WHAT POPULATION STUDIES CAN DO FOR BUSINESS

WHAT POPULATION STUDIES CAN DO FOR BUSINESSAuthor(s): Graeme HugoSource: Journal of the Australian Population Association, Vol. 8, No. 1 (May 1991), pp. 1-22Published by: SpringerStable URL: http://www.jstor.org/stable/41110596 .

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Vol.8, No.l, 1991 Journal of the Australian Population Association

Presidential Address, Australian Population Association Conference, University of Melbourne, November 20th, 1990

WHAT POPULATION STUDIES CAN DO FOR BUSINESS

Graeme Hugo School of Social Sciences

Flinders University of South Australia GPO Box 2100

Adelaide SA 5001

Demographers have a fundamental role to play in planning for the future. They possess a wide range of skills concerning the number, diversity and spatial distribution of the population, which are of value to business concerns. The role of demographers in analysis of census data is of special value. This paper discusses the specific skills acquired by demographers and provides examples of how these skills can be very useful and important in planning in both the private and public sectors. Finally the future of demographic training in Australia is considered by contrasting the APA membership with that of the PAA and considering the need for developing more teaching in demography at Australian tertiary institutions. The role of the APA in improving the status of demography as an important tool for corporate planning for the future is also emphasized.

Introduction

Almost all private and public sector activity has the ultimate aim of producing or delivering some kind of good or service to people. It would appear axiomatic, therefore, that a necessary and fundamental preliminary to efficient and effective production and delivery of goods and services is a sound and detailed knowledge of the population which is being targeted by a business or government agency. However, the extent to which analysis of the changing size, structure and spatial distribution of relevant population groups is incorporated into the planning activities of the private and public sector in Australia is still limited. In this presentation I would like to depart from the tradition of presidential addresses centring on developments in the president's own particular area of professional expertise. What I would like to do is to make a plea for the wider and deeper incorporation of demographic analysis into the planning processes of Australian business and public sector agencies. I would like to do this by showing some of the ways in which demographic analysis can be useful in planning in the private and public sectors. Although the primary focus in the paper is upon business, much of what I am saying is also relevant to the public sector.

Australia's population has undergone enormous change in the last two decades. I will just mention a few of the more striking shifts as illustrations but they have been elaborated in some detail elsewhere (Hugo 1986). The

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major changes include the transition to below replacement level fertility and the unprecedented increases in longevity among older Australians. This has resulted in the reduced size of many households. In addition, the revolution in marriage and divorce patterns with reduced rates of marriage, increased age of first marriage, increased divorce, increased de facto marriage and the general shifts in intra-urban population change with gentrification of inner urban areas, are also of importance. A further shift has occurred as a result of population turnaround whereby the non-metropolitan sector has grown faster than the cities with more than 100,000 inhabitants. There has also been a northward shift in population distribution between the States and a major change in ethnic composition with a greatly increased non-English-speaking background segment (most notably from Asia). Revolutionary changes in the Australian labour market have also occurred, leading to a doubling of female participation in the workforce outside the home and the normalization of two- income families. In addition, throughout the period there has been an increased incidence of single parent families.

These changes and others have caused a total reshaping of markets for goods, services and labour.

What Skills Do Demographers Have Which Are of Use to Business?

It is my strong conviction that all planning is for people and that people must be the first consideration and central concern in any planning. Demography, as the scientific study of human populations, then has a fundamental role to play because it is concerned with analysing and explaining changes in the size, composition and spatial distributions of people. The key word here is changes - populations are never static, but the changes are often incremental and gradual rather than sudden and shattering. Because they evolve, rather than occur overnight, they often attract less attention than other changes like major economic shifts, and planners are often surprised when their effects become apparent. While all demographic change cannot be anticipated much of it can be and should not surprise policy makers and planners.

In later sections of this paper I will consider in some detail examples of the range of problems in the public and private sectors to which demographic analysis can be usefully applied. At the outset though, I would like to list some of the skills which I think a properly trained demographer brings to her or his employer in the private and public sectors. Often these skills are thought by potential employers to be imparted by other disciplines such as geography, economics and sociology but in my experience it would be rare for a graduate in any of those disciplines who has not undertaken a specific demography or population studies course to have the complete set of the skills which I have listed. However, it is of interest to enumerate these skills and consider their value.

Firstly, a demographer has a sound knowledge of how and why populations change over time. Their theoretical and empirical knowledge of fertility, mortality, population movement and ageing allows them to place any specific population and its contemporary dynamics in a wider context so that they can talk sensibly about likely impending changes in that population.

