McKinsey has been looking at demographics too.
It said: “Lower population growth and longer life expectancy are limiting growth in the working-age population. For the past half century, the twin engines of rapid population growth (expanding the number of workers) and a brisk increase in labour productivity powered the expansion of gross domestic product.” But it says that global employment will rise by just 0.3% annually over the next 50 years.
It predicts a peak in the number of employees globally in the year 2050 – which is rather a convenient date.
Is there anything that can be done?
One thing is for sure, we don’t really want to stop people from dying at an older age.
McKisney says that growth can be supported in more than one way, but the key lies with productivity, that it is to say squeezing out more output per employee. It reckons that productivity growth has the potential to be as high as 4% a year.
It says that three-quarters of this growth can “come from the broader adoption of existing best practices, or catch-up improvements. The remaining one-quarter—counting only what we can foresee—comes from technological, operational, or business innovations that go beyond today’s best practices and push the frontier of the world’s GDP potential.”
It says: Business must play a critical role: aggressively upgrading capital and technology, taking risks by investing in R&D and unproven technologies or processes, and mitigating the labour pool’s erosion by providing a more flexible work environment for women and older workers, as well as training and mentorship for young people.”
And what can you do you? Indeed, what must you do in order to survive? McKinsey says: “In an environment of potentially weaker global economic growth, and definitely evolving growth dynamics, executives need to anticipate where the market opportunities will be and the competitors they will meet in those markets. Above all, companies need to be competitive in a world where productivity will increasingly be the arbiter of success or failure.”