Three Rules of the Modern MarketDemographics, demographics and demographics. This is one of our favorites because large-scale shifts in age cohorts drive many markets. For this reason also it gets a little complicated, but here are a few important, and long-term, trends to consider:
The leading edge of the Baby Boomlets...children of Baby Boomers...are now graduating from college. They are thoroughly versed in technology, especially the Internet. They have money. They will soon start to look for careers. They are starting to get married. They will soon start to spend a lot more money on eating out, drinking, buying cars, buying furniture. They like big movies (Lord of The Rings). They like eco-tourism and extreme sports. They have never worn suits.Talk amongst yourselves...The Baby Boom folks are being financially squeezed by their postponement of child-bearing, which means that money to fund retirement is being used to college bills for their kids. This is happening at a time when many of the Boomers are unemployed (and do not show up in the labor statistics because they are out of the labor force or underemployed). They are also getting sick, whether bad knees or the consequences of bad living.
The Boomers’ Mom and Dad. Mom and Dad are getting sick but they will live a long, long time and they will not have enough health insurance to cover the costs of extended or merely chronic illnesses. Their inevitable demise will mean a very large transfer of wealth, assuming that things like the Medicare spend-down requirements do not wipe it out.
The Middle Classes of the Developing World. At the same time, a middle (and upper middle) class has now emerged in developing countries...people with incomes, lifestyles and aspirations roughly equivalent to the American upper middle class. For example, there are now more people in India who can afford Mercedes Benz higher-end models than there are in the United States.
The Entrepreneurs Live Elsewhere. Whatever you can do to increase your business, entrepreneurs in India, China and elsewhere can do just as well and at a lower cost. With access to capital (look at China), they are even more potent. They are export-oriented or, rather, they happily understand that their markets will be elsewhere, such as the US and Europe.
The Wired World is Going Overseas. Depending upon who is counting, somewhere between 40 and 60% of Internet users are now outside of North America and most of them are non-English speaking.
I guess my only quibble would be with the stat that 40-60% of all Internet users now are "non-English speaking." I think someone may have confused "English not as a 1st language" with that, or just cross-referenced "percent Internet users in nation X" with "percent English speakers in nation X", not taking into account that English speaking and Internet use are likely significantly correlated, and both are likely to be a function of overall educational level of the individual.
The amount of energy that your average American consumes was sustainable for some time while it was only the USA who was doing that, but if more and more Chinese and Indians start demanding near the same level of power per capita, the energy resource squeeze could be a major political pressure point as the former developing nations move into developed status. Other than developing our own sources of energy, though, there may not be much we can do about that, and as I think Joe Katzman (?) said a few weeks back, the blowback from an attempt to check the development of other nations could be pretty ugly down the line.
May you live in interesting times, indeed.
For a real discussion of generational demographics and their effects, read Strauss and Howe's "The Fourth Turning".
It's actually not the baby boomers, who are older, but generation X ala "the 13th generation" (Strauss), whose children are now going to college and who are financially squeezed. The baby boomers, whose birth years approximately end in 1945-1961, are just fine. They have always BEEN just fine, and will always BE just fine.
Because they are the masses, their political interests are completely and totally represented and they will (for example) suck the very marrow out of Social Security just before those born in 1965 come to need it. In fact, recent attempts to reform SS were quite blatant about that; advancing retirement age was put off until those born in 1960-1965 reach age 65-70.
W is a boomer, Kerry is a boomer, and most of the people making decisions right now are boomers. As the front of the advancing 13ers, I find that I have little in common with these people, and resent being grouped with them.