertension as compared with national health averages. At the same time, they have lower-than-average access to health care.
Credit: contributed
Credit: contributed
Interventions exist that could reduce the disease burden in Georgia by almost one-third by 2030 — resulting not only in healthier people, but $16 billion in additional GDP. One promising approach is to allocate spending toward preventive medicine to improve public health outcomes and chronic disease management. Another is to address rural-urban access gaps. Another is the range of initiatives supporting healthcare workforce expansion, such as loan repayment for physicians who practice in underserved areas.
Education
The University System of Georgia and the Technical College System of Georgia are major assets for the state today, graduating students ready to work and offering affordability alongside a quality education. That said, it’s important to stay ahead of workforce trends and to meet the needs of older and non-traditional students. The system could expand and promote flexible part-time and full-time graduate programs, with a particular focus on meeting occupational demand, such as in software development and healthcare occupations.
Georgia’s bigger opportunity to improve in education is at the K-12 level, where the state is below average and where scores have barely budged for the past decade. Moreover, Black students consistently score about 25 to 30 points lower than white students. A nine-point gain in NAEP reading scores or 10 points in math could add $35 billion to GDP over a 10-year period. Peer states have achieved gains of this magnitude: Mississippi, which had historically been a national laggard, has improved markedly in recent years by instituting phonics-based reading instruction. By 2019, both Black and white Mississippi students were scoring above the national average.
Transportation
Georgia’s roads and bridges are good, ranking fifth and seventh respectively for quality. But 33 of its 159 counties have little or no public transit. Atlanta’s MARTA system has fewer transit service hours and has recovered less of its ridership post-COVID than systems in other Sunbelt cities like Miami and Dallas. Congestion cost the typical Atlanta metro area driver an additional 17 hours of lost time and $250 more vs. the national average. Future investments could prioritize reducing traffic and congestion to improve quality of life.
Commercial transit infrastructure is a relative strength. That said, Georgia should be aware of the pace of infrastructure investment in other states to stay ahead, perhaps by increasing cargo capacity at Hartsfield-Jackson airport, the Port of Savannah and the freight rail system. The state has proved capable in its road and airport investment in particular. The key is to use its expertise to do as well, or better, in other areas. Our analysis suggests that every dollar of investment in transportation could generate up to $1.60 in increased GDP.
Year in, year out for the past 20 years, more than 5,000 people a week have moved into Georgia. But that success must be continuously nurtured, not assumed.
Investment and sound stewardship in these three areas can help Georgia hit the sweet spot of sustainable, robust and broad-based growth. Education innovation could reduce performance gaps. Better and more accessible healthcare could boost the labor supply 7 percent by 2030. Investment in transportation can help bring discouraged workers back into the market.
Sustainable and inclusive growth is the goal — and it is one Georgia can meet.
Tiffany Burns is a senior partner in consulting firm McKinsey & Co.’s Atlanta office, where Elizabeth Murthy is a partner.
