To what extent does demographic change in the UK represent more of an opportunity than a threat to UK businesses? BY David-MCGOtt The I-JK economy is constantly changing for various reasons such as improvement in medicine and increased globalisation leading to people living longer and the UK economy becoming more diverse culturally. Whether or not it provides an opportunity or a threat to a business will largely depend upon how the management of the business decides to attempt to change because of the change of the demographics.
The largest change to the I-JK demographics would be the overall ncrease in the average age of the country, because of the innovation in medicine keeping people alive for longer and people not getting sick for long. This could provide many opportunities for a firm in the I-JK, either in sales or the management of the firm. A firm could change the demographics of its target audience to an older generation, in order to potentially increase sales.
For example there has been a large increase in mobile phones designed specifically for an older market, with many utilities that would be useful to the older generation, such as larger buttons and a “help me” text button. On the other hand this does provide some threat to firms in the technological industry; with firms having to work harder to gain the attention of the main target market of teenagers and young adults. However, while the over average demographic of the I-JK is growing older this is also countered by the fact that the whole economy is growing in general.
The overall population has increased from 55million to almost 70 million over the last 50 years, and the growth is exponentially growing because of the increase presence of globalisation and the free movement of labour across all EIJ countries. This means that while the average age of the population has increased substantially, the overall market has increased by near the same rate. This means that while the market that are unpopular with the older generation, such as the technology industry, will have stayed about the same size; or maybe even grown a bit.
This means that the there is little threat to firms operating in these markets because of the change in the average age of the economy, and could potentially be in a better position because of it. The only thing that will affect them is that they potentially have a new market to enter and potentially earn money rom. The change in the average age could potentially cause a problem though for employers because of increased pension pays.
With people living longer resulting in people being retired for a substantially longer time, it results in people living for longer and claiming pension for much longer. This could cause problems for firms because of increased costs leading to firms struggling to break even. This also causes great stress on the NHS and other public funded medical establishments resulting in the government having to spend more and more money on these services, resulting in less money or higher taxes for I-JK firms.
However, the older age could also provide a benefit to I-JK firms, with an increased amount of potential employees. For example BnQ currently employ a large amount of older people to work in their stores, rather least, that customers preferred an older store assistant rather than a younger one, finding that they were friendlier, more helpful and overall increased the level of customer service.
However, not all industries can utilise the older generation as employees, such as the technology industry who need to have the younger generation as employees because of their involvement with technology. Another hange in the I-JK demographics would be the increased amount of people in the UK from eastern European countries. With the I-JK being part of the European Union there is free movement of labour and capital throughout Europe; and because England has substantially better living conditions than some of the countries in Eastern Europe many migrants have come to England in search of Jobs.
This could provide large benefits to firms in the I-JK because these workers do not demand the same amount of money as the equivalent I-JK worker (because they have been brought up with less money and value it more so than I-JK residents) while also aving a better work ethics, on average, than I-JK residents. The migrants are also more likely to take the Jobs that UK workers view as “beneath them”, such as strawberry picking. This leads to huge reductions in costs to the firms working in these industries who can benefit from this cheap labour, having large reductions to the cost of production.
Also the increase in the supply of employees means that potentially the average wage rate could reduce, with a larger amount of people vying for the same Job the firms can get away with paying less. This coupled with the fact hat the I-JK is currently in a recession, with large unemployment throughout the world, means that the firms have huge amounts of people to choose from when employing people. The increased amount of migrants in the I-JK economy also provides a new market for firms, with the migrants wanting national delicacies to eat.
This has resulted in large amounts of eastern European food shops opening throughout the I-JK, and even large supermarkets like Tesco and Sainsburys increasing the prominence of their “world food” section of the business with particular emphasis on Eastern European food. However, while the increased level of igrants is in general a huge opportunity for I-JK firms, it does also come with large levels of capital flight from the I-JK. A large amount of migrants are single people hoping to support and provide a better level of living for their family back home.
This means that a large amount of their wages are sent back to their home countries, leading to the demand increase caused by the migrants being relatively low, and by extension the multiplier effect caused by the spending of the wages in the UK being lost as well. Another change in the I-JK economy is the increased level of unemployment. This could prove beneficial to firms in the I-JK because they can get away with paying lower wages to the Jobs, and when looking to employ new people they can offer lower wages and be more specific about the needs of the Job.
They can look around more and look for the best person for the Job with ease, with huge interest in most Jobs that are available. However, this large level of unemployment has also lead to a large decrease demand throughout the I-JK, because people are less likely to spend the money that they earn and save, or they do not have the money to spend at all. This has caused overall demand to fall, with people saving hatever money that they earn Just in case.
This has coupled with the overall lack of economy becoming overall stagnant; even shrinking recently causing the UK economy to go into another recession. In conclusion the changes in demographic overall provide a huge opportunity to firms in the 13K, with new markets growing very quickly and the overall UK economy growing substantially in a short amount of time. However, these opportunities are overshadowed by the current economic climate in the I-JK causing large scale fear about the economy; meaning that these opportunities aren’t available.
