Table of Contents
Title Page
Copyright Page
Foreword
Introduction
Demographics and Migration
1 The 21st Century: A Historic Turning Point
3 Interactions with Other Megatrends and How They Will Affect the Consequences ...
References
Global Security
1 Introduction
2 The Decline of State – and the Rise of Personal – Warfare
3 The Bioterrorism Threat
4 The Cyber Threat
5 The Current State of Governance
6 Interactions with Other Megatrends
References
Biodiversity and Climate Change
1 Introduction
2 Current and Future Biodiversity Trends
3 Interdependencies Between Megatrends
4 Reform Recommendations
References
Energy and Natural Resources
1 Introduction and Organization of the Chapter
2 Basic Concepts in Energy and Natural-Resource Use and Availability
3 2010 – 2030: Limited Options
6 Energy Trends, Impacts and Implications for Other Megatrends
7 Energy and Natural Resource Availability and Use, 2010 – 2100: An Overview
References
Appendix
Economic Globalization
1 Introduction
2 The Current State of Economic Globalization
3 Future Trends in Globalization
4 Governance of Economic Globalization
5 Interdependencies among the Megatrends
6 Conclusions
References
Global Governance
1 Introduction
2 Contemporary Trends in Global Governance
3 Four Scenarios for the Next 20 Years
4 Connection to Other Megatrends
5 National Governance in the Context of Global Governance
6 The 50-Year View
References
Conclusion
Contributors
Foreword
Thinking about “our global future” is often a recipe for vertigo. Although the individual words are simple, the concept is larger and more complex than we as individuals first realize. This book sets out to help us understand how to shape our global future by examining the intersecting megatrends which will greatly impact our world.
Throughout its history, the Bertelsmann Stiftung has tackled a range of major global issues, albeit most commonly in isolation from one another. This elicited the question: Could we design a project that examines our global future through the dynamic interactions among megatrends rather than by looking at each trend individually? From that simple thought experiment, this multi-year project began as an earnest attempt to create a different prism through which tomorrow’s world could be viewed.
We selected six megatrends for analysis, each chosen through a process of prioritization. We do not portend that these megatrends are the only issues that matter, but we feel that each is particularly important in shaping our global future. One chapter is devoted to each megatrend, and each chapter’s author defines the current state of that megatrend and examines its potential interactions with other megatrends in the future. Thanks to the excellent work of Michael Mandelbaum, who wrote the introduction, and Nigel Holmes, who designed the infographics, we can review and reflect upon the interactions between megatrends from a macro level.
This book would not have been possible without the assistance of our partners. We wish to thank the Rockefeller Foundation for its generous support of the project even before it launched. Their advice has allowed us to think big in terms of the dissemination and distribution of the ideas presented here. We are also grateful to the Searchlight grantees, who have contributed ideas and perspectives from their regions around the world. We must, as this book shows, move beyond thinking locally if we are to cooperate and cohabitate on this planet, and develop a truly comprehensive view of the future.
Special thanks go to our own trans-Atlantic staff. The Future Challenges teams in Germany and Washington, DC, consistently overcame linguistic and time-zone issues. More often than not, they turned their differences into strengths.
This project took the efforts of many to create. We hope it enriches and engages you, and encourages you to think and act in ways that secure a better future.
Aart de Geus
Member of the Executive Board
May 28th, 2012
Andreas Esche
Director, Measuring Globalization Effects
Introduction
Michael Mandelbaum
Ever since the ancient Greeks consulted the oracle at Delphi for portents of what was to come, humans have sought to know the future. The future is the place, after all, to which we all aspire to emigrate. We have a natural interest in what we hope will be our home.
The future, in its precise details, is unknowable. Prediction is an art – and an uncertain, erratic, unreliable one at that – not a science. But the world of the decades to come is not completely opaque. While we cannot know everything about that world, we can be reasonably confident about some things. We cannot know what will happen, but we can have a good idea of what can happen, what may happen and even what is more likely than not actually to happen.
For example, the self-immolation of a Tunisian street vendor on December 17, 2010, which led to political upheavals that removed or threatened long-ruling dictatorships in Bahrain, Egypt, Libya and Syria, could not have been and, indeed, was not predicted – certainly not by those with the highest stakes in these events, the regimes that were toppled. But the conditions in which these uprisings took place and that made them possible – stagnant economies, large numbers of young people with no prospects in life and oppressive, corrupt, illegitimate governments – could have been, and were, observed, described and even measured. The specific spark that touched off what became known as the Arab Spring could not have been foreseen; the kindling that fueled it could have been and was, in fact, well-documented. The future is created by human choices within a context established by broad social and economic forces. The choices are frequently surprising, but the context is not. The context until the midpoint of the 21st century and beyond will be, in no small part, the product of six major global trends. They are the subjects of this book.
