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Demographics

An Investing Megatrend: How Demographics and Social Changes are Shaping the Future

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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.

Megatrends - Demographics and Social Change

What are Demographics?

Demographics are the characteristics of populations that change over time. These include:

  • Age
  • Gender
  • Race
  • 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.

Healthcare

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.

Changing Workforce

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.

Education Reform

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.

Consumer Behaviour

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.

Investing Megatrends

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.

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Demographics

Mapped: Population Growth by Region (1900-2050F)

In this visualization, we map the populations of major regions at three different points in time: 1900, 2000, and 2050 (forecasted).

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Map of Population Growth by Region

Mapping Population Growth by Region

This was originally posted on our Voronoi app. Download the app for free on iOS or Android and discover incredible data-driven charts from a variety of trusted sources.

In fewer than 50 years, the world population has doubled in size, jumping from 4 to 8 billion.

In this visualization, we map the populations of major regions at three different points in time: 1900, 2000, and 2050 (forecasted). Figures come from Our World in Data as of March 2023, using the United Nations medium-fertility scenario.

 

 

Population by Continent (1900-2050F)

Asia was the biggest driver of global population growth over the course of the 20th century. In fact, the continent’s population grew by 2.8 billion people from 1900 to 2000, compared to just 680 million from the second on our list, Africa.

Region190020002050F
Asia931,021,4183,735,089,7755,291,555,919
Africa138,752,199818,952,3742,485,135,689
Europe406,610,221727,917,165704,398,730
North America104,231,973486,364,446679,488,449
South America41,330,704349,634,344491,078,697
Oceania5,936,61531,223,13357,834,753
World 🌐1,627,883,1306,149,181,2379,709,492,237

China was the main source of Asia’s population expansion, though its population growth has slowed in recent years. That’s why in 2023, India surpassed China to become the world’s most populous country.

Southeast Asian countries like the Philippines and Indonesia have also been big drivers of Asia’s population boom to this point.

The Future: Africa to Hit 2.5 Billion by 2050

Under the UN’s medium-fertility scenario (all countries converge at a birthrate of 1.85 children per woman by 2050), Africa will solidify its place as the world’s second most populous region.

Three countries—Nigeria, Ethiopia, and Egypt—will account for roughly 30% of that 2.5 billion population figure.

Meanwhile, both North America and South America are expected to see a slowdown in population growth, while Europe is the only region that will shrink by 2050.

A century ago, Europe’s population was close to 30% of the world total. Today, that figure stands at less than 10%.

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