The Power of Demographic Shifts to Create Growth Industries: The Aging of the Baby Boom Generation
Brucker, Suzanne M.
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The Baby Boom generation, those born between 1946 and 1964 or so, has had an enormous impact on American culture and society. New issues are being raised as they age. The aging of the population means that different interests and needs will become dominant. The aging of America is a result of three trends: • The Senior Boom - The numbers of elderly as a percentage of the population is rising and is expected to continue rising well into the next century. • The Birth Dearth - Fertility rates are decreasing as the divorce rate and the number of working women rises. • The Aging of the Baby Boom - The Baby Boom generation is a demographic bulge that has swelled the numbers of each age group through which it passes. The oldest Baby Boomers are now turning fifty. This aging population theme will have a great effect on American culture and economy. The Baby Boomers, who have been a major force behind consumption throughout their lives, are finding themselves in a financial tight spot as they attempt to finance their children's education, their parents' healthcare needs, and, most significantly, their own retirement. The major problems that they face are uncertain employment, less-than anticipated inheritances, and inadequate savings funds. Baby Boomers have transformed each decade of their lives, in terms of social issues as well as in terms of the types of industries that became growth industries due to the Baby Boom generation's large buying power. Some of examples of the generation's influence include the diaper and baby-food industries in the 1950s, the school system crunch of the 1960s and 70s, and the demand for publications concerning business and success in the 1980s. Industries benefiting from the Baby Boomers and the balance of the aging population include security service, financial services, leisure and tourism, and most dramatically, the health care industry. To illustrate the Baby Boomers' impact on the economy, I have focused on the health care industry. This industry is being transformed not only by the changing demographics, but also by the trends towards semi-privatization of Medicaid and by a growing concern for increased cost efficiency. Health care sectors such as long term care, health management organizations (HMOs), and biotech/drugs will prove to be the growth industries and good stock investments of the coming years.