Demographics: The Population Hourglass

It's the futurist's first rule: You can't understand the future without demographics. The composition of a society--whether its citizens are old or young, prosperous or declining, rural or urban--shapes every aspect of civic life, from politics, economics, and culture to the kinds of products, services, and businesses that are likely to succeed or fail. Demographics isn't destiny, but it's close. Our leaders, as a rule, completely miss the boat on demographics and how it informs their own organizations, customers, and constituencies. And it's not hard to see why: Most executives aren't trained to make sense of demographic forecasts (there are no courses on demographics at Harvard Business School or Wharton, for example), and the field itself does little to raise its own profile. Demographers frequently come across like accountants--without all that sex appeal.

But that doesn't mean exciting and important things aren't happening. The United States of 2016 will find itself in the throes of demographic shifts that will upend our political, economic, and technological priorities and redefine our markets. From our age distribution to the color of our skin, we will look dramatically different.

To get a sense of what lies ahead, consider a simple demographic tool: the "population pyramid." Imagine that we took all of the people in a given population and stacked them up by age, putting all the infants at the bottom and all the centenarians up top. For most stable, peacetime societies, the resulting figure would look like a pyramid, with the youngest people at the base and the oldest people up at the tip. And indeed, that is exactly what you see today in a place like India--a perfectly sloped pyramid with lots and lots of babies at the bottom and a handful of the ancient. By contrast, in what passes for a demographic joke (given our fondness for Fritos and Cinnabon), the current U.S. pyramid looks like an overweight contestant on The Biggest Loser, with the giant baby boom billowing out from its midsection.

Starting in the next decade, however, our flabby pyramid is quickly going to slim down. It will assume the form of an hourglass, with the largest number of older people in our society's history, the quasi-retired baby boomers, up top, and the largest generation of young people since the boomers--the millennials, or echo boomers--at the bottom. The beleaguered generation-Xers will form the "pinched waist" in the middle.

The hourglass society will bring an avalanche of new social challenges, cultural norms, and business opportunities. With a huge increase in the number of older consumers, entirely new entertainment, culture, and news markets will open up--film, television, books, and Internet sites pitched more to the Matlock set than to the Eminem crowd. Also, older people tend to vote more frequently, and they will wield significant political clout: We could see a multidecade "boomerocracy" or, as one gen-Xer put it archly over cocktails, "TRBN: terminal rule by boomer narcissists."

(G)old Rush

The demographic concentration of boomers at the top of the population pyramid, backed by their vast reservoirs of disposable income, represents the next American gold rush. Ten years from now, the cover of this magazine will be graced with the smiling faces of the entrepreneurs and corporate leaders who unlocked the elder boomers' hearts and minds--and drained their bank accounts.

It's hard to overstate the weight of the numbers: Boomers now represent a U.S. market of some 36 million, or about 12% of the population, and as they move up the pyramid, the number of seniors is going to rise dramatically. By 2011, the 65-and-over population will be growing faster than the population as a whole in each of the 50 states. The Boomer Binge will have begun.

Businesses aren't confused about the opportunity that growth represents: Consumer electronics firms such as Vodafone are investing in mobile phones with designs tweaked to the requirements of older customers; IBM has developed a computer mouse that compensates for the tremors that sometimes affect seniors' hands; and Gap Inc. recently unveiled Forth & Towne, a new clothing line for women who fall into the vast retail void between the navel-pierced teen and the librarian in a twin set.

And those examples are just a foretaste. The real breakthroughs are going to come from companies helping boomers to hold on to their youth--and milk it for all it's worth. Boomers have never met a life stage they didn't want to remake in their own image, and their golden years will be no exception. Watch grandma windsurf! Pole vault! Pole dance! As their last act, boomers will remake even the American way of death: Consider Eternal Reefs (www.eternalreefs.com), a cremation burial option where your ashes can be mixed with concrete and turned into an artificial reef off the coast of Florida. Boomers will be scuba diving even in the afterlife.

The hourglass phenomenon will shape not only where you work but whom you work with--and how you get along with them.