As the global economy continues to evolve, world populations continue to shift — and at a rate faster than ever. As a result, an understanding of these trends can help a company determine whether its target markets are growing or shrinking, and where to focus its resources. But that’s not all. Population demographics also can determine the likelihood of civil strife, and economic and political instability.

When identifying the most lucrative markets around the world, companies often focus on a variety of demographic data, including disposable income, median age, mobility factors, home ownership, unemployment rates, and population trends. One of the most important factors, population growth, can be telling. Thus, a rising population often reflects a growing consumer base, and in turn, stronger demand. But for many countries, a population reversal currently is underway.

According to the U.S. Census Bureau, this year through 2025, the population in Russia is projected to drop from 142 to 140 million; in Japan, from 127 to 123 million; and in Germany, from 81 to 79 million. What is the impact? Although these decreases appear small, they put economic growth at risk since the number of consumers, as well as those contributing value-added output, decreases.

Unlike many developed countries, the population of the United States is projected to increase from 319 million this year to more than 346 million by 2025, the U.S. Census Bureau says. Much of this growth is due to America’s ability to attract immigrants, including the brightest from around the world. But what happens when a country’s population grows too quickly and when does this become a liability?

Edward Gresser, Executive Director of the Progressive Economy Project of the Global Works Foundation, a Washington, D.C.-based think tank, says the populations of South Asia, Africa, and the Middle East are surging. “Together they will likely add 1.7 billion new people by 2050 or three-quarters of all world population growth,” he estimates. In countries with limited resources and environmental concerns, a rising population that puts too much pressure on an already-poor infrastructure can create tremendous problems.

If jobs are not created fast enough, a quickly rising unemployment rate can result in civil strife or worse.

What’s more, the population of less developed countries with children under age 15 accounts for 28 percent of the population. And young persons, age 15 to 24, bring that total to 46 percent. As a result, “the numbers of children and young people in the less developed regions are at an all time high posing a major challenge for their countries,” the United Nations reports.

But the situation in the least developed countries — which have the fastest growing populations in the world — is even more pressing. Children under age 15 constitute 40 percent of the population, and those age 15 to 24 bring that to 60 percent. This puts increasing pressure on educational institutions often competing for limited resources. But more importantly, if jobs are not created at a pace that effectively absorbs the flow of first-time entrants into the labor force, a quickly rising unemployment rate — often disproportionately born by the youth — can result in civil strife or worse.

Not surprisingly, those countries with the highest fertility rates are among the poorest African countries. They also are the least likely to cope.

Fast-increasing young populations are not the only problem many developing countries face. Aging also is an issue. In the less developed regions, the population aged 60 and over is increasing “at the fastest pace ever — 3.7 percent annually in the period 2010-2015 and is projected to increase by 2.9 percent annually through 2050,” the United Nations says. This adds pressure on younger workers to support an ever-increasing number of retirees.

Overall, the world’s median age is rising and projected to increase from nearly 30 in 2015 to 36 by 2050, the United Nations estimates. That means half the world’s population will be younger and half older than 36. Broken down, by 2015, Germany is projected to have the world’s highest median age of 46.5; Japan will follow in second place at 46.4. The United States will be in 52nd place with a median age of with 37.3. China, at 36.2; Brazil at 31.3; Mexico at 28.3; and India at 26.6 are projected to have younger populations. What does this mean for marketers?

Countries with higher median ages, which are typical of developed countries, generally have higher per capita incomes than their counterparts in developing countries. And in terms of products and services, pharmaceuticals and health-related products, for example, are more likely to be in greater demand, while producers of electronic games are more likely to discover stronger markets in countries with lower median ages.

But as noted above, countries and regions with very young and fast-growing poor populations — like Africa and Western Asia (including the Middle East), which in 2015 will have median ages of nearly 20 and 27 — is a real concern. Unless significant job creation can be achieved and greater resources devoted to infrastructure improvements, an unlikely scenario, these young populations are likely to add tensions and cause unrest. In turn, increasing pressure placed on governments to improve economic conditions can escalate political risks.


John Manzella
About The Author John Manzella [Full Bio]
John Manzella, founder of the Manzella Report, is a world-recognized speaker, author of several books, and an international columnist on global business, trade policy, labor, and the latest economic trends. His valuable insight, analysis and strategic direction have been vital to many of the world's largest corporations, associations and universities preparing for the business, economic and political challenges ahead.

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