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Secondly, demographers have a wide range of useful concepts which allow them to analyse the dynamics of change in a population. Among the most useful is that of the cohort - a group of people who share a particular demographic characteristic - usually being born in the same year. Techniques which allow demographers to follow the ageing of a particular cohort are very useful to planners, especially in business. A cohort of people share a unique set of characteristics engendered by the particular political, economic and social context which applied as they passed together through each stage of the life cycle. A cohort perspective can provide insights into the changing nature of demand for goods and services which is just not possible from a static analysis which studies population in particular life cycle stages at a single point in time. A good example here is the current generation of retirees - people in their 60s and early 70s. Many businesses1 concept of such people is based upon a stereotype which applied to Australia's elderly population in the 1960s and early 1970s. However, by adopting a cohort perspective we can see huge differences between the two groups even though they are at similar stages of the life cycle, albeit 20 years apart. A short list of such differences would include more early retirement, greater home ownership, higher migration, more financial assets accumulated, more experience of other places, greater access to benefits, higher incidence of superannuation, higher average levels of education, more living independently, higher levels of chronic illness, more living outside the inner city, a wider range of housing types, and greater ethnic heterogeneity. Clearly each succeeding generation of older people will have a distinctive composition having its origins in the unique circumstances that prevailed during the period when that cohort passed through crucial life stages. Hence the experience, characteristics, behavioural patterns, purchasing power, pattern of tastes etc. will differ in important ways from those of earlier generations of older people.

A third aspect concerns the fact that when people think of demographers they often think of statistics. I have lost count of the number of times that I have given talks in places where people have come up afterwards and said something like '. . . Gosh I didn't know demography could be so interesting, I thought it was a bunch of boring statistics'. Obviously while it is much more than this, the methods and techniques that have been developed by demographers are an important part of their armoury in tackling planning problems. The basic techniques such as cohort-component analysis and its various elaborations tell us a great deal about the dynamics of change in a population. The enormous developments in computer technology over the last two decades have infinitely widened the potential for population modelling. There is now a wide range of techniques, most of them available in package form for personal computers1 which allow us to construct scenarios for the future given various permutations and combinations of assumptions regarding likely impending changes in key variables. As with any statistical techniques, however, those of demography can be abused as well as used and the ease of accessing them has led to their being used

* Among the better known packages are those developed by the United Nations Population Division in New York.

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inappropriately and their results misinterpreted when they have been employed by people lacking a sound demographic background and experience.

A fourth example of a demographer's training which has considerable application is life table techniques. Life tables are models of the mortality experience of a population in which a hypothetical cohort (usually of 10,000 people) is aged through each year of life using the prevailing age-sex patterns of mortality in the population. Mortality rates are expressed as the proportion of individuals dying between age x and x+1 among 1,000 living at age x. The mortality rates are then used to calculate the number of survivors from birth to successive ages among the hypothetical cohort of 10,000 people. Life tables are the basis of actuarial work and have wider applicability in the business world. They indicate the probability of a person of a particular age surviving in the population for a year. However, the techniques can be adapted to a wide range of contexts where individuals enter or leave a population. For example, Ruzicka (1973, 1986) has prepared tables of working life for Australian males using mortality rates and also empirical demand probabilities of entry into, or retirement out of, the work force. Rogers (1980) and others have developed multi-regional life tables which indicate not only the probability of individuals in specific age-sex groups leaving a region through death but also that of leaving through outmigration or entering through inmigration. In a paper presented at this conference Cook (1990) has employed life table techniques to cost the lost productivity of a group of accident victims. It is clear that multiple increment-decrement life tables can be adapted to a 'rçide array of uses in the business arena.

A further area where I feel demographers have total pre-eminence among their social science colleagues is with respect to data. By this I do not mean simply knowing where to access a wide range of demographic, social and economic data, although I hasten to add that this is one of demographers1 real strengths. More importantly, demographers know how to deploy that data to the solution of specific problems and they are trained to assess the strengths, limitations and potential of data sets. These skills have become especially valuable with the quantum leaps forward that have been made in the last two decades in our ability to store, retrieve, match, analyse and present data. The exponential increases in our capacity to manipulate data wrought by computers has created a great number of new opportunities for planning but all too often people are overwhelmed by the vast array of information available and are left swimming (or floundering?) in a sea of data. Hence data management systems are an important area where computers have greatly strengthened the demographers' arsenal of weapons to deploy in any planning effort Data available from official sources rarely match die ideal data needed to solve a particular problem - the demographer is skilled in locating the best data available and analysing it within its limits so that it can help throw light on particular issues. Many new insights can be obtained from analysing existing data sets as opposed to initiating new primary data collection efforts.

It is also worth stressing that demographers* main statistical source is the Census of Population and Housing. Australia has one of the best census systems in the world yet it remains under-utilized, especially in business planning. The population group at Flinders University receives enquiries

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about availability of specific data items almost daily from both the private and public sector. In half the cases the data are available from the census but the enquirers did not know this or do not know how to access the relevant data. Expensive market research and other surveys are sometimes initiated needlessly because an adequate search has not been made of existing data sources. Properly trained demographers can get the most out of the census and the large number of regular and one-off surveys undertaken by the ABS. Although I should add a footnote here that those of us training young demographers in universities in Australia are increasingly being hampered in our work because we have to purchase ABS data at the same prices as people who are going to use the data commercially. We are now at the ludicrous stage where next year we may have to train our students using Indonesian census data. No Australian university has the budget to purchase large amounts of ABS material given the current pricing policy. Obviously bona fide educational users should be given access to the data on a different basis from commercial users.

