When the Predictable Becomes Unpredictable… That’s When the Breakthroughs Happen

The biggest breakthrough in my research came in 1988. That was when I came up with my Generational Spending Wave. With it, I could predict the economy almost five decades out. And I did so by lagging the birth index for the predictable peak spending of the average household.

I Needed To Make Some Tweaks

The generation before peaked at 44, not 46. And the generation cycle was not as over-arching and powerful before World War II, when everyday households weren’t middle class and higher income.

But that’s why I have a hierarchy of cycles. Including the most important, long-term 45-year technology cycle. Remember, every double – or 90 years – that cycle becomes the Bubble Buster!

It was the assembly line innovation, along with others, that suddenly made everyday households the key driving factor of developed countries. And now in emerging countries as well.

Our productivity is the highest at the peak of this 45-year cycle and it affects demographics as well.

The first acceleration of our lifespans began around the peak of the 1875 tech cycle. And extended through the next two into 1920 and 1965. Life spans at birth roughly doubled, adding 40 years.

Do you know what that did to demographic trends?

Not only did it boost births dramatically into the early 1960s, globally, but also significantly reduced the number of people dying.

Urbanization

Another important demographic trend is urbanization, wherein average GDP per capita triples with no added education at first. That is now the most powerful trend in the still less-urban emerging world today – stronger than even generational spending. It’s straight line progression and correlation with GDP per capita by country is astounding.

The acceleration of global urbanization began in 1920, right at the top of that 45-year tech cycle. And is due to reach 75% to 80% near-peak urbanization by the cycle that peaks in 2100. Lifespans will start to accelerate again by the top of the next cycle in 2055, if not earlier.

First lifespan acceleration, then urbanization, and then lifespan again. The two most important trends driving the greatest economic expansion in history. Both demographic and impacted by my technology cycle predictably.

I explored this unprecedented economic explosion in the December issue of Leading Edge. I’m making that available for you, not only for your own interest, but also for you to send to every high school or older kids or grandkids you have. With this information, they will know more about what’s important than the best economists and world leaders.

What If…

our life spans went up another 40 years to 120 and we peaked in spending more like age 75, had two sets of children, and retired more like 100-plus? What would that due to demographic trends? What would that do to productivity? The impacts would be massive across the board.

I’ll tell you one big change it would have: We won’t see zero population growth by 2100 nor a peak at 11 billion, as scientifically projected today. The peak spending wave of the most impactful Southeast and South Asia region of the world that is set to crest in 2055, could come 10 or so years later and higher.

This is the only trend that could bring demographic growth back to the aging developed countries like the U.S., Europe, and East Asia.

Here’s My Point:

Our demographic trends at Dent Research are the most important in economics today, yet most economists still don’t appreciate how impactful and how forecastable this all is.

And even though demographic factors do change – making the predictable sometimes unpredictable – largely due to advances in technology, we will always be the first to notice and adjust for such changes in peak spending, life expectancies, consumer sectors, urbanization rates, etc… way before they impact you and our economy.

So, keep reading. And for entertainment purposes only, you could keep watching the “experts” miss every major trend change in history, just like they missed the fall of Japan and the greatest stock and real estate bubble in history

 

Harry Dent

Bestselling author and founder of Dent Research, an affiliate of Charles Street Research. Dent developed a radical new approach to forecasting the economy; one that revolved around demographics and innovation cycles.