The most influential Megatrends set to shape the world through 2030, identified by Euromonitor International, help businesses better anticipate market developments and lead change for their industries.
The world’s population is ageing with the biggest demographic transitions taking place in advanced economies in terms of the increasing share of pensioners in total populations.
Ageing puts pressure on government finances through the growing burden of pensions and healthcare but also on the labour force that has to support the rising number of pensioners. The old-age dependency ratio demonstrates the proportion of the population aged 65+ relative to the working-age population.
Old-age dependency ratios: 2020
Source: Euromonitor International from national statisticsNote: Indicates the percentage of persons older than 65 per persons aged 15-64.
Japan will continue to have the highest old-age dependency ratio in the world in 2020 at 48.8%. This reflects Japan’s position as the oldest population in the world with a mean age of 43.8 in 2009 and the population aged 65+ accounting for 22.7% of the total population. This is largely owing to high standards of living and improvements in medicine, which have led to longer life expectancies and declining death rates. The growing number of single people in Japan is also accelerating the trend;
Of the world regions, the ageing trend is most prevalent in Western Europe in terms of the highest proportion of people aged 65+. Within the major countries in the region, the old-age dependency ratio will be the highest in Finland, Italy and Germany in 2020 at 36.7%, 35.9% and 35.4% respectively. This corresponds with the largely Western trends of delaying childbirth and marriage as more females enter employment. Many Western European countries have the oldest average age of women at first childbirth in the world with the UK having the oldest at 30.2 in 2009;
Rising proportions of elderly will cause major challenges for governments and the business environment as the working-age population gets correspondingly smaller. There will be fewer workers paying taxes to enable government expenditure. In Japan, the working-age population (aged 15-64) will shrink by 9.8% between 2010 and 2020 while the population aged 65+ will increase by 21.5%. The mixture of ageing and falling birth rates will result in a total population decline of 3.1% in the same period. Eastern Europe will experience the highest drops in the working-age population and total population partly due to ageing but also owing to a high male mortality rate, (notably due to the pressures of transition) and emigration to other EU countries in search of better opportunities. Eastern Europe’s working-age population will fall by 7.7% between 2010 and 2020;
Many emerging and developing countries are at the other end of the scale with the smallest proportions of pensioners relative to their working-age population. In Qatar, this ratio will be just 1.5% in 2020 owing to its very young population. The UAE and many African countries also have the smallest ratios of elderly. However, the working-age population will also need to support the higher number of young people but this ensures a growing labour force for the longer-term, which will benefit the business environment;
The size of many emerging economies also means a significant number of elderly in absolute terms, with the highest numbers in the world expected in China and India in 2020. China will have 181.6 million people aged 65+ in 2020 accounting for a massive 25.0% of the world total, followed by India with 84.3 million (11.6% of the global total). The Asia Pacific region will have the largest number of elderly in the world in 2020 in absolute terms, which will provide significant opportunities for consumer goods companies targeting the older population. In the long-term, ageing populations will become more prevalent in the developing world too as rapid economic growth and urbanisation is followed by Western trends of smaller household sizes and higher female employment.
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