Seeing business opportunities in a growing population | Business| Economy and finance news from a German perspective | DW | 11.07.2018
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Seeing business opportunities in a growing population

The exploding world population is no small problem. Feeding, clothing and housing everyone will be a challenge, so will be putting them all to work. Will industry step up and grab the unprecedented business chance?

The United Nation's Global Population Day On July 11 is an opportunity to look back, look forward and take stock of the current trends in population growth and all challenges that come with them. The theme of this year's day is "Family Planning is a Human Right."

While on the surface the UN seems to be focusing on health and women's reproductive rights, the economic knock-on effects are huge. Family planning "is also central to women's empowerment, reducing poverty and achieving sustainable development," according to a statement by Natalia Kanem, executive director of the United Nations Population Fund.

Demography versus economics

Growing populations can be a challenge and a boon. At the same time that the overall population is increasing, people are also living longer. In the past 60 years average global life expectancy has risen dramatically. For women it went from just over 52 to 72. For men it went from just over 50 to just under 70. 

Shrinking working-age populations are one impact of older populations. And today 40 countries are in just such a situation according to a story in The Economist in May. Yet an older population need not be a disaster for an economy, though the challenges are still substantial.

"A place with fewer workers must raise productivity even more to keep growing economically... Fewer people will be around to come up with the sort of brilliant ideas that can enrich a nation. Businesses might be loth to invest," concluded the weekly.

To get around these demographic problems, governments and employers need to get more women into jobs, promote family leave, encourage older workers to work longer and offer flextime.

If you build it…

Gathering workers together in cities seems like a good start to being more efficient, but accelerating urbanization also has its challenges. In 1960, only around 34 percent of people lived in urban areas. By 2017, that number had jumped to nearly 55 percent, according to a World Bank report.

In another recent report on urbanization from the United Nations, the number of megacities — those with 10 million inhabitants or more — were counted. In 1990, there were 10 of them. Now there are 33. Another 10 are expected to join the growing list by 2030.

Street traffic in Pakistan (Reuters/ M. Raza)

With more and more people concentrated in big cities, infrastructure improvements are key

"Managing urban growth to insure that it is sustainable has become one of the most important development challenges of the current century," John Wilmoth, director of the UN's Population Division said at a news conference in May. Yet he still sees a silver lining: "The increasing concentration of people in cities provides a way of more economically providing services."

It remains to be seen if more efficient smart cities, self-driving vehicles and tighter regulations can turn these places into real homes and create jobs at the same time, especially since the UN expects two-thirds of the entire world's population to be living in urban areas by 2050.

Growing and growing

Statisticians calculate that the human race first hit the 1 billion mark in 1804 and that it took another 123 years to reach 2 billion in 1927. The next billion only took another 33 years.

World Population Day was first inaugurated in 1989 and came on the heels of "Day of Five Billion," which was on July 11, 1987 and was used to mark the date around which the number of people on the planet reached 5 billion.

In May 2018, the global population hit 7.6 billion and every year around 83 million more people are added. Even when considering deaths, natural disasters, pandemics and declining fertility in much of the world, the UN expects the global population to reach 8.6 billion in 2030, 9.8 billion in 2050 and 11.2 billion in 2100.

With such numbers it's not just the sheer size of the population that is hard to manage; it is the accelerated growth rate that is hard to keep up with and governments alone cannot manage everything. The choices that businesses make — monocultures, microcredit, mobile networks, single-use plastic and most importantly anything that leads to job creation or destruction — will have a major impact on the world of tomorrow. Bosses have important decisions to make, many of which will nonetheless have unintended consequences.

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