With respect to the needs of planners, especially in business, a number of recent developments in the products made available by the ABS are of particular utility. These include especially the making available of small area data in two standard formats on CD-ROM. This makes the deployment of this data to small area problems infinitely easier, quicker and cheaper than was previously the case. Similarly the development of public use unit record tapes of one per cent of Australian households for the 1981 and 1986 census make various kinds of detailed analysis of markets and submarkets for products and services a more feasible proposition than in the past The whole area of geographical information systems is in its infancy in Australia but its potential utility in planning in the private and public sectors is enormous. A recent study (Worrall 1989) has demonstrated this by describing how policy relevant information on urban social and demographic change has been collected, organized and analysed into an integrated urban demographic information system for a city in the United Kingdom. It clearly shows the analytic potential of such models as well as their commercial and planning usefulness. In all of this the development of computer technology has been crucial. As Russell (1984:5) put it, The computer has become the microscope of social and economic research1. An associated development of significance has been the developments in computer graphics which has meant that demographic data stored in numerical form can be issued in map form. This has greatly assisted the business application of census and other small area data.

The story regarding developments in data and data processing/analysis technology is not without its worrying side. The perennial arguments about breaches of confidentiality are a legitimate concern with the development of private data bases of individuals and their characteristics. I should hasten to add that, like all my demographic colleagues, I am totally satisfied with the total confidentiality of the procedures adopted by the ABS in all their work.

My second concern relates to trends in changes in the level of accessibility to data. It is paradoxical that, with the amount of data being produced (especially that applying to communities) at unprecedented levels, the sections of the population who have effective access to that information may be being

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reduced because much of the data is available only in a form where it can be interpreted or analysed by highly trained people. In addition, the costs being charged for data mean that only a monied elite can afford it. This is not to criticize the concept of cost recovery now adopted by the ABS. If people are going to use the data to make a profit the ABS is entitled to recover its own costs and share in the profit. But to what extent are we setting out on a road whereby community action groups, minorities and other impecunious groups are going to be denied access to census information which could help them in defending their rights against more powerful and wealthier organizations and groups? There are very important and sensitive equity issues involved here whereby the community are requested to provide information free to the ABS but are required to pay for getting the results of this data collection. It is a complex issue which needs serious consideration in any discussion of pricing policies and one which the APA should be sensitive to and monitor closely. In a so-called 'information society1 information is power and we must resist attempts to disenfranchise non-profit groups in the community from access to information that can be helpful to them.

Demography graduates are not only thoroughly trained in the collection and analysis of secondary data but also in the planning and execution of primary data collection strategies of various kinds. Of course this is training which is also provided in some (but not all) geography and sociology programmes, but primary data collection is becoming of increasing significance in demography. Some of the most useful surveys undertaken in recent years in Australia have had substantial involvement of demographers.2 As we place more stress on the significance of attitudes and perceptions in influencing demographic behaviour we are becoming more involved in primary data collection. The well trained demographer when given a problem to solve should be able to locate all relevant existing data which pertain to that issue and if this is insufficient be able to plan a cost-effective strategy for the collection of the appropriate information. Demographers' training is especially helpful in establishing the reliability of surveys - i.e. in ensuring that a survey is representative of the population which is being targeted. Training in the efficient use of computers to process and analyse survey data is an important part of the demographer's set of skills.

In this discussion of the sets of skills and expertise which the demographer can bring to planning in the private and public sectors I have placed considerable emphasis on the ability of demographers to identify and access data appropriate to specific problems and the range of techniques and methods they have to process and analyse those data. However in concluding this section I would like to return to emphasize the importance of the first set of skills which the well trained demographer must have - a thorough understanding of how and why populations change. This is the prime element - all the data availability, technology and mastery of sophisticated statistical techniques in the world will be of little use if the analyst is not able

2 Taking just one area as an example - the dynamics of change in families - there has been substantial involvement of demographers in the surveys undertaken both by the Australian Institute of Family Studies and by The Australian National University, the Ageing and the Family Project, and the Australian Family Project.

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to interpret accurately what the results mean. Informed interpretation is absolutely essential for the effective applied use of population data and this can only be achieved through a full appreciation of the theories and concepts relating to population dynamics and a familiarity with the existing body of empirical knowledge relating to those dynamics, especially that relating to Australia. This of course has implications for the training of demographers and population analysts to work in applied contexts, which I will discuss later.

In What Ways Can Demographic Expertise be Used in Business? The possible applications of the demographers' specialized knowledge

and technical skills to enhance planning and provision of goods and services are very diverse. Some of the flavour of this diversity is captured in the sample list of case studies in applied demography included in the bibliography. As Morrison (1988a: 1) has pointed out, 'Applied Demography is driven by problems . . . Its evolution therefore mirrors contemporary issues to which demographic perspectives and data apply1. At the outset I should stress that the contribution of demography in business is often maximized if the demographer works in a team with other specialists. Having a demographic input into decision making impinges upon the bottom line of any business or government agency - the changing number of people who need or are likely to use particular goods and services.

In this section rather than attempt to survey comprehensively the applied demography literature I will attempt to distil what I consider to be the main types of areas in business and public administration where the demographer can contribute.

