Industrial Power: Is Demography Destiny?

Over at Innovation and Growth, Mike Mandel makes the argument that, along with the hardships and sorrows associated with the recent catastrophe in Japan, it may also accelerate Japan’s demise as an economic poworkforce demographicwer.  The underlying reason may simply be the compounding effects of that society’s aging population:

Basically,  Japan’s working-age population is anticipated to drop by 20% over the next 20 years. And that actually understates the problem in the rural areas, which have felt a youth drain to the big cities. ( see here and here ).

That makes it much more attractive to invest in China and the U.S., of all places, which have more desirable demographics for both the workforce and consumption. Ten years from now, much of what is made in Japan today will be made elsewhere.

In some cases, demography can indeed be destiny, or at least place serious constraints on future possibilities.  And it could turn out to be one of our biggest competitive advantages.

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