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In short, demographics are the characteristics of populations that change over time. This makeup includes age, gender, race, birth and death rates, education levels, income levels, and average family sizes. The world is constantly changing, and many of these shifts have the potential to shape how society is organized at a fundamental level. Demographic and social changes form the undercurrents for many economic, cultural, and business decisions and significantly influence how the world evolves.

The biggest shifts in demographics that the world faces today include the following:

 Aging population: The global population is aging rapidly (and living longer) in more developed economies as fertility rates decline, while in developing countries the population continues to increase.

 Baby boomers, millennials, and Generations Z and X: Millennials, those between the ages of 23 and 38, account for over a third of the global population and are starting to receive a multitrillion dollar wealth transfer from their parents, the baby boomers, as they pass on their inheritance to the next generations. Both this group and those slightly older, Generation X, who have deeper pockets, and those younger than them, Generation Z, with fewer funds but a keen interest in sustainable investing, will drive investment flows in the future.

 Future workforce: As the population continues to age in developed economies, fewer people are available to sustain the working population. With a declining working population, modifying a workforce’s skill set may be key to keeping economies buoyant. As automation increases, workers must develop more advanced skills to stay competitive. The New Economy will have to ensure that automation supports a shrinking workforce, without limiting job and wage growth.

 Immigration increase: Immigration has been further increasing since the beginning of the 21st century. Key migration factors range from political turmoil and conflict to the continuing quest for a better quality of life.

 Consumer spending: In developed economies, an aging population is gradually shifting the purchasing power to older households. Global consumer spending from those over 60 years of age has nearly doubled from 2010 to 2020.

 Education reform: By 2100, over 50 percent of the world will be living in India, China, or Africa. Future education and training must be based on skills relevant to the modern workforce and shifting global demographics in these regions.

 Rapid urbanization: Population concentration in certain countries supports the case for rapid urbanization and is an overarching trend to consider, given that this principle originated in developed economies in the 20th century, with people transitioning from agricultural work to factory and service jobs.

While the pace of development and the scope of consequences are difficult to quantify, demographic change is now taking center stage as one of the major global megatrends that have the greatest economic, social, and political impact. Strong social change movements are also influenced by demographic changes. As a result, these trends will offer unique challenges and opportunities for businesses, societies, and investors and will therefore influence investment flows.