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How the world is changing. Demographic, geopolitical and economic trends Prof. Antonio Golini Emeritus, Sapienza University of Rome Acting President of ISTAT, National Statical Institute

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Page 1: 6 Demographic geopolitical and economic trends - … · Demographic, geopolitical and economic trends ... Acting President of ISTAT, ... Source: McKinsey Global Institute, 2012

How the world is changing.

Demographic, geopolitical and

economic trends

Prof. Antonio GoliniEmeritus, Sapienza University of Rome

Acting President of ISTAT, National Statical Institute

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The analyses carried out in this

presentation are the result of

reflections made in the course of my

life as a scholar and do not necessarily

involve the positions of the National

Institute of Statistics.

Many thanks to Dr Elena Gramiccia

and Dr Tommaso Rondinella for their

valuable contribution in preparing this

lecture.

2

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Demographic trends

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Source: calculations on UN Population division data. World Population Prospects: the 2012 Revision

Total population by Region:

1950-2050 (billions)

Demographic trends

4

Continent 2010 2050 ∆ 2050-10 ∆%2050-10

Africa 1033 1998 965 93,5

Americas 898 1128 230 25,6

Asia 4167 5231 1065 25,6

Europe 733 691 -42 -5,7

Oceania 36 51 16 43,3

WORLD 6909 9150 2241 32,4

Total population by Continent

2010-2050

(millions and differences)

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Source: calculations on UN Population division data. World Population Prospects: the 2012 Revision

Total population by Regions, 1950-2050 (%):

(a) More developed countries- MDRs,

(b) Intermediate developed countries- IDCs,

(c) Less developed countries- LDCs

5

Demographic trends

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Population , 1950 - 2050 (millions)

More developed countries

Intermediate developed countries

Less developed countries.

Source: calculations on UN Population division data. World Population Prospects: the 2012 Revision

Note: Estimate 1950-2010. Projection “Average fertility” 2015-20506

Demographic trends

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Source: calculations on UN Population division data. World Population Prospects: the 2012 Revision

Note: Estimate 1950-2010. Projection “Average fertility” 2015-2050

Population 1950 - 2050

(millions)

7

Demographic trends around the Mediterranean Sea

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A country of elderly people:

in 2050, over sixty years old people will represent one-third of the population

(now they are one in five people), and the number of over eighty years old

people will increase from the current 5.8% to 13.6%.

Source: Istat- Demo8

Population by age

1950 - 2050

(billion)

Demographic trends in Italy

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Demographic equilibriums: factor of peace (?)

The population of Israel (8.2 million), with 75 percent of the population being

Jewish Israelis is growing at about 1.8 percent.

The population of State of Palestine (4.4 million + more than 1.5 million

refugees living in camps and 4 million outside) is growing 2.4 percent a year.

While the Jewish proportion in Israel will decline slightly over the next two

decades, it will continue to be the dominant majority of the Israeli

population, 73 percent in 2035. This is not the case, however, when one

considers the entire future population residing in the former British

Palestine. Demographic projections indicate that less than half of the future

population residing there would be Jewish, 48 percent in 2025 and 46

percent by 2035 (53% with only West Bank).

Source: Joseph Chamie , Israeli-Palestinian Population Growth and Its Impact on Peace, 2/2/2014 WORLDVIEWS

*if Palestinians in refugee camps included

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Economic trends: World economic

center of gravity is shifting away

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Source: CPB World Trade Monitor

World economic center of gravity is shifting towards the emerging

countries.

Two-thirds of global growth are generated in emerging economies

e.g. the Asiatic countries.

Economic trends

11

World trade

(monthly

index

2000=100)

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12

Economic trends

Distribution of weights on world economy of emerging and advanced

countries, as defined nowadays

Share of world GDP in emerging and advanced countries, 1950-2030

Source: elaboration on data Angus Maddison and FMI

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In peoples’ relationships we are moving back to ancient times.

1950 situation does not seem to be reproducible, even if some

western countries may be willing to.

Distribution of weights on world economy of emerging and advanced

countries, as defined nowadays

Share of world GDP in emerging and advanced countries, 1950-2030

Economic trends

13Source: elaboration on data Angus Maddison and FMI

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Two-thirds of middle class consumers will be in Asia

Today there are 1.8 billion people in the global middle class,

concentrated in North America (338 million), Europe (664 million) and

Asia (525 million). The US has some 230 million, the EU 450 million

middle class consumers.

