As the World Turns: Why Populations Trends Matter to You, 2040’s Ideas and Innovations Newsletter, Issue 113
Issue 113, June 15, 2023
We’re taking a pause to share several trends that we believe are bellwethers for a sustainable future. And we’re not including climate change, although it clearly ranks high on anyone’s list as a cause for concern. We’re talking about two trends that don’t get much attention: population shifts and life expectancy.
Here’s the big picture from the UN: The world’s population is expected to increase by two billion people, from 7.7 billion at present to 9.7 billion in 2050, before reaching a peak of nearly 11 billion by the end of the century as fertility rates continue to decline. Where that population lives and works, where a percentage of the population is growing or declining, who comprises the overall population (think age, gender. and ethnicity), plus the economic conditions and opportunities where segments of the population are located are all more important to you than you may think.
The Future Is Now
In Wayne Gretzky’s over-quoted philosophy to follow the puck, organizations need to follow population trends to grow revenues, maintain a customer base, and develop a workforce. As we wrote in The Truth About Transformation, your market, and workforce are going to look very different in the future. Those shifts may already be impacting your organization, which may be a reason why you are attempting to adapt, change, transition, and transform.
We continually seek to beat a very loud drum that an organization, its leadership, and its workforce must consider demographical factors and variables in context of your organization, whom your organization serves or seeks to serve, whom your organization employs, and where your organization is located (town, region, country and even globally).
If you have been or are seeking to transform your current offerings — or you have one or a set of new offerings that you want to bring to market — it should be blatantly obvious that to experience market success you may need to grow your workforce to accommodate new or increased demand. But what if your organization pulls its workforce from one of the many regions around the world where the population is projected to decline but your customers exist in another region where the population is ever increasing?
To make it more complex, what if you are a leader who has mandated your staff to come back into the office full-time or on a hybrid schedule? What if the local well of potential recruits simply doesn’t exist? Can you meet the demand? We often see one side of the coin but not both. The adage, if we build it they will come, often permeates business thinking without consideration of the overlapping circles of highly connected and dependent variables and factors.
Both in “The Truth About Transformation” and our newsletter updates this past January, we have sought to raise awareness of how the population around the globe is shifting. These changes must be considered in short and long-term business planning.
Case in Point
If you operate in the tech space in India, you might be on edge because a third of the country’s engineering graduates migrate abroad. India has positioned itself powerfully in the global market enticing companies that want to shrug off their dependence on China and the Chinese workforce. The concern is whether India’s infrastructure can handle the global influx of new business demands. Or will its infrastructure require more time and money than projected to establish a solid foundation? Further, despite India soon overtaking China as the world’s most populous country, what are the skill sets of those who don’t migrate and can they support those seeking to set up shop?
Sands are surely shifting as markets and economists across the globe become increasingly concerned about China’s ability to continue its years of above-average growth. Unlike India, China’s population is in decline, its college graduates are struggling to find work, and applications for marriage licenses continue to decline year over year despite the government’s reversal of the one-child-per-family policy. In fact, couples continue to limit the number of children they are having out of economic necessity or because young couples simply want smaller families. This is a trend that is also occurring in the US and most other developed countries.
India and China are just two examples where there are both positive and negative changes that buck public perception. The number and type of consumers are changing as are those who comprise the workforce in each country.
Population Bubbles
According to the Brookings Institute, a staggering 60% of Africa’s 1.25 billion people are under the age of 25, the youngest population in the world. The disconnect is that the median age of leaders in Africa is 62. Thione Niang, co-founder of Akon Lighting Africa states, “In many cases, the younger generation is more knowledgeable, equipped, and prepared to address the fast-moving issues of today than the establishment leadership.” The generational showdown is hovering on the horizon but may come without the necessary infrastructure and economy to support a younger, more populous society. Yes, the birth rates are high in Sub-Sahara Africa, but so are infant and child mortality rates. History teaches us that when industrialized countries’ services and infrastructure are built in anticipation of an expanding population, infant and child mortality improves, and the population grows to meet the societal and market demands of the population and the organizations that require an expanding workforce. Time will tell if countries across the African continent will invest to build more capacity and infrastructure to meet their projected future population. If those investments are made, based on current trends Sub-Sahara Africa will be responsible for most population growth worldwide and will benefit from advances in technology, biotech, healthcare, and education. The optimistic projection is that the region can leapfrog over the slow progress of the past.
Diversity
Many areas of the United States are changing ethnically and demographically. Organizations historically have had a customer base that has already or is soon to change. Yet most organizations may not make themselves aware of those micro-level changes and simply plan business around the number of people in an area without a focus on who those people are and if they even have a want or need for what the organization offers.
Asian Americans recorded the fastest population growth rate among all racial and ethnic groups in the United States between 2000 and 2019. The Asian population in the US grew 81% during that span, from roughly 10.5 million to a record 18.9 million, according to a Pew Research Center analysis of US Census Bureau population estimates. Furthermore, by 2060, the number of US. Asians are projected to rise to 35.8 million, more than triple their 2000 population.
According to the most recent US Census, the Hispanic or Latino population grew from 50.5 million (16.3% of the US population) in 2010 to 62.1 million (18.7%) in 2020. And slightly more than half (51.1%) of the total US population growth between 2010 and 2020 came from growth in the Hispanic or Latino population.
On a macro level particularly in developed countries, some female population shifts are attributable to the rise in women’s status. In the United States and many countries around the globe, women represent a strong percentage of the workforce. Changes are afoot in developing countries as well. Hans Rosling reported in Factfulness that 60% of girls in low-income countries finish primary school. Women have the potential to become the transformation agents of the future. A widely held belief is that if you educate a woman, you have educated a village, and that has dramatic ramifications ranging from self-esteem to financial stability. Developing countries may soon represent the same diversity across the employment sector as developed countries. This is an important factor all organizations must recognize in defining and building a workforce for the future, as well as understanding which customers have the economic means to buy what an organization is offering.
Population Deficit
According to Darrell Bricker and John Ibbitson, authors of Empty Planet, the global population will peak around the middle of this century and then begin to decline especially in what we consider to be the most affluent places on the planet. According to the authors, Japan, Korea, Spain, Italy and much of Europe are facing long-term reproduction rates that won’t be able to sustain their current population levels. China and Russia seem to be on the cusp of similar population declines.
Optimistically, Ibbitson and Bricker believe that a smaller global population will result in some real benefits: “fewer workers will command higher wages; the environment will improve; the risk of famine will wane and falling birthrates in the developing world will bring greater affluence and autonomy for women.” There is a more serious issue, however, a diminishing population reduces the ability of an organization to maintain and grow a necessary workforce and grow its market.
Birth rates in the US have been declining since the 1970s and are currently sitting at 1.6% which is below population replacement requirements of two births per woman. The government is hoping that by 2056 the metric will be met, however, all objective indicators and subjective polling demonstrates young generations are seeking smaller families than their ancestors or simply do not want to have children at all given what they see as a challenging future for the globe.
All the trends combined create a realization that there will be a huge gap in fielding a workforce, enough people to care for aging boomers, and enough customers for organizations. An older population requires and consumes higher levels of resources across society than younger generations do. An expanding older population increases demands on a shrinking younger generation resulting in need gaps, societal stress, and changing priorities. And a younger generation may be driven by the economic necessity to pursue a different education for care-based careers instead of their professional career aspirations.
Think about it: There is a challenge in maintaining a growing economy with fewer people consuming less and less.
And with fewer workers to go around who demand work/life balance and meaningful work, who will pick up the slack?
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