Demographic statistics shows that the United Kingdom will experience overall population growth and further increase in the number of aged people in the future. Demographics refer to numerical characteristics of people (Lutz, 2006). These statistical characteristics are widely used in marketing.
Generally, demographics entail examination of gender, race, age, mobility, employment status, and disabilities in a population. Therefore, demographic change means a shift in the statistical parameters of a population such as increase or decrease in employment status of the aged in a population (Cowell, 2004).
In the field of business, change in demography affects businesses positively or negatively. This occurs because change in population growth or increase of the population aged 55 years and above affect market trends causing opportunities or threats to businesses (Cowell, 2004). In the UK, demographic change represents more of an opportunity than a threat to UK businesses.
Demographic Change as an Opportunity to UK Businesses
Overall growth in the UK population may increase demand for goods and services. This implies that a larger population serves as an opportunity than a treat for a business to sell more and hence make more profits. Demographic change may make businesses to experience change in demand (Lutz, 2006).
For instance, an increase of the elderly population may change demand patterns for goods and services. This creates an opportunity for UK business to thrive if they address such demand changes promptly.
Changes in demand patterns create marketing opportunities for the UK businesses as demand for goods and services change. Therefore, businesses with good marketing strategies or the one to adapt quickly to demand changes may create more sales or more sales opportunities. Increase of the elderly population makes businesses to review their business plans to accommodate them (Lutz, 2006).
This may involve reviewing their workforce strategies that may improve business operations hence creating more opportunities. However, increase of the aged people may put pressure on businesses to alter their marketing operation or product promotion due to greater pension costs.
For example, the UK government may increase taxes to meet the aging population’s healthcare finances and pensions. This may pose a burden to businesses. However, businesses will use this as an opportunity to strategize how to expand their markets to create more sales (Cowell, 2004).
In any economy, population growth creates business opportunities, although this depends on other factors such as real income per person. According to demographic studies, UK experiences overall population growth hence more business opportunities.
Thus, businesses will have a wide market due to high demand for goods and services. On the other hand, high numbers of people who are 55 years and above may force businesses to alter their salary plans to correspond to the aged workforce. This may help businesses to create more opportunities for expansion through altered remuneration plans Lutz, 2006).
Increase in aging population may bring in place managerial knowledge and experience for UK businesses to utilize. The aged will bring into businesses better planning skills that will minimize damages and create opportunities. Demographic changes affect businesses differently.
For instance, care homes business and children toys business will thrive due to population growth and increase of older people. As new kids are born, demand for children toys will increase. In a similar manner, increase in older population will increase demand for care homes hence creating more business opportunities (Cowell, 2004).
The extent to which demographic change will be an opportunity depends on how the UK businesses prepare for it. Businesses that welcome older employees have a high chance of performing better due to vast managerial experience aged workforce will bring into the business.
Moreover, good business evaluations will tell the balance between business opportunities and threats (Lutz, 2006).
Increase in aging population affects health expenditure as well as employment status. This increases the number of older workforce which puts pension programs and labor supply in question. To meet the guaranteed pensions, employees have to pay more taxes, save more or work longer. These may alter business operations. As a result, demographic change may pose a threat to UK businesses (Cowell, 2004).
Conclusion
In conclusion, demographic change in the UK creates opportunities and treats to UK businesses. The extent to which the change is an opportunity or a treat to a business entirely depends on how the businesses are prepared for the change. Overall population growth and increasing numbers of older population are the major demographic changes that would occur in the UK in future (Commission Communication, 2006).
High numbers of aged people has negative impacts to pensions programs and workforce plans. However, they enhance demand for new products which creates opportunities for business growth.
References
Commission Communication. (2006). The Demographic Future of Europe – from Treat to Opportunity. Commission of the European Communities. Brussels.
Cowell, A. (2004). Demographic time Bomb Threatens Pensions in Europe. New York Times. Web.
Lutz, W. (2006). European Demographic Data Sheet 2006. Vienna and Washington, DC: Vienna Institute of Demography, International Institute for Applied Systems Analysis, and Population Reference Bureau.