Businesses need to see the trends that will affect their performance, whether they be technical trends, business model trends, or economic trends. One trend which I haven’t seen as many companies factor in (although you see many governments talking about it) is age demographics.
Here is a very cool graph on how US population demographics will evolve over time as taken from the Calculated Risk blog (HT: Jeff L). In particular, I find the “Baby Boom” bulge (the wave of youngsters that came of age beginning from 1950-1970) moving towards the right to be very illuminating:
It highlights a trend which Japan is only beginning to grapple with – the “graying” of the American population that comes with the Baby Boomers becoming older. If Japan is any indication, that means the US will see a few things:
- Rise in pension/Social Security costs and payments for care for the elderly
- Decline in average wages as fewer lower-paid and younger workers replace more retiring higher-paid workers
- Socio-economic changes that come from a smaller working-class population which needs to support a larger elderly population
- Change in the political system as a balance will be sought between a growing importance in the elderly vote and the need for governments/companies to change the pension/healthcare payment balance and the ability of medical science to extend the workable years for elderly individuals
- Change in business world as the elderly become more tech-savvy and become a more significant piece of the consumer population
If I were a business-owner looking at the long-term, I’d be looking long and hard at this list, and making investments into understanding how to convert these broad social/economic/political trends into insights which I can use to create a competitive advantage. For instance, if I were working in corporate strategy at Facebook, I’d be thinking of:
- ways to make the site more attractive for the new generation of tech-savvy elderly
- how to make my social network asset more valuable for elderly users (e.g. ways to make it easier to connect with old friends or family, ways to create mentoring relationships between older, more experience users and younger, less experienced ones, etc)
- how to get useful ads that the elderly are more likely to pay attention to
Any other ideas on how things will change because of the demographic shift, and how businesses might adapt to them?