8 demographic trends shaping the US and the world

Pew Research Center recently released a report for this year’s Population Association of America (PAA) annual meeting, highlighting demographic trends that are shaping the US and the world.  As I was reading the report, I realized I have myriad of blogs and articles on each; so clearly I agree with every single one.  I’d like to summarize them in 9 bullets along with my own perspectives.  I believe these demographic shifts are far more than numbers to plug into charts and graphs.  They drive cultural changes, social order and consumption patterns.  And they impact every aspect of business planning, branding strategies and your Value Proposition(s).

  1. Americans are more ethnically and racially diverse than ever before, and by 2055 there won’t be a single racial or ethnic majority

This is one of the major macro trends I have addressed in my book and I speak/consult regularly on.  In 2014, I wrote about demographic tipping shifts happening much sooner than expected… that was the first year in a century that we had more white deaths than births.  Not an epidemic of death but lower fertility rate among whites.  And for the first time, half of children under 5 were non-white.  Although this Pew report notes this change driven primarily by immigration, I think fertility rates also plays a big role.  Nonetheless, nearly 59 million immigrants have arrived in the US in the past 50 years, pushing the foreign born share to 14%, compared to just 5% in 1965.  More Americans say immigrants strengthen the country than say they burden it, and most say the U.S.’s increasing ethnic diversity makes it a better place to live.  Regardless of where you stand on this, you should see this as good news for economy and businesses.  Otherwise, we will end up with declining labor force population much like Europe.  It is the younger multicultural that will help our country stay afloat.  And let’s not forget that marriage of European immigrants led to today’s white population in the US. It would seem only natural to anticipate similar boom of multiracial population.  (You should also read, It’s time to redefine race and multiculturalism–future is already here.)

2.   Asia has replaced Latin America (including Mexico) as the biggest source of new immigrants to the US

If you recall, I’ve focused heavily on Asians and multiracials as fastest growing demographic groups in the US.  In 2011, I wrote one of my most popular blogs, How to reach the fastest growing Asian market.  Back in 1970, Europe was the largest origin of new immigrants.  But currently Asia is the largest source of recently arrived immigrants, and has been since 2011.  Unlike popular belief, we’ve seen one of the largest reversal in immigration flows from Mexico to the US between 2009 and 2014, as more Mexicans went home than arrived in the U.S. And after rising steadily since 1990, the unauthorized immigrant population has leveled off in recent years, falling to 11.3 million in 2014 from a high of 12.2 million in 2007. In 2015, share of Hispanic immigrants dropped to 47% and projected to drop further to 31% by 2065.  Meanwhile, Asians are now the only major racial or ethnic group whose numbers are rising mainly because of immigration.

3.    America’s diversity and demographic shifts are changing the electorate and American politics (as well as growth strategies for businesses)

We already witnessed this in 2008 and 2012.  I wrote an article then about 2012 Election results mirroring The New World Marketplace, and the lessons companies must learn from GOP branding mistakes.  And that was not due to Obama’s race, but rather the changing demographics in the US.  2016 electorate will be the most diverse in US history.  More than two-thirds of net growth in the U.S. electorate during this time has come from racial and ethnic minorities.  I’m sure you’re exposed to the “millennial” craze in news media, politics, business strategies, et al.  The new values and ideological power of youth culture–both Gen Y and Gen Z–is the second major macro trend I’ve written about in my book, and address for businesses as a growth strategy.  We are seeing wide gaps between generations on many political and social issues.  Millennials are more likely to hold liberal views, specially culturally, although 50% identify themselves as independents.  Stepping beyond politics, there are studies that show diversity and multiculturalism yielding higher financial returns for companies, supporting a pillar in business growth strategies.

4.    Shifting roles of women at home, work and in leadership

This is the third major macro trend that I specialize in.  Although the pay and leadership gap still persists, we’ve made progress and have seen roles of women in leadership increasing.  Today women make up 19% of the Congress, about double the share from 20 years ago.  As of 2013, about one-in-six board members of Fortune 500 companies (17%) were women–up from 10% in 1995.  Little to no progress as CEO roles of Fortune 500 companies, but I believe we will see a big shift coming with Millennial women.  In fact, Gen Y women possess new world leadership qualities and will break the glass ceiling and studies show that women and millennials in leadership roles translate into higher financial success for companies.  With all these cultural shifts, companies must learn how to effectively address the evolving needs of women.  In 2013, I wrote an article about 10 key questions you should ask your strategy team to better understand the underlying needs and values to address this largest target market opportunity globally with $20 trillion in annual consumer spending, expected to rise to $30 trillion in the next five years..

