"The dominant factor for business in the next two decades-absent war, pestilence, or collision with a comet-is not going to be economics or technology. It will be demographics." – Peter Drucker, Harvard Business Review, 1997.
The ageing crisis will hit all economies and the one to watch out for first is Japan. Japan is the oldest country on the planet and the way the crisis pans out there will tell us what will happen everywhere else.
The Economist tells us that Japan's working population is shrinking and that in 40 years time, it will be smaller than it was in 1950. Japan, mired in debt, is unlikely to extricate itself from this mess.
It's also happening in China which is likely to become the first country in the world that got old before it got rich. The Financial Times reports that China is now in crisis with a shortage of workers and wives and an ageing population. With its one child policy, Shanghai has the lowest birth rate in the world.
The problem extends to Europe. As I point out in my column, Europe's debt crisis is driven in no small part by its ageing population.
While governments can put in policies raising retirement ages and encouraging people to keep working in their 60s and beyond, the ageing crisis will reshape the global economy. Capital will be drawn to younger and more dynamic economies. That's why we can expect Asian economies to boom in the decades ahead. By the same token, economies in more developed regions will struggle.
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