UNDERSTANDING DEMOGRAPHY
UNDERSTANDING DEMOGRAPHY
The world is changing fast, and one of the greatest changes
in human history has taken place without many of us even
noticing—the changes that result from demographic developments.
Understanding these changes can provide a secure foundation as
well as significant business opportunities.
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| https://bussinessideas.namanmahajan.com/ |
The idea
The idea is simple: by understanding demography, future
opportunities and threats will be revealed. One global business that
understands the significance of demography is HSBC, “the world’s
local bank.” Understanding the composition of populations, how
they will change, and what each group in society will want is vital for
long-term success if you are running a wide range of businesses—
and especially financial services. Consider this HSBC email sent
from its website (www.yourpointofview.com) in 2007:
Tell us what you think. Do you agree with 57% of Indonesians
who see retirement as a time for rest? Or, like 58% of
Canadians, do you see it as the start of a new career? With
more of us living longer these days, it’s an issue that needs
serious consideration. Especially given that, by 2050, 22% of
the world’s population may be living in retirement.
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| https://bussinessideas.namanmahajan.com/ |
HSBC is developing a dynamic business in life, pensions, and
investments, but that is just the start. Demography is behind
many changes within HSBC. For example, HSBC has responded
to migration from Eastern Europe to Britain by recognizing that there is a demand among migrant workers for bank accounts
and loans, even among people without a credit history in Britain,
and immigrants also want to send remittances back to their
families. This was not an isolated incident but a major new
market segment, and HSBC developed and marketed (in several
languages) a product that did just that.
The twentieth century saw unparalleled demographic change.
Global population nearly quadrupled (from 1.6 billion in 1900
to 6.1 billion in 2000); there was the highest population growth
rate (2 percent in 1969) and the shortest time for the global
population to double, which it did between the administrations of
American Presidents Kennedy and Clinton. This was combined
with unprecedented declines in mortality and fertility, significant
international migration, and increased urbanization—resulting in
the emergence of mega-cities.
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Clearly, demographic developments are changing the world around
us. The fastest-growing populations are in India, China, Pakistan,
Nigeria, Indonesia, and Bangladesh. For example:
• Japan expects its population to decline by 50 percent by 2100, the
result of a low birth rate and a very low level of immigration.
• Within ten years, Italy will have more than 1 million people aged
over 90. Within Europe, Italy’s population strength is in fast
decline, as are those of Russia and Germany.
• America is the only major developed country with a population
that is increasing, largely due to migration. By 2050, America
will have a population of 400 million. Despite this, population
growth is concentrated almost entirely in “developing” regions.
• Demographic developments are changing family composition
in the developing world, with the result that the influence of
women is increasing.
• Populations will be older than ever before, with profound
implications for welfare policies, pensions, taxation, employment,
and spending throughout the affected economies of the developed
world.
• Urbanization is widespread and rising. In 2006, for the first
time in human history, global urban population exceeded global
rural population. This movement to cities, like much demographic
change, will profoundly alter behavior and expectations.
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