Thursday, August 02, 2007

Not enough babies

This is the cover from this month’s Economist. Nice creative.

Here are few snippets from the main article. Sorry it is a subscription only magazine (well worth purchasing this copy or buying the audio download from The Economist web site.

Four out of nine people already live in countries in which the fertility rate has dipped below the replacement rate. Last year the United Nations said it thought the world's average fertility would fall below replacement by 2025.

Adjusting to population decline poses problems, which three areas of the world—central and Eastern Europe, from Germany to Russia; the northern Mediterranean; and parts of East Asia, including Japan and South Korea—are already facing.

State pensions systems face difficulties now, when there are four people of working age to each retired person. By 2030, Japan and Italy will have only two per retiree; by 2050, the ratio will be three to two.

An ageing, shrinking population poses problems in other, surprising ways. The Russian army has had to tighten up conscription because there are not enough young men around. In Japan, rural areas have borne the brunt of population decline, which is so bad that one village wants to give up and turn itself into an industrial-waste dump.

And so the article goes on with more and more jaw dropping facts and figures.

Most marketers think that demographics is boring (and they might have a point) but the implications of population change are absolutely fundamental to understanding how markets work. Dick Stroud

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