America's 21st Century Demographics Opportunity

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America

By the year 2050, there will be at least 100 million more Americans than there are today. This is particularly significant when you consider the fact that the rest of the world's affluent industrial nations will either shrink or grow very little.

This demographic surge will place new stresses on the environment and infrastructure, but it will also underpin an era of renewed growth and prosperity.  New homes, and even new cities, will have to be built, along with new businesses and new ways of communicating and working.

In the book The Next Hundred Million,1 Joel Kotkin reports that the U.S. fertility rate is half again higher than that of Russia, Germany, and Japan, while remaining well above that of China, Italy, Singapore, Korea, and Eastern Europe.  Even more importantly, immigration is adding further to America's population growth.

Consequently, the United States will be made up of an increasingly rich mixture of diverse ethnic types, including Europeans, Africans, Asians, and Latinos.

That population will also remain relatively young.  As we approach mid-century, a third or more of the population in Europe and east Asia will be older than 65, while only a fifth of Americans will be that old.  This fact suggests a future for America that is starkly different from what many historians expect:  To put it simply,the much-anticipated decline of the world's greatest power isn't going to happen for a long time.

Some of these scholars have likened the United States to the Roman and British empires in their waning days.  Paul Kennedy, a history professor at Yale, popularized this notion with his book, The Rise and Fall of Great Powers. 2 Even Bill Gates and Warren Buffett have publicly stated that the U.S. is in a long-term decline.  That's why they've increasingly turned their investing toward China and India.

But such pessimism flies in the face of the evidence.  The American economy and the American people have proved time and again to be the most resilient and resourceful in the world — especially in times of crisis.  Part of that track record is due to the basic American characteristics of independence and ingenuity.  The most recent recession showed, for example, that the United States weathered the hard times far better than countries in Europe.  According to the European Central Bank, growth in Europe during the coming decade will be half that in the United States.

Not even China is likely to keep up with the growth of the United States, as its population will rapidly age after about 2025...

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