Strategic Long Term Planning Perhaps the most obvious use of demography in business is the

identification of shifts in the size, structure and distribution of population which will impinge upon the level of demand for the goods or services provided by that business. Many of the recent demographic trends enumerated at the beginning of this paper fly in the face of past experience. When these trends can be anticipated, as they sometimes can via demographic analysis, corporate strategy can be adjusted to maximize the benefits gained from those trends or minimize the losses suffered. Demographic trends such as the downturn in fertility and rapid growth of the aged population, have caused tremendous waves in the national market for goods and services as diverse as baby food and life insurance. The earlier such impending shifts can be identified, the better a business is able to accommodate the market change through diversification into other products, gearing up for expansion, contraction or changes in the nature of demand.

The applied demography literature suggests that the most important characteristics of individuals which shape what they buy are age and income although gender and education are also significant I will focus for a moment on age structure . The scale of recent shifts in age structure in Australia can be gained from the fact that between 1976 and 1986 we experienced, for the first time since European settlement, an absolute decline in the number of

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Figure 1 : Australia: Average Weekly Household Expenditure on Selected Items by Age, 1988 (Source: ABS 1990)

Food ^ k 120-1 y ^ k

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loo- ~**~~^ y^^ '

s / y X' ' ' s / ' % ' ••s 80 s V' ' ' ä x ' ' ' 1 -^^^ ^0^

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24 and Under 25-34 35-44 45-54 55-64 65 +

Age

Australians younger than 15 years (3.7 to 3.6 million). At the same time the elderly population aged 65+ increased from 1.2 to 1.65 million. These aggregate shifts in age structure are very important because many needs for goods and services are strongly concentrated in particular age groups so that shifts in the overall balance between those age groups in a population will cause corresponding variations in the level and type of demand for particular goods and services. Figure 1 shows the variation in household expenditure in various broad categories according to the age of Australians in 1988. The categories are quite broad and fluctuations are even greater if we move on to more detailed categories. Figure 2 shows annual expenditure on a number of selected items by age in the United States in 1985. There are quite different

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Figure 2: United States: Expenditure on Selected Items by Age, 1988 (Source: Merrick and Tordella 1988:9)

2000-

1600- '

X ' ^fs 1 / ' ' ',^

S 1200- / /

' >-"** '*

! ^ .A '*

X S 800- /' ' ?îm N^

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Less than 25 25-34 35-44 45-54 55-64 65-74 75 +

Age

patterns of household expenditure with the age of the household head. The obvious point is that stage of the life cycle strongly influences how much money is spent in a particular area of expenditure and what is actually purchased. It is not the only factor shaping demand for a product, but it is an important one. Clearly shifts in the age structure of the magnitude of those which have occurred since 1976 and which are projected to occur over the next decade or so will influence aggregate national demand for a wide range of products and services. Moreover, demographic projection techniques, which are discussed later, allow us to project such shifts in age structure with a fair degree of accuracy.

A recent study (Ketkar and Ketkar 1987) based on the US Consumer Expenditure Survey analysed the consumption effects of eleven demographic variables - regional location, urban/rural base of the household, its age, size, race, sex and marital characteristics and the education and employment status of the household heads. Using econometric techniques, they showed that demographic characteristics were crucial determinants of spending patterns - at least as important as price and income variables. Some of the implications for the futufe pattern of consumption expenditure which the authors draw from combining likely impending demographic changes with the results of the

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budget share equations they derived are that the probable impending increases in education and female labour force participation will raise expenditure on food away from home, but that expenditure on food at home might stagnate (Ketkar and Ketkar 1987:1492). The decline in average family size and the increase in single person families could increase the demand for rental housing. Similarly an increase in discretionary incomes, associated with falling family size, would raise demand for recreational goods and services. In addition, the increase in female education and labour force participation could lead to a greater proportion of expenditure devoted to domestic service. There may be a reduction in demand for women's and children's clothing.

In short, a demographic component should be one of the basic building blocks of strategic planning of any business or public body. This is especially true when very large fixed investments are involved since many such investments only become cost-effective after a period of 5-10 years or more. In such cases it is especially important to be able to identify impending change in the population being served (Merrick and Tordella 1988:21).

Marketing One of the areas where demographic analysis may be most helpful to

business is in the development of marketing strategies. The demographer can help in the identification, location and understanding of the behaviour of the diverse consumer groups that make up markets for goods and services. Morrison (1988a:5) points out that The analytically more sophisticated applied demographers not only track population shifts, they also provide marketers with insights into how those shifts may shape consumer choice.1 One example: 'Although fertility is low, delayed childbearing may strengthen the sale of maternity fashions, because so many mature mothers-to-be are employed and want to dress well on the job.1

In the marketing area applied demographers have developed ways of linking consumer data from surveys or polls to demographic data. This allows the results of market research to be generalized to a broader population to assist in more effectively targeting and marketing particular products and services. Merrick and Tordella (1988:31) stress that this linking process, which involves assumptions that particular types of residents in an area will behave in the same way as survey respondents, requires considerable 'demographic experience, judgement and skills'.

