Tuesday, March 05, 2019

Boring old demographics keeps determining our future

I have always thought that demographics is a bit like statistics. It is one of those subjects that we know is mighty important but rarely take the time to understand. For marketers it is much more exciting to study branding strategies or the latest craze in social media than get their heads around multiple linear regression theory.

When I talk to people about median ages, support ratios and the suchlike I can see their attention rapidly evaporate.

Occasionally you get an article along the lines 'demographics are our destiny'. Well, know what, that is true.

Yesterday's Wall Street Journal had an interesting article about 'China’s Demographic Danger Grows as Births Fall Far Below Forecast'. I will not bother to give you the link since it is behind an expensive paywall.

The theme of the article is that :

The number of newborns in China dropped to 15.23 million in 2018, according to the National Bureau of Statistics. That’s two million less than 2017 and 30% below the median official forecast of more than 21 million.

The outcome of this fact is that if you look at the median age population of China V US you see that China is fast catching up with the US and will soon become 'older'. Of course neither of them are as ancient as Japan.

You might know that we in the UK are looking forward to exiting the EU  - not everybody but 17.5 million Brits. One subject that hasn't been discussed is what this will do to the median age of Europe.

Have a look at the chart and it will give you a clue. If I was an economic planner sitting in Brussels (thank God I am not) I would be worried (mighty) by the implications of these numbers, especially for Spain and Italy. The big up side is that both countries have very high youth unemployment so there will be lots of young to look after the old. Unfortunately, the downside is that there will not be the government funds to pay for it.

So what is the conclusion of my blog? Demographics will tell you a lot about the long term shape of your markets but little about how you will meet your annual marketing and sales budgets. Dick Stroud

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