Page 1 Dr. Med. Hans Groth l Lecture at the University of St. Gallen (HSG) l 19 th September 2014...

Dr. Med. Hans Groth l Lecture at the University of St. Gallen (HSG) l 19th September 2014

MEGATREND “GLOBAL DEMOGRAPHIC CHANGE - TACKLING BUSINESS & SOCIETY CHALLENGES IN 2030 AND BEYOND”

DR. MED. HANS GROTH, MBAUNIVERSITY OF ST. GALLEN ROOM 22-00418TH OF SEPTEMBER 2014 (14.15-16.00)


2014 World population realities

7.2 billion

Worldwide population in 2014 –6 billion in less developed countries and 1.2 billion in more developed countries.

2.5Total fertility rate worldwide –range from 1.1 children per woman in Taiwan to 7.6 in Niger.

53% The percentage of the world’s population living in urban areas.

38/1000Since 1970, the global infant mortality rate declined from 80 infant deaths per 1000 life births to 38 per 1000 live births.

Source: PRB 2014 World Population Data Sheet


World population facts 1970 vs 2014Age structures have changed almost everywhere



Executives consider demographic ageing a “top global risk”

Source: The World Economic Forum‘s Global Risk Report (2013)


Demography is a burning topic at least since 200 B.C.

One thing is sure - the earth is now more cultivated and developed than ever before. There is more farming with pure force, swamps are drying up, and cities are springing up on unprecedented scale.

We've become a burden to our planet. Resources are becoming scare, and soon nature will no longer be able to satisfy our needs. The time will ultimately come when pest, hunger, floods and war will diminish the excessive numbers of our human species.

Septimius Tertullianus, 200 B.C.


Agenda

2 Geopolitics (examples, patterns)

1 Global population evolution

4Political, societal, economic and technical implications of population dynamics: actions and solutions for business & society

3 The demography of Switzerland and its neighboring countries

What is your benefit to attend this class?5

How to tackle your project assignment successfully ?6

12 project themes to choose from7


Global population evolutionThe history of the global population

» For thousands of years the world population remained well below 1 billion inhabitants.

Within the past 200 years the population grew at an enormous speed to over 7 billion.

Source: Population Reference Bureau; and United Nations, World Population Projections to 2100 (1998)


Global population evolutionOur history of longevity

» Life expectancy at birth has remained relatively stable for more than 1000 years.

However, for the past 200 years we saw an unprecedented life span extension.


Global population evolution: Changes in lifespan inequality

0 6 12 18 24 30 36 42 48 54 60 66 72 78 84 90 96 1021080

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

1751 2011

Gini Index for length of life:1751 = 0.462011 = 0.08

Life expectancy at birth:1751: 38 years2011: 82 years

Changes in lifespan inequality with improving health: Sweden 1751 vs 2011

Source: Human Mortality Database. Sweden, Total (1x1) Life tables, available at http://www.mortality.org/cgi-bin/hmd/country.php?cntr=SWE&level=1 Accessed August 18, 2014.


Global population evolution4 stages of demographic evolution/population dynamics

Stage 1: High mortality/fertilitylow population growth

Stage 2: Declining mortality/high fertilityhigh population growth

Stage 3: Declining fertility/dynamics in population age structuresdemographic opportunity

Stage 4: Ageing population, low fertility, decreasing mortality at all agesincreasing „dependency ratio“

Past

21 st Century


Global population evolution: Stage 4Rapidly rising share of older people in world population

1950 1975 2000 2025 2050 2075 2100

0.00

0.05

0.10

0.15

0.20

0.25

0.30

80+ share60+ share

Sh

are

of

tota

l p

op

ula

tio

n

2.8 billion

0.8 billion

» The share of 60+ and 80+ in the world population will massively increase.

This has broad implications on economics, society and politics.


Global population evolution: Stage 4Dementia – the new pandemic

» The worldwide number of people suffering dementia is forecasted to increase massively

during the next 20 to 40 years.


Agenda









»Most of the world’s population growth will come from less developed and poor countries.

More developed countries face population stagnation or even decline.

