Populations are shifting significantly. Unprecedented ageing is occurring in mature economies, income growth is driving changes in developing countries, and rapid urbanisation is driving increased demand for infrastructure, housing and services. This creates structural growth opportunities in certain areas, though there are also pronounced risks from growing fiscal burdens. Changing patterns of labour participation, such as education later in life and the growing proportion of women in the workplace, also contribute to these shifting dynamics.

Improved medical technology, combined with lower birth rates, means that populations in many developed countries are ageing. In fact, 2018 was the first year in recorded history where people aged 65 and older outnumbered children under the age of five.

Ageing populations pose a number of issues for countries, including the challenges of funding social and medical care and providing pensions that span these much longer retirements to so many people, all from income generated from a (proportionally) smaller working population.

Additionally, the elderly have different spending priorities and needs, so the consumer, health-care and housing sectors may all be affected.

In many emerging economies, the population changes look quite different. The rapidly growing middle class in Asia is changing the consumer sector significantly, along with having profound implications for our planet. It will be a challenge to support the billions of Earth’s inhabitants under any circumstances, let alone when millions more people are hoping to live lives defined by convenience, choice and consumption.

With rising incomes comes a growing desire to live in urban centres, hence why many of these same countries are seeing rapid urbanisation. These ideas are captured by our population dynamics theme, which we think is crucial for understanding the complex world in which we live and invest.