Its first chapter, written by Jack Goldstone, concerns demography. This is the most reliably predictable of all the six trends. Many of the inhabitants of the world four decades hence are already alive, and the number that will join them during that period can be forecast with considerable accuracy because birth and death rates change only very slowly. The size and distribution of the world’s population will be determined, as the chapter shows, by the consequences of the great demographic transition now under way, in which birthrates and death rates both decline. Where the transition is most advanced, in the rich countries, populations will both age and shrink. (The United States will be a partial exception. In 2050, Americans will be older than they are now on average, but there will be more of them.) Where its effects are only beginning to be felt, in poorer countries, populations will continue to grow, in some places rapidly. The great shifts of population from younger to older age cohorts and among different countries will, as the author shows, reconfigure our world in ways that give rise to new social and economic challenges with which governments will have to grapple. Between now and the year 2050, we will see unprecedented increases in older groups demanding pensions and health care in the rich countries, a huge youth surge in the very poorest countries, and the emergence of billions of new consumers in markets for food, energy, manufactures and services in the successful developing countries. The numbers of those seeking international migration and of swelling new and existing urban centers will likely increase dramatically as well.
In the next chapter, Benjamin Wittes writes about one of the most pressing security challenges the world will have to face: the wider distribution and lower cost of technologies that have benign but also destructive uses. The fissionable material on which nuclear power reactors run but which is also crucial for nuclear weapons is the most dramatic example, but not the only one. Biology produces both medical miracles and deadly pathogens. Cybertechnology connects the world but can also disrupt, at great cost, the many connections it creates. Where once the greatest threat to people and property came from the large, well-organized military forces fielded by sovereign states, Wittes argues, in future decades, the chief danger may come instead from disaffected, resourceful, determined individuals and small groups.
The reduction of biodiversity – the existence of variation within individual species and of many different distinct species – is the third trend the book examines. It has, as Wolfgang Cramer and Katrin Vohland note, a variety of causes: the reclamation of land for farming and human habitation, deforestation, environmental pollution and, not least, climate change. Since the future benefits of endangered plant and animal species cannot be known, the cost of their disappearance cannot be calculated with any certainty. But these costs, counted in benefits lost, could be very high indeed.
In the book’s fourth chapter, Stephen P. A. Brown and Joel Darmstader assess the future of the planet’s natural resources, with an emphasis on those devoted to producing energy. Energy’s economic role may be compared to the part oxygen plays in human life. Like oxygen, energy is indispensable. Unlike oxygen, however, it is not free, and since the inhabitants of the planet use so much of it, the world’s energy future will have an enormous impact on its economic future. Moreover, since the consumption of what are overwhelmingly the most popular energy resources, fossil fuels, has powerful, if not entirely predictable, effects on the Earth’s atmosphere – and, above all, on the planet’s temperature – the pattern of energy usage will affect human and all life forms in ways that extend beyond economics.
Economic globalization, as Scott Barrett writes in his chapter on the subject, involves the integration of markets of all kinds throughout the world. By some accounts, globalization has been the dominant feature of international affairs in the last two decades. The ever-larger cross-border flows of goods, money and people are often said to be both inevitable and benign. As Barrett writes, globalization is not necessarily either. In previous eras, globalization has stalled and even declined; global markets have actually disintegrated. And where integration does take place, the consequences are usually complicated and mixed, varying from market to market, from country to country and from one period to another. The one thing that is all but certain about globalization is that the world will have to cope with these diverse consequences in the decades ahead.
One way that it will attempt to do so is through the mechanism of global governance, the subject of the book’s sixth and final chapter by Bruce D. Jones, with Andrew Hart. The term global governance refers to the arrangements for dealing with issues that transcend national borders. The chapter canvasses the forms it may take in the first half of the 21st century.
Each of the trends described in the pages that follow will have a major impact on the social, economic and political life of the planet in the four decades to come: hence the title of the book – Megatrends in Global Interaction. Each of the essays describing them provides an overview of their major features and may therefore be seen as a briefing on its particular subject. Each essay, moreover, describes the likely interactions between its subject and the other five megatrends. And closely interrelated they are: The number of people in the world, for example, will do much to influence the amount of energy consumed globally, which will in turn help determine whether many species survive or vanish and how fast the world’s national economies are able to grow.
Together, the chapters provide a picture of the world’s future. It is not, and cannot be, a detailed picture. It is like a house glimpsed from a distance. The street number, the design of the doors and windows, and the color the walls are painted cannot be clearly seen. But the shape of the building is discernible.
The six megatrends described in this book will do a great deal to determine the shape of the human future. The descriptions of them that follow offer as valuable a guide to that future as is available from the inevitably limited evidence of the present.