Geopolitics (examples, patterns)Global population growth

Source: United Nations Population Division, World Population Prospects: The 2010 Revision, medium variant (2011)


» In the 21st century Africa is the driving force of global population growth. Russia and many

European countries will decline, the US will continue to grow, Asia‘s growth will slow down.

Geopolitics (examples, patterns)Global population growth in the 21st century

7 8.1

9.3

10.6

6.2

10.1

15.8

SzenarienFertilität

Population Growth Annual Population Growth rates in %

Source: CIA Factbook estimations (2011)


Geopolitics (examples, patterns)The 15 most populous countries

Rank Country Population* Country Population* Country Population*

1 China 815 China 1341 India 16922 India 554 India 1225 China 12963 United States of America 209 United States of America 310 United States of America 4034 Russian Federation 130 Indonesia 240 Nigeria 3905 Indonesia 118 Brazil 195 Indonesia 2936 Japan 104 Pakistan 174 Pakistan 2757 Brazil 96 Nigeria 158 Brazil 2238 Germany** 78 Bangladesh 149 Bangladesh 1949 Bangladesh 67 Russian Federation 143 Philippines 155

10 Pakistan 59 Japan 127 DR Congo 14911 United Kingdom 56 Mexico 113 Ethiopia 14512 Italy 53 Philippines 93 Mexico 14413 Mexico 52 Viet Nam 88 United Republic of Tanzania 13814 France 51 Ethiopia 83 Russian Federation 12615 Ukraine 47 Germany 82 Egypt 123

Japan (16) 109Viet Nam (17) 104Germany (25) 75

France (21) 63 United Kingdom (26) 73United Kingdom (22) 62 France (27) 72Italy (23) 61 Italy (31) 59Ukraine (29) 45 Ukraine (56) 36

Switzerland (70) 6 Switzerland (93) 8 Switzerland (110) 8

* in million **including East Germany

1970 2010 2050

15%

51%2%

33%

8%

55%

3%

34%

4%

51%

7%

38%

Developed Countries Least Developed CountriesEmerging and Developing Countries Rest of the World


World population realitiesCountries with highest and lowest fertility rates



Geopolitics (examples, patterns)Our next world has two fundamentally different challenges

The developed world will have to figure out howto manage and prosper with not having enoughchildren to become tomorrow‘s workers and breadwinners

» Developed countries will have to find new models with declining workforces.

Developing countries have to create opportunities to harvest the demographic dividend.

Developing countries will have to create societies that offer employment and opportubities to their young before ageing starts to manifest in their societies


Geopolitics (examples, patterns)Nigeria – a ticking time bomb (UN Projections)

0

200

400

600

800

1'000

1'200

Mil

lio

ns

Actual

High-fertility

Medium-fertility

Low-fertility

Fertility assumption

158348

433

505

730

1025

» In case the high fertility scenario becomes reality, Nigeria might have 1 billion inhabitants by

2100. Already by 2050 the country will have a population size equal to the one of Europe.


China

100 50 0 50 100

0-45-9

10-1415-1920-2425-2930-3435-3940-4445-4950-5455-5960-6465-6970-7475-79

80+

Population in million

Age structure in China (1980)

100 50 0 50 100

0-45-9

10-1415-1920-2425-2930-3435-3940-4445-4950-5455-5960-6465-6970-7475-79

80+


Age structure in China (2030)

India

100 50 0 50 100

0-45-9

10-1415-1920-2425-2930-3435-3940-4445-4950-5455-5960-6465-6970-7475-79

80+


Age struture in India (1980)

100 50 0 50 100

0-45-9

10-1415-1920-2425-2930-3435-3940-4445-4950-5455-5960-6465-6970-7475-79

80+


Age structure in India (2030)

Geopolitics (examples, patterns)Population dynamics in China and India (1980 vs 2030)

Source: Own graphs based on UN, World Population Prospects 2010


» Shrinking working age populations in developed and developing countries - but in developing nations they will shrink without social security! And will there be enough jobs for the growing workforce cohorts in the fragile emerging nations?

