The Age Curve: How To Profit From The Coming Demographic Storm

Generation Y is the face of the future. They're going to be the key to U.S. competitiveness in the global market. And you'd better learn more about them if you're going to sell to them and employ them.

That was the message of Kenneth Gronbach of KCG Direct, author, futurist and demographer.

"Groups of people are predictable," he said. "If you want to predict the future, do the math."

In order to understand where we are today, with the waning of the Baby Boomer generation and the up-and-coming energy of Generation Y, Gronbach offered a tour back through the generations of the 20th Century:

The GI Generation: Born from 1905-1924. These were the Baby Boomer's parents, 56.6 million, and they were augmented by a huge amount of immigration. "They were savers to the point where they left $7 trillion to $10 trillion to their boomer kids - and their boomer kids blew it," Gronbach said.

The Silent Generation: Born from 1925-1944, this was the smallest generation of the last 100 years, at 52.5 million, thanks to the Great Depression and World War II. There was also very little immigration during that period, Gronbach noted - "and in fact, a lot of people packed up and left and went back."

Baby Boomers: Born from 1945-1964, 78.2 million strong. "They're voracious consumers, and they're still going."

Generation X: Born from 1965-1984, 69.5 million. A wave of Latino immigration has helped fill up the GenX "hole" between the baby boomers and Generation Y. "Remember zero population growth?" Gronbach said. "We cut a hole in the center of our demography. There were some maternity wards that didn't do any business in January of 1965. We weren't having kids. When that hole in the demography moves forward to where it makes the most money and does the most expenditures and there's a hole, do you think we're going to have a problem? No we're not, because of Latino immigrants."

Generation Y: Born in 1985 and later, this represents 90 million young people in the United States, Gronbach said. "We set a record in 2007 for the number of live births, 4.315 million," he said. "That makes us the only industrialized advanced nation having kids."

Generation Y, sometimes called the Millennials, is key to the U.S.' place in the world, because other countries largely lack this up-and-coming workforce, Gronbach said.

"We're the only western culture, the only industrialized nation that is having kids above replacement level," he said. "This is the best labor force this nation has ever seen. That is simple demographic fact. We have an enormous crop of kids coming our way."

Generation Y kids are voracious consumers, Gronbach said, "because they had Baby Boomer parents who bought them anything they wanted. They speak cyber as a first language. They multitask. They are very impatient, they are taught to be kind, they're well educated, they're technical. Do you want that person working for you?"

They also have an entrepreneurial spirit, he said. He gave the example of Best Buy's creation of an employee portal. The company was going to invest $5 million with an outside company. Their "Geek Squad" said, "Wait a minute, you're going to pay someone how much?" Gronbach said. "They did it for under $500,000 and while they were at it, one of them in his spare time figured out how to put it on his cell phone. Do you want that person working for you?"

"Are they green? Beyond measure," Gronbach said. "Just a suggestion - you're going to start to see Generation Y flood towards you. Generation Y is so green that if you as a company do not have a real green story, not 'greenwashing' as they call it, but a real green story, you're going to suffer. Get a green story."

Gronbach noted that Generation Xers generally favored college over trade schools, one of the reasons we are facing a shortage of qualified vehicle mechanics.

"The entrepreneurial sprit of Generation Y says, 'Are you telling me I can make $100,000 a year being a Mercedes mechanic and I don't have to go to college?' We're having a retooling of technical schools, they're now filled up with the best and the brightest, and there's a waiting list. So we're going to have a lot of young, Generation Y men entering the workforce. When this happens we're going to have the best and the brightest workers here."

Gronbach says Generation Y will, in fact, be the solution to many of the problems facing the U.S.

Healthcare? "When the baby boomers were healthy and paying into the system and not using it, you could be an idiot and be in the health insurance bus and make money," He said. "But when baby boomers started using more services and right behind them the healthy [Generation X] has 9 million fewer people, they cannot compensate for the sheer risk system, which is what's given us the headaches. Generation Y is going to start filtering into the age where they will be paying into healthcare and not using it, and it will fix the system by itself."

And the housing crisis: "They're going to get married early and buy houses. They're not going to buy starter castles the boomers built, but they're going to buy new houses.

"It's like a wave headed at the U.S. The solution's right inside us."


Gronbach is the author of the 2008 book, "The Age Curve: How to Profit from the Coming Demographic Storm" and offers a monthly Age Curve Report and demographic research and consulting services. More info: http://www.agecurveresearch.com

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