WIMA 2006 Globalization: Rapid Demographic and Economic and Technological Change

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WIMA 2006GlobalizationRapid Demographic and
Economic and Technological Change

• Margee M. Ensign, Dean
• School of International Studies
• University of the Pacific

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MORE PROGRESS IN LAST 5 DECADES THAN IN THE
PREVIOUS 5 CENTURIES
NW GLOBAL SKILLS AND COMPETENCIES

• Life expectancy rose by 10 years
• Infant mortality was nearly halved
• Food production outpaced population growth
• Illiteracy dropped by a third
• Most children, and more girls enrolled in primary
  school

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Population Growth History

• For most of human history, death rates were
  high and birth rates low Numbers grew very
  slowly.
• It took a million years of human history for
  world population to reach the first 1 billion.
• During the early stages of the Industrial
  Revolution the worlds population began to
  expand rapidly. This is the beginning of the
  demographic transition, which describes the
  relationship between birth and death rates over
  time.

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Demographic Transition
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Population Growth

• In 1650 there were only 500 million people on
  Earth.
• By 1850 we reached 1 billion.
• Eighty years later, by 1930 the worlds
  population had doubled again to 2 billion.
• The next doubling to 4 billion took only 40
  years and occurred in 1970

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World Population Growth
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Population Growth
Between 1950 and 1990 world population more than
doubled from 2.4 billion to 5.2 billion. WHY?
After World War II rapid technological advances
in medicine and sanitation and economic and
social development led to dramatic declines in
death rates This is one of humankinds greatest
achievements-but it came at the cost of a
population explosion. The late 1960s marked
the most rapid period of population growth in
human history. During that time, the worlds
population was estimated to double every thirty
five years.

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Demographic Transition
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Key terms used to describe measure population
growth
Demographic Transition Relationship between
birth and death rates. Total Fertility Rate
Number of children a woman will have in lifetime.
Assumes current age and specific birth rates are
constant throughout childbearing years. Crude
Birth Rate Number of births per 1000 population
that occur during a given year. Crude Death
Rate Number of deaths that occur per 1000
during a given year.

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Replacement Level Fertility Number of children
required to replace parents, allowing for
subsequent mortality. Infant Mortality Rate
Number of deaths among children between birth and
year 1 per 1000 live births in a given
years Population Growth Rate Average
calculated mid-year population expressed as a
percent. Population Momentum The phenomenon
that describes that for some period after
replacement level fertility has been achieved,
population growth continues.

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Population Growth

• From 1965-70, developing countries growth rates
  were calculated to be at 2.5 per year.
• Industrialized countries were growing at an
  average 1 per year.
• Consequently most population growth is now
  located in the developing world. Most of the
  projected increases in population will also occur
  in the developing countries.
• Industrialized countries will increase 4,
  developing countries 55 by 2050, and global
  population will reach 9.3 billion.

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Global population growthA developing country
phenomenonBillions

Source United Nations Populations Division,
World Population Prospects, The 2004 Revision
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World Population by Region at the Turn of Three
Centuries 1800, 1900, and 2000Population in
millions

? Excludes Australia, Japan, and New
Zealand. Sources UN Population Division, World
Population Prospects The 2004 Revision (2005)
and Briefing Packet, 1998 World Population
Prospects (October 1998) and I.B. Taeuber, The
Population of Japan (1958) 21-23.
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Projected Population Change by Region, 20052050

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Worlds Largest Countries 2005
and 2050

• China
• India
• US
• Indonesia
• Brazil
• Pakistan
• Russia
• Bangladesh
• Nigeria
• Japan

1. India
2. China
3. US
4. Indonesia
5. Nigeria
6. Pakistan
7. Bangladesh
8. Brazil
9. Congo
10. Ethiopia

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Population Growth Implications

• Two dynamics emerging that have been referred to
  as the demographic divide
• Poorer countries with high birth rates, lower
  life expectancy. Youthful populations (School
  supplies)
• Rich countries low birth rates, long life
  expectancies. Aging populations (Empty
  classrooms, Ergonomic products)
• Both demographic forces have enormous economic,
  political and social implications.
• .

