Demographics, Americans And Times Are A-Changin? (Guest Commentary by Jim Karrh)

Are you a skeptic when it comes to books, programs or media reports about the latest “this will change the world forever” trend? I am, and I believe that is a healthy trait for business executives. When I hear someone say “if current trends continue,” I tend to drastically discount the value of the subsequent prediction. (I still remember the 1980ish column in my hometown’s weekly newspaper breathlessly declaring that “the leisure suit is here to stay.”)

It’s more common that things run cyclically rather than in endless growth streams.

Projected trends in the economy, design, migration or natural resources – even from the experts – often don’t play out. However, one set of widely publicized projections is actually happening more quickly than was originally anticipated.

In 2004, the U.S. Census Bureau had estimated that non-Hispanic whites would cease to be the racial majority in America by the year 2050.

Now the government has released new projections that actually move that landmark point ahead by eight years, to 2042.

The increasing rates of immigration and births among minorities have fueled this increased pace of diversity.

Long before 2042, however, the changing face of America will have led to profound changes in the winners and losers in American business.

Here are some of the highlights from the Census Bureau’s updated projections:

• By 2017, the Social Security system will have reached the point when payouts exceed collections.

Consider the sense of urgency and opportunity this will mean to financial institutions.

• By 2023, minorities will comprise more than half of all American children under the age of 5. Toy manufacturers, day-care providers and educational leaders should be paying close attention to the implications.

• By 2030, those aged 65 or older will make up one-fifth of the American population. What will that mean for travel, investing and health care?

• By 2042, whites will cease to be a majority of the population.

• By 2050, Hispanics will account for 30 percent of the population (rising from 15 percent today), while Asians will account for more than 9 percent of the total (compared with 5 percent today).

• The total U.S. population will have grown from the current 305 million people to 439 million.

Other imperatives for marketing plans abound in these numbers. The growth of Hispanic households – with their larger average sizes – plus the changing composition of other American households of the future are big news to architects, contractors and real estate agents as they plan, buy and sell houses, apartments and assisted-living facilities. Manufacturers of products such as greeting cards, playground equipment, maternity wear, theater seating and pet items must understand the dynamics of family relationships, household location and personal mobility. Media and technology companies need to innovate with relevant content and new ways to distribute it.

At the same time, traditional consumer goods companies must continue to make good decisions about ingredients, product design and labeling. How must educational institutions adapt in terms of curricula, funding and the overall distribution of learning opportunities? What are the implications for recruiting and training the future members of your marketing team?

Before we get too carried away, of course, it’s worth noting that census numbers are aggregates; you can’t depend on them for precise insights as to your customers or best prospects. Nevertheless, smart marketers can blend what they already know about their customers and organization with this updated population data to create powerful segmentation strategies.

If you haven’t yet embraced the concept of disciplined market segmentation and put it to work for your business, well, you’re a laggard. You do have time to adjust and take advantage of the changes and inevitable opportunities that profoundly changed demographics will produce. But the landscape is already changing and the pace is picking up.

 

(Jim Karrh, Ph.D., is senior vice president of Advantage Communications Inc. in Little Rock. E-mail him at [email protected].)