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In this series, we’ll look at a diverse set of trends that your business needs to keep up with. With a globalized world, changes and large trends have a huge impact on your business.
The global megatrends discussed in this series may impact supply chains, availability of resources, and social or political situations – in your own backyard and on the other side of the world. In an increasingly dependent global business environment, such trends are important to monitor. The series is derived from the European Environment Agency’s outlook report and will cover the following:
- Global population
- Urban population growth
- Disease burdens and pandemics
- Technological change
- Economic growth
- A multipolar world
- Global competition for resources
- Pressures on ecosystems
- The consequences of climate change
- Environmental pollution
- Approaches to governance
Why stay on top of trends at all? If you’re not keeping track, your business runs the risk of becoming outdated. By staying on top of trends, your enterprise can learn to adopt sustainability practices. It’s important to both provide for today’s populations while taking into account the needs of future generations.
In this first post of the series, we’re keeping track of global population trends. Of all the things your business watches out for, global demographics probably aren’t on the list. However, it shouldn’t be ignored. Let’s find out why.
1. The world population will be very different in 50 years
The world population more than doubled between 1960 and 2015. It will continue to grow even more, although at a slower rate. The United Nations (UN) expects that the global population will reach around 10 billion by 2050.
Companies that rely on selling products to consumers need to understand how regional population growth affects them to make better business decisions. The best companies become resilient by considering how growing populations have impacts on their businesses.
On one hand, more people could mean more consumers. On the other, increased production could lead to increased environmental impact. If a business wants to succeed in the long-term, they must balance their own corporate sustainability.
Many businesses in many different industries are starting to incorporate sustainability into their value spectrum. A proper sustainability approach balances the needs and wellbeing of the present population with those of future generations.
2. More people and migration patterns mean a higher risk of environmental issues and climate change.
Understanding that the population is on the rise is just one aspect that affects sustainability. However, populations are also migrating – from rural to urban centres and from developing to wealthier countries.
Behaviours are changing, both in consumption and in land-use. Land that was once considered protected or rural is steadily being converted into urban landscapes. Industries like construction or manufacturing drive up land prices around the globe, making it difficult for small-to-average size agricultural operations to stay in business. Selling their land to capitalize on high prices is sometimes the best option for them.
On top of that, migration patterns result in populations migrating and settling to developed nations. The increased migration puts stress on resource allocations and access to settlement or social services. The effect is particularly large in urban areas, the destinations of many migrating peoples.
The net effects of changing land-use and migrating populations suggest greater exposure to environmental degradation.
3. With changing demographics comes changing consumption behaviour
Not only are global populations growing, but they’re also changing, too. Proportions of certain age categories create an intricate balance on consumer behaviour and industrial production.
For one, developing countries are experiencing a growing middle class. With a larger population having access to wealth and increasing their consumption behaviour, production and growth may become unsustainable.
The increased demand for various common goods means that natural resources will be consumed at larger rates. The world currently runs on oil and fuel-consuming machines and transportation. If a growing global middle class wants to consume more goods, shop online, and provide greater services for their families and livelihoods, the total effect could be hazardous to the sustainability of the earth’s ecosystems.
Youth patterns are changing, too. The least-developed nations reached a peak in the share of 15-24-year-olds in 2005. In the coming decades, particularly in the sub-Saharan African and Middle East regions, an immense proportion of young people will require adequate employment opportunities.
A lack of opportunities and access to resources could result in conflicts and more migration patterns that see young people migrate to more developed nations or compound the rural to urban migration. Each scenario has its own effects on how industries grow, attract, and retain workforces (and consumers).
Demographics and your business
Sorting out the changes to global demographics, and what they mean for your business, is no small feat. In many cases, the effects seem to counter-balance.
That’s why this global population megatrend has been labelled a “diverging trend”.
Imagine that Earth’s population is heading down an open road toward growth and expansion. There are forks in the road and some of the paths diverge and head in new directions.
The paths are different between regions, age, and gender demographics. Each new road has unique challenges both for public policymakers and business owners.
To stay on top, the best way is to tune in to the demographic trends that most affect your business. If you haven’t identified your target demographic yet, it’s time to. Honing in on a specific age, culture or gender that your business relies on for growth will only become more important as the population grows.
For others looking to expand to new markets, demographic trends offer a unique insight to how regions change. By studying the trends, you can stay ahead of your competition and make better business decisions by targeting regions that will yield the highest returns for your investments. You’ll get insight about how large or young the workforces are, income levels and wage rates as well as the hidden secrets about where people are migrating.
Each element can offer your business an advantage – not only to thrive in today’s world but also to set up your company for continued sustainability.
There’s plenty more to come in our series of global megatrends that affect your business. Next, we’ll take a closer look at the impacts of an increasingly urbanized world.