The Retiring Baby Boomers

In most of the developed nations there is a large of number of people in the Baby Boom generation who are getting ready to retire from the workplace. This will have a significant impact on the fiscal health of these countries.

78 million Americans are in the Baby Boom generation, and they have just begun to retire. Spending on retirement and medical benefits for them is about 7% of US economic output today. It will increase to 13% by year 2030.

In the graph above, the bulge in the middle represents the 78 million Baby Boomers, and because there are a lot more of them in the generations that follow, when they retire there will be fewer workers active in the work force to cover the cost of retiree health care and pensions.

Federal Reserve Chairmen Ben Bernanke refers to this as a ‘vicious cycle’ that will result in rising government deficits and interest rates. Since the cost of health care for older persons is often much higher than for other age groups, the financial burden will be significant.

As in Japan, this is potentially a significant source of inter-generational conflict about social priorities and government spending. It will have a large impact on government policy in taxation, health care, immigration , and in all the financial services industries.

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This blog post is number six in a series on key trends for innovators.

The Robot Divide

When people receive care from robots, what emotions will develop in these relationships? Will people come to love their robots, as they love dogs and cats and horses? Will they love them as people love spouses and children?

David Levy recently published a book entitled "Love + Sex with Robots," in which he predicts that sex and marriage between humans and robots will eventually become common.

So how close will we get to science fiction's depictions? Will Data (from Star Trek) actually exist one day?

Today we talk about the "digital divide," the haves and have-nots when it comes to computers. When will we start talking about the "robot divide"?

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This blog post is number five in a series on key trends for innovators.

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Mzinga : Enterprise Social Media & Learning Solutions for Your Business

Washington, DC the rise of network intelligence

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The Robot Market

As Japan's population declines, there are fewer and fewer workers available to perform service jobs. One response is emerging from the Japanese technology sector: Robots, to fill the many jobs that be needed in the service sector, particularly caring for the elderly.

This shows how issues in one area affect others. In this context, robots are a technological response to a demographics issue, although there are of course other reasons why robots are being developed.

Taken from the opposite viewpoint, demographics presents a potentially-significant new market opportunity for robot manufacturers.

Toyota, for one, believes that service robots will be one of its most significant core businesses. For example, Japanese researchers are developing a robot that can spoon-feed the elderly, bathe them, help them carry groceries, or carry them over uneven terrain.

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This is blog post number four in a series on key trends for innovators.

Japan's Declining Population

In 59 countries around the world, the birth rate has slipped below the replacement level, which means that in these countries the population is actually declining.

Japan is perhaps the most extreme example, as shown above. There the birth rate is about 1.3 children per couple, which is far below the level needed to maintain the population. (2.1 is the replacement rate.)

Unless Japan opens its doors to foreign immigrants, which it has historically resisted, then it the population will probably continue to decline, and this is likely to lead to inter-generational conflict as society must choose to allocate resources to various population groups.

An example of inter-generational conflict in the US occurs in local school districts that must raise their own funds through local taxation. In districts where a significant proportion of the population is retired people, funding for schools is often lower because the older people vote against taxes for education. (The children, of course, do not have the right to vote, so they are under-represented.)

In Japan, the declining population also has significant economic impacts elsewhere. For example, as consumer markets shrink, the profits that Japanese companies can earn in their home market declines, forcing them to go overseas.

There are a lot of business questions to ask here, and also sociology questions, such as, Why don't Japanese people have more children?

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This blog post is number three in a series on key trends for innovators.

Tobacco Kills 1 Billion in 21st Century

The UN's World Health Organization estimates that during the course of the 21st century, tobacco will kill 500 million people who are alive today, and another 500 million yet to be born. It called on all nations to adopt a six-pronged strategy to dissuade people - especially women and young people - from smoking and to help them quit.

Raising taxes to as high as 75% or more of the pack price would be the single most effective strategy, the WHO said. Higher taxes would also provide funds to counter tobacco industry marketing tactics.

But there's a lot of money in it. For example, who sells cigarettes in China? The government does ... So how long will it take for governments to learn that the cost of death, disease, and lost productivity may be greater than the gains from selling little packs of addictive death?

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This blog post is number two in a series on key trends for innovators.

Cell Phones Win

According to the International Telecommunications Union, the world passed the point some time earlier this year when more than half of the human population are cell phone users, totaling 3.3 billion subscribers worldwide.

About one billion of them live in Brazil, Russia, India, and China. In comparison, only 12% of the population had cell phones in 2000.

Which means that the cell phone has won, and gradually all consumer-oriented commerce will have to adapt to whatever the cell phone can provide in the way of connectivity, information dissemination, customer service, shopping.

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This blog post is number one in a series on key trends for innovators.

Launching an Innovation Trends Database

For the next few months, this blog will be focusing on key trends that we believe will be particularly influential for the future across a number of important theme areas, including demographics, technology, economics, and society.

Please share your comments with us, and let us know of any trends that you may think are particularly important or interesting.

Urgency or Methodology?

Suppose you work in an organization where some people feel like change and innovation are mandatory, and you are one of those people, but others lack your sense of urgency. What would you do?

Maybe John Kotter's new book would help you. (It's called "A Sense of Urgency.)

I found it, well, scary, that he describes a general sense of complacency as a common attitude across corporate America, and the book is filled with stories about people and organizations that are clueless when it comes to the need for innovation. Are things really that bad?

Kotter's stories are interesting, and the tactics he describes for dealing with complacency are helpful, but there is an underlying assumption in the book that I found lacking. He presents a series of tactics for dealing with the urgency question without articulating the need to find a better way of working.

In our experience, the existence or non-existence of urgency is a consequence of how people work, how they organize their time, how they think, and how they make decisions.

Hence, the real underlying issue is not (only) how to cultivate a sense of urgency as a matter of leadership, but rather how to structure a way of working such that an appropriate sense of urgency is inherent in how the organization functions on a day-to-day, minute-to-minute basis.

It's a question of methodology.

(To some degree it is also a matter of point of view: Kotter is a professor of leadership, so his book is written from the perspective of that lens; we're into innovation methodology, of which leadership is one critical component, so my comments on the book come from a methodological viewpoint.)

When people work in artificially sterile environments, when they are thoroughly disconnected from the realities of innovation and competition, when they deal almost entirely with abstractions, then it's no wonder they have no sense of urgency. It's like working in a protected bubble.

A design solution is to take away the bubble and create a day-to-day working atmosphere where people see, hear, touch, and smell the real world of the marketplace, and engage with all the many players in the marketplace in such a way that they are attuned to reality.

(Kotter also includes many references to the importance of teams, but again, he doesn't engage with the reader in making the distinctions between effective teams and than time-wasters, and he doesn't discuss the methods that differentiate them. The foundation of success is here, at the nitty-gritty level, and it is again the systematic pursuit of the best methods that makes the difference between success and failure.)

The book is due out September 3.