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Fertility Levels in Selected World Regions, 1950
and 2005Children per women

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Fertility Decline

• What leads to declines in fertility and what
  does it mean for you?
• Single most important predictor of declines in
  fertility is female education.
• An additional year of schooling can reduce the
  fertility rate, on average between 5 and 10
  percent.
• (Summers, 1994)

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Total Fertility Rate
10 20 30 40
50 60
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The Demographic Divide

• Population and Economic Growth The fastest
  growing countries in the next 50 years will be
  among the poorest and least developed
• Most of the rich countries are aging and will see
  population size stagnate or decline by 2050.
  This includes Japan, Germany, Russia and Italy.
• US is only developed country experiencing
  significant population growth. US population
  will climb from 250 in 2006 to 420 million in
  2050.

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Implications of Aging Populations

• 1. Most of wealthy countries will see little or
  no population growth between 2005 and 2050. Of 30
  OECD countries, only US, Mexico and Turkey will
  grow at least 10 in next 45 years.
• 2. Shift in age structure has begun
• Japan-- number of elementary and junior high
  students fell from 13. 4 million in 1994 to 10.9
  in 2004 and 2,000 elementary and secondary
  schools closed.

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Implications of Youthful and Growing Populations

• 1. Nearly all high demographic growth countries
  have low per capita incomes and low literacy
  rates. Economies are primarily based on
  agriculture rather than industry or
  manufacturing.
• 2.Currently these countries account for 8 of
  global population. This will increase to 20 by
  2050. .

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China

• Chinas population is currently at 1.3 billion.
• After decades of one-child policy, Chinese
  fertility is falling. Deaths likely to outnumber
  births by 2030, causing beginning of population
  decline.
• However, China will add 110 million to its 2005
  total reaching 1.4 billion in 2050.
• Labor shortages emerging in China-increasing
  wages. Shifts in production to Vietnam, Bangladesh

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Chinas Population by Age Groups 1950-2050 Chinas Population by Age Groups 1950-2050 Chinas Population by Age Groups 1950-2050 Chinas Population by Age Groups 1950-2050 Chinas Population by Age Groups 1950-2050 Chinas Population by Age Groups 1950-2050
1950 1995 2010 2025 2050
Total 556.7 1,226.7 1,380.5 1,488.1 1,484.4
0 - 4 76.2 103.7 92.7 86.3 78.1
5 - 19 165.0 319.6 290.4 278.1 245.6
20 - 49 228.4 594.7 665.0 597.9 529.7
50 87.1 208.8 332.4 525.8 631.0
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Global Economy

• East Asian Miracle, South Asia China and India
  coming on strong.
• Latin America From the Third Wave of Democracy
  to Populism?
• Sub-Saharan Africa-Falling Behind But Some Hope

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Fastest Growing Economies
Annual average growth rates of 10 fastest
growing economies 1980-2002 (World Bank, 2004)
Source WDI
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US Currently has largest GDP, but
Globalization

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China emerges as largest country in 2040
Global Challenges

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Reshaping the Global Economy
Percentage of World GDP
2004
2025
2040
India
India
India
China
Other
Other
Other
China
Japan
Japan
US
US
China
EU
US
EU
Japan
EU
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International TradeFoundation of Growth

• During past 20 years volume of world trade
  has grown twice as fast as world GDP (6 vs. 3)
• Value of exports has tripled
• Exports represent 1/5 of global GDP
• Countries are more tightly integrated than
  ever before

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Nature of Trade

• Trade is increasingly intra-corporate
• Exchanges within MNCs account for 2/3 of world
  trade flows
• Access to world markets is increasingly a
  function of participation in internal corporate
  markets

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Summary

• We live in time of unprecedented change driven by
  demographic, economic and technological change
• Most of the wealthiest countries will see
  population size stagnate or decline by 2050
• Most population growth will come from developing
  world between 2005-2050 as world adds another 3
  billion people