Geopolitics (examples, patterns)Dynamics of the 15-64 population share (2050 vs 2010)

Source: Own graph based on United Nations Population Division. World Population Prospects: The 2010 Revision Population Database.

Developed Nations Developing Nations Emerging Nations

Sweden -13% Philippines +6% Angola +28%

United Kingdom -13% South Africa +4% Uganda +23%

USA -13% India +2% Ethiopia +23%

France -14% Mexico -6% Yemen +19%

Finland -16% Turkey -9% Nigeria +13%

Australia -16% Indonesia -9% Kenya +13%

Netherlands -19% Brazil -12% Pakistan +11%

Poland -22% Viet Nam -16% Jordan +11%

Germany -23% Russia -18% Egypt +2%

Italy -23% Thailand -19% Bangladesh +2%

Switzerland -25% China -21% Mongolia -9%

Spain -26% South Korea -32% Iran -16%


» A global phenomenon in the 21st century: Declining/low fertility rates result in a shrinking share of the 0-14 population share.

Geopolitics (examples, patterns)Decline of the 0-14 population share (2050 vs 2010)

Source: Own graph based on United Nations Population Division. World Population Prospects: The 2010 Revision Population Database.

Developed Nations Developing Nations Emerging Nations

Germany +2% Russia +5% Nigeria -20%

Sweden 0% South Korea -23% Mongolia -21%

Finland -3% South Africa -30% Kenya -24%

Poland -4% Thailand -31% Uganda -26%

Italy -5% China -32% Yemen -31%

United Kingdom -5% Philippines -34% Angola -37%

France -8% India -38% Egypt -38%

USA -10% Turkey -39% Pakistan -41%

Spain -10% Viet Nam -39% Iran -41%

Australia -10% Indonesia -40% Ethiopia -45%

Netherlands -11% Brazil -43% Jordan -47%

Switzerland -11% Mexico -44% Bangladesh -49%


Geopolitics (examples, patterns)Increase of the 60+ population share (2030 vs 2010)

» Exploding share of the 60+ cohort everywhere. The emerging and developing countries – today nations with a high youth share – experience the fastest and most substantial increase of elderly cohorts.


Number of years needed to increase the 65+ population from 7% to 14%

115

85

73

70

66

53

45

27

26

25

21

18

France (1865-1980)

Sweden (1890-1975)

Australia (1938-2011)

USA (1944-2014)

Canada (1944-2010)

Hungary (1941-1994)

United Kingdom (1930-1975)

China (1930-1975)

Japan (1970-1996)

Chile (2000-2025)

Thailand (2003-2024)

Singapore (2001-2019)

Source: Own graphs based on UN, World Population Prospects 2010

Geopolitics (examples, patterns)The incredible speed of today’s demographic ageing

» It takes China only 27 years for what took France 115 years!


0-45-9

10-1415-1920-2425-2930-3435-3940-4445-4950-5455-5960-6465-6970-74

75+

10 8 6 4 2 0 2 4 6 8 10

1985

Percentage

FemaleMale

0-45-9

10-1415-1920-2425-2930-3435-3940-4445-4950-5455-5960-6465-6970-74

75+

10 8 6 4 2 0 2 4 6 8 10

2008

Percentage

FemaleMale

0-45-9

10-1415-1920-2425-2930-3435-3940-4445-4950-5455-5960-6465-6970-74

75+

10 8 6 4 2 0 2 4 6 8 10

2050

Percentage

FemaleMale

5.6

6.67.16.76.6

6.96.56.36.15.75.6

4.34.03.02.72.62.2

2.2

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

1924

1928

1933

1938

1943

1948

1953

1958

1963

1968

1973

1978

1983

1988

1993

1998

2003

2008

Geopolitics (examples, patterns)Country example: Turkey 1985 - 2050


Geopolitics (examples, patterns)Country example: Turkey 2010

Fertility rate distribution

Source: : Koç, İ., Eryurt, M.A. (2010) “Demographic Integration through Intermarriage of Turks and Kurds in Turkey”

» Eastern Turkey is mainly populated by the Kurds.

