Demographic shifts have an important role to play in the Future of Work.
The slow but inexorable march of demography is one of the main drivers affecting the future of work. We cannot predict the future very accurately in many areas, but many things can be foreseen with a certain degree of accuracy when it comes to demographic changes. Demographic changes come slowly and pan out across decades, but their impact can be seen well in advance, as some of them are based on birth and death rates, which don’t change so drastically over the years.
For example, we know that the world, especially the West and some Asian countries like Japan, is aging, and the cohort of people over 65 years old will be the age segment with the most significant growth in the next decade. We also know that a new generation, the so-called Gen Z (those born between 1997 and 2010), is now entering the workforce and that by 2030 a significant majority of the workforce will be composed of millennials and Gen Zers. We also know that Asian and African populations will keep growing over the next decades. They might comprise around 80% of the world population by the end of the century between the two.
All these shifts will have a considerable impact on the way we work and how companies are run. Let’s have a look at these phenomena in more detail.
Generations in the workplace
In 2030 the oldest millennials will be 50, and most of the baby boomers should be retired. This means that my dear Gen X, also known as the sandwich generation (for being sandwiched between two bigger and more talked about generations like the Boomers and the Millennials), will be the oldest generation in the workplace and will be taking some of the most senior positions in organisations, but many Gen Xers will also be retiring by that time.
In ten years, Millennials will be taking the shots, and Gen Zers will form a big part of the working population. What will be the consequences of this?
Each generation seems to have distinct commonalities and ways to look at the world. Both Millennials and Gen Z are generations marked by the severe crises they had to face when they entered the job market: the Great Recession and the financial crisis in the case of Millennials, the global pandemic in the case of Gen Zers. Millennials are (unjustly) criticized for their seeming lack of loyalty when they have had to face precarious job conditions and job insecurity in their initial formative professional years.
Gen Zers are the most sensitive and insecure generation in history and prone to suffering anxiety and stress. It is still early days to see how this insecurity will be reflected in their work behaviours and leadership traits once they start climbing the professional ladder.
What is clear is that these two generations are the most preoccupied with sustainability, diversity, and inclusion and with companies having a purpose beyond shareholder profits, which, if you ask me, can only mean good news.
They are also much more technology-literate than their elders and will be able to maximise the use of AI and other disrupting technologies better. Some companies are already using shadow boards composed of millennials to get a more creative and tech-savvy view of the markets and business priorities and to inform the overall strategy of the companies they work for, with excellent results. It will be interesting to see how these boards are enriched when Gen Zers also join them.
Boomers had their time in the sun, and now it’s the turn of Gen X, but personally, I’m looking forward to seeing more Millennials and Gen Zers in leadership positions.
Japan, Western countries, and many others in the world are aging quickly. The fastest-growing demographic group in the world will be the elderly, with the population over 65 reaching 1 billion by 2030.
Life expectancy has been growing for the last centuries, and this growth has accelerated in the last decades, with many countries now reaching the low eighties. Some experts believe we are now reaching the upper limit of what is biologically feasible in terms of increasing life spans, while others, like singularity proponents like Kurzweil, think the technology that will allow us to become a-mortals and have the possibility to live forever (unless your life is cut short by an accident or murder) is within our grasp and will be developed in the next few decades.
Whichever of the two is true, the fact is that more and more people are getting older and getting in reasonably good health to their seventies and eighties. This means populations are aging and have more people above 65 years old as a proportion of the overall population than at any other time in history.
The “gray tsunami” of aging won’t be necessarily damaging for the economy and society, but it will impact the workplace. Many experts foresee that we will be retiring at an older age, and many people won’t even fully retire, as they will come on and off retirement by taking consultant and similar gigs. This will have implications on lifelong learning, employment contracts, and the organization of labour.
Population growth projections
There are different population growth projections out there. The most-cited is from the UN, which forecasts a world population of 8.5 billion by 2030 and over 11 billion by 2100. Other projections show the world population peaking at over 9 billion people in around 2060 or 2070, and then decrease to approximately 8 billion by the end of the century.
One of the main differences between the UN and the other projections seems to be on Africa’s growth forecasts. The UN researchers believe it will grow by 3.5, to reach almost 4 billion people by the end of the century. At the same time, other projections show a bigger reduction in fertility rates as the countries become richer, thus reducing the population growth estimates considerably.
Regardless of what projections you want to believe, what seems clear is that Asia will continue to be the most populated region in the world, and Africa will be a close second one by the end of the century (how close is another matter). These two continents will be not only the most populated ones but also the youngest ones. In comparison, Europe will finally have merited the moniker of the “Old Continent” because of its inhabitants’ age, and the US will go the same way if they continue being more closed to immigration from other regions.
The relative weight of world markets and economies will gravitate towards the East and the South. This process has already started, as most of the world’s economic growth has been coming from Asia recently. Also, some of the Asian economies seem to be better positioned to benefit from the post-covid world.
As African countries’ population balloons at a neck-breaking speed, will their economies be able to enter the development race and achieve the status of rich and middle-income countries like some Asian countries did in the last decades?
Some thinkers believe that as automation and robotics pervade all industries, it will be more difficult for poor countries to step into the development ladder through cheap labour like many other countries have done in the past, as human labour won’t be so necessary anymore, thus negating the only way these countries would have to join the club of developed countries.
On the other hand, some innovative start-ups are already flourishing in Nigeria and other African countries, and it seems to be a continent vibrating with new ideas and a willingness to prosper and grow. There are many issues that need to be solved in many African countries, from corruption to poor governance to low education levels, but if some of these problems are solved, Africa will have some tailwinds in the form of a young and vibrant population willing to consume, work, innovate and create wealth.
I’m looking forward to seeing what the next generations of Asian and African business leaders can contribute to the world of leadership and management.
The importance of demographic shifts
When discussing the Future of Work, fascinating topics like the rise of AI and the threat of automation or the shift to working from home get most of the general public and experts’ attention. Still, the impact demographic shifts will have shouldn’t be underestimated.
How different generations, with their own quirks and traits, interact with each other in the same workplace, how companies respond to an aging workforce and consumer base, or the rising importance of regions like Asia and Africa will considerably affect how we work and we manage our teams.
The changes brought by demographic shifts are, like many forces in nature, slow but unstoppable. Slow changes are often the most difficult to detect and therefore act upon (climate change anyone?).
People not paying attention to the importance of demographic shifts do so at their own peril.