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Wanted: babies, education.

DEMOGRAPHIC AND GENERational trends are worth exploring now and then regardless of the business we're in.

This is a big picture issue most of us don't have time to dwell on or worry about, but any strategic business discussion must take demographic shifts into consideration.

Most of the attention tends to focus on baby boomers because that generation's sheer size has a substantial impact on everything from health care to disposable income spending. The boomers have presented this country with both its greatest financial opportunities and challenges.

Unemployment is a daunting issue today in the economic recovery efforts, but the population demographics are clear: We won't have enough workers to replace the retirees. And in professions requiring math and science education, the outlook is grimmer.

Tassu Shervani, a marketing professor at the Southern Methodist University Cox School of Business, has an excellent presentation on globalization that he delivers to corporate groups across the country. He focuses on capital, labor, product and commodity markets.

He describes the number "2.1" as the most important number in understanding globalization and even brands it "the new pi" {that's about 3.14 to refresh your math memory). It's the birth rate required to keep the population constant in a developed country. As of 2001, the United States was the closest developed country to that rate at 2.0, and 20 percent of U.S. women don't have children. The education of women is the biggest factor contributing to the decline from an average of five to seven children per woman in the early 1900s.

Japan, Russia and Italy are in population declines, and Germany is next because of low replacement rates. Italy, you ask? The big Catholic families are a thing of the past with a birth rate of 1.1 and 46 percent of women there not having children.

Some countries are desperately trying to reverse the decline. Russia has National Conception Day on the second Monday in September with government rewards for babies born nine months later. Women in China and India are taking bribes for marriage due to lack of women, but of course China is trying to control population from a birth rate standpoint.

The ratio of U.S. workers to retirees in 1935 was 12-to-l and in 2004 was just 2.5-to-l. Shervani says that number will fall to 2-to-l in 2020 and 1.25-to-l in 2050.1 sure hope we have robots to help take care of me at age 85 at the fitness center because I don't think there will be enough people out there.

Not only are we facing smaller numbers of workers, but we're also facing generations that show less and less interest in math, science and technology education. In 1986, 15 percent of U.S. bachelor's degrees awarded were in engineering, math and science. By 2006, that number had plummeted to 9 percent.

Shervani says companies needing those science graduates will have to go where they are, and that doesn't bode well for the United States. He thinks the reason so many millennial generation students don't want any part of math and science is because those professors don't care about their self-esteem (very important to that group). The number of psychology degrees awarded has more than doubled in 20 years while engineering degrees are down 23 percent.

"The developed world has technology and capital, but not enough people," Shervani concludes. "The developing world has people, but not enough technology and capital. Managing the potential interaction between the developed and developing world is the most significant challenge and opportunity facing political and business leaders."

We can't manage the world's dilemma, but we can sure work to make a difference in our own backyard. Arkansas must continue to invest in--and increase awareness in the value of--math and science education. The demographics and trends can work in our favor if we acknowledge and act on them.

Jeff Hankins can be reached via e-mail atjhankins@abpg.com, followed on Twitter @]effHankins and connected with at Facebook.com/ jeff.hankins and Linkedin.com/in/jeffhankins.
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Title Annotation:Publisher's Note.
Author:Hankins, Jeff
Publication:Arkansas Business
Date:Jul 12, 2010
Words:676
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