The Mark Hotel
September 27th and 28th

AGING OF THE GLOBE
TREND PAPER ONE
The Impacts of Global Free Markets on Youth and the Aged

Even with doubts being expressed in Asia and Russia, there is still broad international consensus that free market forces are the best prompters of economic growth, and "whole areas of economic activity are becoming decoupled from time and space," with the lines between the industrialized and developed world becoming blurred. An outgrowth of this is that populations around the globe are faced with massive culture change. While most adults find themselves on the cusp of change, struggling to make a life stitching together the old and the new, the two age groups at the ends of the spectrum are profoundly affected by being quickly detached from traditional practices and beliefs. As privatization increases and government supports decrease, the decline in social services throughout the world has contributed to a social and political void, often being filled spontaneously at the local level.

The Aged: Loss of Entitlements. In China, 120 million people (10% of the population) are over 60. By the middle of next century, this will grow to 410 million (25%). One in three of the urban elderly lives alone. The American model is increasingly moving in - old-age homes, nursing homes and large-scale western-style pensions and social security programs are increasing. The same is true in Japan, where retiring Japanese who used to live with their children now settle for phone calls and visits.

Japan's fertility rate is its lowest ever. Birth rates throughout Europe have also dropped precipitously, as life expectancy increases, leading to a large number of elderly and not enough working people to support them. Italy is the first nation in history with more people over 60 than under 20. Next year, Germany, Greece and Spain will be in the same situation. In the Czech Republic, Hungary and Poland, mutual funds and private pensions are expected to mushrooms governments reform their overburdened state pension systems.

In the U.S., the growing senior population is having a sinking effect on public infrastructure expenditures, with older votes resisting taxes for services that benefit the young, like higher education and public schools. However, as potent consumers, they do want amenities that serve them better, and so theme park operators are having to provide comfort, fountains, seating and scenery. A good example of this is Opreyland Hotel in Nashville.

The U.S. led the way in having its seniors live without housing or caregiving from their children. It may now be leading the way in the reorientation of estates and inheritances. Not only is there a growing popularity of the idea of "spending your childrens' inheritance," but more estates are being left to non-family (to caregivers and organizations).

What all the above point to is a melding free-market culture of the global aged. Regardless of nationality, religion or ethnic origin, seniors are stepping into the 21st century with their traditional bases of support and pride withdrawn. They are having to fend for themselves, and those who can will increasingly do it the American way - saving more effectively for their own upkeep in retirement, using their power as consumers to force the market to pay attention to them, using their power at the polls to divert public expenditures into areas of interest and concern to them. They are no longer the wise elders of their community - they are increasingly the seniors of the world.

The Youth: Loss of Identity. The spreading free market and cutbacks in government subsidies have had different effects at the other end of the age spectrum. Today's youth may be the vanguard of a "global species consolidation" - a 10,000 year process in which nationalities are giving way to the consolidation of all ethnicities into one global ethnicity and all races into one global race. While an interesting theory, this is still a long way off. In the meantime, many young people are trying to figure out what identity they want to adopt.

American-style consumerism and values, and its psychology of entitlement, are spreading and attracting the young of the world, and changing their idea of their place in it. McDonald's (having become hangouts for the young) has changed Asian youth: children's birthdays are now celebrated, the Japanese are getting used to eating standing up, and the Chinese are smiling at strangers (previously an insult in China). In China, fast food outlets, cyber cafes and coffee bars are booming.

In Eastern Europe, the mom-and-pop stores are disappearing, replaced by hypermarkets and malls. For practical and business reasons, immigrants to the U.S. Anglicize their names. There is little that can be done to stop the spread of Western identity. The Islamic Taliban movement, which rules most of Afghanistan, has banned TV sets, VCRs, tapes and satellite - devices deemed as causing the corruption of the society. Other countries have tried to do the same, but failed.

Implications:
Here in the U.S., there is a great controversy over whether the senior market is paid attention to enough by marketers and product-driven companies. Some argue that it is the most lucrative market; others that younger markets are more important demographically. This is a moot point for corporations that are global or do business internationally. The global senior market is enormous! And the spread of the free market system is causing it to become, in some very important ways, homogenous - especially in the realm of need for financial products and services. But it will also be coming into the marketplace in ways it never did before, flexing its new muscles of economic freedom and choice.

Here in the U.S., the Baby Boom Echo is shaping up to be a larger group than the Boomers. But around the world, youth populations are shrinking. Whenever a U.S. demographic segment became powerful in the marketplace, it shaped and reshaped all manner of product and service. The Echo will be an incredibly powerful shaper of consumer products and infrastructure, but more importantly, it will set much of the pace for the youth around the rest of the world, since they will have diminishing presence in their own countries. The tendency toward loss of ethnic identity will exacerbate the move toward brand identity. Many of the "brand nationalities" will be American-derived, but others will be gotten from trendy companies that will start up as part of the freeing up of markets all over the globe. It would be wise for large corporations to seed fund their own start-ups by young people in other countries, in effect, growing their own competition for the trend/brand conscious youth.

TREND PAPERS:
1. Diamonding
2. Digital Granny
3. The Impacts of Global Free Markets on Youth and the Aged

 

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