Jain Temple

Hot Spots

India Links
Call Home


Art & Culture
Book Shelf



About Us

Contact Us
About Us

Article by Mohan Babu

Coping with the challenge of demographic trends

Indian companies must study America’s demographic profile in greater detail to cater more effectively to the changing US market, writes Mohan Babu

Two most common topics close to most Americans are — the economy and the weather, not necessarily in the same order. During the past week, an array of gloomy economic and financial data came out, sufficient to send a chill down every economist’s heart. Data ranging from the rise in US unemployment from 4.9% in September to 5.4 % for October brought home the looming recession. These and other economic factors are going to have a ripple effect across the country (and the world), and the US government acutely aware of the consequences, has requisitioned the services of some of the best economists and wizards. However, most economists also realize that economic conditions are relatively “short term” and there are various other factors that are going to play a role in the long term, one of them being the demographics of the nation. There is an increasing mention of the change in demographic profile of the country in the media and elsewhere and I thought I’d research it a bit and was surprised by the findings.

There are a few distinct demographic generations in the US. The first being the “Silent Generation”, consisting of those born between 1925 and 1942. They are hard working, economically conscience, and trusting of the government. They were very optimistic about the future and held a strong set of moral obligations.

The generation most talked about is the “Baby Boom” generation, generally consisting of those born between 1945 and 1960. Boomers have a strong set of ideals and traditions, and are very family-oriented. They are fearful of the future and politically conservative. Boomers have shaped the current economy and financial markets to no small degree. Currently, they are in the segment of the life cycle characterised by having enough wealth or income to purchase items other than houses and cars. This wealth, often in the form of professionally managed retirement accounts, mutual funds, and pension funds, results in a huge infusion of funds into the markets for stocks, bonds, and other financial investments. The parents of the Baby Boomers are now reaching the latter stages of the life cycle and are beginning to pass down accumulated savings to heirs in sizable chunks. Billions and billions of dollars worth of wealth are inherited every year.

Next comes the Generation X (1961-1981) who live in the present, like to experiment, and expect immediate results. By some accounts, they were the dominant force behind the dotcom boom. GenXers are selfish and cynical, and depend a lot on their parents.

The future generation Generation Y is already in the teens, currently age 14 and younger, very materialistic, selfish, and disrespectful — but also very aware of the world and very technologically literate. There are 70.4 million youths in the US aged 5-22, comprising approximately 26% of the whole US population, which is almost three times the size of Generation X ! Another interesting fact about this generation is that this is the most ethnically diverse generation yet. One in three is not white and nine out of 10 children under the age of 12 have friends of different ethnicity than their own.

What does the changing nature of American demographics mean to Indians and Indian companies? Reading this far, you are probably wondering what all this means to you.

If you are a young professional aspiring to come to the US, you need to compete with the GenXers. You also need to prepare yourself for the influx of Generation Y youngsters into the job market in the next few years. They are going to be technically savvy and unlike the earlier generations, not hesitant to learn new tools and technologies. In a nutshell, coming to the US will not be a walk in the park. However, there will be a definite demand for people with certain skills who can supplement the talents of local folks here.

For Indian companies, a study of American demographics might unearth interesting facts. They need to study the demographic profile in greater detail since it will help them in catering to the demands of the changing American market. The market for consumer goods is going to start booming; especially as the GenXers and Generation Y folks hit the job market and build disposable incomes. Interestingly, the aging baby boomers will require products and services to cater to their tastes too. They are extremely wealthy and will not hesitate to spend big bucks for quality products and services. Indian tourism industry take note, baby boomers are going to travel to exotic destinations and if we can provide them with the right kind of amenities. We need to generate some hype and with proper PR and marketing, India could easily become the “go to” destination.

Most Americans, believing in Keynesian maxim that in the long term we’re all dead, are focusing on the short term, worried more about the immediate future, are concerned about the stock market crash and current economic woes. Of course, there is a lot of negative economic data in the horizon and an economy slipping into recession is not going to be good. However, even a cursory glance at the next decade or so, shows an interesting demographic shift, one which could lead to some interesting opportunities. I can already see Indian entrepreneurs sizing opportunities in the US, riding on the changing demographics. Any takers?





About the Author

  • A Bio and profile of the author, Mohan Babu, can be found at his homepage
  • Mohan has authored a book on Offshoring and Outsourcing (Publisher McGraw Hill, India), a link to which can be found here
  • Mohan has also authored an Online book on "Life in the US," available for free download.
  • Sponsored Advert

    Advert: Visitor's Travel Insurance

    Click for free online Quotes


    For FAQ, Trivia and Information on Life in America, visit the Ask-A-Desi section

    ©Mohan Babu: All Rights Reserved 2005

    Mohan Babu is an international consultant trying to find the ‘sweet spot’ where IT meets business. E-mail: mohan He is also the author of a recent book on "Offshoring IT Services"

    All rights are reserved. Mohan Babu ("Author") hereby grants permission to use, copy and distribute this document for any NON-PROFIT purpose, provided that the article is used in its complete, UNMODIFIED form including both the above Copyright notice and this permission notice. Reproducing this article by any means, including (but not limited to) printing, copying existing prints, or publishing by electronic or other means, implies full agreement to the above non-profit-use clause. Exceptions to the above, such as including the article in a compendium to be sold for profit, are permitted only by EXPLICIT PRIOR WRITTEN CONSENT of Mohan Babu. 

    Disclaimer: This document represents the personal opinions of the Author, and does not necessarily represent the opinion of the Author's employer, nor anyone other than the Author. This Article was originally published in Express Computers


    GaramChai® 1999-2005