The population might be growing, but lower fertility rates point to new problems down the line
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The population might be growing, but lower fertility rates point to new problems down the line

It’s common knowledge that the world’s population is growing. According to the United Nations, it will go from 7.6 billion people in 2017 to 11.2 billion by the end of the century. This will lead to a number of challenges, including possible water and food crises, but it’s not the whole story. While the world’s population continues to grow, its overall fertility rate (the number of live births a woman will experience in her lifetime) is declining. In the 1960s, the fertility rate was 5 – now, it’s 2.4.

graph 1709 populations

According to the world bank, for a population to remain stable, a fertility rate of 2.1 is required. Many developed nations already have fertility rates well below that – and as the rest of the world urabnises, we can expect its total fertility rate to drop beneath this number. That will present us with numerous challenges – not least of which: how do relatively few working age people support a growing mass of elderly people?

The fertility rate in some of the world’s biggest economies, like the U.S., China, Germany, and Japan, is well below the 2.1 threshold. For the moment, developing countries in Africa and Asia are “propping up” the number of live births worldwide, but falling fertility is likely a result of more modern lifestyles. Increasing urbanisation means that families are disincentivised to have a high number of children, who would once have helped out ploughing fields, and a number of trends around women working, education, and government initiatives reducing teenage pregnancy, will almost certainly have the same effect in the developing world as they have in the developed world.

In China, where decades of a one-child policy has seen the fertility rate fall to 1.6, the population is predicted to drop 28% by 2100. In Japan, with an even lower fertility rate of 1.4, the population could fall by as much as 34% over the same timeframe. As people live longer thanks to medical advancements, this presents these countries and many others with a growing problem: how to support a large population of retirees.

One obvious answer is immigration. But even apart from the political issues that often accompany widespread migration, there is a limit to how many young people more populous countries can provide the rest of us. If trends continue, and the ageing population becomes a global phenomenon, then we will need other solutions. Amongst them could be automation.

In Japan and China, which are facing some of the most well-documented and severe ageing crises worldwide, automation is already a powerful force. A number of fully automated businesses, from factories to cafes, are already in operation, helping to make up for a shortfall in workers. And in Japan particularly, robotic assistants already aid in care for the elderly. As the rest of the world gears up to deal with similar demographic issues, our greatest solution might not be human at all: it may well be the robots that save us.


Dominion holds a number of companies that deal with automation and robotics in its Global Trends Managed Fund.

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