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:

• 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.

Ranked: Which Economies Are the Most Competitive?

What makes a country successful from an economic perspective? Many think of this in terms of GDP per capita—but in a rapidly changing world, our definitions of progress have evolved to encompass much more.

This animated Chart of the Week visualizes 10 years of global competitiveness, according to the World Economic Forum, and tracks how rankings have changed in this time.

How Do You Measure Competition?

The WEF’s annual Global Competitiveness Report defines the concept of ‘competitiveness’ as an economy’s productivity—and the institutions, policies, and factors which shape this.

This year’s edition unpacks the national competitiveness of 141 countries, using the newly-introduced Global Competitiveness Index (GCI) 4.0 which looks at four key metrics:

1. Enabling Environment
   Includes: Institutions, Infrastructure, ICT Adoption*, Macroeconomic Activity
   *Refers to information and communications technology
2. Human Capital
   Includes: Health, Skills
3. Markets
   Includes: Product Market, Labor Market, Financial System, Market Size
4. Innovation Ecosystem
   Includes: Business Dynamics, Innovation Capability

Each country’s overall competitiveness score is an average of these 12 main pillars of productivity. With that out of the way, let’s dive into the countries which emerge triumphant.

The Most Competitive: Movers and Shakers

The world’s top countries excel in many fields—but there can only be one #1. In 2019, Singapore wins the coveted “most competitive economy” title, with a 84.8 score on the GCI.

The nation’s developed infrastructure, health, labor market, and financial system have all propelled it forward—swapping with the U.S. (83.7) for the top spot. However, more can be done, as the report notes Singapore still lacks press freedom and demonstrates a low commitment to sustainability.

How have the current scores of the most competitive economies improved or fallen behind, compared to 2018?

Rank	Economy	2019 Score	2018 Score	2018-2019 Change
#1	🇸🇬 Singapore	84.8	83.5	+1.3
#2	🇺🇸 United States	83.7	85.6	-2
#3	🇭🇰 Hong Kong	83.1	82.3	+0.9
#4	🇳🇱 Netherlands	82.4	82.4	0
#5	🇨🇭 Switzerland	82.3	82.6	-0.3
#6	🇯🇵 Japan	82.3	82.5	-0.2
#7	🇩🇪 Germany	81.8	82.8	-1
#8	🇸🇪 Sweden	81.2	81.7	-0.4
#9	🇬🇧 United Kingdom	81.2	82	-0.8
#10	🇩🇰 Denmark	81.2	80.6	+0.6

Finland (80.2) and Canada (79.6) are notable exits from this top 10 list over the years. Meanwhile, Denmark (81.2) disappeared from the rankings for five years, but managed to climb back up in 2018.

Regional Competitiveness: Highs and Lows

Another perspective on the most competitive economies is to look at how countries fare within regions, and how these regions compete among each other.

Middle East and North Africa (MENA) has the widest gap in competitiveness scores—Israel (76.7) scores over double that of poorest-performing Yemen (35.5). Interestingly, the MENA region showed the most progress, growing its median score by 2.77% between 2018-2019.

The narrowest gap is actually in South Asia, with just a single-digit difference between India (61.4) and Nepal (51.6). However, the region also grew the slowest, with only 0.08% increase in median score over a year.

Region	Best Performer	2019 Score	Worst Performer	2019 Score	Regional Gap
Europe and North America	🇺🇸 United States	83.7	🇧🇦 Bosnia & Herzegovina	54.7	29
Latin America and the Caribbean	🇨🇱 Chile	70.5	🇭🇹 Haiti	36.3	34.2
East Asia and Pacific	🇸🇬 Singapore	84.8	🇱🇦 Laos	50.1	34.7
South Asia	🇮🇳 India	61.4	🇳🇵 Nepal	51.6	9.8
Eurasia	🇷🇺 Russia	66.7	🇹🇯 Tajikistan	52.4	14.3
Middle East and North Africa	🇮🇱 Israel	76.7	🇾🇪 Yemen	35.5	41.2
Sub-Saharan Africa	🇲🇺 Mauritius	64.3	🇹🇩 Chad	35.1	29.2

Across all regions, the WEF found that East Asia’s 73.9 median score was the highest. Europe and North America were not far behind with a 70.9 median score. This is consistent with the fact that the most competitive economies have all come from these regions in the past decade.

As all these countries race towards the frontier—an ideal state where productivity growth is not constrained—the report notes that competitiveness “does not imply a zero-sum game”. Instead, any and all countries are capable of improving their productivity according to the GCI measures.



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