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Demographics

An Investing Megatrend: How Demographics and Social Changes are Shaping the Future

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For millennia, people have found support and community through defining factors, ranging from age and race to income and education levels.

However, these characteristics are not static—and drastic demographic changes are starting to create powerful ripple effects in the 21st-century economy.

The Impact of Demographics and Social Changes

Today’s infographic from BlackRock delves into the significant impact that demographics and human rights movements have on global markets. Of the five megatrends explored in this series, demographics are predicted to have the farthest-reaching impact.

Megatrends - Demographics and Social Change

What are Demographics?

Demographics are the characteristics of populations that change over time. These include:

  • Age
  • Gender
  • Race
  • Birth and death rates
  • Education levels
  • Income levels
  • Average family size

As a result, major demographic trends offer both unique challenges and opportunities for businesses, societies, and investors.

The Biggest Shifts

What are the biggest shifts in demographics that the world faces today?

1. Aging Population

The global population is aging rapidly─as fertility rates decline worldwide, those in the 65 years and older age bracket are steadily increasing in numbers.

2. Future Workforce

As the population continues to age, fewer people are available to sustain the working population. For the first time in recorded history, the number of people in developed nations between 20 to 64 years old is expected to shrink in 2020.

3. Immigration Increase

Immigration has been steadily increasing since the turn of the 21st century. Primary migration factors range from the serious (political turmoil) to the hopeful (better job offers).

In particular, areas such as Asia and Europe see much higher movement than others, causing a strain on resources in those regions.

4. Consumer Spending

A steadily aging population is slowly shifting the purchasing power to older households. In Japan, for example, half of all current household spending comes from people over 60, compared with 13% of spending from people under 40.

How Does Social Change Play a Part?

Demographics are the characteristics of people that change over time, whereas social change is the evolution of people’s behaviours or cultural norms over time.

Strong social change movements have often been influenced by demographic changes, including:

  • Ending poverty and hunger
  • Expanding healthcare in developing nations
  • Reforming education quality and accessibility
  • Championing gender and racial equality

Examples of major human rights movements include creating stronger environmental policies and securing women’s right to vote.

Opportunities for Investors

These changes pose some exciting opportunities for investors, both now and in the near future.

Healthcare

Global healthcare spending is predicted to grow from US$7.7 trillion in 2017 to over US$10 trillion in 2022. To meet the demands of age-related illnesses, companies will need solutions that offer quality care at much lower costs—for patients and an overburdened healthcare system.

Changing Workforce

With a declining working population, adapting a workforce’s skill set may be the key to keeping economies afloat.

As automation becomes commonplace, workers will need to develop more advanced skills to stay competitive. Newer economies will need to ensure that automation supports a shrinking workforce, without restricting job and wage growth.

Education Reform

By 2100, over 50% of the world will be living in either India, China, or Africa.

Global policy leadership and sales of education goods and services will be shaped less by issues and needs in the U.S., and more by the issues and needs of Africa, South Asia, and China.

—Shannon May, CoFounder of Bridge International Academies

In the future, education and training in these growing regions will be based on skills relevant to the modern workforce and shifting global demographics.

Consumer Behaviour

Spending power will continue to migrate to older populations. Global consumer spending from those over 60 years is predicted to nearly double, from US$8 trillion in 2010 to a whopping US$15 trillion in 2020.

Investing Megatrends

Demographics and social changes are the undercurrents of many economic, cultural, and business decisions. They underpin all other megatrends and will significantly influence how the world evolves.

As demographics shift over time, we will see the priorities of economies shift as well─and these changes will continue to offer new opportunities for investors to make an impact for the future of a global society.

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Demographics

Top 20 Countries Where Older People Are the Happiest

Advanced economies are the happiest countries for older people, likely due to their stronger social security systems.

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A cropped chart ranking the top 20 happiest countries, for those over 60 years old, sourced from the World Happiness Report 2024.

Top 20 Countries Where Older People Are the Happiest

This was originally posted on our Voronoi app. Download the app for free on iOS or Android and discover incredible data-driven charts from a variety of trusted sources.

The newest global happiness index doesn’t have any massive surprises from the ongoing trends of the last decade: Europe generally does the best, Africa is still finding its footing, and Asia and South America have vast rank disparities between constituent nations.

However, as the World Happiness Report notes, happiness levels differ across age groups, and countries’ overall ranks tend to obfuscate how the old and young feel separately. To counter this, the report also creates a happiness index by age.

We’ve visualized the top 20 happiest countries according to those aged above 60. For comparison, we have also included a country’s overall index rank.

Data and Takeaways

ℹ️ Gallup’s survey in Israel occurred after October 7th, but before much of the subsequent warfare. As a result, overall life evaluations in the country fell by 0.9 for 2023. Note that each country’s rank is based on a three-year average score.

The top two countries where the seniors are most satisfied—Denmark and Finland—also happen to be the top two countries on the overall happiness index.

As a general trend, advanced economies make up the bulk of this top 20 list, likely due to their stronger social security systems and financial security. Relatedly, they also tend to do well when it comes to the best countries to retire in.

CountryHappiness Rank
(Age 60+)
Overall Happiness
Rank (All ages)
Rank
Difference
🇩🇰 Denmark12-1
🇫🇮 Finland21+1
🇳🇴 Norway37-4
🇸🇪 Sweden440
🇮🇸 Iceland53+2
🇳🇿 New Zealand611-5
🇳🇱 Netherlands76+1
🇨🇦 Canada815-7
🇦🇺 Australia910-1
🇺🇸 U.S.1023-13
🇦🇪 UAE1122-11
🇱🇺 Luxembourg128+4
🇰🇼 Kuwait13130
🇨🇭 Switzerland149+5
🇦🇹 Austria1514+1
🇮🇪 Ireland1617-1
🇨🇷 Costa Rica1712+5
🇮🇱 Israel185+13
🇧🇪 Belgium1916+3
🇬🇧 UK20200

Norway, at third, has the first real discrepancy, with its elderly population ranking four places higher compared to its overall 7th place rank.

New Zealand (6th) and Canada (8th) also have gaps with their overall ranks: indicating that the older generation is happier than other generations within the country.

But for the U.S., (10th) and the UAE (11th), this rank discrepancy is in the double-digits.

In fact, when ranking only by those aged below 30, the U.S. ranks outside of the top 50, indicating that its younger residents are significantly unhappier than their older counterparts.

This is an interesting phenomenon mirrored in Canada, Australia, and New Zealand. According to the report, as recently as a decade ago, the younger generation in these countries were about as happy as those aged over 60.

“In the West, the received wisdom was that the young are the happiest and that happiness thereafter declines until middle age, followed by substantial recovery.” –- World Happiness Report.

For other countries like Costa Rica (17) and Israel (18), this pattern reverses. Their overall rank is higher than their rank for older populations, indicating that the young are happier.

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