Investing in the Great Lakes Boom

Will Great Lakes Investing Be as Big as the Dot Com Boom?

Remember when the digital revolution disrupted everything? Disruption was chic. For high-tech entrepreneurs and early adopters especially, the upheaval wrought by computers, the internet, e-commerce, and social networking was exciting. For everyone else, it was a roller coaster ride, a decades-long deluge of creativity and destruction where you had to adapt swiftly or be trampled.

Get ready for a new, higher-magnitude disruption. This one, not so chic, will be wrought by the confluence of massive climate migration and freshwater scarcity. As in the computer/internet revolution, the climate/freshwater revolution will present phenomenal market shifts and investment opportunities.

I began studying both human migration systems and freshwater resources, and the Great Lakes Basin (GLB) in particular, in the mid-1970s when I got a BA degree in geography at the University of Illinois Chicago. Based on that education and informal studies since then, including 40 years as a financial journalist, I developed the following vision about the future of the GLB and what I predict will be an economic boom in the region. Even if you already envisioned this sort of future, it will happen faster than you expected.

Mass Migration to the GLB

Climate migration and disaster displacement will be among the great transformative forces of the 21st century.

According to the National Academy of Sciences, over the next 50 years, 1 billion to 3 billion people will be forced to migrate from newly uninhabitable land due to catastrophic climate change — droughts, floods, sea level rise, and extreme weather — to more temperate and more stable climates, the kind that “have served humanity well over the past 6,000 years.”

“As climate change impacts intensify and living conditions in certain areas gradually worsen, affecting land productivity, access to clean water, food security, and livelihoods, more and more people will likely be forced to leave their homes and potentially cross borders into other countries,” states Renee Cho, Earth Institute.

In North America, masses of people and corporate headquarters will migrate from drought and flood-stricken areas — especially the coasts and southeastern USA — to the Great Lakes Basin, which has a relatively stable climate. “Cities like Detroit, Cleveland, and Buffalo [for example] will still be livable as the climate changes and have the space to absorb climate migrants,” write Kelly Leilani Main and Greg Lindsay in Fast Company.

Freshwater-Based Wealth

The United Nations estimates that 1.2 billion people live in “severely water-constrained agriculture areas.” By 2050, 52% of the world’s 9.7 billion people will live in water-stressed regions.

While global water supply has remained constant over millions of years, the demand has increased six-fold just in the last century. The rate of demand is increasing at roughly double the rate of population growth due to irrigation, mining, manufacturing, and other industrial uses, as well as household and commercial consumption.

As clean, potable water becomes scarcer, and demand for freshwater resources grows, the value of fresh surface water will soar, and the Great Lakes (which contain 20% of the world’s fresh surface water) will derive great wealth from freshwater resources, perhaps until affordable/sustainable desalination and/or other water technologies emerge — which might be never. Even if desalination can be done cheaply and without hogging so much energy, disposing of the salt, which is contaminated and toxic in high concentrations, is still a big problem.

The Future of the Great Lakes Basin

Based on those predictions, here is what will unfold in the GLB over the next 10 to 20 years:

Regional Security

Freshwater-related resources will come under intense stress from overuse, depletion, illegal diversion, pollution, taking, sabotage, and invasive species. That will lead to an urgent need for regional security and resource management expertise. Security will continue to be partly the responsibility of the US Environmental Protection Agency and state departments of natural resources. But it will increasingly become the job of corporate, private, and regional authorities such as the Great Lakes Commission and the Conference of Great Lakes and St. Lawrence Governors and Premiers.

For example, in 2008, the US Congress approved the Great Lakes-St. Lawrence River Basin Water Resources Compact after it was ratified by the eight Great Lakes states. The Compact governs how the states must protect the resources and prevent unwarranted diversions. It is administered primarily by the Conference of Great Lakes and St. Lawrence Governors and Premiers, without federal interference.

Increased Power, Wealth, and Autonomy

Shifting population (mass migration from East and West Coasts and Gulf states to the GLB) will result in a shift of power toward the Great Lakes states in the US Congress and a corresponding shift in the Canadian parliament for the two Great Lakes provinces. Increased power and wealth in the GLB will result in more regional autonomy over the security and management of freshwater resources.

Great Lakes Coalition

Various regional authorities will consolidate to form a Great Lakes Coalition and establish a semi-autonomous Great Lakes Security Agency with greater control over freshwater exploitation and protection.

Great Lakes Basin: Nation to Empire

Here’s what might unfold in the ensuing 20 to 30 years:

Great Lakes Nation

The existing compact and coalition between the eight states and two provinces that border the Great Lakes and St. Lawrence River will become stronger, wield more power on the continent, and gain broader autonomy. There will be increased competition between regions of North America forced to compete for dwindling freshwater resources (as they competed for medical and protective resources during the pandemic in 2020).

Global Realignment

National borders and international alliances will realign according to riparian alliances and will depend less on traditional geographic borders. In The Durability of International Water Treaties, I proposed that in the 21st century, it is likely that international water treaties will be more durable than national borders and traditional political alliances.

Great Lakes Empire

International water treaties, alliances, and compacts will gradually replace traditional political alliances and borders.

• North American countries will fragment into autonomous, balkanized regions based largely on riparian partnerships (e.g., western slope vs. eastern slope of the Rocky Mountains).
• The Great Lakes coalition and security agency will evolve into a Great Lakes National government. The west coast (from California to British Columbia) will form an independent state.
• Southern US states will secede and form a white Christian supremacist ethnostate.
• The Great Lakes Nation will dominate the continent. In fact, the GLN will dominate the world in several sectors, including freshwater research, utilities, distribution, law, security, and related industries.

