Deconstructing Population Growth And Life Expectancy
As expected, insights offered by the late, great statistician, Hans Rosling in Factfulness will make you think differently about the world, starting with his take on population growth.
In contrast to common perception, Rosling shows how humans are again starting to live ‘in balance’ with nature, as population growth flattens following a 20th Century surge. I assumed population growth was beyond control. I thought we had overcrowded, overfarmed and plundered the earth. Rosling says this scenario isn’t likely.
His theory goes like this -
In 8,000 BC, there were about 5 million people on earth. This increased slowly for 10,000 years, reaching 1 billion in 1800. But then it picked up pace, with the next billion added in 130 years. Then the curve exploded, with 5 billion added in under 80 years.
The reason for that spike was the child mortality rate.
Until 1800, an average woman gave birth to 6 children yet the population curve stayed flat because 4 in 6 children died before adulthood. 2 children survived. They became parents and had 6 children, of which 2 survived. There was a balance. It was dictated by death.
That balance ended when science and education caused the number of children that reached adulthood to go through the roof. Women had the same number of children (on average, between 5 and 6) but far more survived. The graph spiked.
But come the end of the 1900s, the trend reversed. Knowing their children had a higher chance of survival, people no longer insured their family’s future or their work force by having lots of children. They knew the risks were lower so they could have less.
In 1948, women had 5 children. By 1998, that fell to 2.5. The trend continues. Balance is returning. But it’s not a balance by death, like in 1500. It’s a balance by life, as parents choose to have 2 children who both have a high chance of growing up into adults.
Hence, contrary to popular perception, the population curve is flattening.
In line with popular perception, Rosling agrees that we are living longer.
Life expectancy in 2100 will have increased by 11 years, adding 1 billion to the earth’s population, taking it to 11 billion. But, by then, growth will be all-but-flat. In fact, if we continue to educate women and nurture children, population growth could turn negative.
Of course, population growth still has a way to run between now and the end of the century. And this presents opportunities because, between now and 2100, there will be more people over the age of 45 than ever before. Despite the population curve flattening, this demographic is growing and these people (i.e. me) will need feeding, moving, insuring, looking after, entertaining and, if possible, a use found for them in an increasingly-automated economy.
So, as Rosling states, we shouldn’t fear long term population growth. It’s the short term needs of our generation that are more pressing. How we answer a problem that will grow over the coming 50-80 years is critical. It offers opportunities for forward-thinking companies in health, education, technology and finance, but those hoping to take advantage will need to act fast.
The upward shift in life expectancy will impact every aspect of our society -
How we move around our cities will change, with road architecture and public transport requiring sweeping updates. The way parts of our cities (homes, car parks, shopping centres etc) are planned and constructed will need a rethink too.
What we eat as a society will be impacted. How we eat, too, will change, with the demand for delivery services and home catering growing. Farming for a healthier diet that suits the elderly will need updating.
Healthcare and pharmaceuticals will be in higher demand than ever before. The portion of the population with age-related impairments will grow, and the market for goods and services that minimise and manage these conditions will grow with it.
In turn, the health and life insurance markets will be altered beyond recognition as they grow to service a bigger percentage of society. Public health services will come under increased strain, leading to higher uptake in private offerings.
Advertising will also need to evolve to target demographics that have never been as valuable. Understanding how this demographic can be reached will be critical.
The savings and investments market will have to adapt to a retiring population that need income for an extra 11 years of life. This could fundamentally shift the basics of portfolio theory in the pensions world.
The list goes on. The challenges and, thus, the opportunities are endless, especially if you allow for the possibility of life enhancement and extension that Harari talks about in Homo Deus.
As with other predicted trends - such as the rise of automation, the popularity of electric cars, the dwindling of fossil fuels - we know this change is coming and we know when it is going to arrive. All we need to do is think of ways to position our businesses, our investments and our lives so that we take advantage of it.