Five Things to Think about from a Business Acumen Perspective: Part 3 of 4 Covering Understanding the 2016 Business Headwinds and Tailwinds
In part 1 of my 4 part series on what will cause business headwinds and tailwinds during 2016 and what they mean to you from the Global Business Acumen perspective, I discussed, The Age of Emerging Market Urbanization. In part 2, I discussed one of biggest challenges on almost every CEO’s list, the effects of accelerating change of technology in the business world.
In part 3, I will focus on the challenges of an aging world and the effects that this changing demographic will have in business.
According to researchers at Harvard Medical School, the first person who will live to be at least 150 years old has already been born. You actually have to read this at least twice.
The first person who will live to be at least 150 years old has already been born
As a result of innovations in healthcare, sanitation, and lifestyles, the lifespan of people born on this planet has changed dramatically. Most babies born in 1900 could expect to live to about 50. You basically got “middle age” when you were 25. Today, the average American lives to almost 80 and the trend is still increasing at a fast rate.
Dr. David Sinclair is the co-director of a laboratory on aging at Harvard. He recently commented on some of his work; “Over the past ten years, my lab and others around the world have shown that it’s not just possible to delay again, but to reverse aspects of it.” Sinclair has conducted research on molecules that allow mice to live 20 to 40% longer than normal. And not only are they living longer, they are actually healthier.
The direct impact of this trend is that the entire population of the world is getting older. And at the same time, global fertility is falling. Only this year did the birth rate in the US actually go up slightly for the first time since the great recession of 2008. The rest of the world including China, Japan, Russia, and South America are still feeling the impact of declining or slowing birth rates. As a result of these dramatic changes the population of the planet may actually peak. In 1986, just a few countries had fertility rates substantially below the “break-even” number of 2.1 children per woman. By 2013, that number had risen to about 60% of the world.
These are dramatic changes and certainly end fears of out-of-control population growth destroying the planet because of over-crowding. The European Commission forecasts that by 2060, Germany’s population will decline by 20% and the number of people working will decline from 54 million to 36 million. The same sort of dramatic decline is predicted for France and other European drivers as well.
In the big Asian economies (China, India, Japan, Korea) they have also peaked in terms of the active and fully productive workforce.
Now, here is the scary part; caring for large numbers of elderly is going to cause severe pressure on the existing workers and of course the governments running the countries. It will also create a number of business opportunities.
Things are going to have to change and I present five things to think about from a Business Acumen perspective:
Increased Savings and Planning
People should start saving more money and planning for a longer elderly life. This could potentially mean less disposable income being spent now which could further dampen the economy.
Governments are going to have to get more efficient
Global government debt is out of control and reforms in spending and waste are going to have to come sooner rather than later. If you are in a business that sells to or depends on government contracts and spending, it is important to start preparing for less spending and more efficiencies.
Reset expectations for what is elderly care is
The idea of a luxury living surrounded by healthcare workers around the clock is not going to happen for most elderly people. There will be fewer facilities, fewer doctors, fewer nurses, and fewer staff available to meet the demand which will be very expensive. Most people are going to need to reset their expectations for what it’s going to be like to live into your 90s without a lot of support and right now that is a terrifying prospect for a lot of people.
Evolved social structures
One of the results of evolved expectations for the elderly will be evolved social cultures. Over the past 25 years, things have changed dramatically; but not imagine a situation where grandma and grandpa are forced to live with their kids or even their grandkids because they simply have no place to go.
The Business of Aging
The good news in all of this is that there will be many opportunities to build and develop businesses that cater to an elderly population. Housing, food, healthcare, and other basic services will become a premium and business leaders should start building strategies to take advantage of these opportunities. Brands will need to become stronger, services will need to become more unique, and above all business leaders will need business acumen skills to make the right decisions.
