02 January 2012 09:00 [Source: ICIS news]
By Andy Brice
LONDON (ICIS)--Policy-makers are failing to acknowledge an important generational shift in the world’s population, and have yet to capitalise on its untapped potential, a consultant said on Monday.
Lessons need to be learned after the past few years of economic turmoil, while the chemical industry must also re-examine its long-term strategy, according to Paul Hodges, chairman of UK-based consultancy International eChem.
Companies must seriously start to focus on the demands of the 272m people in the west who are now over 55 – the baby-boomer generation – and those in emerging economies who are now climbing out of poverty, he said. If the industry were to achieve that, there could be room for optimism looking ahead, said Hodges.
“We have 29% of the western population – the wealth creators and baby boomers – who are now over 55 years old, and nobody is creating products and services for them. So how can you have growth at a robust level if you’re not targeting nearly one-third of the population? Equally, if you look at the emerging economies, hundreds of millions of people are now emerging from poverty for the first time. Is the chemical industry getting behind this in a big way?”
“It’s time to face up to this. Social pressures are telling us that this can’t go on,” said Hodges.
“We have to think about wider society, and start creating product that will meet the needs of the whole of society, from birth to death – not the very wealthy niches. That’s how we did it in the past.”
Despite unbridled optimism at the start of 2011, the year ended with volatile oil prices and dwindling demand.
For 2012, said Hodges, the outlook appears equally tough: “There was a lot of wishful thinking [in 2011]. We’ve had 25 years of almost unbroken growth – something that’s probably unique in the history of the world, so a whole generation of managers understandably have grown up thinking that this is the natural way of things.
“If there was a wrong thing to do over the last two to three years, [policy-makers] have more or less chosen that – particularly this very misguided idea of stimulus packages and liquidity programmes. There’s really been a complete failure to understand what’s going on, and I just hope people are learning from their mistakes.”
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