17 May 2017
Demographics: Global Picture
- Posted by Dejan Pekic BCom DipFP CFP GAICD, Senior Financial Planner
Researchers are forecasting that the number of individuals in the under 40 age group will be flat over the next decade while the over 40 age group is booming.
Currently the over 40 age group makes up 39% of the global population but is expected to rise to 43% by 2026 which is an estimated 434 million more individuals.
This implies that income growth is increasingly biased to the older affluent individual.
In China for example, the consumer segment of the over 40 age group with a household income between US$20,000 and US$125,000 is expected to grow from 122 million individuals to 297 million by 2026.
Interestingly the research highlights that Switzerland, Norway and Australia are over educated, implying that more capital spent on education in these countries will have minimal contribution to increasing productivity per worker to grow Gross Domestic Product (GDP).
However for developing countries, capital spent on education is the key differentiator to grow GDP with India only just now reaching the point where every 6 to 12 your old child goes to school.
Disappointingly this still puts India two to three decades behind China.
The finding, the over age 40 consumer is becoming far more important to business.
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