Megatrend #1: Changing Demographics

American society has undergone seismic shifts in the past few decades, dramatically changing the nature of our families, our workplaces and a myriad other aspects of our lives. These fundamental changes have come in five major areas: our ages, our families, our economic status, our ethnic makeup and our educational achievement.

Aging America

The Baby Boom is probably the most significant demographic phenomenon of the 20th Century, shaping all aspects of our economic lives. This generation of 76 million people born between 1946 and 1964 in many ways built the dynamic economy we have today, although increasingly that torch is being passed to the much smaller Generation X.

The aging of the Baby Boomers will become 3 significant economic issues, not only for them but also for following generations.

Competition for jobs at the top of the hierarchy from older baby boomers and, for the rest, competing with up and coming Generation Xers. In just four years for the first time ever there will be more workers over 40 than there are workers under 40. As Fortune Magazine notes, "At some point after 2010, as baby-boomers start to retire, companies will get desperate for workers--even older workers. But until then, there will be too many highly paid boomers competing for too few top jobs."

Competing with young and hungry Generation Xers isn't much easier--The harder Gen Xers work, the more they tend to resent all those 44-year-olds who put in half as many hours and earn more money.… 'You have to do more for young people because they are likely to turn over more quickly than older workers. Consequently, a lot of companies are putting young people on the fast track, so you have 28-year-olds running entire departments that 20 years ago were run by 55-year-olds,' explains Joe Gibbons, an H.R. consultant at William M. Mercer. 'That's a big change--it's a sea change.' (Fortune Magazine, Feb. 1, 1999)

Extending the working life of Baby Boomers: Boomers will begin to retire in about ten years, and with the advances of science, will live longer than any generation before them.

Concerns about our Social Security system are already high on our national agenda--will there be enough money to pay for a secure retirement for these people? Should we push back the retirement age? Will older Americans have the skills and flexibility to work in the new economy, and will they? These questions are key drivers for the growth in the corporate training market.

Making Generations X and Y Hyper-Procedure: Generation X may find itself stuck between a demographic rock and hard place--in their peak earning years they have to not only provide for themselves and their children, but also for the retired Boomers. The fundamental drivers of economic growth are growth in the labor force and productivity gains. Given that the labor force is not going to grow in the near term, we need to ensure than both Generations X and Y are as productive as possible.

Family Status

Over the last 30 years, the nature of the American family has dramatically changed. Today only 7% of families resemble the stereotypical Ozzie-and-Harriet model of a never-divorced working father and stay-at-home mother. In 1960, only 19% of married mothers with children under age six worked outside the home.

Combined, an almost unbelievable 80% of U.S. families are either dual-income or single-parent households. This has significant implications for children in these families. Increasingly, a portion of the early education that used to take place at home with the child's mother is being outsourced to a relative or childcare provider. Thus, the need for educationally enriched, high-quality and affordable childcare has never been greater.

Economic Status

The new phenomenon of dual income families, coupled with great economic times, has masked a widening gap between the "haves" and "have nots." And the gap is now significant for some of our citizens. Over 20% of our children, for example, live in poverty, far more than in any other developed nation.

In our knowledge-based economy, intellectual capital is one of the few determinants differentiating employees. As such, the correlation between education and compensation has become crystal clear. The gap between those with college degrees and those without has grown dramatically, from 50% in 1980, to over 100% today. Put another way, the purchasing power of a 30-year-old man with a high-school diploma has dropped by over one third over the past two decades.

What has helped compensate for the dramatic reduction of the purchasing power of the high-school educated breadwinner has been strong economic conditions and the increase in the workforce participation of women, up 39% since 1970 to 57% of all women.

Ethnic Diversity

American history has always been characterized by diversity, and the strength of new ideas from each wave of immigrants has enriched our economy and our culture. This process will continue into the next century, which, when combined with higher birth rates among certain groups results in a much more diverse population. By 2050, only 60% of the population will be white, down from 77% in 1990.

The bulk of the growth in the "minority" population will be the result of a growing Hispanic presence. California is often a bellwether for the future of the U.S., and in terms of racial diversity, this is certainly the case. One fourth of California students are limited-English proficient, and in grades K-3, that percentage is one in three. In many Los Angeles schools, Spanish is the predominant language. In still others, as many as sixteen languages may be spoken ahead of English. A push for language training, technology-based education in different languages, and training in cultural understanding will be important in this environment.

Educational Attainment

Ironically, at a time when education and training are among the few determinants of economic success, only 21% of American adults over age 25 have a bachelor's or higher degree.

These economic facts are driving "non-traditional" students back to school in record levels. Adults age 25 and over represent 43% (6.1 million students) of all post-secondary enrollments, up from 28% in 1970.

Another shift in our educational goals as a population--teens graduating from school are going to college at rates higher than ever before, creating great opportunity for post-secondary educators.

The impact of demographic shifts on the education and training industry are mammoth and long-lasting, as described in the following table.

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