Market Segmentation One particular development in consumer markets in recent decades which

has made the applied demographer's contribution even more crucial is that of market segmentation. Weinstein (1987:4) defines this as 'the process of partitioning markets into segments of potential customers with similar characteristics who are likely to exhibit similar purchase behaviour'. The first two postwar decades were the heyday of the mass market. Francese (1986:9) has characterized the same situation in the US:

The father worked and brought his paycheck home to his wife, a fulltime homemaker and mother. They had three children, a dog, their home with a swing set in the backyard, and high hopes for the future. The little boys played with

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cowboy guns and wanted to grow up to be like their dads; the little girls helped mommy in the kitchen and dreamed about finding Prince Charming to take care of them.

A similar picture of conformity is painted in Australia by Townsend (1988) in her book The Baby Boomers. In such a situation mass marketing thrived

In recent decades, however, this mass market has splintered. Living arrangements have become more complex, stages of the life cycle overlap and households are formed in increased numbers and varieties. Higher average levels of education have played a key role in this increased diversity of the market, as has increased diversity in the origin of immigrants to Australia. This change has had enormous implications for business. Francese (1986:10) puts it like this:

... the mass market is dead, so - figuratively speaking - is any producer of consumer goods or services who also continues to focus on efficiency in production and distribution. In a highly segregated society, the only strategy that will work is one that concentrates efficiency in marketing. In other words focus on the customers ...

This important change has meant that understanding the population and how it is changing has become of crucial importance and the demographer's role has been enhanced.

Product design and Marketing must be tailored to the tastes and buying power of specific often disparate groups in the consumer population. Demographic information becomes essential to identify and locate the increasingly diverse consumer groups that constitute the modern market place (Merrick and Tordella 1988:4). These segmentation patterns are nowhere so apparent as in the post World

War II baby boom generation who represent such a large proportion of our population but who are differentiated along so many lines. There are important differences, for example, other than age, between those born in the early part of the boom and those born towards its end (Francese 1987). Of particular interest in Australia is the segmentation of markets caused by the very high level of immigration in the post war years in relation to the total population. Moreover, the last decade has seen a great diversification of the national origins of immigrants to the nation.3 The implications of this for creation of new market niches remain to be fully explored.

Clearly businesses which are able to identify particular niches in the evolving market are going to gain advantages by developing appropriate products and services designed to appeal to those groups. Demographic analysis is an important part of the identification of such segments in the market.

Small Area Analysis In applied demography there is an important focus on spatial variation in

demographic phenomena. As Merrick and Tordella put it, 'Demographics

3 For example in 1953 the three origin countries (UK-Eire» Italy and the Netherlands) provided 85 per cent of all immigrants while in 1989 the three largest origins (UK-Eire, New Zealand and the Philippines) accounted for 42 per cent of the intake and 57 countries each provided more than 100 immigrants.

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cannot exist without the geographic component. Every decision on marketing or site location is strongly geographic.1 The potential to undertake demographic analysis at a small area level has been greatly enhanced in recent years by a number of developments including: 1 . The greater emphasis placed by the ABS on making a range of census data available at

CD, SLA, and postcode levels. 2. The possibilities of matching census data with other data at small area level, especially

the postcode area level. 3. The development of computing technology and software to allow the high speed

analysis of large amounts of data for large numbers of small areas. 4. The development of computer graphics which allow for the quick cartographic

representation of the spatial distribution of demographic variables. These areas have not been developed as much as they could in Australia. The development of geographic information systems (GIS) needs to be explored for possible applications in demographic analysis. It offers considerable potential not only in the types of applied analysis being discussed here but in helping us understand better the complexities of the dynamics of population change at the local level (Worrall 1989).

It is obvious that many business marketing and location decisions are based on 'where people of particular types are located now and where they are going to be in the future1. Demographic analysis can assist in targeting services or advertising campaigns to certain areas, in determining what particular products or services to emphasize in a particular area and in deciding on the siting of particular stores, factories etc. It is important to point out with respect to the latter however, that the main role of the demographer is in narrowing down the range of possible areas for a site, not in determining the best possible site, because that will be strongly influenced by a range of non-demographic variables.

Small area analysis is not without its difficulties, especially when undertaken by inexperienced workers. There are ecological fallacy problems of incorrectly inferring individual-level relationships from ones which apply at an aggregate level (Merrick and Tordella 1988:30), and problems of important spatial variation within the spatial units being studied. However in Australia we have an advantage over countries like the US in that our census is a full count so that we are not bedevilled at the small area level with sampling error problems.

Household and Family Level Analysis For a great many goods and services the basic unit of consumption is the

household and not the individual so that tracing changes in the formation, functioning and structure of households and families is of importance to the providers of those goods and services. Again, demographers have the background and training to study the complex qualitative and quantitative changes occurring in Australian families and households. This is nowhere better exemplified than in the work done by demographers at the Australian Institute of Family Studies and the ANU's Australian Family Project. The increasing complexity of living arrangements in Australia and the rapidity of change with respect to them makes it difficult to target particular goods and services to them. This increased complexity is demonstrated in Table 1 which

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shows that families consisting of couples and 'others1 (dependent children and other family members) made up 47.8 per cent of all households in 1976 and 41.4 per cent in 1986. As Russell (1984:10) points out in the US:

Today the business that targets the stereotypical American family of a breadwinner father, a non-working mother and two children is reaching an insignificant 6 per cent of the household market.

