By: Alan Nevin
As a real estate economist with a long history of following trends, it has become apparent that the changes in demography — both national and local – will have an enormous effect on how businesses function now and in the future.
Though our national economy ebbs and flows in cyclical patterns, demographic trends tend to be rather dependable in the United States, and of long duration.
We know that every decade the United States adds about 30 million people. Further, we also know that where these 30 million people reside changes through time.
In the 1960s and 1970s, numerous books were written about the expansion of the Sunbelt. Nobody talks much about that anymore, but the reality is that the trend toward the sun has been constant since the end of World War II. As a matter of fact, the U.S. population has been moving south and west since the first census in 1790.
We, here in California, along with Florida and Texas, have typically captured almost 40 percent of the nation’s growth in the past three decades. Another eight states make up another 23 percent of the growth, leaving the other 39 states to share the remaining one-third of the population gains.
Our home state of California now has 38 million people and we continue to grow by 400,000-500,000 annually.
San Diego participates in that growth and routinely adds 30,000-plus people annually. In the past decade, most of that growth resulted from natural household formation (more people being born here than dying). The balance of the growth is the result of in-migration from elsewhere. Our current 3.1 million population is anticipated to reach 3.8 million by 2030 — not that far away.
As we explore the demographic changes for San Diego County, three expansion trends become obvious: the growth of the Hispanic market, the importance of the Asian market and the senior market. These three segments of our population will have an enormous affect on the way we do business and open the opportunities for new business in the legal, estate planning and general business communities.
In the past decade, the Hispanic population accounted for 60 percent of the county’s population gains, but during the next 30 years, four out of five people added to our county population will be of Hispanic origin. One-quarter of the growth in this county in the past decade has been Asian.
On the senior side, the statistics are even more eye-opening. Currently, 12 percent of our population is over 65, but during the next 30 years, 50 percent of the total population gain in the county will be folks over age 65.
This massive change in the demography of San Diego County inevitably means that the profile of professional service firms is destined to change.
The demographic changes lead to the conclusion that professional firms should acquire executive and staff level personnel who can comfortably speak in minority tongues, particularly Spanish and Chinese.
Similarly, there should be major opportunities for professional service firms owned by minorities.
For the senior market, advisory services in the field of estate planning, real estate, insurance, advisory services and health-related issues, business succession, real estate and a myriad of other issues will proliferate.
Similarly, because of the broad range of advisory services that span the needs of both the minority and senior communities, it is important to form “team relationships” with professionals with similar clientele. Collaborative teams will inevitably result in broadening the marketplace for professional firms and are most probably the key to survival during the coming decades.
Therefore, as we look to the future of San Diego County, we see a pattern of growth that demands a new way to look at our businesses. The old model just may not work anymore. Or, with a positive spin, there are multiple opportunities for expanding our businesses by building teams that can successfully address the needs of the growing minority and senior community.