By John Richardson
And, as we have highlighted before on this blog, there are no long-term guarantees that China, the big driver of BRICS growth, will continue to prosper.
Even if China and the other BRICS countries continue to boom, it will decades, not years, for them to catch up with the West.
The painful reality is that the West faces a demographic crisis that has to be addressed. If not, we face political and social - as well as, of course, economic - disaster. This is no exaggeration.
As the Research Note points out:
The G7 countries alone saw births rise 15% between 1946-70, compared to the previous 25 years. They added 33 million babies to their population – the equivalent of another Canada, itself a G7 member, and whose $1.7tn economy is a similar size to India’s.
As these babies grew up, and the Western economy prospered, it therefore became almost inevitable that they would spark a growth SuperCycle on reaching the Wealth Creator 25- 54 age group, typically the period of peak consumption. They were, after all, the largest and richest generation that the world has ever seen.
But now, the Boomers are ageing fast. The oldest Boomers began to join the New Old 55+ generation in 2001, and it now contains 272 million Westerners. They are 29% of the population, and their numbers are rising all the time.
Growth will inevitably be very much slower than in the 1982-2007 SuperCycle years.
The reasons are:
* When people are young, they need to buy new things.
*And the Western BabyBoomers had lots of money to spend, particularly during the credit boom.
*But now the kids have left home, and the Boomers don’t need many new things.
*Instead, they mainly buy replacement products, and only when these wear out.
Demographics are not only a problem – they are a huge opportunity. Chemicals and other companies need to focus on manufacturing the products of the future that will serve the 55+ generation.