During the decade to come, we will see the ebbing of the demographic tide that helped to drive the prosperity of the immediate postwar period. The age cohort known as the baby boom—the children born during the Truman and Eisenhower administrations—will be in their sixties, beginning to retire, beginning to slow down, beginning to get old. As a result, the same demographic bulge that helped create abundance a half century ago will create an economic burden in the years ahead.
The baby boomers (in the 1950’s) helped create demand for millions of strollers, tract houses, station wagons, bicycles, and washer-dryers. In the 1970s, they began to seek work in an economy not yet ready for them. But as they applied for jobs, married and had children, bought and borrowed, their collective behavior caused interest rates, inflation, and unemployment to rise.
As the economy absorbed them in the 1980’s and as they matured in the 1990’s, the boomers pushed the economy to tremendous levels of growth. But during the next decade, creativity and productivity previously supplied by the boomers will go down, and the economy will suffer for it as it feels the dawn of a demographic crisis.
Technologies will need to make up for the decline in population.
Wars, as it so happens, is a big source of technological breakthroughs that the economy will be desperate for.
As funding for these wars dries up, research and development budgets will take the first hits. This is a normal cycle in American defense procurement, and growth will not resume until new threats are identified over the next three to four years. With few other countries working on breakthrough military technologies, this traditional driver of innovation will not begin bearing civilian fruit until the 2020s and beyond.
The sense of life or death that should drive technological innovation in the coming decade is the crisis in demographics and its associated costs.
This is not to say that the world of digital technology is moribund. But computing is still essentially passive, restricted to manipulating and transmitting data. The next and necessary phase is to become active, using that data to manipulate and change reality, with robotics as a primary example. Moving to that active phase is necessary for achieving the huge boost in productivity that will compensate for the economic shifts associated with the demographic change about to hit.
The U.S. Defense Department has been working on military robots for a long time, and the Japanese and South Koreans have made advances in civilian applications. However, much scientific and technological work remains to be done if this technology is to be ready when it will be urgently needed, in the 2020s.Even so, relying on robotics to solve social problems simply begs another vexing question, which is how we are to power these machines.
The question of climate change raises two others that demand astute presidential leadership: first, is it possible to cut energy use? and second, is it possible to continue growing the economy using hydrocarbons, and particularly oil?