Will you still need me? Will you still feed me? The Beatles asked the right questions back in 1967, when singing ‘When I’m Sixty-Four’ on their iconic Sergeant Pepper album.
What would happen to the Western BabyBoomers when they became 64? Would they be about to die, as had previous generations? Or would their future be different? Today, we are starting to discover the answer to The Beatles’ questions, as the oldest Boomer reached the age of 64 last year.
Chapter 5 in the blog’s free ‘Boom, Gloom and the New Normal: How Western BabyBoomers Are Changing Chemical Demand Patterns, Again’ eBook co-authored with John Richardson, describes how companies need to adapt their business models to this New Normal.
One measure of the change underway is that two-thirds of all those who have ever reached the age of 65 years in the world are alive today. This is the demographic timebomb that faces us.
The Boomers are the richest, and largest, generation that the world has ever seen. But since 2001, they have been entering the 55+ age range, when people typically spend less and save more. By 2020, 33% of the developed world population will be over 55 years old.
It is not surprising, therefore, that recent ‘recoveries’ have proved so weak, in spite of massive ‘stimulus’ spending. The Boomers simply don’t need more housing or new cars. Equally, they are becoming uncomfortably aware that their pension funds may now have to support them for one or more decades, rather than just a few months or years.
Western women are particularly likely to become more cautious in their spending, as equal pay for equal work remains only an aspiration for many. And whilst women have longer life expectancies than men, 25% are only in part-time employment, according to official figures from the Organisation for Economic Cooperation and Development. So their prospective pensions are even smaller.
Thus we must assume that future demand growth will be slower. We must also plan for a world where regular and deeper recessions are likely to become a feature of the global economy once more, in contrast to the relatively smooth growth seen during the Boomer-led Super Cycle.
But the Beatles provide a reliable guide, if we are prepared to listen to their message from ‘When I’m Sixty-Four’. The megatrends such as an ageing population and the need for improved food production provide the key to future success.