If every entrepreneur could predict the future, starting the right new business would be easy. Since my experience and interests have been primarily with technology, I’ve been watching those trends for a long time, and I see rapid change, but predicting impact is a challenge. Recently I’ve changed my focus a bit to people demographics, and I find the implications a bit more concrete.
In fact, I was impressed with the classic book, “Upside: Profiting from the Profound Demographic Shifts Ahead,” by Kenneth Gronbach, which is full of specific facts on demographic changes over the past few years, and what they mean for some of the major business segments out there today. Gronbach is well-known for his generational research and keen forecasting of societal trends.
First, a quick summary of the major U.S. demographic generations out there today, ranked from large to small:
- Generation Y (Millennials) – 82.9 million, born 1985-2004, biggest business opportunity
- Baby Boomers (no other name) – 70.7 million, born 1945-1964, major workforce element
- Generation Z (Post-millennials) – 68.2 million, born 2005-2024, yet to be defined
- Generation X (Generation Me) – 64.9 million, born 1965-1984, growing with immigration
- Silent Generation (Lucky Few) – 21.8 million, born 1925-1944, slowing down rapidly
Outside these societal generations, the people counters are also seeing other major shifts and trends that will have a marked impact on our economy and business, including the following.
- Healthcare: An oncoming tidal wave. There is a Baby Boomer and Silent Generation tsunami headed straight for our healthcare system, so opportunities there are endless. That means that starting soon, our doctors, hospitals, eldercare, hospice and even death care systems are going to face unprecedented demand. Technology won’t solve this one.
- Autos for drivers: Waning market demand. American’s long love affair with owning and driving a car is over. A recent survey shows that 45 percent of Generation Y, the largest generation ever, consciously seek out alternatives to driving. Here technology is stepping up to the plate with driverless vehicles, resulting in big opportunities all around.
- Housing: A shortage looms. In the next ten years, 86 million Gen Y’ers will be moving out of their parents’ homes to start their own families. With 330 million people in the U.S. already, we’ll be at least 25 million homes short, based on the 155 million housing units that exist today. That’s good news for all business segments and the economy.
- Shipping and delivery: Strained to the limits. The building of new houses, communities, and infrastructure – as well as the new demand for retail that delivers – will strain trucking and shipping to its limits. As Boomers migrate to the Sunbelt, and everyone orders more online, I can hardly wait for drones to use the sky to help out.
- Education: More students and different classes. Everyone is predicting a rise in massive open online courses (MOOC), that will drive the need for new course content, architecture, and delivery approaches. In addition, children from Gen Y will spark a comeback in public school enrollment, and keep traditional colleges in business.
- Immigration: Continuing on the rise. Despite recent controversy, we are becoming more and more a nation of immigrants. The Asian population is expected to double by 2050, and Latinos are projected to jump from 17 to 25 percent in the same time frame. These cultures bring a whole new set of needs in food, entertainment, and lifestyle.
- Women: On the move. Women professionals are definitely increasing their ranks. There are 60 women to every 40 men in college, and they are entering the world of work in force. They are also moving into more critical leadership positions in both the public and private sector. That brings new business opportunities in fashion, home care, and leisure.
These shifts are independent of technology innovations, but certainly will drive the application of key product developments. Every entrepreneur needs to understand that people and populations drive business opportunities, as well as society. Thus I recommend the study of demographics in determining what business you start, where you start it, as well as how to scale it. Your success may depend on it.
Related: 5 Keys to Moving From Entrepreneur Thinking To Action