The Herman Trend Alert
October 5, 2022
The Importance of Demographics
Demographics is the study of human populations and their segments, especially by age, sex, education, and other social characteristics. In my lifetime, I saw how a 15 percent decrease in the number of people in Generation X had a profound effect on employers' ability to recruit and retain workers.
Population Non-Replacement
If the population growth is less than 2.1, the population is not replacing itself. That may not seem like an issue now, but for the future, it may ultimately be devastating. Why? When there are not enough babies are being born, the largest population segment gets older and older and the younger segments smaller and smaller. That trend also means that fewer people are in the largest tax-paying to financially support aging populations.
Other Unintended Consequences
With fewer people being born and growing into their high-consumption years, we will have a reduced number of people to consume goods and services. But the biggest problem is that we will have fewer people to produce the goods and serve the customers.
A New World Order?
With populations declining in countries like Italy, Germany, and surprisingly China over the past few decades, we have seen birth rates drop. Then sadly, nationalism will replace globalization. If you live in the United States, we are in a slightly better position: though our birth rates are shrinking, they are not dwindling to the degree of China or Italy. With immigration, we, in the US, are capable of being self-sustaining.
Companies Thinking about the Future
Many US companies are making moves that reflect their long-term thinking. Apple is moving its production facilities from China. According to the Wall Street Journal, "US companies are bringing workforces and supply chains home at a historic pace." As I have forecast, US companies are homeshoring all kinds of products. The country recently even passed a law supporting the domestic manufacture of semiconductors.
Human Capital on the Balance Sheet
According to a study by Ocean Tomo, human capital has become more than 90 percent of a company's value. As we move into the future, having educated and/or trained younger talent coming into the workforce will be a competitive global advantage. Fortunately for the US, many populations still perceive the US as an attractive place to live and work. An important element to making this strategy work is a solid immigration policy that will allow talent into our country.
A Book that Details this All
Peter Zeihan is a geopolitical strategist and author who has focused on international affairs throughout his career. In his new book, The End of the World Is Just the Beginning: Mapping the Collapse of Globalization, he illustrates all of this information and much more, helping readers to know what's coming and prepare for a successful future.
Next Week's Herman Trend Alert: Making Robots Laugh
Next week's Alert looks at the difficult challenge of teaching robots to laugh at the appropriate time. Even Elon Musk has jumped on the robot bandwagon.
Learn more about how our digital friends are becoming more human-like next week. See you then!
Special thanks to my friend Anthony Onesto, Chief People Officer at Suzy and host of the Burn the Box Podcast. To buy Peter's book, visit https://www.amazon.com/End-World-Just-Beginning-Globalization/dp/B09CS8FRRD/ref=sr_1_1?crid=3LEO2K96IXEPJ&keywords=peter+zeihan&qid=1663524899&sprefix=Peter+Zeihan%2Caps%2C141&sr=8-1
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