Like the California Gold Rush of the mid-1800s, the Great Lakes Boom will bring both blessed and severe effects upon the current population, as well as opportunities for millions of new “settlers,” who will immigrate from all over the world in all their glorious diversity. In fact, diversity itself will help the region flourish and preserve its heritage as a free-market, constitutional republic.

The Great Lakes Economic Boom

Given the surging population, natural resources-derived wealth, and political supremacy of the Great Lakes states and provinces, we can expect a commensurate economic boom in the region that results in Great Lakes investing opportunities. Here are the details for 10-year, 20-year, and 30-year economic horizons:

10-Year Economic Horizon

• Infrastructure and real estate — Mass migration to the GLB will result in surging population growth and a great need for new housing throughout the GLB. Greater population density in cities means demand for the replacement and upgrade of aging urban infrastructure and public transportation – also the development of corporate headquarters in suburban and exurban areas, rehab and repair in urban areas, and a real estate boom throughout the basin.
• Water rights and utilities — There will be a boom in freshwater protection, exploitation, use, consumption (including packaged water), and privatized water utilities, as well as legal diversion deals approved by the Great Lake Commission. Riparian rights will be investments, including “water futures” as hedges.
• Consumer goods and services — Freshwater-based wealth will result in thriving communities, arts and entertainment, education, financial institutions, luxury goods and services, media, and venture finance.
• Strictly defined regional territory — Growth will occur in exclusively regional enterprises (based in the GLB, not marketed beyond GLB), especially health care, financial services, and food. If a company wants to expand beyond the GLB market, it may indeed grow, but that growth will be much slower.
• Public financing — Municipal, district, and regional utilities will issue bonds to fund explosive growth and upgrades. The greatest potential is in Detroit, Cleveland, and Buffalo.2

20-Year Economic Horizon

• Freshwater expertise — We will see increasing corporate, private, and regional authority over GLB freshwater resource management and protection, requiring relevant expertise. Industrial and commercial water treatment, remediation, bottling, distribution, and security contractors will thrive, as will water lawyers, water researchers, and water educators. Milwaukee and Toronto have a head start as freshwater law and research centers. Freshwater management and security contractors and consultants throughout the region will thrive, as will water law and research firms.
• Politics — I predict greater power in the US Congress for the eight GLB and St. Lawrence River states, as well as a corresponding power shift in the Canadian parliament for the two GLB-SL provinces. There will be more autonomy for GLB states and provinces (and regional authorities, Great Lakes coalitions) over freshwater security and management.

30-Year Economic Horizon

• Great Lakes supremacy — The Great Lakes Compact and coalition will gain power and autonomy over not just the freshwater resources but the broader economy.
• The new geography — National borders around the world, including North America, will realign according to riparian alliances. International water treaties will replace existing political borders. In North America, the Great Lakes coalition will evolve into a Great Lakes Nation government, which dominates the hemisphere.

Great Lakes Investment Strategy

If you knew that the Great Lakes region would experience a historic economic boom over the next 10 to 20 years, given its position as a climate refuge and freshwater paradise, how would you exploit that knowledge? Here are some of the sectors, industries, and services that I believe you could bet on:

10-Year Investment Horizon

Explosive Growth Potential:

• Real estate and farmland throughout the GLB
• Freshwater rights, water futures
• Freshwater security firms and consulting businesses (especially in the areas of preventing and remediating water pollution; preventing and investigating theft, taking, and illegal diversion; and battling invasive species)

Moderate-to-Fast Growth Potential:

• Privatized water utilities
• New housing throughout the GLB
• Replacement and upgrade of aging urban infrastructure and public transportation
• Development of corporate HQ in suburban & exurban areas
• Rehab and repair of housing and commercial buildings in urban areas
• High-end & luxury retailers, food retailers with GLB market exclusively
• Regional banks, media and venture finance (in GLB exclusively)
• Public financing (bonds for GLSL municipal, water-related district and regional utilities)

20-Year Investment Horizon

Explosive Growth Potential:

• Corporate and private freshwater management and security firms/contractors
• Industrial and commercial water treatment, remediation and waste disposal
• Legal diversion schemes (approved by the Conference of Great Lakes and St. Lawrence Governors and Premiers)

Moderate-to-Fast Growth Potential:

• Great Lakes shipping
• Freshwater research and education
• Localized irrigation development projects
• Regional land development bonds

Not included: (a) Companies whose market is wider than GLB, or which intend to grow outside the GLB; and (b) regional subsidiaries of national or international companies.

The Great Lakes Basin…the New Silicon Valley?

Just as the digital revolution ushered in the information age, the Great Lakes boom will usher in the age of freshwater supremacy. Today is the ground floor of the Freshwater Age. The Great Lakes Basin is today’s equivalent of Bell Labs, Fairchild Semiconductor, and Silicon Valley during the explosive development of microprocessors and the internet, which seeded the “third industrial revolution” and made some early venture capitalists very wealthy.

In the 21st century, you don’t have to be a millionaire and invest six figures in a venture capital fund or REIT to get very wealthy in the Great Lakes boom. Every American, regardless of income or net worth, can invest as little as $100 in local startups and growing businesses thanks to the Jumpstart Our Business Startups (JOBS) Act of 2012. The JOBS Act deregulated private securities and authorized online angel investing under Regulation A+ (which launched “mini-IPOs”) and Regulation CF (which launched equity crowdfunding).

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[Editors’ Note: To learn more about this and related topics, you may want to attend the following on-demand webinars (which you can listen to at your leisure and each includes a comprehensive customer PowerPoint about the topic):

• Investing in Residential & Multi-Family Real Estate

• Investing in Commercial Property

• Commercial Leases, Their Provisions and Pitfalls to Avoid

This is an updated version of an article originally published on June 23, 2021.]

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