rebogged from the Harvard Business Review
by Kevin Evers | 6:30 AM September 21, 2012
The recovery from the Great Recession has been sluggish, no doubt, but if economies keep adding jobs, slowly but surely, then we’ll be good to go, right? No so, say McKinsey’s Richard Dobbs and Anu Madgavkar at VoxEU. Two long-term trends — ageing workforces and declining birth rates — could stunt growth in advanced economies for decades to come.
Robbs and Madgavkar say the global workforce will shrink by nearly a third by 2020. Simply put, more retirees will exit the workforce, less college-educated workers will enter. The U.S. should be OK, considering its “relatively young and fast-growing population.” But Japan and Germany and southern European countries? Not so much. So what’s a nation to do besides making more babies? A serious investment in training and education is a good start. If economies don’t act quickly, the authors say, “growth itself will be at risk, income inequality will deepen, public budgets will be under even greater stress, and advances in living standards may cease in some countries. These are outcomes no nation can afford.” Happy Friday…