This region shows above country average fertility rates.


Geopolitics (examples, patterns)Country example: Turkey 1935 – 2008

Percent distribution of language/ethnic groups in Turkey

Source: : Koç, İ., Eryurt, M.A. (2010) “Demographic Integration through Intermarriage of Turks and Kurds in Turkey”

» For the last 70 years Turkey has seen a constant increase of their Kurdish population.

What are the implications for the country’s governance and political leadership etc.?


Insufficient Healthcare system

Increasing contraceptive usage

Unemployment rate 7.7%

Low fertility reached

Increasing role of women

High literacy rate at 90.4%

Increasing education levels

1750

1770

1790

1810

1830

1850

1870

1890

1910

1930

1950

1970

1990

2010

0

5

10

15

20

25

30

35

40

45

50

France

Iran

Geopolitics (examples, patterns)Country example: I.R. Iran










Iran by age, sex and educational attainment in 1970

Iran - Population by Age, Sex and Educational Attainment in 1970

2000 1500 1000 500 0 500 1000 1500 2000

15-19

25-29

35-39

45-49

55-59

65-69

75-79

85-89

95-99

Males Population in Thousands Females

No Education

Primary

Secondary

Ter

`

Age










Iran by age, sex and educational attainment in 2030

Iran - Population by Age, Sex and Educational Attainment in 2030

5000 4000 3000 2000 1000 0 1000 2000 3000 4000 5000

15-19

25-29

35-39

45-49

55-59

65-69

75-79

85-89

95-99

Males Population in Thousands Females

No Education

Primary

Secondary

Ter

`

Age









Geopolitics (examples, patterns)I.R. Iran – Ban on vasectomies

Iran’s parliament bans permanent forms of contraception as well as the advertising of birth control in the country

This measure shall boost population growth which will (given the current TFR of 1.6) decline from 75 million to 31 million by 2094

The call for more babies has a geopolitical background and is supposed to «strengthen national identity and to counter «undesirable aspects of Western lifestyles»

Source: South China Morning Post 12.08.2014


Geopolitics (examples, patterns)Differing life expectancies in East/West Germany and USA

Life expectancy at birth: East Germany, West Germany, and USA, 1956-2011

Source: Human Mortality Database. USA, East Germany and West Germany, Total (1x1) Life tables, available at http://www.mortality.org/ Accessed August 29, 2014.

1955

1958

1961

1964

1967

1970

1973

1976

1979

1982

1985

1988

1991

1994

1997

2000

2003

2006

2009

68

70

72

74

76

78

80

82

East Germany West Germany USA

Lif

e e

xp

ec

tan

cy

at

bir

th (

ye

ars

)


Indonesia and its islands

Geopolitics (examples, patterns)Country example: Indonesia

» Indonesia is the 4th most populous nation worldwide with the largest Muslim population within. It is centrally located in the dynamic South East Asian region. It has a growing working class population and a rising middle class while ageing is delayed.


Demography… more than just figures

Which new alliances might emerge and become irrelevant?

What are the drivers of success?

What needs to be unlocked in order to turn demographic change into a viable and sustainable opportunity for a given nation and a given individual?

How does demography impact the future of a nation, its society, governance system, economy and wealth creation, as well as its power and influence?


Agenda









Switzerland’s population dynamics 1975 - 2035


Switzerland’s population dynamics

Swiss “population ageing clock”

17.6%At the beginning of 2014, the 65+ age cohorts in Switzerland included 1,432,000 people, thereby representing 17.6% of the population.

28% By 2060, the 65+ cohorts are expected to include 2,515,000 people and 28% of the population.

In other words, the 65+ cohorts are currently growing by:

• Daily: 64 people every day = the community of Gondo/VS

• Monthly: 1,920 people every month = the Community of Hindelbank/BE

• Yearly: 23,045 people every year = the city of Frauenfeld/BE


The demography of Switzerland The dynamics of birth rates and migration since 1870

» Since 1950 Switzerland’s population growth has been driven substantially by migration.