Demographics and Migration
Jack A. Goldstone
1 The 21st Century: A Historic Turning Point
The first half of the 21st century will be truly historic in terms of global population trends. The dominant trends of the last 50 or even 200 years will be reversed and, in some respects, such as population aging and urbanization, we will see conditions that have never existed in human history.
This paper discusses six major trends in global population that will likely pose significant challenges to global peace and prosperity in the coming decades. These are:
1. a marked slowdown or even reversal of growth in the advanced industrialized nations;
2. a concentration of large, youthful populations on the move in an “arc of instability” reaching from southern Africa through the Middle East as well as South and Southeast Asia;
3. the rapid aging of societies in Europe, North America and East Asia;
4. increased migration flows, both voluntary and involuntary, within and across national boundaries, with ever-larger migration from developing to developed countries;
5. increasing urbanization, especially in China, India and Africa; and
6. the concentration of near-term population growth in regions with relatively poor populations, fragile or ineffective governments, and especially high vulnerability to climate change.
For the most part, these trends cannot be altered by any reasonably practical means during the next two to three decades, except at the margins. Most of these trends are already “built in” to existing populations as a result of the mortality and fertility trends of the last 30 years. However, the consequences of these trends have yet to be determined; these will depend in large measure on shifts in the other areas covered in this volume. For example, the increase of urban populations of China, India and Africa – which will drive the world’s urban population to likely double, increasing by almost 3 billion, in the next 40 years – represents a marked shift in lifestyles and patterns of employment, residence, transport and energy use (centralized versus decentralized). But whether this shift results in much greater efficiencies of energy production and consumption, or simply a huge increase in both, depends on what use is made of technological opportunities and innovations in the area of energy and natural resource use.
Age structures
The key to understanding the implications of these six major global population trends is that the problems likely to arise are not simply the result of changes in the total number of people in the world. Rather, the critical issues will arise from the distribution of population – that is, where the growth is occurring and where people will live: in cities or towns; in richer or poorer countries; under stable or unstable governments; in environmentally resilient or fragile regions. The real dangers arise from population distortions in which populations grow too young, too old, too fast, too urbanized or too mobile for the prevailing economic and administrative institutions in specific countries to maintain stable socialization, labor-force absorption and social welfare (Goldstone 2002; Cincotta, Engelman and Anastasion 2003; Leahy et al. 2007).
The first part of this chapter will describe these population trends in detail and highlight some of the more likely consequences. The second part of this chapter will then consider how changes in other global megatrends could alter those consequences – for better or for worse.
2 The Population Megatrends and Their Likely Consequences
A Tilting Balance in the Global Population and Economy
These days, countries experiencing substantial population increases are growing for two major reasons: still-high fertility rates and demographic momentum. A number of countries in Africa and the Middle East, plus a few in Latin America and South Asia, have birthrates that remain much higher than their mortality rates, producing population growth rates of over 2.0 percent per year. In these countries – including Afghanistan, Angola, Chad, the Democratic Republic of Congo, Ethiopia, Guatemala, Iraq, Malawi, Pakistan and Yemen, to name just a few – population is still doubling every generation, or roughly every 30 to 35 years.
In other countries, such as China, India and Indonesia, fertility rates have recently dropped substantially, with the result that they are growing more slowly in percentage terms, at around 0.5 to 1.5 percent per year. However, owing to rapid population growth in earlier decades, these countries now have such a large cohort of women of childbearing age that their populations continue to add substantial numbers of children each year. In China, for example, although most couples have fewer than two children, zero population growth is still two decades away. While China’s population growth rate has sunk to around 0.6 percent per annum, that will still add almost 80 million people to China’s population in the next decade. Although it is not quite as large as China at the moment, India is still growing more than twice as fast, at 1.3 percent per annum, and will add roughly 150 million people in the next decade. Even with a continued decline in their birthrates, taken together, these two countries alone are expected to gain roughly 380 million people by 2030, or more than today’s entire population of the United States and the United Kingdom combined (Population data from U.N. Secretariat 2009 [unless otherwise indicated, all population data in this paper is from the medium-growth projection variant detailed in this report]. Data is available online at http://esa.un.org/UNPP/).
Table 1 shows the change in populations in the 25 largest countries in the world over the next four decades. These are mainly countries with modest growth rates but large demographic momentum and, thus, the countries that will make the largest contributions to total world population growth in the next 40 years. Table 2 shows the current rate of growth in the world’s fastest-growing countries with populations over 1 million. Although these are generally smaller countries, they are the countries facing the largest burden of additional growth in terms of percentage.
