We’ll add another billion people to the world’s population by 2025, making the estimated total 8 billion. At the same time, we’re living longer and having fewer children. As a result, the fastest growing segment of the population will be the over 65s.
The pace of this change will vary immensely across different regions. Africa’s population is expected to double by 2050, while Europe’s should shrink. The average age in Japan in 2050 is expected to be 54 – and just 21 in Nigeria.
All countries will need to implement bold policies to cope with these demographic changes. In Europe, Asia and Latin America, higher labour force participation from women and the elderly alongside higher levels of immigration will be needed to sustain an ageing population. Africa will experience a strong demographic dividend but it will need to develop the right policy conditions to maximise returns from its younger population.
Emerging economies will need to face up to their demographic challenges over a much shorter period of time. It took France a century to double the share of the over 60’s in the labour force (from 7% to 14%) – China, India and Brazil are expected to do it in less than thirty years.
But because demographic trends are often presented as problems, the opportunities can be overlooked. We see two core sources of growth that our clients can tap into:
- the consumption power of growing demographic segments; and
- the innovative potential of a diverse workforce.
Women already control two thirds of the household budget in G7 countries, and as the wage gap with men continues to narrow, their purchasing power should continue to rise. Aging baby boomers will spur the demand for health care services. Nigeria’s population is expected to exceed America’s by 2045. There is an underlying theme that connects the demographic trends we’re seeing – the world is becoming a more diverse place.
Demographics of a diverse workplace
A growing body of evidence connects workplace diversity to improvements in businesses and economies’ performance. The most innovative companies are already adapting to tap into the growing diversity of their workforce in terms of gender, geography and age – as well as feelings and values.