New Paradigms To Consider - Declining Birth Rates and Aging Populations

Birthrates in the developed countries have declined below the minimum rate necessary to maintain population levels. This includes the US whose rate is below the 2.1 live births for every woman of child bearing years necessary to have a level replacement rate. The US rate would even be lower if it were not for immigrants who tend to maintain their home country birthrates.

Undeveloped countries still have high birthrates but these are also declining and are mirroring developed countries with maybe a hundred year lag. It would appear that the Malthusian theory of outstripping our food supply will not happen.

The populations of the developed countries are also aging. It is predicted that after the year 2015 the absolute numbers of young people will make a rapid decline. The end result will be more than a third of the population over the age of sixty.

The declining birthrates is a tremendous paradigm shift for most of us who have always assumed that the population would continue growing and that there would always be an ample supply of new people entering the workforce. A few of the probable effects of this change include:

A change in consumer spending habits. Older people are just not as interested in jet skies as they are in better financial planning. If you believe that consumer spending moves the economy, then you should be spending a lot of thought on this factor.

Productivity from knowledge workers must continue to increase or the companies that employ them will decline. The failure of too many businesses, government, and other organizations to keep productivity increasing will result in a national decline.

Retirement age will increase out of necessity, both for the need of workers in the workforce and the fact that social security cannot be supported by the relatively small group of young workers.

The old class wars will be replaced with generation wars. Not actual warfare, but definitely a lot of politics and a lot of hard feelings.

Immigrants will be seen in a new light as the population of younger people declines and knowledge workers become the norm.

These changes are a given. They will happen. Most companies will have to change their current strategies to deal with these realities. Some new ideas that might work include:

An emphasis on knowing your customer's spending habits. Measuring your business share of their disposable income might give you a leg up on the trends. Be ready to drop products fast that no longer appeal to your customer base or be ready to change your customers.

Increasing employee productivity through the Internet. Corporate offices could be eliminated to some degree by allowing people to work out of their homes. This would produce a big saving in commuting and building costs. The Internet is also a big step forward in reducing the need for reports produced on paper and a strategy of paperless records is now a possibility.

Knowledge management is another new discipline that could have significant strategic advantages.

Learn how to work with older knowledge workers in order to keep them working for you.

10/26/00

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