Italy’s love for life? Apparently, it's gone. Italians are now the least happy people in Western Europe.

Italians are older, poorer, and more in debt, contributing to their unhappiness. Italians' average age is 42, and they’re not having kids (there is a 0% growth rate). This year, Italy dropped three places to 20^th on the Human Development Index. The unemployment rate (7%) is high for a World 1 country. Italians have 106% public debt in proportion to their GDP (the sixth highest in the world). Even Italian staples aren’t selling well: sales of pasta and bread were down in 2007.

The Italian economy has relied on small, family-owned businesses that use cheap labor and produce high-quality products. But with competition from countries like China, these firms aren’t prospering in a globalized economy.

The nation seems angst-ridden and unsure how or whether to change. One Italian has devoted his entire blog to his country’s demise. At one level, it seems like Italy is just in a funk, but will it be able to get out? And, more importantly, is this what is going to happen to all aging World 1 countries? Or is Italy an outlier, while most of World 1 will adapt to new global realities?

Image: José Goulão (Flickr)

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The demographic challenges facing Europe are well-known, as aging and birthrates below the replacement level change the face of the EU. An article in Spiegel Online caught my eye because it tells a slightly different story, recounting how Germany is seeing a mini-baby boom nine months after it hosted the 2006 World Cup. 
As one doctor stated in the Spiegel Online article, “With many people the excitement they felt during the matches seems to have lasted and been employed in other ways after the final whistle.”

According to the article, registrations for prenatal classes are on the rise. A doctor at one hospital in Kassel, Germany anticipates a 10-15% increase in births.

Now, while this may just be a blip and have little effect on the long-term demographics of Europe, this phenomenon reminded me of some useful lessons to consider when thinking about the future:

The future is not just more of today—Demographics are among the most stable trends, but as this article reminds us things can and do change. Thinking about the future means not only looking at the most probably directions or outcomes, but also examining trigger events, countertrends, and discontinuities that could cause lower-probability change to emerge.

Consider unintended consequences—Thinking about the future means thinking broadly and connecting the dots between unrelated bits of information. It requires creativity, in combination with rigorous analysis. It means we need to think about the second and third-order impacts and implications as we consider different possible futures. The idea that the World Cup may have sparked this mini-baby boom reminds us to think beyond the obvious.

Don’t underestimate the power of people—When we think about the future it’s easy today to focus on new technologies. Technology is tangible, getting cheaper and spreading to every corner of the earth, and there’s no shortage of people who are willing to tell you where they think it is going. What’s harder to track and understand is people and what they need and want, but this task is a critical part of studying the future, and we’re happy to see more of our clients asking us to help them understand how consumer values are changing and even intersecting with technological change. This article about Germany reminded me that people are the real changemakers.

So…who’s next? Well, if there’s anything to this sport-induced baby boom thing China could be in for it…they’re hosting the FIFA Women’s World Cup this summer and then the Beijing Summer Olympics in 2008.

(Image: Social Technologies) 

One of our far flung correspondents recently returned from Moldova, visiting friends she had made eight years previously while in the Peace Corps. Moldova is a proud country, sandwiched between Ukraine and Romania, which unfortunately finds itself Europe’s poorest outpost. But Moldova is finally shaking its post-Soviet malaise and life is improving. In many ways Moldova illustrates the fact that some global consumer trends are occurring almost everywhere:

• Consumerism—New restaurants, casinos, and advertisements for appliances and mobile phones abound as Moldovan consumers finally emerge from their Communist past. One area that is boomimg is house building and DIY supply stores are popping up all over the country.

• Monetization—Coming hand in hand with consumerism is increased monetization of services. The best example of this is pet stores. Where in the past dogs were at best tolerated and at worst, totally neglected, there are now stores that cater to pet owners, offering a variety of products and pet services.

• Social freedom—As the memory of totalitarian rule fades, homegrown civil society NGOs are being created to bolster the foundations of participatory democracy and an open society.

And of course, all of these are expressions of middle-class growth.

Moldova’s relationship with its breakaway region Transdniestria illustrates its rising fortunes. In the years immediately following the end of Soviet rule, most of the good jobs in Moldova were to be found in Transdniestria, where the bulk of Soviet-era manufacturing took place, while Moldova’s economy moldered. But recently this has shifted, as Moldova proper has begun to grow its economy, while Transdniestria has seen its economy contract as the manufacturing sector dried up.

Of course, it is important to keeps Moldova’s resurgence in perspective. Moldova is still in many ways last in line in Europe--but perhaps Albania should begin to glance at its rear-view mirror.

There is no doubting the global population is aging. From 2000 to 2050, the median age of the global population is projected to rise by 10 years, to 36.8 years, according to the UN. In Europe, the situation is more pronounced. European Commission data putsthe fertility rate for the EU-15 at 1.48 children per woman in 2003.  Replacement rate, or the rate at which births outpace deaths, is 2.1.  European legislators are well aware that the aging trend has major economic implications, including rising pension obligations paired with a shrinking tax base.

This last issue has now collided with, if you'll pardon the pun, a strange bedfellow in the question of whether or not European policies on in-vitro fertilization (IVF) are pro-growth. Setting aside the political or moral issues around the technology, researchers at Sheffield University in the UK have concluded that while it could cost around £13,000 to provide a full cycle of IVF treatment to parents unable to conceive on their own, a child born of that IVF treatment would contribute approximately £160,000 in taxes and insurance payments to the UK economy over a lifetime--a net gain to the government of £147,000 per additional child these policies would add to the population.

In its coverage of this perhaps cold-sounding proposal, the BBC points out that national governments currently look to migration as a means of getting a boost in populations. However, these migrants don't provide the same "net gain" in revenue as they may, in some cases, come with additional family members who require more public services and social support--something that may be less likely with a domestic birth to a family requesting IVF, the researchers imply.

This may simply be an academic argument for the time being--research that bolsters the British government's interest in increasing IVF treatment and providing more liberal social benefits to encourage families. However, it shows the new areas into which social policy and economic policy will increasingly tread as the aging crunch erodes the ability of governments  to maintain the social compact with its citizens and remain competitive. Somewhere out there, Aldous Huxley may be perking up an ear as this discussion evolves.

(Image: sxc.hu)