Megatrends and how to survive them: Megatrend # 1: Population
Megatrends and How to Survive Them is the title of our book that is due to be published in October this year, by Cambridge Scholars Publishing. The book launch is on November 8th from 5 to 7 at the Reform Club in Pall Mall, London. Numbers are restricted but if you would like an invitation please let Tricia know, email@example.com.
This is one of a series of blogs based on the work we have done for the book. In discussing the megatrends, we start with Population. This is because this trend drives most – if not all – of the others. The world population is still growing, although the rate of growth has slowed with some countries experiencing negative growth. Today’s growth is mainly in Asia and Africa.
When we explored this megatrend, we were helped by using the UN terminology popularised by Hans Rosling as Levels 1, 2, 3 and 4, for people’s living standards. A quick aide memoire for the living standards of each Level is:
|1||1||A person brushes their teeth with a finger or a stick|
|2||3||There will be one toothbrush for the whole family|
|3||2||Each family member will have their own toothbrush and they can probably afford a dentist|
|4||1||Each family member will have their own electric toothbrush, they will go to the dentist at least once a year|
Levels 3 and 4 are often referred to as “middle class”. Today there are 3 billion “middle class” globally. It is this growth in the middle classes that drives all the other trends. When people get to level 3 or 4, they have the ability to exercise choice. Choice in what they buy, where they live, what work they do and how they do it, what they do for recreation and where.
Population growth peaked (2%) between 1965 and 1970 and has declined to just over 1% between 2010-2015. It should decline yet further by 2032, despite rising longevity as the size of the age group of 65+ grows. A key risk to note is that the IMF projects that in Europe, the dependency ratio will go from four workers per retiree to two workers per retiree by 2050, while the median age in Europe will increase from 37.7 (2003) to 52.3 by 2050. What might your organisation need to do about this?
What surprises us is that up until quite recently, demographics has been mostly forecastable. But looking at the graph above, it becomes clear that today, we really have no idea what the population will be in 2100. That doesn’t take into account the deflections we could see, caused by war, catastrophic events and pandemics.
The opportunity that arises from improving health and the fact that more than half of us live in urban environments is that the education level of all is rising. This is especially important for women, because educating women leads to improved health and well-being, as well as a rise in life expectancy across the board.
We continue our horizon scanning: some recent headlines that might be of interest are:
A growing number of Americans over age 65 are filing for bankruptcy just to get by, and it could signal a larger problem in the US: https://www.businessinsider.com/older-americans-are-filing-for-bankruptcy-during-retirement-2018-8.
State media in China boasted that their healthy life expectancy is now better than the US – and they’re right: http://www.businessinsider.com/china-boasts-that-its-healthy-life-expectancy-beats-the-us-is-correct-2018-5.
(Voracious consumption) x (rising population) = planetary crisis: https://www.theguardian.com/environment/2018/jul/24/voracious-consumption-x-rising-population-planetary-crisis.
More migrant workers needed to offset ageing population, says IMF: https://www.theguardian.com/business/2018/apr/09/get-more-migrant-workers-to-offset-strain-of-ageing-population-warns-imf.
Some questions you might like to consider, looking towards 2032:
- Thinking about population change in your country, how might your strategy and business model need to change in order to continue to be successful?
- Who do you think you will be selling to, and where will they be located?
- How might your product/service offering need to change.
We live in interesting times!
Authors: Patricia Lustig, MD LASA Insight and SAMI Associate and Gill Ringland, SAMI Emeritus Fellow and Director, Ethical Reading.
This blog simultaneously published on the SAMI Consulting blog.