Demographics -- The Population Hourglass

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    Demographics: The Population Hourglass

    Your future is older, browner, and more feminine than you might have realized. Thatwill make for some major lifestyle changes ("Welcome home, Mom!") and lots of hugeopportunities for business.

    From:Issue 103| March 2006 | Page 56 By: Andrew Zolli Photographs by: Phillip Toledano

    It's the futurist's first rule: You can't understand the future without demographics. Thecomposition of a society--whether its citizens are old or young, prosperous or declining,rural or urban--shapes every aspect of civic life, from politics, economics, and culture tothe kinds of products, services, and businesses that are likely to succeed or fail.Demographics isn't destiny, but it's close. Our leaders, as a rule, completely miss the boaton demographics and how it informs their own organizations, customers, andconstituencies. And it's not hard to see why: Most executives aren't trained to make senseof demographic forecasts (there are no courses on demographics at Harvard BusinessSchool or Wharton, for example), and the field itself does little to raise its own profile.Demographers frequently come across like accountants--without all that sex appeal.

    The demographic concentration of boomers at the top of the population pyramid represents thenext American gold rush.

    But that doesn't mean exciting and important things aren't happening. The United Statesof 2016 will find itself in the throes of demographic shifts that will upend our political,economic, and technological priorities and redefine our markets. From our age distributionto the color of our skin, we will look dramatically different.

    To get a sense of what lies ahead, consider a simple demographic tool: the "populationpyramid." Imagine that we took all of the people in a given population and stacked them upby age, putting all the infants at the bottom and all the centenarians up top. For moststable, peacetime societies, the resulting figure would look like a pyramid, with theyoungest people at the base and the oldest people up at the tip. And indeed, that is exactlywhat you see today in a place like India--a perfectly sloped pyramid with lots and lots ofbabies at the bottom and a handful of the ancient. By contrast, in what passes for ademographic joke (given our fondness for Fritos and Cinnabon), the current U.S. pyramid

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    looks like an overweight contestant on The Biggest Loser, with the giant baby boombillowing out from its midsection.

    Starting in the next decade, however, our flabby pyramid is quickly going to slim down. Itwill assume the form of an hourglass, with the largest number of older people in oursociety's history, the quasi-retired baby boomers, up top, and the largest generation of

    young people since the boomers--the millennials, or echo boomers--at the bottom. Thebeleaguered generation-Xers will form the "pinched waist" in the middle.

    The hourglass society will bring an avalanche of new social challenges, cultural norms, andbusiness opportunities. With a huge increase in the number of older consumers, entirelynew entertainment, culture, and news markets will open up--film, television, books, andInternet sites pitched more to the Matlock set than to the Eminem crowd. Also, olderpeople tend to vote more frequently, and they will wield significant political clout: Wecould see a multidecade "boomerocracy" or, as one gen-Xer put it archly over cocktails,"TRBN: terminal rule by boomer narcissists."

    (G)old Rush

    The demographic concentration of boomers at the top of the population pyramid, backedby their vast reservoirs of disposable income, represents the next American gold rush. Tenyears from now, the cover of this magazine will be graced with the smiling faces of theentrepreneurs and corporate leaders who unlocked the elder boomers' hearts and minds--and drained their bank accounts.

    It's hard to overstate the weight of the numbers: Boomers now represent a U.S. market ofsome 36 million, or about 12% of the population, and as they move up the pyramid, thenumber of seniors is going to rise dramatically. By 2011, the 65-and-over population will be

    growing faster than the population as a whole in each of the 50 states. The Boomer Bingewill have begun.

    Businesses aren't confused about the opportunity that growth represents: Consumerelectronics firms such as Vodafone are investing in mobile phones with designs tweaked tothe requirements of older customers; IBM has developed a computer mouse thatcompensates for the tremors that sometimes affect seniors' hands; and Gap Inc. recentlyunveiled Forth & Towne, a new clothing line for women who fall into the vast retail voidbetween the navel-pierced teen and the librarian in a twin set.

    And those examples are just a foretaste. The real breakthroughs are going to come from

    companies helping boomers to hold on to their youth--and milk it for all it's worth.Boomers have never met a life stage they didn't want to remake in their own image, andtheir golden years will be no exception. Watch grandma windsurf! Pole vault! Pole dance!As their last act, boomers will remake even the American way of death: Consider EternalReefs (www.eternalreefs.com), a cremation burial option where your ashes can be mixedwith concrete and turned into an artificial reef off the coast of Florida. Boomers will bescuba diving even in the afterlife.

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    California, Texas, and Florida, which by 2016 will have overtaken New York as the third-largest in the country. The giant sucking sound you'll hear will be the national center ofgravity shifting south and west. By 2016, where you compete may matter much more thanhow.

    It won't be just the age and color of the workforce that change in the years ahead--its

    gender will change, too. Though it has been widely underreported, women make upapproximately 58% of the undergraduate college population, and that figure is rising.Within 10 years, at least 3 million more women than men could be attending college, andbecause educational and economic achievement are so strongly correlated, those gains willinevitably translate into cultural influence, purchasing power, and corporate leadership.That trend will only accelerate through the 2010s.

    Women's economic achievement is already seeding the clouds for a deluge of development.

    Women's economic achievement is already seeding the clouds for a deluge of distaffmarketing and product development. According to the National Association of Realtors,

    the percentage of single female home buyers in the past 20 years has nearly doubled,placing them second only to married couples. And the number of women buying high-endconsumer electronics like plasma televisions is growing faster than the number of men (areality yet to sink in at the big-box stores).

    Finally, while the workplace undergoes tremendous change, so will the American family.Thanks to boomer retirees who've outlived their income--or failed to save any of it--manyfamilies are going to get bigger. Consider Florida: While most of us think of it as a geriatrichaven, in recent decades the number of seniors exiting the state has steadily increased, inmany cases because they can no longer afford to stay. (To deal with this, MetLife startedoffering longevity insurance in 2004, a fixed deferred-income annuity to help insure

    seniors against "the biggest risk they will face in retirement: longevity risk.)

    Where will boomers go when they run out of money? In many cases, the answer will be,home to live with their kids. In fact, according to some projections, a woman born after1980 is likely to take care of her mother longer than she cares for her own children.(Perhaps MetLife will get around to "mother-in-law" insurance.) As those boomers moveback in, they'll redefine the family from a two-generation "nuclear" family to a three- oreven four-generation affair, a return to the beginning of the 20th century.

    These new multigenerational families will be a fertile new market for everything from newsenior-plus-family transportation (call it "the Clan-agon") to travel, entertainment,

    cooking, and shopping. Health-care and financial-services companies will find themselvesspeaking not only to their senior customers but to their family members, who form anextended-care network.

    Oh, and it's not just your parents who may be living with you. Your kids may be there, too.Millennials fully expect to live forever, which gives them plenty of time to drag out eachstage of life, starting with a nice prolonged "twixter" adolescence. For some, this will lastwell into their thirties.

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    You won't have to worry about a babysitter, though: Grandma plays a mean game ofGrandTheft Auto.

    Futurist Andrew Zolli is the founder of Z + Partners, a strategy consulting firm, and curator of the annualPopTech conference. He was a member of the Fast 50 class of 2005.