Companies need to plan for slower global growth

Consumer demand


US consumer spend.pngAs promised, the blog looks today at the business implications of population ageing and slower economic growth. The chart shows official US household expenditure data, by category. The overall message is clear: spending peaks by the age of 55 years, and then falls away quite sharply as people age.

This matters because household consumption is between 60-70% of GDP in most Western countries. Thus US consumers alone are 16% of the global economy. Western consumers in total are 40% of global GDP, equalling the entire GDP of the emerging economies. It is obviously impossible for these countries to replace the spending that is now being lost.

Most executives moved up the corporate ladder during the economic SuperCycle. They will now have to unlearn much of what they have learnt about critical success factors. ‘If you build it, they will come’ is no longer a viable strategic mindset. Over-optimistic market assessments will no longer be rescued by constant growth, and the arrival of ‘pent-up demand’:

• Executives will find themselves buffeted by markets which exhibit ongoing and high levels of volatility, uncertainty, complexity and ambiguity, as the economy transitions to the new normal. In addition, they may well have to cope with continuing waves of unhelpful, though well-meaning, interventions by policy makers: their recent role in raising oil prices is just one example.

• Executives will therefore need to learn new tools with which to sustain growth. Business model innovation will be essential, in order to meet the needs of those market sectors with future growth potential. One example of these is the opportunity to develop new products and services to meet the needs of the New Old 55+ generation.

• Technical innovation will also be essential, as the successful products of the future are likely to be based on ‘needs’, rather than ‘wants’. Affordability, rather than premium pricing, will be key, as markets re-segment themselves into a large ‘value’ sector and a small ‘luxury’ segment, with little middle ground in between. This will be quite unlike the SuperCycle.

The Research Note summarises the rationale for the launch of our New Normal strategy workshops for company Boards and senior executives. These have now been held on 4 continents, highlighting the global implications of ageing for future business success.


Ageing populations mean decades of slower growth


The next few decades will see very much slower economic growth in most countries...

Learn more

China's infrastructure lending jumps $1.1tn before Congress


Its never easy interpreting China’s statistics. Partly this is due to the ...

Learn more
More posts
Portugal shows the way to climate neutrality by 2050

“If you don’t know where you are going, any road will do”. The Irish proverb’...

The next billion phone users will be buying $10 smart feature phones, not $1000 iPhones

Smartphone sales plateaued in Q3, down 9% since Q3 2017’s peak of 1.55bn, as the chart shows....

Companies ignore the Perennials 55+ generation at their peril

Nearly a third of the the world’s High Income population are now in the Perennials 55+ generat...

Auto markets set for major disruption as Electric Vehicle sales reach tipping point

Major disruption is starting to occur in the world’s largest manufacturing industry.  Hundred...

Smartphone sales continue their decline, whilst $25 smart feature phones open up new markets

Global smartphone sales have now been falling for 8 consecutive quarters, since Q3 2017. They are no...

Smartphone market decline begins to impact global stock markets

The bad news continues for the world’s smartphone manufacturers and their suppliers.  And Pre...

There’s a great future for the European plastics industry in recycled plastic

Europe’s plastics industry is under major threat from the growing legislative and consumer bac...

$60bn opportunity opens up for plastics industry as need to eliminate single-use packaging grows

150 businesses representing over 20% of the global plastic packaging market have now agreed to start...


Market Intelligence

ICIS provides market intelligence that help businesses in the energy, petrochemical and fertilizer industries.

Learn more


Across the globe, ICIS consultants provide detailed analysis and forecasting for the petrochemical, energy and fertilizer markets.

Learn more

Specialist Services

Find out more about how our specialist consulting services, events, conferences and training courses can help your teams.

Learn more

ICIS Insight

From our news service to our thought-leadership content, ICIS experts bring you the latest news and insight, when you need it.

Learn more