By David Born and Christian Krys

Trend 1 of the Roland Berger Trend Compendium 2050 addresses the foundational elements that underpin all other megatrends: Population and Society. In this section, we explore most relevant aspects of population dynamics, migration, as well as education, labor and values, which are fundamental components shaping the evolution of contemporary societies.

Population: The world population continues to grow, becoming older and more urban – with varying dynamics across regions

Reduced birth rates in developing nations will slightly slow global population growth by 2050, yet our world's population remains on a strong upward trajectory. By 2050, Earth will be home to nearly 9.7 billion people, an increase of nearly 2 billion compared to today. This growth predominantly occurs in developing nations. While overall population in industrialized countries will hardly increase by 2050, population in some developed countries, such as the US, the UK, and France, is expanding, while in others, such as Japan and Germany, population is declining.

The divergence in population growth between developed and developing countries will result in approximately 87% of the world's population residing in developing countries by 2050.

One phenomenon observed in both developing and developed nations is the aging of our society. By 2050, half of the global population will be older than 36, compared to just over 31 today. This shift is driven by declining birth rates in developing countries and longer life expectancies. Yet on average, developing countries will remain notably younger – with a median age of under 35 – than developed nations, where the median age will be 46 by 2050.

Another evident trend expected to persist for decades to come is the trend of urbanization. Currently, 56% of the global population is residing in cities, a figure set to climb to 68% by 2050. The most significant increase in the degree of urbanization is projected for Africa, surging from around 44% today to 59% in 2050, and Asia, rising from 51% to 66%. Megacities, such as Delhi, Shanghai, and Mexico City, continue their expansion. By 2035, the world is projected to have 48 megacities with more than 10 million inhabitants. By then, nine of the fifteen biggest urban agglomerations will be in Asia, with Delhi topping the list with more than 43 million inhabitants.

Migration: Driven by choice or necessity, people move across as well as within borders

Currently, over 320 million individuals are residing outside their countries of origin or having abandoned their habitual residences within their own country. Migration is multifaceted, with a significant portion of migrants seeking opportunities for employment and education in foreign locations, particularly the affluent regions of Europe and North America. At the same time, a substantial portion of migrants is compelled to flee persecution, conflict, or natural disasters, with nearly three-quarters of these seeking protection in neighboring countries.

The Northern Africa & West Asia region is a case in point; it currently ranks among the regions with the highest migrant stocks, both in terms of interregional and intraregional migration. Concerning intraregional migration, only Europe & Northern America surpasses the region regarding the stock of international migrants. Looking at interregional migrants, Northern Africa & West Asia stand as the primary destination for migrants. In no small part, this is due to the numerous conflicts, famine, and poverty plaguing the south of Africa and Central Asia, compelling people to leave their home region towards neighboring regions.

Anticipating the future, the global migration pressure is poised to persist and intensify. Cumulatively, it is projected that by 2050, approximately 62.5 million interregional migrants on a net basis will depart from their region of origin. The majority of these emigrants originate from the Asian continent. Furthermore, Africa and Latin America are expected to experience net population outflows. Northern America and Europe continue to stand out as favored destinations, with projections indicating the arrival of approximately 36 million and 23 million net immigrants, respectively, by 2050. Furthermore, experts foresee a huge increase in climate refugees due to the consequences of global warming.

Education & Labor: More and more people are getting access to good education, increasing their chances for better work and a more prosperous life

For several years now, educational attainment among adults has been on the rise. In 1990, only 41% of all people 15 years and older worldwide had completed secondary education as their highest level of education, but by 2020, this figure had increased to 51%. Meanwhile, the proportion of those with lower or no qualifications has decreased significantly during the same period. In addition, the percentage of individuals holding a post-secondary degree has doubled. It is anticipated that global education will continue to improve in the future. Experts estimate that by 2050, one in four adults will have a post-secondary degree, while the number of adults without any formal education is expected to shrink to 6%.