These tables show that global population growth over the next several decades is going to be concentrated in only a few regions and countries, mainly Islamic societies (almost the entire top half of Table 2) and huge states with populations of 60 million or more. Most of the states that dominate Tables 1 and 2 are also among the world’s lower-income countries.
By contrast, in Europe and Japan, population growth rates are already low and, in some cases, negative. This divergence means that the demographic weight of the advanced countries is going to be dropping dramatically in coming years, which has major implications for both economic growth and the ability of these regions to take the lead in global affairs.
Table 1: The populations of the world’s largest countries (in millions)
This marks a dramatic reversal of prevailing global trends. From the onset of the Industrial Revolution in the late 18th century, European countries had been steadily increasing their share of the global population. Indeed, from 1700 to 1900, the population of Europe and its overseas offshoots rose from roughly 20 to 40 percent of the world’s total population (Maddison 2007: 378). Other industrializing countries, such as Japan, also enjoyed rapid population gains.
In 1950, all of Europe plus Japan, the United States and Canada comprised roughly one-third of the world’s population. Yet by 2009 that figure had fallen to below one-fifth and, by 2050, the figure is projected to drop to below one-seventh. In the nearer term, until 2030, the population of the world outside of these developed countries is expected to increase by 1.5 billion people, while the population of these developed countries will increase by fewer than 40 million.
Table 2: Countries with the fastest-growing populations, 2005 – 2010 (at least 1 million people)
Country | Annual growth rate, in percent |
---|
Liberia | 4.1 |
Niger | 3.9 |
Afghanistan, Burkino Faso | 3.4 |
Syria, Timor L’Este, Uganda | 3.3 |
Benin, Palestine (occupied) | 3.2 |
Eritrea | 3.1 |
Jordan | 3.0 |
Burundi, Tanzania, Yemen | 2.9 |
Chad, DR Congo, Gambia, Malawi, U.A.E. | 2.8 |
Angola, Rwanda, Madagascar, Sierra Leone | 2.7 |
Ethiopia, Kenya, Senegal | 2.6 |
Guatemala, Togo | 2.5 |
Kuwait, Mali, Mauritania, Papua New Guinea, Zambia | 2.4 |
Cameroon, Côte d’Ivoire, Guinea, Mozambique, Nigeria, Somalia | 2.3 |
Guinea-Bissau, Iraq, Pakistan, Sudan | 2.2 |
Ghana, Oman, Saudi Arabia | 2.1 |
Honduras, Libya | 2.0 |
Central African Republic, Congo, Namibia, Nepal | 1.9 |
Bolivia, Egypt, Gabon, Ireland, Laos, Paraguay, Philippines | 1.8 |
Israel, Malaysia, Venezuela | 1.7 |
Cambodia, Haiti, Panama, Tajikistan | 1.6 |
Algeria, Colombia | 1.5 |
Note: Countries with populations that are at least 50 percent Muslim are in bold. |
A similar fate awaits in economic terms. The share of the world’s total income obtained by the developed countries, which have the richest billion people on the planet, will likely fall from roughly 60 percent in 2005 to less than 30 percent by 2050 (estimated using PPP-adjusted gross national per capita income in current U.S. dollars). This is not mainly the result of huge disparities in growth in per capita output. Even if the developed countries increase their per capita incomes at a robust annual rate of 2.5 percent for the next 45 years and the rest of world catches up only slightly, increasing their per capita income at an annual rate of 4.5 percent, these results will still follow. This is because, while the total population of the developed countries is expected to stagnate, growing by only 3 percent in total by 2050, the population of the rest of the world is expected to grow by 50 percent, from 5.3 billion people in 2005 to over 8 billion people by 2050 (population and per capita GNI data from Population Reference Bureau 2005). The combination of more rapid per capita income gains plus much more rapidly expanding population means that the bulk of economic growth will shift to the developing countries.
By 2050, the proportion of global GDP produced by Europe and the United States will fall to roughly 23 percent, or a smaller proportion than was the case in 1820. Put another way, of all the growth in global GDP expected to occur between 2003 and 2050, less than one-fifth is projected to occur in Europe and the United States combined.
This is an epochal shift in the global balance of demographic and economic power. The rise of the BRICs (Brazil, Russia, India and China) that we have seen in the last decade is just the tip of the iceberg when it comes to future global change. Economic growth in Indonesia, Mexico and Turkey, as well as in Brazil, China and India, will replace growth in Europe, Japan, Korea and North America as the main driver of global expansion (Russia, on the other hand, is facing such a severe decline in population, and an economy so dependent on natural resources, that it may well become less rather than more important in the coming four decades).
