With the coming of new-age against the backdrop of increased mechanisation, humans will continue to play an important role in defining the moments of history
Of late, academic and policy discussions around demographics and its potential role in scripting a new economic and social narrative have gathered momentum. One of the reasons for the sudden shift in focus to demographics is the realisation that a skilled workforce can significantly contribute to productivity and sustainable economic growth. This is evident from the fact that following the 2008 financial crisis, global recovery progressed at a cripplingly slow pace, primarily due to a sinking supply of people in the workforce. Ruchir Sharma, in his book, ‘The Rise and Fall of Nations — Ten rules of change in the post-crisis world’ observes that a collapse in population growth was already underway before the 2008 crisis and, in fact, it can explain a good chunk of the persistently disappointing recovery since.
According to the United Nations’ 2017 report on ‘World Population Prospects’, global population today stands at nearly 7.6 billion as of mid-2017. Of this, 60 per cent of the people live in Asia (4.5 billion), 17 per cent in Africa (1.3 billion), 10 per cent in Europe (742 million), nine per cent in Latin America and the Caribbean (646 million) and the remaining six per cent in Northern America (361 million) and Oceania (41 million). China (1.4 billion) and India (1.3 billion) remain the two most populous countries of the world, comprising 19 and 18 per cent of the global total, respectively.
By 2050, it is estimated that global population will rise by 2.7 billion from 7.6 billion to 9.7 billion. A number close to 10 billion may sound scary and like the neo Malthusians, there is a growing fear that overpopulation may leave the planet hungry. However, what needs to be understood here is that overall population growth is slowing down. Fertility rates have fallen while life expectancy rates have grown drastically. As a result, fewer babies are born, fewer people are entering the workforce but people are living longer. Therefore, it is unlikely, as the neo Malthusians fear, that the world will have to starve as there will not be any added pressure to increase production. Overall population will continue to grow, though at much reduced rate, but the working age population that contributes to economic growth, will face steady slow-down. European Commission, in one of its Green Papers titled, ‘Population ageing in Europe: Facts, Implications and Policies’ notes that population and labour force ageing in particular, accompanied by a shrinking of the work force, raise concerns about future economic growth.
In 1987, Singapore launched a campaign under the slogan “Have three, or more if you can afford it”. It was aimed at encouraging parents to have more children. Baby bonuses haven’t been announced by various countries in the recent past to arrest population decline. Interestingly, China ended its notorious one-child policy in 2015. Germany in 2007 increased the retirement age from 65 to 67 for men and women, inspiring several other EU nations to follow suit. In short, there is a general awakening among nations to promote population growth that could become potential drivers of economic growth.
Among the Asian giants, India has a far stronger demographic positioning with more than 50 per cent of its population below the age of 25 and more than 65 per cent below the age of 35. By 2020, it is expected that the average age of an Indian will be 29 years as compared to 37 for China and 48 for Japan. With the rest of the world grappling with an ageing population and falling workforce productivity, India possesses a unique opportunity to turn its demographic advantage into growth. China, for example, in the last three decades, grew on the back of cheap labour and a conducive domestic policy environment. However, after years of steady growth — at times double digit growth — the Chinese economy has now started showing signs of slowdown. But today, China is the second largest economy in the world. Similarly, for India, the demographic advantage may not last forever and, hence, it will be wise to leverage the demographic dividend for driving growth while the sun shines. However, it is imperative to initiate policy action to ensure that adequate number of jobs are created for millions of people who enter the workforce every year. Skilling and upskilling at regular intervals will further play a crucial role in preparing the workforce for an uncertain future of opportunities. In addition, woman labour force participation is a sine qua non to balance and accelerate growth, especially in the wake of shrinking workforce.
Today, for a majority of the global economies, challenges will be manifold and new-age of growth will unfold against the backdrop of increased mechanisation and invasion of robots into the workforce. However, unlike the neo-Luddites, who fear robots will replace the human workers, humans will continue to play an important role in defining the moments of history.
(The writer is a communications professional)