Demographer and author Ken Gronbach argues that developing real strategy requires knowing your markets and their relationship to shifting demographics. At The MFG Meeting 2023 event in April, he educated, entertained, and inspired a packed house of manufacturing leaders. Some of them pose challenges for industries that have traditionally been resistant to change, but failure to address changing demographics leads to missed opportunities and business hurdles. Here are eight key takeaways from his mesmerizing presentation:
We’re not having enough kids. The fertility rate in the United States is about 1.6 births per woman, and it should be two.
“Without immigration, we don’t have a country,” says Gronbach. “Go find a Latino and…thank them for coming, because without them, we don’t have a country in 2050, because we don’t have enough people. The Generation X (1965-1980) group is too small. Business cannot shrink, it can grow but cannot shrink. Same thing with a market economy.”
2. The United States is going to be a minority majority nation by 2045.
“We’ll see a huge number of Latinos, 60 million, filling in for Generation X. Also, 6% Asian and 13% African Americans. Go to U.S. Census Bureau Quick Facts and you will get an understanding of where the country or your state or town is. [Given that] 45% of the U.S. market is minority, how much of it are you missing or misunderstanding.”
3. China’s aging population will have major effects on its manufacturing capacity.
“As countries are getting older, there are more people dying than being born. If you don’t have people in the middle that are working and providing for people on the extremes, you’re cooked. That’s what China is facing. They’re missing half a billion people under 40 years old due to the one child only policy. In 2050-2060, China’s population will be half of what it is. A market economy cannot survive that.
“I know a lot of you are dependent on China for manufacturing products. That’s all going to change, and there’s nothing you can do about that. China is 92% Chinese, and they don’t do immigrants,” says Gronbach.
Japan, the EU, and Russia also have low birthrates that are going to cause problems as well.
4. Knowing your end-user is critical, and unfortunately many manufacturers look too far upstream to making parts and products without focusing on the end-user market.
“You need to know your end-user, and you need to know your talent pool, because it will influence everything you do,” says Gronbach. “And right now, there’s a problem with talent. It’s because of Generation X (which is too small), but you have a crop of talent coming your way. That’s how talent works.”
5. Young people are good for business.
“We’re in good shape. Do you realize that in 2024, we [the U.S.] will have 170 million people under 40 years old? They’re going to move out of their parents’ homes. They’re going to start households and families, and yes, they will consume products.”
6. Manufacturing is going to be huge because it’s moving away from Asia.
“Asians are going to start making their product here,” says Gronbach. “Like Hyundai, you will see manufacturing come to the states and Mexico. With 170 million people under 40 who are consuming, automotive will be huge. Agriculture, technology, and healthcare will be huge. Baby boomers will demand it.”
7. Our culture is changing, and you’ll have to think like that and stand for something other than money. You’ll need to give back.
“Young people are more liberal, moderates are currently a small group in the middle, and conservatives are the older baby boomers. But they’re dying, and we will become more liberal,” says Gronbach. He recommends being informed and mindful about social and political issues.
8. Hire millennials and bring them to high level positions. They will bring a new dimension to your business.
Gronbach says, “Boomers are leaving now and they’re walking out the door with your intellectual property imbedded in their minds. You can’t allow that. You should have them train your younger people and transfer that property. This is imperative.”
Ken Gronbach is always popular at AMT conferences because of his insight into future population trends that will likely impact future markets. Your next opportunity to hear presentations to enhance your business strategy will be at MTForecast, October 4-6, 2023, in Detroit, Michigan. Learn more here.