- Declining birth rates associated with economic advancement
- Better health care increasing longevity
The net effect, according to United Nations forecasts, is that the world population will either stabilize or peak around 2050, after growing for centuries at an ever-accelerating rate. However, that population will be considerably older.
For example, between 1950 and 2000, the percentage of the world population older than 60 rose almost imperceptibly to 10 percent from 8 percent. By 2050, however, that percentage will more than double, to 21 percent. And in many countries — notably Japan, the most rapidly ageing country in the world, and those in western Europe — the share of population age 60-plus will be more than 40 percent by mid-century.
Despite this, in the developing world, the working population is still growing, which will lead to increases in productivity there. For example, by 2050, it is estimated that roughly 20 percent of the world population is going to be in Africa, up from 9 percent in 1900.
Anomalies in this trend include:
- In the developed word, despite having the same demographic profile as Japan or Europe, high rates of immigration in the US offset the effects of population ageing
- In the developing world, by contrast, past policies to limit population growth in China mean that its population is like to age rapidly. (Today, only 11 percent of the Chinese population is older than 60, but by 2040 the proportion will rise to 28 percent.)
These trends have tremendous implications for business and policy makers which are often overlooked as the trends spans more than one business planning or electioneering cycle. Some of these implications are:
- The escalating retirement and pensions crisis (especially acute with regard to un- or underfunded DB pensions such as the UK public sector and state pensions, as relatively fewer people of working age bear the burden of supporting a growing number of people in retirement).
- An increase in the need for health care, particularly long-term care.
- Firms may need to shift their focus from products and services aimed at younger consumers to products and services aimed at older consumers. For example, in Japan, they are already looking at toilets that communicate with elderly patients GPs, cars with larger displays, hand controls for the break and accelerator and the ability to curb dangerous driving habits, graveside web-cams for the partner left behind, easy to swallow food, robot pets, beds that turn into wheelchairs and cybernetic suits that strengthen and protect the frail. They are also scaling up production of art supplies for post-retirement hobbyists.
- Firms may also need to adapt to include older workers in the workforce, or be forced to shift production from areas with shrinking working age populations, such as Western Europe, to countries with growing working age populations, such as India