Road to 2030


Demographic challenges by their nature take time to materialise and addressing them has always been difficult to prioritise within the context of an electoral cycle. Unlike the complex adaptive system that is the global economy, demographics is relatively straightforward to model, being largely a function of births, deaths and life expectancy. What is less certain, however, is the impact these trends will have on their respective economies, as the spirit of Thomas Malthus bears testament to.
The Road to 2030 project is an investment-led project designed to articulate possible visions of the future, and the key drivers behind those outcomes. We explore five key themes, one of these is demographics.

Managing risk—that is to say, building strategies that are resilient to events like these—is not easy. So what can investors do?

In Road to 2030, we take a practitioner's perspective aided by both internal and external experts to ask the ‘what if’ questions and consider major changes to the status quo.

Forecasting is difficult, especially about the future, but one can prepare for “the future that has already happened”.

The project is laid out in five overarching themes followed by a scenario at the end. At the very least, the Road to 2030 is a horizon-scanning and risk management exercise. At its best, it provides a foundational understanding of the main drivers that will transform markets over the next decade.

Demography is indeed destiny and it will be hard to change course. But the economic and geopolitical effects of this destiny are not foregone conclusions.

How do we think about demographics?

In November 2008, as the global financial system was wilting, Her Majesty Queen Elizabeth opened a new building at the London School of Economics and asked two deceptively simple questions of the gathered academics.

The first was why nobody saw the crisis coming and the second was if the system was so large, how come everybody missed it?

And so, somewhat unfairly, the bubble in economic respectability was popped. Ever since, academics and policymakers have been trying to better model the world around them.

Without mass migration into an ageing population, the pool of available workers will shrink, reducing productivity and creating economic headwinds. Are those countries destined to follow the Japanese disinflationary example, where the demography is indeed destiny and it will be hard to change course population has already shrunk by 2 million since 2010 and is forecast to shrink by a further 16%, or 20 million people by 2050?

We use mindmaps to organise and articulate our thoughts about subjects that are conceptually complex, and below shows our theme demographics.

Demographics mindmap

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