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94 THE PRACTICE OF INNOVATION

then organized themselves for the additional student enrollment; the
traditional, and especially the “prestige” universities, on the other hand,
did nothing. As a result, twenty years later these brash newcomers had
the students, and when enrollments decreased nationwide as a result of
the “baby bust,” they still kept on growing.
One American retailer who accepted the “baby boom” was then a
small and undistinguished shoe chain, Melville. In the early 1960s
just before the first cohorts of the “baby boom” reached adolescence,
Melville directed itself to this new market. It created new and differ-
ent stores specifically for teenagers. It redesigned its merchandise. It
advertised and promoted to the sixteen- and seventeen-year-olds. And
it went beyond footwear into clothing for teenagers, both female and
male. As a result, Melville became one of the fastest-growing and
most profitable retailers in America. Ten years later other retailers
caught on and began to cater to teenagers—just as the center of demo-
graphic gravity started to shift away from them and toward “young
adults,” twenty to twenty-five years old. By then Melville was already
shifting its own focus to that new dominant age cohort.
The scholars on Latin America whom President Kennedy brought
together to advise him on the Alliance for Progress in 1961 did not see
Latin America’s urbanization. But one business, the American retail
chain Sears, Roebuck, had seen it several years earlier—not by poring
over statistics but by going out and looking at customers in Mexico
City and Lima, São Paulo and Bogotá. As a result, Sears in the mid-
fifties began to build American-type department stores in major Latin-
American cities, designed for a new urban middle class which, while
not “rich,” was part of the money economy and had middle-class aspi-
rations. Sears became the leading retailer in Latin America within a
few years.
And here are two examples of exploiting demographics to
innovate in building a highly productive labor force. The expan-
sion of New York’s Citibank is largely based on its early realiza-
tion of the movement of young, highly educated and highly ambi-
tious women into the work force. Most large American employers
considered these women a “problem” as late as 1980; many still
do. Citibank, almost alone among large employers, saw in them an
opportunity. It aggressively recruited them during the 1970s,
trained them, and sent them out all over the country as lending
officers. These ambitious young women very largely made
Citibank into the nation’s leading, and its first truly “national”