The impact of the shrinking demographic weight of the richer countries puts them on the horns of a dilemma. If the economies of fast-growing developing countries do not start to close the gap with those of the richer countries, the standard of living enjoyed in the West will seem more elite and unfair than ever, thereby fueling resentment among developing-country populations against the more developed world. On the other hand, if economic growth in those countries does exceed that of the West, with the result that living standards in these countries start to close the gap between rich and poor countries, in the future, the combination of shrinking populations and lagging economies will render the currently developed countries more and more economically diminished relative to the world economy.
These demographic and economic changes also imply that the military capacities of large developing countries will increase as their populations and relative incomes rise. At the same time, the ability of the G-8 countries (made up of Canada, France, Germany, Italy, Japan, Russia, the United Kingdom and the United States) and NATO member nations – many of which will face drastically shrinking military-age populations in the near future – to puts “boots on the ground” in order to actually control the sites of any future conflicts will diminish. As we note below, the likely reduction of economic growth rates in these countries, and the diversion of income toward supporting retired and aging populations, will also make funding tighter for new and technologically advanced weapons. Already today, the wealthy countries are having enormous problems dealing with political instability, insurgencies and weak states in the developing world. In the decades ahead, when the developing countries have far larger populations and more money for weapons, while the rich countries have sharply diminished relative numbers and wealth, efforts to manage such conflicts will become far more difficult and more of a strain on their resources than they were before.
The military problem is particularly acute for the United States. As the world’s richest nation, it has chosen to bear much of the cost of maintaining the global order, from pushing Iraq out of Kuwait to defending South Korea from North Korea, as well as Taiwan from China. With its huge debts and desire to reduce military expenditures, the United States has been looking to its allies to play a greater role. Yet its key allies – Europe, Japan and South Korea – are all facing even more rapid aging than it is itself as well as a shrinkage of their military-age populations. In Germany, Europe’s largest nation, the population aged 15 – 24 will decline by one-fourth in the next 20 years; in Japan, that age group will decline by one-fifth. Accordingly, these countries can hardly be expected to substantially increase their military manpower in the coming years.
These trends require us to consider a major restructuring of international security and governance institutions. NATO, for example, will be comprised almost entirely of countries with aging and stable or shrinking populations as well as slow-growing economies. The major exception is Turkey, although its relations with NATO have become strained. If NATO is called upon (as it has been in Afghanistan and, more recently, in Libya) to contribute to efforts to stabilize countries in Africa, the Middle East or South or Central Asia, it will be heading into countries with rapidly growing and youthful populations that will find it far easier to mobilize insurgents than NATO will to mobilize troops (as is already the case in Afghanistan today). In 30 years, Afghanistan, Ethiopia, Nigeria and Somalia will have populations twice as large as they are today, while the population of Europe will be somewhat smaller. Logistically and demographically, it would make much more sense – and be far more valuable – to invite countries such as Brazil or Egypt to enter NATO (as was done with Turkey, owing to its size and strategic location) than countries such as Albania.
This brings us to our second trend: the rapid growth of youthful populations in Africa, Asia and Latin America.
The Arc of Instability: High Population Growth and Youthful Populations in Low- and Middle-Income Countries from Southern Africa to the Middle East and South and Southeast Asia
If we look back at Tables 1 and 2, it is striking that most of the fastest-growing and large, still-growing countries are either Muslim or have large Muslim minorities. This is because, in contrast to the societies of Latin America or East Asia, while Muslim countries have adopted the Western technologies that reduce mortality rates, a number of them have been more resistant to cultural changes that empower women, such as increased female literacy, higher education and workforce participation, all of which reduce birthrates and family size. The result is that many such countries have been undergoing very slow or even stalled demographic transitions while simultaneously sustaining rapid growth rates. There are exceptions, of course, as some Muslim countries have had vigorous government-promoted contraception programs. But, for the most part, they still bear substantial demographic momentum and will continue to grow substantially for at least another one or two decades.
More generally, the regions with fast-growing populations also include Central and Andean America and virtually all of Africa, as well as the Middle East and most of South and Southeast Asia. These countries also have exceptionally youthful populations. They are still in the early and middle stages of the demographic transition, in which large numbers of children are being born and larger numbers are surviving to adulthood, while the older and smaller cohorts are living longer. The result is that the older cohorts continue to hold on to their jobs and positions in the economy, thereby blocking the ascent of younger workers, while the dramatic increase in the number of workers entering the labor force produces a spike in un- and underemployment in cases in which the economy is not growing extremely rapidly.
Most recently, we have seen some consequences of this imbalance in North Africa. Indeed, this region has large youth bulges: In almost all Arab states, youth aged 15 – 29 make up 40 to 50 percent of the entire adult population. In addition, since government programs in many Arab nations promised jobs to workers beginning in the 1960s but stopped doing so in the 1990s due to fiscal constraints, unemployment has been unusually concentrated among the young. According to the International Labor Organization, youth unemployment in the Middle East and North Africa reached 23 percent in 2010, or roughly twice the global average. The high rates of unemployment among youth also suppressed marriage rates, with the result that in Egypt, for example, almost half of young men under 30 remain unmarried. These trends have created a vast reserve of young males who are willing to risk revolt to alter the status quo because they are unattached to the social order by jobs or marriage.
