This week I showed the video Demographic Winter to both my undergraduate and graduate students.
The video documents a chilling demographic trend that is not getting enough attention — the declining fertility rate that is occurring in about 70% of the countries around the world.
Here is a part of the synopsis of the film from their website:
One of the most ominous events of modern history is quietly unfolding. Social scientists and economists agree – we are headed toward a demographic winter which threatens to have catastrophic social and economic consequences. The effects will be severe and long lasting and are already becoming manifest in much of Europe.
A groundbreaking film, Demographic Winter: Decline of the Human Family, reveals in chilling soberness how societies with diminished family influence are now grimly seen as being in social and economic jeopardy.
Demographic Winter draws upon experts from all around the world – demographers, economists, sociologists, psychologists, civic and religious leaders, parliamentarians and diplomats. Together, they reveal the dangers facing society and the world’s economies, dangers far more imminent than global warming and at least as severe.
We had a rich discussion in both of my classes.
We talked about the impact of declining populations on the future of the US and world economies. The data presented in the film seems to paint a fairly bleak picture for the US and other western economies over the coming decades due to population decline. Japan and much of Europe are already feeling the negative economic effects of declining fertility rates. The US is expected to begin this slow economic decline beginning around 2010 — when Baby Boomers reach their peak spending age.
The graduate students, mostly Generation X, were stunned. Our program is an evening MBA degree, so most of the students are working full-time. They were concerned about their careers, their children’s futures, and their outlook for retirement.
My undergraduate students, who are mostly Generation Y, seemed to take it more in stride. They reminded me that this is part of the reason why they are studying entrepreneurship, after all. They understand that our economy will never look like it did even a decade ago. They already know that it is up to them to create their own way in the world — the corporate career path of the past century is at a dead end in their minds.
What is increasingly clear to me is that our post recovery economy will probably not be very robust. The timing of this recession just at the time that Baby Boomers are reaching peak spending age is like, to use the words of one of my students, “the perfect storm.” I believe the recovery will be slow, but that the long term will be a general decline over the coming decades.
Will there be opportunity in this world? You bet. But, you will need to be highly skilled at identifying more scarce market niches and a much more nimble manager as your business grows. We will not see times when any fool can make money as an entrepreneur. With softer markets only the best will thrive.
The film suggests that much of the boom of the past twenty years is attributable to one main cause — the Boomers reaching their peak consumption age. Those times are over, and there is every indication that a long-term booming economy will not come again in the US for generations — if ever.