For millennia, people have found support and community through defining factors, ranging from age and race to income and education levels.
However, these characteristics are not static—and drastic demographic changes are starting to create powerful ripple effects in the 21st-century economy.
The Impact of Demographics and Social Changes
Today’s infographic from BlackRock delves into the significant impact that demographics and human rights movements have on global markets. Of the five megatrends explored in this series, demographics are predicted to have the farthest-reaching impact.
What are Demographics?
Demographics are the characteristics of populations that change over time. These include:
- Birth and death rates
- Education levels
- Income levels
- Average family size
As a result, major demographic trends offer both unique challenges and opportunities for businesses, societies, and investors.
The Biggest Shifts
What are the biggest shifts in demographics that the world faces today?
1. Aging Population
The global population is aging rapidly─as fertility rates decline worldwide, those in the 65 years and older age bracket are steadily increasing in numbers.
2. Future Workforce
As the population continues to age, fewer people are available to sustain the working population. For the first time in recorded history, the number of people in developed nations between 20 to 64 years old is expected to shrink in 2020.
3. Immigration Increase
Immigration has been steadily increasing since the turn of the 21st century. Primary migration factors range from the serious (political turmoil) to the hopeful (better job offers).
In particular, areas such as Asia and Europe see much higher movement than others, causing a strain on resources in those regions.
4. Consumer Spending
A steadily aging population is slowly shifting the purchasing power to older households. In Japan, for example, half of all current household spending comes from people over 60, compared with 13% of spending from people under 40.
How Does Social Change Play a Part?
Demographics are the characteristics of people that change over time, whereas social change is the evolution of people’s behaviours or cultural norms over time.
Strong social change movements have often been influenced by demographic changes, including:
- Ending poverty and hunger
- Expanding healthcare in developing nations
- Reforming education quality and accessibility
- Championing gender and racial equality
Examples of major human rights movements include creating stronger environmental policies and securing women’s right to vote.
Opportunities for Investors
These changes pose some exciting opportunities for investors, both now and in the near future.
Global healthcare spending is predicted to grow from US$7.7 trillion in 2017 to over US$10 trillion in 2022. To meet the demands of age-related illnesses, companies will need solutions that offer quality care at much lower costs—for patients and an overburdened healthcare system.
With a declining working population, adapting a workforce’s skill set may be the key to keeping economies afloat.
As automation becomes commonplace, workers will need to develop more advanced skills to stay competitive. Newer economies will need to ensure that automation supports a shrinking workforce, without restricting job and wage growth.
By 2100, over 50% of the world will be living in either India, China, or Africa.
Global policy leadership and sales of education goods and services will be shaped less by issues and needs in the U.S., and more by the issues and needs of Africa, South Asia, and China.
—Shannon May, CoFounder of Bridge International Academies
In the future, education and training in these growing regions will be based on skills relevant to the modern workforce and shifting global demographics.
Spending power will continue to migrate to older populations. Global consumer spending from those over 60 years is predicted to nearly double, from US$8 trillion in 2010 to a whopping US$15 trillion in 2020.
Demographics and social changes are the undercurrents of many economic, cultural, and business decisions. They underpin all other megatrends and will significantly influence how the world evolves.
As demographics shift over time, we will see the priorities of economies shift as well─and these changes will continue to offer new opportunities for investors to make an impact for the future of a global society.
Visualizing Population Density Patterns in Six Countries
These maps show the population density of several countries, using 3D spikes to denote where more people live.
As of 2022, Earth has 8 billion humans. By 2050, the population is projected to grow to 10 billion.
In the last 100 years, the global population more than quadrupled. But none of this growth has been evenly spread out, including within countries.
This series of 3D maps from Terence Teo, an associate professor at Seton Hall University, renders the population density of six countries using open-source data from Kontur Population. He used popular programming language R and a path-tracing package, Rayshader, to create the maps.
France and Germany: Population Density Spikes and Troughs
Let’s take a look at how the population spreads out in different countries around the world. Click the images to explore higher-resolution versions.
France is the world’s 7th largest economy and second-most-populous country in the EU with 65 million people. But a staggering one-fifth of the French population lives in Paris and its surrounding metro—the most populous urban area in Europe.
Many residents in the Paris metropolitan area are employed in the service sector, which makes up one-third of France’s $2.78 trillion gross domestic product.
Unlike France, Germany has many dense cities and regions, with Berlin, Munich, Stuttgart, and Cologne all having over a million residents. Berlin is the most populated at 3.5 million residents in the city proper, and 6 million in the wider urban area.
That said, the relatively recent reunification of West and East Germany in 1991 meant that post-WWII growth was mostly concentrated in West Germany (and West Berlin).
Italy and Chile: Coast to Coast
In Italy, another phenomenon affects population density and urban development—a sprawling coastline.
Despite having a large population of 59 million and large metropolitan areas throughout, Italy’s population spikes are closer to the water.
The port cities of Genoa, Napoli, and Palermo all have large spikes relative to the rest of the country, as does the capital, Rome. Despite its city center located 15 miles inland from the sea, it extends to the shore through the district of Ostia, where the ancient port of Rome existed.
Meanwhile in Chile, stuck between the Andes to the east and the Pacific Ocean to the west, population spikes corroborate with its many port towns and cities.
However, the country is more concentrated than Italy, with 40% of its residents congregating around the capital of Santiago.
Turkey and Canada: Marred by Mountains and Climes
Though Chile has difficulties with terrain, it is relatively consistent. Other countries have to attempt to settle many different climes—regions defined by their climates.
Mountains to the south and east, a large, semi-arid plateau, and even a small desert leave few centers of urban growth in Türkiye.
Predictably, further west, as the elevation comes down to the Aegean and Mediterranean Seas, population spikes begin to heighten. The largest of course is the economic and cultural hub of Istanbul, though the capital Ankara is also prominent with more than 5 million residents.
In Canada, the Rocky Mountains to the west and freezing cold temperatures in the center and north account for the large country’s relative emptiness.
Though population spikes in Western Canada are growing rapidly, highly populous urban centers are noticeably concentrated along the St. Lawrence River, with the Greater Toronto Area accounting for more than one-sixth of the country’s 39 million people.
According to the World Bank, more than half of the world’s population currently lives in cities, and that trend is only growing.
By 2050, 7 out of 10 people are projected to live in cities. This congregation makes cities a beehive of productivity and innovation—with more than 80% of the world’s GDP being generated at these population centers.
It’s in this context that mapping and studying urban development becomes all the more important, particularly as policymakers try their hand at sustainable urban planning.
As Teo puts it:
“By showing where people are (and are not), they show us where political and economic power is concentrated, and perhaps where and who our governments represent.”
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