As shown in the map, in the countries with large youth populations, the proportion of individuals aged 15 or younger makes up over 30 percent of the population and, in most cases, over 40 percent, or approximately twice the level found in the more developed countries. This is also a historically anomalous condition.
While it is true that the elderly have always been scarce in human societies, this does not mean that youth were plentiful. In fact, it was quite the reverse. The striking feature that distinguishes modern developing societies from pre-industrial societies is the much higher rates of infants and children surviving into young adulthood. Even the poorest countries of the 21st century – the Democratic Republic of Congo, Somalia and Sudan – have life expectancies of 45 to 55 years. By comparison, life expectancy in England in the 1750s was 35 years. The difference is due to the much higher survival rates of infants and children in modern developing countries resulting from simple but widespread improvements in sanitation and the prevention of childhood diseases. This has produced modern societies that are exceptionally skewed toward large youthful populations. Indeed, in 2009, 60 percent of the population of the least developed countries was under age 25, and 40 percent was under age 15.
As might be expected, such social distortions also lead to broader political ones. A number of scholars have documented the greater incidence of civil violence and state breakdowns in countries with large youth bulges and several generations of rapid population growth (Homer-Dixon 1999; Goldstone 2002; Kahl 2006; Leahy et al. 2007; Urdal 2006, 2007). A rapidly growing and exceptionally youthful population creates strains on systems of schooling and socialization; large populations of un- and underemployed youth are vulnerable to radicalization and to recruitment into criminal and insurgent movements. Likewise, growing populations frequently increase competition among elite groups for control of patronage resources and force populations to encroach into regions of poorer or already-claimed resources. Growing costs of administration, service provision, education and security often arise before economic growth can provide governments with the resources they need to meet those needs, thereby leading to ineffective governance. A growing population and rising demand can also push up costs, ranging from those for housing to basic foodstuffs and fuels (thereby increasing government costs when such items are subsidized). Growing populations can also lead to the degradation of natural resources, including forests, grazing lands, fish and game stocks, and water supplies.
While a well-organized and effectively repressive regime can maintain order in such societies, it is a brittle order that can be overturned in the event of an economic crisis or a failure of government leadership (as happens, for example, in a succession crisis). This is not merely a contemporary phenomenon, nor one primarily characteristic of Asia and Africa. Indeed, European countries have also exhibited a much higher incidence of civil strife and state crises whenever they have experienced periods of youth bulges and relatively high population increase (Goldstone 1991).
These demographic patterns mean that the instability in such places as Afghanistan, the Democratic Republic of Congo, Cote d’Ivoire, East Timor, Iraq, Libya and Yemen is not just a result of varied and specific conditions in those countries. Rather, the threat of chronic and intermittently acute instability will persist as long as there is a disjunction between the pattern of economic absorption, on the one hand, and the growth rate and age structure of the population, on the other.
As we have seen in the last decade, international intervention by regional or global peacekeeping forces can help stabilize such conflicts (Human Security Center 2006). However, as populations grow in this arc of instability, the difficulties of maintaining order will also grow. Iraq, for example, has been difficult to stabilize with its current population of 31 million and, in 15 years, its population will swell to 44 million. Afghanistan and Pakistan currently have 28 million and 181 million people, respectively; in 2025, based on current trends, they will have 45 million and 246 million, respectively. In sum, the costs and difficulty of helping stabilize crises in these and similar nations will escalate sharply.
The ways to respond to this situation and thereby reduce future threats are well-known: improve employment prospects for youth; improve the capacity of these nations’ governments to deliver services to their populations; reduce the provocations that focus grievances and discontent on governments and their allies (ranging from corruption and excessive or poorly directed repression to discrimination and exclusion of significant groups or elites from political and economic life). Unfortunately, while these objectives are easily stated and widely recognized, their attainment is exceedingly difficult and complex insofar as the tasks of promoting economic development, political inclusion and better governance in the face of complex histories, social dynamics, limited institutional and administrative capacities, and cultural and social differences are immense. What we can say, however, is that the resources that international development agencies have directed toward accomplishing these tasks in recent years will likely need to be increased if they are to cope with them in the future.
A Brave New World: Aging and Workforce Reduction in Europe and North America
Fortunately, perhaps, the structures of excessive youth populations in the developing world now face a mirror in that developing countries will soon have exceptionally aged populations as well as stagnant or declining labor forces.
