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Implications of Demographic Trends or Key Lifestyle Essays

Implications of demographic trends or key lifestyle (increased health consciousness) for business. * Definition: Demographic trends reveal developments and changes in human population. More specifically, demographic trends relate to changes in a population’s age, gender, geographical location, marital status, educational attainment, employment status, household income, race, religion, and health. * Implications: * Clearly international trade will continue to grow. The significant improvements in communications, transportation and trade regulation mean we will be doing more cross border business.
More importantly, a growing population, especially one with more disposable income, creates demand for goods and services. The world will consume more – and inevitably this will create demand for natural resources, and contribute more to environmental degradation. In the next edition of Accelerator we will specifically examine growing and declining economies. * The battle for talent will continue and getting good people may become harder in developed economies. Conversely, there is a growing talent pool in the developing economies as more people gain full educations.
This all points to a labor market that will become more global, and this will support further immigration. Any talent shortage will also mean employers will adopt increasingly flexible approaches to employment, allowing part time and remote working. We are all aware of the significant growth in IT development outsourcing to India and China; the use of off shore call centers; the outsourcing of many accounting processing (including income tax return preparation); and many other activities. In the future even more business functions will be outsourced.
Once again, improvements in communications technology will overcome the tyrannies of distance previously experienced. * Business support functions are being increasingly provided by service providers. Payroll was one of the earliest, but all sorts of functions are now outsourced. Recent trends have seen outsourced processes now include email hosting and exchange server hosting. These will be provided from low cost centers, typically offshore. This trend will continue. As more business processes become technology-based, and with broadband becoming ubiquitous, it will be easier and more cost effective to outsource than finding ualified employees to perform tasks in-house. * Aging populations will put additional strains on governments to deliver health and aged care services. The private sector’s role in these areas will rise as governments move to outsource the delivery of these services, or simply privatize them. * Target investments will move beyond the traditional equity and property markets which are already overheated in terms of valuation. As people grow older they tend to have more money (savings) than young people.
Just look at the massive growth in funds held in structured pension funds and in other forms of personal investment. Where will these funds be invested? They may well provide the capital for the privatization of some of these public services. Certainly, public infrastructure like roads, tollways, airports, telecommunications, railways and so on will become attractive targets for institutions that have billions of dollars to invest. Some of these investments will be in developing economies where country risk is substantially reducing.

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