Taking The Long-Term View

Much has been written about China’s ascendency over the past decade, as economic liberalization has led to rapid development and growth. With over a billion people, China represents an enormous under-developed market, and global companies (as well as a legion of domestic companies) has been aggressively positioning themselves to capture share. India, which began its development earlier, similarly has been an amazing growth story.

It is perhaps natural that most people (and certainly the press) assume that older, mature economies will decline, not only in relative terms, but even in absolute terms. After a global downturn, in which these mature economies suffered mightily, this perception seems to have grown. And the U.S., as the largest economy (and proximate cause of the financial crisis that triggered the downturn), is sometimes cast as the big loser.

Yet, such simple formulations may be wrong. The table below was developed from the U.S. Census Bureau’s International Database, and presents population projections for 2010 – 2010 for the largest five countries.

I think if you asked most Americans to name the fastest growing large country, few would answer the United States. Yet, due to immigration, one of the highest birth rates for a developed country (about 14.2 births per 1,000 people), and an adult population that is living longer, the U.S. population is projected to grow over 40% in the coming decades. While on an annual basis, this represents slow growth, over the course of a couple of generations, it represents a healthy increase. By contrast, Japan’s population is expected to contract by 26% over the same period, and birth rates in large parts of Europe are barely at replacement levels.

In relative terms, the economic growth rates for countries such as China and India certainly will outstrip those of the U.S.. But the one-dimensional view that they will be the only winners is unlikely to be true. Growth in our population suggests that the domestic market will grow, and if we can achieve meaningful growth in exports, particularly to growing markets, the U.S. economy should flourish.

For marketers, this macro-trend is probably too long-term to drive today’s planning, but as the results of the 2010 census are published in the coming months, the shifts within our population should be of greater short-term interest. We can assume that the data will tell us that older adults and Latinos will continue to be expanding sub-populations, and both seem under-served by corporate marketers. Advertising still skews toward younger consumers, and much of the marketing by big advertisers to minority populations still seems awkward or forced – when they take the trouble to speak to such population at all.

Marketing and advertising are often focused myopically on the short term: yesterday’s response data…this quarter’s marketing calendar.  While we need to get today’s work done, we should consider some of these longer term trends and what they will mean for our company.