Table 3: Aging and labor-force change in major European and other countries, 2009 – 2050 (projected)
Table 3 shows the projected population changes in the major countries of Europe and several other countries up until 2050. Many of the countries of Europe, plus Japan and Korea, will see their populations shrink, mainly due to a sharp decline in the number of children per couple, to well under 2.0 and, in some cases, under 1.5. Indeed, over the next 40 years, Europe’s overall population is expected to shrink by 5 percent.
The change in total population, however, is not the most striking change evident in Table 3. Since these countries are also rapidly aging, more of the remaining members of the population are exiting their prime working years. Therefore, in the coming decades, the decline in the working-age population in most countries is expected to be many times greater than the decline in the overall population. Most of the countries of Europe, plus Japan and South Korea, are expected to lose one-quarter to one-third of their prime labor forces by 2050. Although not starting until about 2030, China is also likely to experience a decline in its prime labor force by 2050 of about 17 percent. Even several countries that are expected to enjoy considerable population growth – such as France, Spain and Switzerland – due in part to high immigration rates, will have the aging of their population overpower this growth, which will lead to a stagnation or decline in the population of members of the labor force of prime working age.
While these countries are facing a startling decline in their labor forces, their older population (i.e., of individuals 60 and older) will simultaneously and rapidly increase. Indeed, over the next 40 years, most countries will see a roughly 50 percent increase in their over-60 populations. Strikingly, this change is likely to be even more dramatic in those countries still enjoying the greatest growth in their overall populations and labor forces as their larger, healthy populations rapidly age. Thus Canada, Spain and the United States will face a doubling or more of their over-60 populations. Likewise, some countries that shifted rather recently and rapidly from high to low population growth – China, Ireland and South Korea – are set to face staggering increases in their aged populations.
As a result, by 2050, in Japan, South Korea and most European countries, the proportion of the over-60 population is expected to climb to between 35 and 40 percent of the total population. Even in the United States and Canada, the percentage of the population over 60 will grow substantially, from today’s 16 to 17 percent to 28 to 30 percent by mid-century (U.N. Secretariat 2009).
This represents a highly novel and abnormal pattern. In the great sweep of history, there have been long periods in which population growth was stagnant or in which major epidemics (e.g., the Black Death) substantially reduced populations in large areas. However, during these periods, the cause of population stagnation or decline was high mortality rates, especially among the young. Birthrates remained high, and when conditions were more favorable for growth, population increase resumed. Populations thus remained predominantly young, as they have been throughout all of history, and there were naturally fewer older people. In modern Europe (as well as in other high-income countries, such as Canada, Japan and the United States), it is changing birthrates that have precipitated population decline, as people have chosen to have smaller and smaller families. Likewise, women are marrying later, if at all, and having fewer children. The result is an unprecedented aging of populations that is expected to see people over 60 comprise one-third of the developed world’s population by 2050.
This slowdown in population growth has major implications for overall economic growth (Eberstadt 2001). Stimulus to the economy from growing numbers of consumers and growing demand for housing will simply be absent. The capital growth generated by larger generations of young people approaching their peak earning years and saving for retirement will cease as well. When the labor force of the developed countries was growing at between 1 and 2 percent per year, as it did all the way up until 2005, even modest increases in real per worker output of 2 percent per year provided overall annual growth levels of between 3 and 4 percent or better. Instead, with the labor force in the developed countries shrinking by between 0.7 and 1 percent per year, the same 2 percent increase in real per worker output will yield only between 1 and 1.3 percent in overall annual growth. In other words, even if Europe’s productivity growth remains constant, its overall economic growth rate will likely be cut in half, from 3 percent to less than 1.5 percent per year, over the next 40 years.
An overall growth rate this small allows few margins for accumulation to head off economic downturns or to invest for the future. As Benjamin Friedman (2005) has recently argued, substantial growth rates allow more groups to share to some degree in growth as well as providing social resources for a variety of services and investments. By contrast, he argues, overall annual growth rates below 2 percent allow for little redistribution or investment, and they tend to heighten social conflicts over such issues as pensions, migration and labor-employer relations.
This pattern will likely be exacerbated by a shrinking of the labor force that will be more dramatic than the overall slowdown in population. A declining birthrate and increasing numbers in larger, older cohorts mean that the working-age population is being reduced at both ends. In fact, for Europe, the turning point came precisely in 2005. Between 1950 and 2005, Europe’s working-age population (15 – 59) increased steadily, growing from 330 million to 480 million. But, between 2005 and 2050, Europe’s working-age population is projected to steadily decline by 150 million workers and entirely reverse these gains, shrinking all the way back to its 1950 level.
