The World Population In 2050: The Business Impact

What will the world be like in 2050?

It is very difficult to make such long-term forecasts, as we know it is already difficult to make forecasts on the economic trend for next year.

However, all forecasts agree on one aspect: in 2050 the world population will be much higher than it is today.

How much higher? There are several estimates about it, in the graph below you can see the United Nations estimate.

Population growth will be due to a lengthening of the average life span, but also to a very high birth rate in some countries of the world. It is important to keep in mind that population growth will not be uniform: some countries will dramatically increase their population, while others will stabilize or begin to decline.

The graph above shows some trends:

  • Most of the world population increase will be related to population growth on the African continent: growth will be supported by North Africa, but above all by countries in sub-Saharan Africa.
  • After years of strong growth, the Asian population will begin to stabilize. In particular, the Chinese population may already begin to decline around the year 2030. By the way, It is estimated that in 2030, India should overtake China and become the most populous country in the world.
  • The population will grow moderately on the American continent.
  • The European population will drop significantly: the declining trend is already occurring in some countries of Eastern Europe, while in Western Europe, this does not happen because there is compensation due to migratory flows.

How can this impact the business?

Can something already be done today to take advantage of these trends which are quite evident and are extremely likely to occur?

Investing in least developed countries with booming population (mainly in Africa)

Most sub-Saharan African countries will double their population over the next 30 years. They will be much larger markets than today. Investments by companies in Africa (large and medium-sized) has been focused on a few countries, mainly in the north of Africa, and South Africa.

In most other African countries, investments have been relatively low or concentrated almost exclusively in the oil or mining sector.

Many of the African markets are still little explored by the multinationals themselves because the GDP per is still very low and the consumer goods market (B2C) is still too small. There will certainly be an expansion due to GDP growth and population growth, however, it is a process that could take several years.

For business goods and services (B2B), there are some niches for which Africa is already an interesting market. In particular, many countries are making major investments in the construction sector.

Investing in Africa presents various risks (political, high corruption, slow bureaucracy, slow judicial power, etc. ), and all these risks mean that investments are still limited, although there are important differences between different countries. Each country has its particularities, we have written in more detail of Angola, Benin, Djibouti, and Ethiopia.

An interesting aspect of investing in sub-Saharan Africa is the presence of numerous programs aimed at promoting the development of local economies, for which they enjoy various and important trade agreements (such as the Everything But Arms program).

Probably in the next few years we will see the birth of large African companies that will be able to better respond to local needs.

Developing countries

Most developing countries, that grow strongly in the past 20-30 years, will slow their demographic growth as well as GDP growth.

They will find themselves in a similar situation that Europe is facing now. In short, there will be an older population, a middle class with high spending power, and an economy with lower growth rates.

From a business point of view, managers and entrepreneurs can imagine if there could be opportunities (and threats) in there future evolution of developing economies.

If you want more information, we have written specific articles for some developing economies: Uruguay, Vietnam, Malaysia and Brazil.

Developed countries

The population of Europe, Japan, and North America will be constant or will decline. 

It is very difficult to predict how the economy and society will evolve in the long run. This is because these countries are the pioneers on this path and there are no historical precedents to help us imagine the future 30 years later.

Surely the issue of immigration will be a central theme. To date, it has been the main tool with which demographic decline has been contained, especially in Western Europe and North America. 

Conclusion

It is impossible to make such long-term predictions.

Entrepreneurs and managers should always try to imagine the future of their business sector and their company in the long term. In doing it, they should consider the demographic variable: we will live in a world very different from the current one.

Globartis Research Team