It took 250 000 years for the world’s population to reach it’s first billion. It took roughly another century to reach it’s second billion and then just 32 years to reach 3 billion. It took just 12 years to leap from 5 billion to 6 billion and now just another 12 years to reach 7 billion. The UN thinks that by 2050 the world’s population will have reached 9.3 billion. However, the climax of population growth in the world actually peaked in the 1960’s and despite the growth of population sizes in terms of numbers, the actual percentage of growth per annum is actually 1%, half that of the 1960’s. It is also predicted that it will take 14 years to reach 8 billion people, which is two years longer than the 12 years of the last 2 billion; and 18 years to reach the billion after that. This represents significant population growth decline.

The world’s decline in fertility rates is impressive. In the 1970’s the average family in the world had four or five children. Now, the number is 2.45 worldwide; and for many countries this is below replacement levels. This is, of course, having a massive influence on demographic change. It is the shifting balance of age groups within a population that is interesting to consider.

“A fall in fertility sends a sort of generational bulge surging through a society. The generation in question is the one before the fertility fall really begins to bite, which in Europe and America was the baby boom generation that is just retiring (or are they?), and in China and East Asia the generation now reaching adulthood. To begin with, the favoured generation is in its childhood; counties have lots of children and fewer surviving grandparents (who were born at a time when life expectancy was lower). That was the situation in Europe in the 1950’s and in East Asia in the 1970’s.

But as the select generation enters the labour force, a country starts to benefit from a so-called ‘demographic dividend’. This happens when there are relatively few children (because of the fall of fertility), relatively few older people (because of high morality previously); and lots of economically active adults, including, often, many women, who are entering the labour force in large numbers for the first time. It is a period of smaller families, rising income, rising life expectancy and big social change, including divorce, postponed marriage and single-person households. This was the situation in Europe between 1945 and 1975 and in much of East Asia in 1980 – 2010.

But there is a third stage. At some point, the gilded generation turns silver and retires. Now the dividend becomes a liability. There are disproportionately more old people depending upon a smaller generation behind them. Population growth stops or goes into reverse, parts of a country are abandoned by the young and the social concerns of the aged grow in significance. This situation already exists in Japan. It is arriving fast in Europe and America, and soon after will reach East Asia.

A demographic dividend tends to boost economic growth because of a large number of working-age adults increases the labour force, keeps wages relatively low, boosts savings and increases demands for goods and services. Part of China’s phenomenal growth has come from its unprecedentedly low dependency ratio – just 38 (this is the number of dependents, children and people over 65, per 100 working adults, it implies that the working-age group is almost twice as large as the rest of the population group put together).

The world as a whole reaped a demographic dividend in the 40 years to 2010. In 1970 there were 75 dependents for every 100 adults of working age. In 2010 the number of dependents dropped to just 52. Huge improvements were registered not only in China but also in South-East Asia and North Africa, where dependency ratios fell by 40 points. Even ‘ageing’ Europe and America ended the period with fewer dependents that at the beginning.

A demographic dividend does not automatically generate growth. It depends on whether the country can put its growing labour force to productive use.

[Source: THE ECONOMIST October 22 2011 pages 30 and 32]

 According to the UN’s Population Division head, Hania Zlotnik, the world can be divided in to three groups, dependent on fertility rates. About one fifth of the world lives in countries with high fertility rates, most of which are in sub-Saharan Africa.

“At the moment, Africa has larger families and more dependent children than India or Arab countries and is a few years younger (it’s median age is 20 compared with their 25).

[Source: THE ECONOMIST October 22 2011 pages 30 and 32]

In theory therefore, Africa could be among the fastest growing parts of the global economy over the next decade. If we are to achieve this kind of success in Africa, it will become an imperative that we deal with corruption and improve our education. Jay Naidoo, former Minister in Mandela’s government, suggests that there are 12.5 million people under the age of 24 in South Africa at the moment who will never have a job because they will not access the right circumstances to acquire sufficient skills to do so. The number of matriculants with university entrance is frighteningly low; and income disparity amongst our population currently is alarmingly large. We have a large, unskilled and badly educated young population. I think it will be up to corporate South Africa going forward to assist with combating some of the problems the education system is currently creating (for a multitude of reasons) if, as a country and a sub-continent, we are to fulfil our potential.

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