This shift in the demographic pattern also raises major concerns about the recovery from the current (2008 – 2009) economic crisis. After the Great Depression, a vigorous baby boom in the United States and Europe helped fuel demand and overall growth, thereby spurring the pace of recovery. Unless current demographic patterns change rapidly, this spur to growth will be missing in the coming decades. Recovery will accordingly be much slower, with no sharp spike in demand for homes, major appliances, cars or other items typically acquired by young families and workers as they enter the labor force and then enter their prime earning years.
It is often noted that the developed world is heading for difficulties in terms of paying for pensions and health care for the elderly (Jackson and Howe 2008). But the dimensions of this demand at a time of rapid decline or relative stagnation in the labor force in the developed world are not always appreciated. It is not just that an elderly population will be ill; in fact, they might actually be quite active. But, in the latter case, they will demand the hip and knee replacements, cornea replacements, heart transplants, diabetes treatments, blood-pressure treatments and other procedures and medications necessary to sustain an active and healthy life into older ages. At the same time, this will occur at a time when the supply of new doctors and nurses will probably be declining.
Nor is simply keeping the elderly population at work a solution. Older workers will generally not welcome either entry-level work at entry-level wages or physically demanding work. Those gaps in the labor force will have to be filled by younger workers. Moreover, while older workers excel in experience and judgment, they aren’t as good as younger workers at thinking outside the box. Indeed, path-breaking innovations in science and technology overwhelmingly come from those under 45. For this reason, countries with fewer and fewer younger workers will most likely lose an edge in innovation, as well.
There are several routes by which the developed nations can try to head off this impending slowdown in growth. The first is to ramp up investment in productivity-increasing technology. An increase in productivity producing a 1 percent greater gain in per capita output per year would offset the change in population. Increased technological prowess would also help Europe, Japan and the United States maintain their leadership roles in the global economy since companies and countries in areas of rapid growth would turn to them for their technology.
The second route is to increase immigration and seek as quickly as possible to boost immigrants’ productivity and earnings to the average level in receiving countries. While there have been efforts in Europe to increase the inflow of skilled workers, it may well be that unskilled and entry-level labor will be required in the coming decades. This is not a short-term fix, however, since integrating and educating immigrants can take a generation or more. Moreover, if the children of unskilled migrants do not have the opportunities to find fulfilling roles in the receiving societies, their frustrations can create more problems than solutions. Australia, Canada and the United States have enjoyed the benefits of making it easy for immigrants to start a business, acquire educations and move into the mainstream of life, with the result that the incomes of many immigrant groups exceed the national average. This suggests a path that European nations would do well to follow.
Unfortunately, in Europe, Japan and, more recently, the United States, debates on immigration have expressed the fear that immigrants steal wealth from the countries that attract them. This mistaken view is as pernicious as the idea that protecting trade through high tariffs or blocking foreign investment will preserve the prosperity of a country that builds such walls to global exchange around itself. In fact, as Simon (1999) has shown, migrants tend to self-select for entrepreneurial talent, ambition and energy as well as to result in net gains for national economies. Having lost much of their own demographic momentum and energy, Europe, Japan and the United States can ill afford to exclude new generations, even if they come from abroad, from taking the place of the ones they are no longer producing themselves.
A third way would be to encourage greater labor-force participation. Part of this will have to include delaying retirement. At present, this is deeply unpopular because workers face a definition of retirement that is “all or nothing” – in other words, one is either working full time or retired. Accordingly, at present, delaying retirement simply means more years of full-time work. However, there is no reason for this all-or-nothing approach. Indeed, a more flexible definition of “work” and “retirement” would do a better job of dealing with the varieties of people and their choices. For example, instead of simply delaying retirement, the government could offer workers over 62 additional weeks of paid vacation (which it pays for itself) rather than full pensions. For example, according to this model, the government could offer to fund an additional two weeks of paid vacation for each year an individual works after age 62; thus, by age 70, the individual would effectively be “semiretired,” working about half a year, but he or she would still be productively employed. At the same time, workers who choose to retire earlier could still do so, but at reduced pension rates, and certain classifications of workers (those in high-risk or high-stress jobs, e.g., steel workers, air traffic controllers, police officers and firefighters) could retire early with partial pensions, which would allow them to take lower-paying but less stressful jobs without suffering a loss in overall income.
In addition, steps should be taken to increase the labor-force participation rates of youth and women by offering employers a variety of options and incentives related to the more flexible hiring and firing of new workers.
A fourth way would be to pursue pro-natal policies that encourage larger families among the existing populations. Unfortunately, it is not clear which policies would produce this gain, as demographers have yet to reach a consensus on the reasons behind baby booms. Unless a shift in values occurs that sees people place a higher value on having larger families than on endlessly increasing their consumption of consumer goods, small families will continue to be preferred.