Printed with permission from TCI Management Consultants. A group of senior-level management consultants, offering strategic planning and marketing services to a wide range of public and private sector clients.

Boom, Bust and Echo 2000 - Profiting From the Demographic Shift in the New Millenium
David K. Foot with Daniel Stoffman
Macfarlane, Walter and Ross, Toronto, 1998
ISBN 1-55199-029-6

After the phenomenal success of the original Boom, Bust and Echo, published in 1996, we suppose that this new 'millennium edition' was inevitable. About twenty percent of the material in this book is actually new, with the rest repeating the previous book. Foot and Stoffman continue their theme that "demographics explains two-thirds of everything" (meaning consumer behavior), with added material in the sections on the real estate market, investing, retailing, urban development, health care, and public policy.

A review of the original book can be seen by clicking here . In this review, we¹ll just summarize the main points made in the new sections.

Regarding real estate, they make the point that the industry is coming back to some extent, although it will never regain the heady growth it saw in the early eighties (when the baby boom generation hit the streets and fueled demand for houses, office space, shopping malls, etc.). The growth in real estate will tend to be in particular niche areas, such as the following:

In the investment arena, Foot and Stoffman predict, not too surprisingly, that certain companies that cater to the needs of aging boomers will do particularly well, and will make attractive investment opportunities. These include:

Each of these represents an area that will be of interest or concern to the boomer generation, and thus something that will enjoy a growing market as well as be of inherent interest to the boomer generation.

Turning to retailing, what's new on the scene appears to (again) be the emergence of the baby boom echo generation into their spending years:

"The arrival of the echo kids, the largest group of teens since the boomers themselves, is an important new factor in the retail marketplace of the late 1990s. Because of the echo kids, frozen pizza, metallic nail polish, and name-brand sweatshirts were growth industries in North America. ŠCompanies that just a few years ago were focussed solely on figuring out what the boomers wanted now had to ask themselves a second question: "What do the boomer's kids want?"

The answer, of course, was that they wanted the same things teenagers have always wanted ­ music and clothing their parents disapproved of and lots of unhealthy food. But there was a significant difference from the last time teens were plentiful: these kids had more money to spend. Demographics were the reason. When the boomers were young, they had to compete for their parents money with two or three siblings because, at the peak of the boom, the average Canadian woman was producing four children. The boomers themselves, however, produced only 1.7 children per family; that meant that two-income boomer families had more money to lavish on each offspring. And what some marketers called the "six pocket" phenomenon ­ kids getting cash from two parents and four grandparents ­ explained why many echo boomers could afford to spend $50 for a Nike sweatshirt when a similar garment without the trademark could be had for only $15." (pp. 120-121)

In the arena of urban development and urban renewal, Foot and Stoffman's big prediction is that the growth of the suburbs will start to tail off, as the boomer generation ages and either moves back into the city, or out to smaller communities outside the major urban areas. This will fuel the redevelopment of city centres (which we are seeing in Toronto and Winnipeg, for example). The echo generation (as well as new immigration to Canada) will to an extent move into this suburban niche that has been vacated, but it will not represent the sort of strong growth in the suburbs seen in the sixties, seventies and eighties.

Regarding health care, it is fairly obvious that as the giant boomer generation moves into their declining years, health care issues will become a big priority. Foot and Stoffman predict a health care crisis in the next twenty years as demand for services from the system outstrips the ability of cash-strapped governments to provide. They see an increasing emphasis on home care as a result, as well as the possible rise of a two-tier health system , as wealthier boomers refuse to accept the constraints and limitations (i.e. long waiting lists, drugs and certain treatments not covered) that will characterize the health care system of the future.

The final area where there are major revisions to the 1996 book is that of public policy. Here they discuss briefly what they see as the "demographic crisis" in Quebec, where the francophone population growth is not keeping pace with anglophone and other cultures' growth, This will fuel fears of a loss of the francophone influence, and making the separatist threat even more tangible.

A second major public policy area that Foot and Stoffman touch upon relates to immigration policy. They make the point that it would be very foolish for Canada to increase its immigration quotas ­ already the highest in the world on a per capita basis ­ at a time when the baby boom echo is about to enter a relatively saturated job market. After all, they say, demographics tells us that those most likely to emigrate are those who are young and want to start a new life ­ exactly the age cohort of the echo generation that will be competing with them for jobs.

The book ends with a rosy forecast regarding Canada¹s ability to uniquely understand and sell to a global market, because of its fortunate demographic positioning:

"Canada is in a unique position entering the new millennium of global trade. Demographically, it is one of the most favoured countries in the world, with a relatively low share of juniors and seniors and a high share of the population of working age. The big boomer generation is in its most productive years. These demographic circumstances give Canada a golden opportunity to market to the world if it can learn to exploit its age structure. Being between the younger marketplaces of Africa, Asia and South America and the older marketplace of Europe, Canada is in an excellent position to understand the needs of all countries, whether it be for schools for the young, houses and cars for young adults, communications and management services in the workplace, or retraining programs for older workers and pharmaceuticals for seniors." (pp.270-271)

The above summary has been provided to you compliments of TCI Management Consultants

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