Business - Written by Don Tapscott on Wednesday, July 23, 2008 11:23 - 9 Comments

Don Tapscott
Children of Men: The world in 2053?

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While I’m an admitted proponent of the power of the Net Generation (hence my new book), I’m also fascinated by the phenomenon of declining birth rates in much of the Western world and what this will mean for future generations, let alone the future of our workplaces and economies. As part of our Government 2.0 research program, Amy Cortese and Dan Herman recently completed a piece that seeks to address those questions. It has yet to be released, but in the meantime I thought I’d point you towards a recent article by Russell Shorto from the New York Times. The article, entitled “No Babies?”, discusses declining global birth rates and the various attempts by government to reverse the trend.

Shorto notes,

For the first time on record, birthrates in southern and Eastern Europe had dropped below 1.3 [births per woman.] For the demographers, this number had a special mathematical portent. At that rate, a country’s population would be cut in half in 45 years, creating a falling-off-a-cliff effect from which it would be nearly impossible to recover.

Interestingly, a country’s birthrate rises almost proportionally to its female participation rate in the workforce. But in Southern and Eastern Europe, societal pressures for women to stay at home after their first child conflicts with inflation that has seen the traditional single earner model become no longer viable. My colleague Dan is a huge fan of the theory of the Demographic Transition. Ask him about it sometime over cocktails and he’ll start drawing charts on the nearest wall. To avoid that vandalism, this chart works just as well:


The West is in Stage 4- low birth rates and contractionary pressure on the population. If it wasn’t for increased immigration, (which, by the way, explains why the US has been able to keep its birth rate above replacement) even more countries would be headed for the dramatic bifurcation of their populations brought about by an ageing population and below-replacement birth rates.

So what does this mean? While Shorto focuses on the incentives for more babies, whether in the form of cash payment or more flexible environments for both parents, we’re also going to have to do a much better job at taking care of our older citizens, notably allowing them the flexibility to stay or re-enter the workforce, let alone the significant reforms of pension and healthcare systems that will be needed to ensure that service provision keeps pace with demand.

There needs to be a fundamental change in perception of what it means to be old. As former British Prime Minister Tony Blair noted:

“For government, the challenge is to change attitudes and preconceptions about what an aging society means and to stimulate innovative ideas and technologies to transform older lives.”

Governments are already lifting mandatory retirement ages but can do more to encourage employers to provide older workers with flexible options, such as phased retirement, part-time hours, telecommuting and other flexible arrangements, and mentoring opportunities.

It is here that Web 2.0 technologies can play a critical role. For example, The State of California has won accolades for Boomerang, a new online job matching service that links retiring state employees with state offices that need experienced temporary or part-time help. YourEncore.com is another great tool that provides a similar service. Issues such as immigration and incentives play an equally important role but ultimately all of these issues speak to the need for a dramatic shift in how both the public and private sectors tap talent markets and facilitate flexible working roles for diverse populations, be that defined by age, gender, language, etc.

And so what does it mean for the Net Generation? It means this generation will, more than any other, have to step up to the plate to work more productively and efficiently in an increasingly diverse world. Are they up for it? Given the research we’re doing on their norms, notably their predisposition to collaboration and teamwork, I definitely think so.



9 Comments

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Shaun
Jul 23, 2008 13:23

Something positive that could be taken from the lower births-per-woman rate would be an emphasis on adoption. Many working women do not want to put themselves in a position of a 9-month pregnancy, especially if their employer is not required to give them maternity leave. Stringent restrictions on who can adopt is a big pet peeve of mine, when any two morons can conceive a child.

Jaclyn
Jul 23, 2008 15:51

Why are declining birth rates a bad thing? If the rates increase, aren’t we at risk for overpopulation?

Ben Letalik
Jul 23, 2008 16:42

This is a very interesting discussion.

Shaun: If governments continue giving larger incentives for having children, I could certainly see more people (especially low income couples) having children and then giving them up for adoption. However, the morality of this practice opens up an entirely new debate.

Jaclyn: As Don points out, birth rates have decreased so far below the replacement rate of 2.1 births per person that the population is shrinking too rapidly. This becomes a concern when our social welfare system is contingent on the younger, working population supporting an older, retired population. It places a large burden on the Net Generation.

The systems we have in place work best when the population remains constant or is growing. However, you are quite right in saying that overpopulation is a concern if the birth rate is considerably higher than 2.1. Before the single child policy, China was fighting a huge overpopulation problem. Much of Africa is facing a similar problem as well.

All countries should be aiming to be in stage 3.

Denis
Jul 23, 2008 17:43

There is a very good argument that can be made that Stage 4 is a WONDERFUL place for a country to be in – and things like Social Security and other support systems just need to be adapted to suit it, which requires certain sacrifices (such as delayed retirements, etc).

The problem is these changes our hard, because our entire economic system – from banking itself all the way down to social security – has been built on a leverage model that depends on continuous population growth continuing forever. If you think that sounds like a pyramid scheme, you’re not far off.

It’s a peculiar aspect of economics, and our markets in general, that we’ve been conditioned to think of a gradual decline in population as a bad thing / something to panic about – like more resources per-capita is somehow an awful outcome. I think a global birth rate below replacement levels doesn’t sound that bad at all… we just need to think about things a little differently to make it work.

Tel
Jul 24, 2008 4:02

You might want to study the work of Charles Darwin and perhaps also note that it took almost the entire human history to get to 1 billion people, then took two hundred years to reach 6 billion. I’m quite sure that this “falling-off-a-cliff effect from which it would be nearly impossible to recover” is completely irrelevant on a global scale.

For a long time, the cities of Britain were making a net loss in population (i.e. eating people) while the countryside was producing a net surplus (large numbers of whom would move to the cities) but the system as a whole still operated and the cities still expanded.

Jaclyn: As Don points out, birth rates have decreased so far below the replacement rate of 2.1 births per person that the population is shrinking too rapidly. This becomes a concern when our social welfare system is contingent on the younger, working population supporting an older, retired population. It places a large burden on the Net Generation.

It is going to place a much larger burden on those who believe that the Net Generation is under some obligation to support them and who also seem to believe that our economic system has no ability to “correct” for such imbalances.

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Brennan
Aug 11, 2008 22:44

I’m only 24, so I don’t know much about a lot of these things. But I found this TED video of a lecture given by Hans Rosling. He’s a Professor of International Health at Karolinska Institutet in Sweeden.

His presentation talks about some of the topics everyone is discussing here. It’s worth checking out.

http://www.youtube.com/watch?v=hVimVzgtD6w

ohmohm
Sep 1, 2009 11:23

Perhaps collecting tax on employment and consumption causes low birth rate. Loan shark too.

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