Table 1 Australia: Families and Households: Growth by Type

Family Per cent Change in Household Type Number ('000) Number

1976 1981 1986<a> 1976-81 1981-86

Couple only 955.3 1,063.3 1,156.2 +11.3 +8.7 Couple, others^ 2,031.2 2,095.4 2,188.3 +3.2 +4.4 One parent, others») 221.5 317.2 356.0 +43.2 +12.2 Related adulisi 200.9 223.4 273.2 +11.2 +22.3 All families 3,408.9 3,699.3 3,973.7 +8.5 +7.4

Non-family households^) 824.4 1.113.1 1,313.8 +32.1 +18.0

(a) Adjusted for differences due to coding of family structure and identification of de facto couples without children, and excluding families in caravan parks, (b) 'Others' include dependent children and/or other adult family members, (c) It is not possible to adjust the 1986 census data for this category for differences in the definition of dependent children and adult family members, (d) Non-family households were coded as 'head only' family type in previous censuses.

Source: ABS (1989:9).

Projections and Estimates

Perhaps the type of task which demographers are most frequently requested to do by business and public administration agencies is the projection or estimation of population sizes. Russell (1984:13) points out that these provide the basis for market planning: 'Population and household estimates allow companies to determine how large their market is right now. Population projections allow them to determine how large it will be in the future1. There is no need to tell this audience about the problems of persuading the users oí projections how they must be distinguished from forecasts and in the problems of developing realistic assumptions for projection, especially at the small area level. Nevertheless the development of computer technology and improved data sets and understanding of population change has greatly enhanced our capacity to undertake projection work at all levels. We should not downplay the important role that demographic projections can have in illuminating what populations of the future will be like if certain assumptions hold. All decision making requires judgement about future conditions and demographic projections greatly assist this judgement. As Morrison (1971:58) points out: 'Decision making involves hedging bets against identifiable consequences. Demographic information can support this

13



effort by illuminating the contingent as well as charting the probable1. In Australia not only has the ABS greatly improved the availability of projections at state and national levels but the area of small area projections has developed considerably (Bell, forthcoming).

Human Resource Analysis A quite different but also major way in which applied demography can

assist business and other organizations is in deepening their understanding of their own 'internal demography1. The effectiveness and efficiency of any organization depends on the availability of workers with appropriate experience and skills. Keeping track of the demographic characteristics of their workforces can allow businesses to anticipate problems caused by retirement of groups of key workers. For example studies of the academic staff in two Australian universities (Santow and Bracher 1983; Hugo et ai 1984) showed impending difficulties in some departments where a large percentage of staff will retire within a short period. Many businesses and organizations have similarly unbalanced internal age structures caused by rapid growth at a particular time and hence a concentration of workers in a narrow age range. Detection of such patterns allows for action to be taken to ensure continuity in the availability of skills of a particular kind. As Merrick and Tordella (1988:17) point out knowledge of the demographics of labour force whether it be at local, national or individual firm level is one of the elements which can contribute to achievement of effective management.

International Population Trends A final area where Australian demography can be of help to business and

government is in relation to population trends within the Asia-Pacific region. There is a high level of expertise in Australia with respect to the demography of this region which is experiencing unprecedentedly rapid economic growth as well as major social change. Although expansion of exports is seen as being imperative to Australia's future economic well-being, the current level of trade with our near neighbours is very limited. The ASEAN nations alone have a population equivalent to the EEC (Guest 1990). There is little knowledge and understanding of the nature of potential markets in the region and demographers, among others, can assist business in filling this gap.

What are the Implications for Training of Demographers in Australia? So far I hope that I have painted a picture which suggests that applied

population analysis has a significant role to play in planning the effective and efficient provision of goods and services to the Australian population by both the private and public sectors. This of course begs the question of who is doing this type of work now and who will do it in the future.

As to who is doing it now, there is at present some excellent applied population work being done by individuals in different federal, state and local government departments and agencies as well as some private consultants. I can see many of these individuals in the present audience and it is true to say that the extent of this work has changed enormously since 1975 when the

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release of the first report of the NPI raised the level of public consciousness of population issues. However, I would venture to suggest that the bulk of this welcome development has occurred in the public sector, especially at the national level, and not in business.

In this respect it is interesting to compare the people one sees at the APA meetings with those at the annual meetings of the Population Association of America. At the latter one is immediately struck by the high proportion of delegates who are practising demographers in the private sector or at the county or local level of government. Thankfully in the APA the predominance of academics is being increasingly leavened by people applying demography in their day-to-day work. It is true to say that much of this very welcome growth has been from employees of national and, to a lesser extent, State government agencies and departments who apply 'demographic information to the design, implementation and evaluation of public programs and policies1 (Merrick and Tordella 1988:36). Local government employees are under-represented and representation of the private sector is still very limited. The PAA has a special Committee on Business Demography which was set up in 1989 and another on State and Local Government Demography. A quarter of PAA members describe themselves as 'applied demographers1.

