Question

1. As it relates to the Demographic segment, what are some implications of the "aging population", on firms?
2. As it relates to the Sociocultural Segment:  
   • Briefly discuss two industries that have benefited from the growing awareness about health and fitness.
   • Also briefly discuss two industries that have been adversely affected by this trend.

Answer 1

An aging population can have an adverse impact on firms due to various reasons. The firms might have to pay more in social security as the average workforce is closer to the retirement age now. They might also have to contribute more to the healthcare fund for the employee as they are more susceptible to fall sick with increased age. The productivity of older workers is expected to be lesser than that of the young and dynamic workforce and thus will hurt a firm's output and profits. This is especially true for industries requiring heavy physical labor such as manufacturing and construction. In terms of sociocultural effects, the workforce will become less flexible and less motivated.

Industries which benefit from health awareness:

Organic food and products - As people understand the importance of their health, they will likely switch some of their consumption to organic products which are of superior quality.

Fitness industry like Gym, yoga : More and more people will get involved in some form of fitness routines which will boost the revenues in gymnasiums and ancillary health supplements.

Industries which are adversely affected by health awareness:

Fast Food chains like McD: People will gradually shift away or try to minimize their consumption of fast food due to the harmful effects it can have in the long term in their bodies.

Medical equipment and hospitals: As people improve their overall health status, there will be less need to visit hospitals and the demand for various hospital equipment like medicines, ventilators etc will fall.