Population growth in Switzerland

VD 6.1

VS 2.8

TI 2.2

GR 0.8BE 1.2FR 5.4

NE 0.8

LU 4.3

AG 5.0

GE 4.8

JU 0.7BL 2.5

SO 2.5

ZH 4.0

TG 4.2

SG 2.0

AI 2.6

AR 1.8

OW 4.3

NW 2.7UR

0.5

SZ 2.6

ZG 2.4

GL 2.1

BS 1.3

SH 0.9

Population growth by cantons 2010-2035

» The Swiss cantons are growing at very different speed.

CH: 3.4 (Average growth

rate per 1000 people)


2010 2030 %

Population 82,4 77,9 -5.5

Aged 15 – 64 m 54,3 46,2 -14.9

Aged 65+ m 16,8 22,0 +30,9

Aged 80+ m 4,2 6,3 +50.0

2010 2030 %

Population 7,6 8,1 +6,6

Aged 15 – 64 m 5,1 5,0 -2.0

Aged 65+ m 1,3 2,0 +53.8

Aged 80+ m 0,4 0,6 +50.0

2010 2030 %

Population 8,4 8,6 +2.4

Aged 15 – 64 m 5,7 5,3 -7.0

Aged 65+ m 1,5 2,1 +40.0

Aged 80+ m 0,4 0,6 +50.0

2010 2030 %

Population 62,6 66,5 +6.2

Aged 15 – 64 m 40,5 39,4 -2.7

Aged 65+ m 10,6 16,1 +51.9

Aged 80+ m 3,4 5,2 +52.9

2010 2030 %

Population 60,1 59,6 -0.8

Aged 15 – 64 m 39,3 36,3 -7.6

Aged 65+ m 12,3 15,9 +29.2

Aged 80+ m 3,6 5,2 +44.4

The demography of Switzerland and its neighboring countriesSwitzerland’s neighbors have a different dynamic


Agenda



4Political, societal, economic and technical implications ofpopulation dynamics: actions and solutions for business & society






Actions and solutions for business & societyOtto von Bismarck's life course

Source: Alexandre Kalache, Advisor on Global Aging, New York Academy of Medicine, ALI Harvard, 2013

» Bismarck's life course in the 19th century was structured in three separate parts.


Actions and solutions for business & societyA man’s life course today

» Today the clearly separated life course stages start to blur.

The learning and retirement phases significantly expanded since the 19th century.



Actions and solutions for business & societyA woman’s life course in the future

» A woman’s life course will be significantly fragmented. This fragmentation provides us

with new opportunities and challenges. And will men follow?



Actions and solutions for business & societyThe 5 WDA pillars for a competitive nation in the 21st century

P o l i t i c s E c o n o m y S o c i e t y


Business & society in the 21st centuryThe 7 WDA areas of change

A longer and more flexible working life

Volunteering and community contributions

Redesigned environments/infrastructure

New markets and new consumers

Caring and family cohesion

Enhanced social skills

Intergenerational transfers


» A “Multi-Stakeholder Dialogue” is an imperative to successfully tackle the complex challenges of an ageing society and to secure its financial sustainability.

Technology

Economy

Politics

Society

Law

Business

Academia

GovernmentAdvocacy Groups

Turning the longevity

challenge into an opportunity

Actions and solutions for business & society“Multi-Stakeholder Dialogue” to pursue change


Agenda









What is your benefit to attend this class?The insights you can extract…

» A global outlook until 2030 and beyond in terms of demography, economy, society, ecology and health by region.

» Potential impact on business, society and the power of nations.

» Basic understanding about which industries/ products/services will disappear, succeed or emerge.

» Leap forward in creative thinking to develop “Sustainable 2030 business models” for existing and new industries as well as infrastructure, governance and society.

» Demography is a topic that will be on the agenda of every future business planning process. Therefore it is imperative for future business leaders.


Agenda






How to tackle your project assignment successfully?6



How should you tackle your project assignment?There are different ways to accomplish a given goal…

Porter‘s Five Forces?

Blue Ocean Strategy?

PESTEL Analysis?

and/or the Adolf Guyer-Zeller Approach?*

Which might be the right framework to choose?

