1. What are the implications of the global baby bust for marketers of consumer goods?

The implications of the Global Baby Bust for Marketers of the Consumer Goods are that they are
worried about the rising population and the competition that follows. However, Phillip Longman
states different in his book "The Empty Cradle". He feels that the real problem would be the
declining birthrate. A marketplace responds to an ageing population. Marketers are preparing
niche markets as a solution to the problem of baby bust wherein they target older and senior
boomers. For example, "Old Spice". "Everybody comes into world with one mouth and two
hands," says economist Donald Boudreaux of George Mason University. "It's generally true that
most people produce more than they consume." While households are changing, living alone can
be a challenging for customers. Living alone can affect where people shop because a single
earning person means less income and lack of shared responsibility. Women want to establish
themselves before starting a family and hence there are more single people than families. If
there are very less number of people to consume the marketers would ultimately end up in losses.
There would be not enough people to sell and advertise their goods to. I feel the more the people,
the more the chances to sell and produce. Hence I feel that a global baby bust could reduce the
sales & production of consumer goods, which in turn would mean lesser profitability for the
marketers.

2. What are the implications of the global baby bust for marketers who sell to
governments?
Health care for elderly people costs more than education for the young, so population aging will
eventually strain government budgets for health care and pension plans, and with fewer workers
to pay the taxes. In several European countries pensions and health care costs are likely to
consume 30% of all national output. Health may actually decline due to the lifestyle changes of
the urban environment, with its greater stresses and sedentary lifestyles. At the same time,
retirement means that income tax revenues required to fund these programs and the economy
shrinks. An aging workforce leads to less innovation. Capital investment may decline as elderly
people cash in their investments to cover daily costs of living. The government has more
responsibilities in such a situation and fewer working population to help them out. If the

government doesn't have sufficient capital, it obviously won't buy from the marketers. Hence
imports and exports can be affected. All of this can result in recession and the markets can suffer
from inflation wherein the prices would keep rising and people wouldn't be able to buy and
marketers would end up in losses.
3. What is the evidence that entrepreneurship in a nation declines as its population ages?
Business creation over the past four years has been higher than average, given what we have
seen since the survey in 1996. However, from 2007 to 2010, the rate at which individuals
established new firms with employees declined. In 2009, it was at an all-time low. The rate
remained flat from 2010 to 2011. So weve got a tale of ups and downs: Self-employment is near
all-time highs, but larger business starts still havent recovered from before the recession. We
look at the governments Current Population Survey, which is collected jointly by the U.S.
Census Bureau and the Bureau of Labor Statistics. What we analyze is the percentage of adults
who report that they have started a business in a given month. Older age groups have trended up
a little bit in our survey, though their rates of entrepreneurship have been relatively steady over
the past three to four years. In our 2011 data, 45- to 54-year-olds had the highest propensity for
entrepreneurship.
4. How might the decline of entrepreneurship impact global marketing?
Global marketing can be affected if there is a decline in entrepreneurship. Entrepreneurs, creators
of new firms, are a rare species. Even in innovation-driven economies, only 12% of the work
force starts a business in any given year. Yet entrepreneurs, particularly innovative entrepreneurs,
are vital to the competitiveness of the economy and may establish new jobs. The gains of
entrepreneurship are only realized, however, if the business environment is receptive to
innovation. In addition, policymakers need to prepare for the potential job losses that can occur
in the medium term through creative destruction as entrepreneurs strive for increased
productivity. Entrepreneurs boost economic growth by introducing innovative technologies,
products, and services. Increased competition from entrepreneurs challenges existing firms to
become more competitive. Entrepreneurs provide new job opportunities in the short and long
term. Entrepreneurial activity raises the productivity of firms and economies. Entrepreneurs
accelerate structural change by replacing established, sclerotic firms. Entrepreneurs face a

substantial risk of failure, and the costs are sometimes borne by taxpayers. In the medium term,
entrepreneurial activities may lead to layoffs if existing firms close. A high level of selfemployment is not necessarily a good indicator of entrepreneurial activity. Entrepreneurship
cannot flourish in an overregulated economy. Entrepreneurship is important to economic
development. The benefits to society will be greater in economies where entrepreneurs can
operate flexibly, develop their ideas, and reap the rewards. Entrepreneurs respond to high
regulatory barriers by moving to more innovation-friendly countries or by turning from
productive activities to non-wealth-creating activities. To attract productive entrepreneurs,
governments need to cut red tape, streamline regulations, and prepare for the negative effects of
layoffs in incumbent firms that fail because of the new competition.

5. How might terrorism affect the relative attractiveness of different national markets?
Terrorism is an important geopolitical risk that affects the global economy and financial markets.
The immediate impact of terrorist attacks on financial and commodity markets are predictable in
that they lead to increases in investors risk aversion. The market reactions are also consistent
with the expected economic impact of terrorism in the intermediate and longer term: by reducing
confidence and increasing the risk aversion of consumers and firms, by lowering consumption
and real investment activity, by triggering economic slowdown if not outright recession, and by
spilling over to other stock markets, fixed income market yields, currency and even other
commodity markets. There is also the potential impact of psychological fear of terrorism on
economic behavior. For investors, corporations and government policymakers, it is critical to
understand the magnitude of the effects of terrorist acts. It matters for whether and how investors
might choose to incorporate the risk of a terrorist attack into the value of the shares of publiclytraded companies so exposed. It matters for corporations in their decision to seek out terrorism
risk insurance and for the insurance companies is providing and pricing such products. Finally, it
matters for governments charged with the task of supporting an insurance industry that may
hesitate to furnish such insurance programs at reasonable premiums or for monetary and fiscal
policymakers who may have to react to broad-based attacks like those of September 11, 2001.
"Some have claimed that the 09/11 event actually pushed the U.S. into a recession, and point to
massive layoffs in the airline and hospitality industries and the overall decline in consumer

confidence as evidence. Yet while such talk creates good headlines, the direct evidence points to
something different, "said Thornberg, senior economist with the Forecast.

REFERENCES

1.)
2.)
3.)
4.)
5.)
6.)
7.)
8.)
9.)

USnews.com
Investopedia
Bloomberg news articles
Studymode.com
Foreignaffairs.com articles
USnews.com Ctvnnews.com
World of Labor Evidence-based policy making (by Alexander S. Kritikos)
National Centre for Policy Analysis (NCPA)
Becker, G. and Y. Rubinstein, 2004, Fear and Response to Terrorism: An Economic Analysis,

University of Chicago Department of Economics working paper.

10.) Doherty, Neil A., Lamm-Tennant, Joan and Laura T. Starks, 2003, Insuring September
11th: Market Recovery and Transparency, Journal of Risk and Uncertainty, Vol. 26, pp. 179
199.
11.) Alan B. and Jitka Maleckova, 2003, Education, Poverty and Terrorism: Is there a Causal
Connection?, Journal of Economic Perspectives, Vol 17 (4), pp. 119-144
12.) Sage Journals (Australian journal of Management)
13.) The Impact of Terrorism on Financial Markets R. Barry Johnston and Oana M. Nedelescu
14.) Chen, Andrew H., and Siems, Thomas F., 2004, "The effects of terrorism on global
capital markets", The European Journal of Political Economy, Vol. 20, pages 349-366.
15.) Phillip Longman, "The Global Baby Bust," Foreign Affairs, pg 64-79
16.) "Everybody comes into world with one mouth and two hands," says economist Donald
Boudreaux of George Mason University.