Global demographic shifts

The Epic of Gilgamesh, the epic poem of Mesopotamian mythology dated from the 2nd century BC, tells the story of King Gilgamesh and his quest for immortality. In the tale, Gilgamesh famously gives up his pursuit – humanity has not. 

The ‘Gilgamesh project’ is the perennial scientific endeavour of humanity to elongate life and, ultimately, end death. The search for immortality continues, but humans are already living longer. In the US, a child born in 1900 had a life expectancy of 48 years – by 1960, this had reached 70 and today sits at just under 80 years. In developed countries this, combined with declining birth rates, has created ageing societies. In some developing regions this has been counteracted by high birth rates, creating populations with a growing youth contingent. 

Global population dynamics have undergone a significant transformation in recent decades – globalisation, urbanisation, geopolitical volatility, migration patterns, and environmental changes have all contributed to this. Yet, the ageing of populations in developed nations and the rapid growth of youth populations in developing regions underpin key shifts in regional, national and global economic structures. These shifts present both challenges and opportunities to economies across the globe, necessitating proactive strategies from governments, businesses and societies worldwide. 

Ageing populations 

Developed countries, including Germany, Italy and Japan are experiencing an increasing proportion of individuals aged 65 and above. In Japan, almost a third of people fall into this category. As declining birth rates have shrunk the youth population, advancements in healthcare have led to longer life expectancies and an enlarged aged population. 

This trend is only set to continue. According to World Health Organisation (WHO) estimates, by 2050 the number of people aged 60 and above is expected to almost double from 1.1 billion in 2023 to 2.1 billion, with a significant increase in the number of people aged 80 and over. 

This demographic shift poses challenges to labour force participation, public finances, healthcare systems, and social cohesion. The International Monetary Fund (IMF) highlights that while healthy ageing can mitigate some negative economic impacts, global economic growth is projected to slow significantly throughout the 21st century, requiring substantial efforts to stabilise public debt-to-GDP ratios. 

Youthful populations 

On the other hand, regions such as sub-Saharan Africa and parts of South Asia are experiencing high birth rates, resulting in a growing working-age population. If effectively managed, this demographic shift can provide a ‘demographic dividend,’ offering huge economic growth opportunities. 

This will have its effect on the growing inhabitation of the planet. The global population is projected to reach 9.7 billion by 2050, with nearly half of this growth concentrated in nine countries, including India, Nigeria, Pakistan and the Democratic Republic of the Congo (DR Congo), with the United States the only one of the nine in what is typically considered the ‘Global North.’  

Implications for governments 

Ageing societies come with attached fiscal pressures. Pensions, healthcare and long-term care all require government expenditure, and an increased level of expenditure is putting a strain on public finances. 

In response, governments are already considering raising retirement ages, incentivising higher birth rates, and adopting immigration-friendly policies to address the challenges posed by ageing populations. European countries in particular have been relying on immigration to offset these challenges and supplement the labour market for several decades, but the current political debate around this issue is at fever pitch. 

For nations with rapidly growing youth populations, investment is required in education, healthcare, housing and job creation to meet their needs. Effective and targeted investment can enable countries to harness the potential of a youthful workforce, leading to improved economic outcomes – this would be particularly transformative in countries like Pakistan, Ethiopia and DR Congo, who are all classified as nations of ‘low’ living standards in the 2025 Human Development Index. 

Business implications 

In ageing markets, businesses will need to adapt. They should consider implementing flexible work arrangements, lifelong training programmes and creating age-friendly workplaces to accommodate an ageing workforce. But the shift also provides opportunities – the ‘silver economy,’ encompassing sectors such as eldercare, leisure, housing, finance and digital services, is expanding rapidly. In areas such as social care, technological innovations in robotics, artificial intelligence and telehealth can help mitigate labour shortages and enhance care efficiency. 

Youth-driven markets and consumer bases fuel demand in many sectors including housing, retail, food, digital media, education technology and fintech. A vibrant, youthful labour pool offers businesses access to dynamic talent, provided there is sufficient investment in skills development. This creates the conditions for rapid urban growth, which further necessitates investments in smart infrastructure, logistics, utilities and technology solutions to accommodate expanding populations.

Societal and cultural considerations 

Beyond economic concerns, an evolution in social attitudes is necessary to adapt to demographic shifts. Attitudes towards ageing must evolve to recognise older adults as active economic and societal contributors through volunteering, caregiving and community roles. But also, a focus on not just ageing, but ageing healthily, is critical. Focusing on disease prevention and early detection will help reduce societal strain and keep people as active contributors to society for longer. 

Yet, it must be accepted that there will be greater strain on many households, and society will need to adapt to this. With people living longer lives and having smaller families, traditional eldercare practices may require more organised public support. 

The development of youthful populations could be inhibited by pre-existing harmful socio-cultural values and norms – to unlock the potential of youthful demographics, it is fundamental to ensure quality education and the empowerment of young women. 

There are also environmental concerns. How will developing societies use this demographic advantage to expand economic output without having an adverse effect on the environment? To the dismay of the nations of the ‘Global North,’ they may decide that now is their time to reap the benefits of the earth’s natural resources.

Emerging opportunities 

If policymakers and business leaders heed this advice, they will open up new opportunities. 

A rising demand for health, wellness, leisure and age-tailored financial services will present new market opportunities that businesses can target. Emerging nations can leapfrog their established counterparts by building well-planned cities, advanced transport and green infrastructure. All societies can leverage youthful innovation and elder experience to fuel breakthroughs and community resilience. 

There are certainly challenges, but if these demographic shifts are managed effectively and carefully, they will unlock vital opportunities for economic growth and increased living standards that will benefit populations across the world. 

About the author  

Professor of global economy at Cranfield School of Management, Joe Nellis CBE is one of the UK’s most experienced and well-known economists, with four decades of experience commenting on UK, European and global macro-economic trends.  

Joe is a frequent commentator to national print and broadcast media on issues such as public investment, GDP and growth, tax and the wider economy, as well as data points such as inflation, unemployment and interest rates. 

He has published 19 research and subject-based books and over 200 academic and practitioner journal articles. His research encompasses analysis of business developments in a changing world in terms of the macroeconomy, the role of government, the impact of technology, societal and demographic trends.