Global Intelligence Briefing for CEOs - Implications - Western Civilization Demographics
by Herbert Meyer, 2007
Herb Meyer served during the Reagan administration as special assistant to the Director of Central Intelligence and
Vice Chairman of the CIA's National Intelligence Council. In these positions, he managed production of the U.S.
National Intelligence Estimates (NIE) and other top-secret projections for the President and his national security
advisers.
Meyer is widely credited with being the first senior U.S. Government official to forecast the Soviet Union's
collapse, for which he later was awarded the U.S. National Intelligence Distinguished Service Medal, the intelligence
community's highest honor. Formerly an associate editor of FORTUNE, he is also the author of several books.
Four Major Transformations
Currently, there are four major transformations that are shaping political, economic and world events. These
transformations have profound implications for American business owners, our culture and our way of life.
This page discusses the implications of Western Civilization Demographics.
Implications Of The Four Transformations
3. Western Civilization Demographics
Europe and Japan are dying because their populations are aging and shrinking. These trends can be reversed if the young
people start breeding. However, the birth rates in these areas are so low it will take two generations to turn things
around. No economic model exists that permits 50 years to turn things around. Some countries are beginning to offer
incentives for people to have bigger families. For example, Italy is offering tax breaks for having children. However,
it's a lifestyle issue versus a tiny amount of money. Europeans aren't willing to give up their comfortable lifestyles
in order to have more children.
In general, everyone in Europe just wants it to last a while longer. Europeans have a real talent for living. They don't
want to work very hard. The average European worker gets 400 more hours of vacation time per year than Americans. They
don't want to work and they don't want to make any of the changes needed to revive their economies.
The summer after 9/11, France lost 15,000 people in a heat wave. In August, the country basically shuts down when
everyone goes on vacation. That year, a severe heat wave struck and 15,000 elderly people living in nursing homes and
hospitals died. Their children didn't even leave the beaches to come back and take care of the bodies. Institutions had
to scramble to find enough refrigeration units to hold the bodies until people came to claim them.
This loss of life was five times bigger than 9/11 in America, yet it didn't trigger any change in French society. When
birth rates are so low, it creates a tremendous tax burden on the young. Under those circumstances, keeping mom and dad
alive is not an attractive option. That's why euthanasia is becoming so popular in most European countries. The only
country that doesn't permit (and even encourage) euthanasia is Germany, because of all the baggage from World
War II.
The European economy is beginning to fracture. Countries like Italy are starting to talk about pulling
out of the European Union because it is killing them. When things get bad economically in Europe, they tend to get very
nasty politically. The canary in the mine is anti-Semitism. When it goes up, it means trouble is coming. Current levels
of anti-Semitism are higher than ever. Germany won't launch another war, but Europe will likely get shabbier, more
dangerous and less pleasant to live in.
Japan has a birth rate of 1.3 and has no intention of bringing in immigrants. By 2020, one out of every five Japanese
will be 70 years old. Property values in Japan have dropped every year for the past 14 years. The country is simply
shutting down.
In the U.S. we also have an aging population. Boomers are starting to retire at a massive rate. These retirements will
have several major impacts: Possible massive sell-off of large four-bedroom houses and a movement to condos.
An enormous drain on the treasury. Boomers vote, and they want their benefits, even if it means putting a crushing tax
burden on their kids to get them. Social Security will be a huge problem. As this generation ages, it will start to
drain the system. We are the only country in the world where there are no age limits on medical procedures. An enormous
drain on the health care system. This will also increase the tax burden on the young, which will cause them to delay
marriage and having families, which will drive down the birth rate even further.
Although scary, these demographics also present enormous opportunities for products and services tailored to aging
populations. There will be tremendous demand for caring for older people, especially those who don't need nursing homes
but need some level of care. Some people will have a business where they take care of three or four people in their
homes. The demand for that type of service and for products to physically care for aging people will be huge.
Make sure the demographics of your business are attuned to where the action is. For example, you don't want to be a baby
food company in Europe or Japan. Demographics are much underrated as an indicator of where the opportunities are.
Businesses need customers. Go where the customers are.