Dans le cours : Navigating the Demographic, Economic, and Geopolitical Landscape as a Leader

Adapting to shifting demographics and the new middle class

Dans le cours : Navigating the Demographic, Economic, and Geopolitical Landscape as a Leader

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Adapting to shifting demographics and the new middle class

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- One often hears that demography is destiny. I would not go that far, but we are in a very different situation because of the fact that global fertility rates are dropping and each baby is expected to live much longer than in the past. Those two trends change everything. For example, in the US, the fertility rate has fallen from about five children per woman in the 1950s to 1.7 today. In the European Union, it's 1.5, and in China, it's only 1.2. Meanwhile, those babies are expected to live longer thanks to medical, technological, and lifestyle improvements. That means two things for companies. First, each age cohort is smaller these days. That means more competition for workers and for consumers. Second, the population as a whole is aging. This poses a huge challenge in terms of paying for pensions and healthcare. It also means that the largest consumer segment is now people about the age of 60. Brand positioning, marketing and advertising will need to adapt, given that in the recent past, most brands targeted consumers in their twenties and thirties. As if these demographic transformations weren't enough, we also see the rise of a new middle class of consumers in emerging markets, especially China and India. They are first generation consumers, which means that they are far more aspirational than consumers in Europe or North America. The combination of population aging and the rise of the new middle class means that labor markets and consumption are shifting in two directions, by age and by geography. That's a double whammy that companies need to navigate. As you reflect on these changes, think about the long held assumptions you will need to jettison. Are people aged 60 old? How about aged 70? And is India the next big opportunity? I am familiar with a tech company that is a leader in its field. They have been very successful with young people. They're now realizing that they may fall behind competitors unless they figure out a way to attract more people aged 60 plus to their platform. To tackle this, they organize a retreat to discuss the ways in which they might pivot demographically, including appointing a multifunctional manager to coordinate the pivot company wide. Consider if you have the right talent and marketing managers to be successful in this new reality. Write down two things you will need to do to align yourself and your company with this new realities. Shifting demographic trends mean that your company needs to track them closely, establish how they affect your talent management practices, and incorporate the findings into your overall strategic plan. And that's just the demography. Don't rush to any big conclusions because in the next movie, we are looking at how population trends will interact with technological change.

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