5.    Shifting roles and lifestyles of American family

All these rapid changes bring forth shifting roles of men and women at home and big changes in American family structure.  Studies show millennials have delayed “adulthood milestones” including marriage by 5-7 years and almost a quarter of them moved back home.  Two-parent households are on the decline in the U.S., while divorce, remarriage and cohabitation are on the rise. About one-in-six American kids now live in a blended family. And the roles of mothers and fathers are converging, due in part to the rise of breadwinner moms at an all time high of 40%….I wrote an article about dads becoming new moms.  Successful companies know to create Value Propositions that negate traditional family stereotypes.

6.    Shrinking middle class in the US– (and I will add) increasing middle class in developing countries.

Back in 2011, I wrote an article about shrinking middle class in the US, asking if American Dream is dying.  I also included a chapter in my book on this topic.  If you are following the political primaries, you know that income inequality is at the forefront of all the sound bites.  I’ve noted that the US ranks #3 among all the advanced economies in income inequality, along with other concerning stats.  Now, recent Pew research shows the share of U.S. adults living in middle-income households fell to 50% in 2015, an all time low. And the financial gaps between middle- and upper-income Americans have widened, with upper-income households holding 49% of U.S. aggregate household income (up from 29% in 1970) and seven times as much wealth as middle-income households (up from three times as much in 1983).  Meanwhile, we are seeing middle class increasing in developing countries.  McKinsey reported that by 2025, almost half of companies world-wide with over $1B in revenues will be headquartered outside of developed countries.  And by 2050, the world population is expected to reach 9.1 billion, with all growth occurring outside developed countries.

7.    Shifting demographics in religion in the US and the globe

The US remains home to more Christians than any other country–however, the percentage of American Christians dropped from 78% in 2007 to 71% in 2014.  Driven mainly by millennials who do not identify with any organized religion, the percentage of Americans unaffiliated with any religion is now at an all time high of 23% last year.  The unaffiliated are now the second-largest religious group in 48% of the world’s nations. The world’s religious makeup will look a lot different by 2050: Over the next four decades, Christians will remain the largest religious group, but Islam is the only major religious group projected to grow faster than the world’s overall population, driven primarily by larger family size. By 2050, the number of Muslims will nearly equal the number of Christians.  Regardless of your politics, this is an important demographic shift that will have an impact on your business strategy, globally.  According to the July 2015 issue of Time magazine, from 2010 to 2050, estimated growth rate of the global Muslim population is 73%. Stereotyping this largest global population cohort would require a very limited and narrow mindset.  You may also want to read, Muslim women creating fastest cultural shifts, currently at 800 million population, surpassing the combined population of the US, Russia and Brazil.  Nearly 40 million Muslim women have joined the labor force and the next wave of change is under way. According to McKinsey, in the next 15 years, even if women participation in the workforce reaches two thirds of men (or around 60%), it has the potential to spike regional GDP by 20% or more.

8.   The world is aging, a big demographic challenge

The demographic future for the U.S. and the world looks very different than the recent past. Growth from 1950 to 2010 was rapid — the global population nearly tripled, and the U.S. population doubled. However, population growth from 2010 to 2050 is projected to be significantly slower and is expected to tilt strongly to the oldest age groups.  This is a major concern for Asian countries like Japan and South Korea, where they expect majority of population to be older than 50 by 2050.  We are seeing strong initiatives towards immigration to offset this decline.  China is also one of most rapidly aging country, so it is no wonder that they’ve abandoned their one-child policy.  Germany, Spain and their neighboring countries are also concerned, which may explain (partially) their willingness to open doors to immigrants and refugees.  Our entire globe is facing this demographic crisis and why we are seeing countries like Japan leading robotic initiatives.  Good news is, although the US is also expected to get older, it will be at a much slower rate than most other countries, thanks to the multicultural population growth keeping our labor force and economy afloat.


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