Women are having far fewer babies. The Total Fertility Rate, which used to be high in traditional nations (like India), has fallen below replacement level (2.1). That means there will be far fewer younger workers to propel the global economy forward in a generation. Sure, AI tools and automation will boost worker productivity. However, there is still one question that I will address in this article: “What is the future of the global economy?”
The Global Population Pyramid Will Change for the Worse!
The global population pyramid had many young workers on the bottom, some middle-aged workers in the middle, and a few older workers on the top. Governments could afford social safety nets and transfer programs like social security because there were enough younger workers to pay into the system. However, rapidly and suddenly declining birth rates mean that the pyramid will be flipped.
That means that older workers will be forced to retire later. Some people may never be able to afford retirement. Governments will be cash-strapped in the future and will be unable to afford handsome cash transfers to the elderly.
What Will the Future of the Global Economy Be?
The world economy will grow at a much slower pace (and perhaps even rate) as there will be far fewer younger workers to boost global productivity and to buy the goods and services that companies produce. However, part of the reason for the slowdown will be that advanced economies won’t grow as fast and developing economies (which will grow at a much slower rate than currently) won’t be able to pick up the slack.
AI May Dominate
AI and other advanced technologies will develop at breakneck speed in the future and will become an integral part of the corporate workplace. But AI and advanced technologies will change the way people live and evey buy things. Companies will use big data to analyze buying patterns and consumer psychology and to understand both.
They will use that input to market to increasingly picky and skeptical customers. Customers will reward smart companies that make their job of researching brands before making a purchasing decision easier with their hard-earned money. Companies will become much more targeted with their marketing campaigns, and ads will be very specific and customized.
Employers will use AI and emerging technologies to personalize the workplace and make accommodations for workers with special needs. That will boost worker productivty as technologies complement employee strengths and weaknesses. Expect traditional 9-5 jobs to become less and less common and gig positions to become more prevalent as well.
Asian Economies Will Continue to Grow
China’s economy will continue to grow, despite current news articles stating that manufacturing is starting to leave China in the droves. India’s economy will grow as well, and the nation will likely be the world’s third largest economy in a few years. India’s economy already accounted for 8.3% of total global economic output last year.
The Global Economy May Be Different in the Future
The global economy will be more technologically advanced as AI comes to the forefront. It will likely manned by older workers as fertility rates drop worldwide and as AI tools take over tasks once done by college and even highschool graduates. The world economy may well sputter along as a lack of young woers means that productivity drops.
