It is my honest belief that you become a better leader when you view the world through a multitude of perspectives. My columns, conference presentations and consulting reports all are meant to add the demographic perspective to your worldview.
Demographic data allows us to see long-term trends and cycles. Political and business leaders have endless urgent matters to attend to.
In their messy schedule, time to view the world through a long-term perspective tends to be limited and all too often a few obvious trends are overlooked.
This is why I am a fan of the Intergenerational Report (IGR) and the impressive press coverage that at least the main few talking points receive. The IGR is a 296-page beast of a report.
Let’s look at a few highlights and think through how your life and work might be impacted.
Strong population growth is to be expected. No surprise here. As I wrote about previously, the large increase in the population aged 85+ is leading to massive demand for growth in care jobs.
This all but guarantees the continuation of the current high migration approach as the additional care workers can’t all be homegrown.
The below chart shows that Australia would only grow by 80,000 people per year without migration. Considering the rapid ageing of Australia, these 80,000 people will not be enough to curb the retirement cliff.
The national transition into a service economy continues. I remain nervous about our national uptake of technology that really makes service economy workers more productive.
Productivity grew at a mere 1.2 per cent over the last (incomplete) cycle – that compares to 2.1 per cent growth during the 1990s.
For today’s column we ignore all the details about how to measure productivity (the IGR writes about this in case you are interested) and are just concerned with brainstorming what could be done to be more economically productive.
We must embrace automation and AI to make sure workers are more productive. This is true for every industry and every occupation. Australian businesses must invest to be more productive.
Looking forward we are expected to only grow productivity by 1.2 per cent per year – that in line with the past 20 years but falls way behind the 1990s when productivity grew by 2.1 per cent.
While the productivity growth rate tends to be lower in other Western nations, we must aim for more as a nation.
We need to automate tasks wherever machines and algorithms can help out. Only a paradigm shift can get us significantly above the 1.2 per cent rate.
The IGR, like me and most experts, expects strong global demand for Australian mining products. The upcoming prolonged mining boom should lead to a rethinking of our approach towards resource extraction.
This additional mining revenue could act as a handbrake on other industries. The uptake of innovative and disruptive technologies tends to speed up under pressure. We innovate when we must but merely cruise along if things are good enough.
I argued in the past that I welcome our record low unemployment rate as it forces employers to invest in labour-saving technologies. We must better utilise our mining wealth.
I would welcome the establishment of an Australian sovereign wealth fund that is fed by mining profits and is utilised to drive down national emissions by investing in innovative technologies. I referred to this as the Norwegian approach to climate change in the past.
Over the last decade, Australians started businesses at a lower rate than in previous decades. To increase economic activity, we must make it easy for founders to have a go. A cutting of red tape is important.
Speeding up and simplifying all the administrative tasks linked to starting a business should be a priority.
The IGR also forces us to think about the impacts of climate change. We are not going into details about water management or potentially falling yields today. I just want to leave you with a single climate change related fact: It will be expensive.
Insurers had to pay out heaps more over the last few years. Don’t expect fewer extreme weather events, expect more. Higher insurance premiums hold capital captive that we would prefer to spend on innovation etc.
Overall, the IGR is a great read. It’s worth downloading the pdf version of the report to flick through all the charts. It provides a decent view of the future and most importantly a view of the future that policy makers will take into consideration.
I am very pleased that more long-term thinking gets injected into the public discourse and hopefully into political decision-making.
Demographer Simon Kuestenmacher is a co-founder of The Demographics Group. His columns, media commentary and public speaking focus on current socio-demographic trends and how these impact Australia. Follow Simon on Twitter (X), Facebook, LinkedIn for daily data insights in short format. This story first appeared in The New Daily.