There are many other differences too with the United States in this respect. Many will be familiar with the phenomenally successful journal American Demographics which is published monthly and reports on population trends and their implications for business and government. In recent years it has greatly expanded its activity into other publications and sponsoring conferences. There has been an explosion of private companies involved in providing general demographic research services, geographic data processing, consulting services, direct mailing demographics, forecasting services, human resource services and firms specializing in particular services such as software development (Russell 1984; Morrison 1988a). American Demographics recently published a directory of what it considered to be the top 100 of these companies (Farnsworth Riche 1989). A recent analysis of applied demography in the US (Merrick and Tordella 1988:36) identified a number of areas in the corporate sector where demographers are increasingly being employed

. . . including a number of important manufacturers as well as banking and financial services, real estate, communications, transportation, power companies, hospitals and health care providers, as well as in retail sales from shopping malls and mail order houses to delicatessens. Demographers are also working on application of demographics for the management of unions, trade associations and non-profit organisations, and in the business offices of colleges and universities.

Of course many of these developments are a function of the US population being so much larger than the Australian population. However, it is not just a scale factor and I strongly feel that there is a need to encourage the development of applied demography in Australia.

The present situation in Australia with respect to applied demographic analysis is not satisfactory although things are improving rapidly. What has tended to happen in the past with respect to detailed analysis of population patterns and trends in business and, to a lesser extent, in the public sector is one of the following scenarios. First, this type of analysis is considered to be

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something that people with no specific training in the area can undertake, so that a staff member with no training or background in demography is assigned the task of analysis. The task often falls to people with an economics training. Indeed job advertisements for people who are needed to do demographic work are usually phrased in terms of people with an economics background. This can result, and has resulted, in considerable wastage of scarce resources for very little return. In the area of population forecasting and projection there has been considerable involvement of non- demographers and people who call themselves demographers but have no training in the area. It must be realized that projection and population analysis is a specialized task, it is not simply a matter of lifting data off the shelf. It does require certain skills in analysis and interpretation.

A second possibility is that occasionally a consultant or outside expert is called in to do a demographic study. These can be useful and can be well done. However no population, especially those of individual local communities, is static and there is a need for regular monitoring and other ongoing activities. It seems to be a common misconception that sufficient demographic analyses can be conducted by hiring someone for a short period once every 5-10 years. Optimal returns cannot be expected from such a strategy.

A third possibility, a variant on the above used by government departments, is to employ university graduates under one or other of the unemployment or work experience schemes or on a very short term contract. Again some useful analysis will result but the utility of such analysis should not be judged on the results of such exercises, especially since the recruitment seems often not to take into account the specific skills of the graduates involved.

In short, much of the work which has been done in the area of applied population studies has been of an ad hoc nature. It often involves untrained or partially trained personnel and generally does not involve a sustained continuous effort to chart changes in the community. This is not to say that much good work has not been done. However it is obviously being given extremely low priority.

I feel that there is a pressing need for Australian business, and to a lesser extent government, to inject more demographic expertise into their planning structures. This may be achieved via employment of graduates with a significant component of demographic training in their degree or periodically calling upon one of the private consultants who genuinely has expertise in the demographic area. All this must not be taken to denigrate many of the longstanding practitioners of demography in Australia who in fact have had to learn their demography fon the job1. Indeed, there are many fine workers in that situation. However, I would submit that the opportunities for such on the job or trial and error type training are much less in the current economic and political context. The emphasis on user-pays principles and the huge pressures placed on the ABS greatly reduce the time that government and non-government employees have to learn on the job.

To what extent then are the demographers in the education sector providing an adequate training in applied demography to equip graduates with the skills and experience to undertake tasks of the nature described earlier?

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Australia, especially through the ANU Demography Department, has been a world pioneer and leader in the development of postgraduate programmes in demography and population studies. This is clearly evident in the large numbers of people from all over the world who have come to Australia to undertake Masters and PhD degrees in this area. (The Australian' dinners which have become a regular feature at the four-yearly IUSSP World Population Conference meetings always not only involve a huge number of people but are gatherings in which the Australian-born are in a distinct minority.) Subsequently, postgraduate programmes were developed at Macquarie, Flinders and Queensland Universities as well as NCDS at ANU. However, what is happening with respect to the training of undergraduates? Here the situation is not nearly so encouraging. There are courses in geography programmes, and to a lesser extent economics and sociology, which have a substantial population content. The courses which are specifically demographic or population studies in name and content are very limited with the Faculties at ANU and Macquarie University being pioneers and developments at Flinders, Wollongong and Queensland being note- worthy.