* Adolf Guyer-Zerler built the “Jungfrau Bahn” (1894 – 1899) with confidence, self- esteem and innovative spirit


How should you tackle your project assignment?PESTEL Analysis – a tool to tackle demographic change

Political

Societal

Environmental

Legal

Technological

Economic

DemographicChange

The PESTEL Framework (adapted)


How should you tackle your project assignment?Adolf Guyer-Zeller’s Approach

Adolf Guyer-Zeller (1839-1899)


How should you tackle your project assignment?You have to think in interdependencies !

Demography

Employment &Social Protection

Ageing Societiy

Migration

Decision-Making &Incentive Systems

Economic Growth & Development

Urban Management

Food SecurityEducation Systems

Chronic Diseases& Conditions

Healthy NextGeneration

Global HealthcareSystems & Cooperation

Welfare of Children

Global Institutional Governance

Poverty & Development

Finance

Nutrition

Ecosystems & Biodiversity Loss

Skills Gap

International Legal System


How should you tackle your project assignment?Group assignments

Group assignments 2014 – 12 unique project themes

» 2- (3) students to choose one topic

» 45-minute group presentation with subsequent discussion in front of the plenum

» Project paper

»15 pages plus executive summary»Format: Word»Font type: Arial»Font size: 11»Line spacing: 1.5

Grading

» 70% group paper

» 30% group presentation

You will receive a template for writing


How should you tackle your project assignment?Evaluation of the presentation

Structure and Content (70%)

»Introduction / Motivation»Optimal weighting»Time management»Logical structure»Well-designed slides»Conclusions & recommendations»Main research topics and corresponding literature

Verbal and non-verbal aspects (30%)

»Clear and understandable language (English)»Rhetorical aspects»Supporting media»Answering of questions


How should you tackle your project assignment?Evaluation of the paper

Academic and formal aspects (40%)

»Layout, grammar, style»Citations»Literature

» 100% compliance with the editing guidance provided (15-20 pages, format: Word, font type: Arial, font size: 11, line spacing: 1.5).

Content, content, content….. (60%)


Agenda







12 project themes you can choose from today7


A. Demography & Society

1Professional activity of people aged 50+:The strengths and weaknesses, opportunities and threats for them, the organizations they work for, and the society at large.

2On what underlying principles does intergenerational solidarity rest? How can it be upheld or strengthened? How do demographic trends influence or modify it?

3 How is the entry of young people into the working world influenced by demographic trends such as population ageing?

4 Shrinking societies: Does that phenomenon inevitably lead to a loss of national economic power and prosperity?


B. Demography-related challenges in Switzerland

1

Demography and media: How and at what frequency is the topic of demography covered by the Swiss media? What is the national level of awareness on demographic change and what is the content focus?

2Does an increased nursery capacity lead to more children? National family policies in Switzerland: What they are vs. what they should be? Are there lessons from other countries?

3 What is the impact of immigration on Switzerland? Could the country sustain itself without a foreign workforce? Draw a picture!


C. Demography & Geopolitics across the Globe

1Sub-Saharan Africa (SSA): How to design a composite indicator that reflects the demographic risk sub-Saharan African countries are facing?

2The demography of Europe’s largest economies: Germany, France, Italy, and the United Kingdom. What are the wealth and welfare prospects for these countries based on their demographic forecasts?

3 Ageing in China: What are the present demographic predictions and how will they influence the Chinese economic power in the future?

4How does the demographic future of Hong Kong look like? What are the emerging threats and opportunities? Are there lessons to learn for Switzerland?

5 How will demography impact/shape the conflict between Israel and Palestine and their neighbors (e.g., Jordan and Syria)?


How should you tackle your project assignment?Administrative topics & downloads

Contact information lecturer

»[email protected]»Mobile +41 (0)79 400 48 60

Internet links for downloads

»www.wdaforum.org »www.demographic-challenge.com»etc.

Deadline for submission

»November 1, 2014 (electronically)»November 3, 2014 (paper version)

http://www.wdaforum.org/

http://www.demographic-challenge.com/

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