Notably, the length of schooling as well as the quality of education lines up with a nation's economic prosperity as well as future earning prospects for the individual – a compelling confirmation of the dividends stemming from educational investment.

The rise in educational attainment also has implications for the labor market, a fact well documented by multiple studies. It is evident that individuals with a solid educational base are less likely to experience unemployment. This is particularly crucial considering demographic trends, where many Western countries, as well as China and Brazil, are poised to witness a shrinking workforce by 2050. By contrast, countries such as India and Nigeria are experiencing a positive influx of labor into their job markets.

Furthermore, productivity gains of workers have decelerated in recent years. A glimmer of hope for re-kindling productivity lies in a widespread adoption of Artificial Intelligence (AI). Several studies suggest that AI will exert a significant influence on labor productivity, potentially disrupting entire professions in the process. This underscores the transformative potential of AI on workforce dynamics.

Values: In our diverse world, a complex matter, yet essential for our shared journey

A commonality amongst contemporary societies is their alignment along values. At the same time, modern societies are increasingly complex. This leads to growing challenges in finding consensus on values as well as the adherence to both formal and informal norms.

The UN Sustainable Development Goals for 2030 represent a pivotal milestone in the pursuit of global development guided by value-based principles. At their core, these goals articulate a collective vision for a sustainable coexistence for all individuals.

Gender equality stands out as a critical facet of this endeavor. Substantial progress remains imperative in enhancing the representation of women in leadership roles, both in corporate and political spheres. Over the past two decades, the global proportion of women in managerial positions, encompassing businesses and public administration, has only modestly increased from 25% to 28%. In national legislatures, the percentage of female representation surged from 11% in 1995 to 26% in 2023.

How companies can take advantage of megatrends

Faced with a combination of several demographic megatrends as outlined above, companies need to take stock, asking what is relevant for their business. To address the challenges posed of a shrinking talent pool – for example – firms should initiate a comprehensive needs analysis to identify areas where specific skillsets are most urgently required. To bridge any gaps, businesses can implement training programs, to equip non-specialist staff with relevant skills and boost the productivity of existing specialist teams. Additionally, companies have the option to tap into external expertise or outsource certain functions to concentrate on core value-adding competencies. The integration of AI, robotics, and automation can provide valuable support in closing existing skill gaps, although continued training and development for the existing workforce may be necessary to fully harness these technological advancements.

Advances in AI in particular offer a promising solution to bridge the skills gap, especially among knowledge workers. Companies should foster a culture of perpetual learning and adaptability in evolving business environments, motivating employees to embrace AI technologies, rather than resisting the best use of these innovative tools.

Changing demographic dynamics and the ongoing urbanization trend are reshaping consumer profiles and target markets. Companies can respond to this shift by venturing into new markets. Exploring markets characterized by steady population growth and robust purchasing power can be a compelling strategy to not only attract talent but also expand their global market share. Additionally, given that global aging trends affect customers in many regions, companies should reconsider the current and future needs of their customer base.

Anticipating the likely surge in migration pressures, particularly in Global North countries, companies should proactively recognize the linguistic and cultural diversity among their workforce and customer base. This involves providing multilingual support and communication to address a wide range of needs. By framing a comprehensive strategy for recruiting a diverse workforce, which may include setting up international exchange programs within the company, corporations can harness this trend to bridge the skilled labor gap and augment a more diverse environment. Moreover, they can tap into a new and diverse customer base by adjusting their marketing and product strategies accordingly.

Amid shifting demands and expectations from stakeholders concerning issues of Diversity, Equity, and Inclusion (DEI), it is imperative for companies to strengthen transparency in reporting. This involves communicating their initiatives and progress under DEI (and also ESG) principles in an effective manner. To emphasize their efforts and strengthen relationships, corporations should proactively engage with stakeholders, asking for perceptions, insights as well as feedback.