In my view the time is ripe for a number of developments in the teaching of demography within Australian tertiary education institutions which build upon and expand the existing training opportunities. These include the following possibilities. First, there is a need for a number of Australian universities to develop programmes which allow students to take demography courses at first, second and third year level. This will allow students with geography, economics, sociology or other social science majors to gain a thorough background in the theory, concepts and methods of demography and acquire a satisfactory empirical knowledge relating to Australian population change. Importantly it would allow students also to gain a comprehensive knowledge of available data sources, especially those of the ABS, and particularly the census. The present situation allows us only to teach the most basic of introductions to the census. If this were to occur we would be turning out a cadre of demographically literate economists, sociologists, and geographers. There should also be scope within such programmes for allowing a few people to specialize in demography. This could be accommodated through a demography honours programme in which virtually all of the courses and the dissertation would be in demography.

Secondly, we should be injecting a greater element of applied demography into our teaching programmes. The expansion of undergraduate programmes outlined above would provide considerable scope for this. One could even involve students in undertaking specific applied projects as part of their training. The appropriate content of such courses in applied demography has been discussed by a number of American authors (Merrick 1988, Morrison 1988a andb). Thirdly, we should be encouraging the development of demography courses as part of business programmes of study. Again developments in the US are instructive, with 'business demography1 being taught in many MBA programmes (Pol 1986). In the Georgetown University MBA programme, for example, there is now a major sequence of business demography available to students. We need to explore ways in which we can add a demographic perspective to the training of

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business students in Australia. Similar arguments could be applied to courses in public policy, public administration and management

A fourth point concerns the training of young demographers. We need to place some emphasis upon their being able not only to undertake demographic analysis but to interact effectively with policy makers and planners. This would involve emphasizing a number of the skills enumerated by Morrison (1988b). Among other things, he includes the explanation and interpretation of demographic realities to audiences not necessarily conversant with the perspective and techniques demographers use. In addition, Morrison (1988b) drew attention to identifying the important effects that demographic shifts will have and clearly elaborating what potential issues they may pose for the private and public sectors. As a further point there may be some scope for development of short courses in applied demography which would allow people already in the workforce to retrain or upgrade their demographic skills.

The initiation of what amounts to an expansion of teaching of demography in Australia's tertiary institutions will not be an easy matter. These institutions are in a ferment of change and cost pressures are being keenly felt Nevertheless, other elements in the present context would appear to be conducive to such developments. Not the least of these is the increasing emphasis on privatization and stressing of the need for better management to facilitate the more cost effective and profitable provision of goods and services. Moreover, the proposed developments seem eminently compatible with the slogan of 'the clever country' and the associated emphasis on better use of information in planning, evaluation, resource allocation and marketing decisions both in business and in the public administration sector.

The significance and usefulness of demographic analysis in business may be more important now than in the past because of changing 'domestic and international economic and financial conditions' (Merrick and Tordella 1988:4). When populations are growing very rapidly as they were in Australia in the 1950s and 1960s, the market place has room for almost everyone whereas when growth slows down, the market becomes more competitive and crowded. Similarly, there has been a growing internationalization of capital, labour and production processes such that businesses are not only competing with other national organizations but often with international operators. When this is linked up with movements toward deregulation the importance of gaining a competitive edge via a thorough knowledge of markets can be appreciated. In the more restricted and rapidly growing markets of the 1950s and 1960s there may have been some scope for errors in judgement of potential markets to be absorbed by private and public organizations. These margins have now been greatly reduced. It is argued here that the value of demographic information to business has greatly increased in recent years and it is fortunate that contemporary developments in data collection and computer technology have made it easier and cheaper to gain access to appropriate demographic information. The development of applied demography has been greatly enhanced in recent years by the full gamut of developments in computer and communications technology, in particular the availability of efficient 'mass storage devices, improved data communications, micro computers, complex graphics facilities, visual displays and hard copy reproduction capabilities, ... the development of

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computer software for rapid data retrieval and regional data bases, graphics, mapping and statistical analyses1 (Merrick and Tordella 1988:5).

Conclusion The APA now has a decade of experience behind it. I hope to have raised

a number of challenges for the APA in its activities in the 1990s. They are certainly not the only challenges we face as is clear from many of the papers presented at this meeting, not the least of which were Professor Borrie's remarks in opening the conference. Nevertheless, I feel strongly that we should be doing all that we can, through the APA, to encourage the injection of more demographic analysis into corporate decision making in both private and public sectors. Demography provides an important management tool which many organizations are not tapping into. In addition, the association should continue to promote the expansion of the teaching of demography and population studies in our tertiary institutions, and the development of more applied demography in our teaching programmes. Further encouragement of a strong feeling of professionalism among practising demographers, which may involve developing a code of ethics, and professional accreditation, should continue. In addition, the lifting of the profile of demography in the community so that there is a wider public appreciation of its potential contribution, is of major importance.

It is my conviction that the 1990s offer some exciting possibilities for the development of the study of population in Australia and for the APA. It is up to us to clearly identify those opportunities and to act effectively upon them. Demography and demographers can make a contribution to improving the lives of Australians and we are more likely to be able to maximize this contribution if policy makers and planners have some appreciation of what demographers can do. Demography provides unique and valuable insights into people, and people are important.

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Documents

WHAT POPULATION STUDIES CAN DO FOR BUSINESS