Today Asia accounts for less than one-quarter. By 2020, that share is

expected to double. By 2050 two-thirds of middle class consumers

will be in Asia.

Source: Kharas, 2010. Working paper, OECD Development Centre.

Shares of Global Middle

Class Consumption,

2000-2050

Middle class consumers

spend between 10 and

100 $PPP per day.

Economic trends

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Productions goes where work is cheaper and more available

A growing share of Foreign Direct Investments move towards developing

economies.

Source: UNCTAD15

Inbound Foreign

Direct

Investments

(annual data,

stock, millions of

dollars)

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Source: elaboration on World Bank– World Development Indicators – and UNCTAD data

The weight that Italy holds in the world is progressively diminishing, in the

quantity of goods and services both produced and exported, as well as in the

population.

16

Weight of Italy:

share of world

GDP, Export and

Population

1960 – 2012

(percentages)

Economic trends in Italy

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Source: Istat

Productions goes where work is cheaper and more available

Nationally controlled enterprises in foreign countries by economic activity – years 2007 and 2010

(percentage share with respect to the whole enterprises resident in Italy)

17

Foreign

Direct

Investments.

Italy,

inbound and

outbound

(stock –

millions of

dollars)

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Labour supply perspectives

Source: A. Golini, Seminario Ambrosetti, Milano 2011

Growth forecasts of working age population and number of jobs needed to absorb it – Years 2010-

2050

The huge low cost labour supply in less and intermediate development countries, in

particular the BRICS and Sub-Saharian African countries, together with the reduced or

negative supply in western countries, in particular the European ones, makes

production increasingly move where work is cheaper and more available.

18

Regions ∆1970-

2010

∆2010-

2050

∆ %

1970-

2010

∆ %

2010-

2050

Africa 392 725 204,5 124,1

North

America

92 40 64,3 17,2

Latin

America

231 79 150,1 20,5

Asia 1.610 595 135,8 21,3

Europe 81 -103 19,2 -20,6

Oceania 10 7 79,0 29,7

WORLD 2.416 1342 114,6 29,7

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Demographic trends: Migrations The majority of migrants are in the North of the world (128 million), but come

from the South (147 million) .

While needed, migration can not and will not, as has happened from 800 to 900,

resolve miseries of the world.

South

53,453,4

South

North

73,273,2

74,374,3

13,3

Source: elaboration on UN Population division. Trends in International Migrant Stock data 19

North

Migrant population by Region of origin and destination – Year 2010

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… it is worth noticing that movements take place mostly within the

same Regions.

Migrant population by Region of origin and destination, 2010 (millions)

Source: elaboration on UN Population division. Trends in International Migrant Stock data 20

Demographic trends: Migrations

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Employment and Migration

Source: Eurostat

Foreigners employed people (% on total employment)

21

Migrations are needed also in downturns because in developed countries

they help rebalance not only quantitative labour market disequilibria, but

also the qualitative ones. In developing countries it is not the same.

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Foreign employment in Italy

Source: Istat

Foreign employed

people by economic

sector in Italy

(percentage)

In the Italian Labour Market, foreigner employed people are less than 2 per

cent in the Public Administration, Finance and Insurance, Education while are

the 16.5% in the «Hotel and Restaurant» sector, the 18.9% in the

construction, and the 76.8% in the domestic and care Service sector (it was

the 67,3% in 2008).

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23

Employment and Unemployment

Employment rate

(15-64 years old)

in advanced

countries before

and after the

financial crisis

(%)

In the advanced countries, millions of jobs have been burned by the

financial crisis, and have not been made up.

And there is a very strong competition trying to do this.

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The amazing ability to carry everything everywhere cheaply and fast is largely

based on a «banal» but extraordinary invention such as the container

Containers moved in the world (millions of TEU)

Source: World Bank; Port of Genoa; Levinson M., “The Box”, 2007. 24

World containers’ traffic

in 2011 has reached nearly

600 million TEU

(TEU: 20 foot equivalent units)

And has more than doubled in

the last decade

Product goes everywhere at cheaper and cheaper costs

In 1956 loading a ship in the USA cost 5,86 dollar a ton and needed up to 6 days. Today

it costs 16 cents a ton (97% less than in 1956) and needs 6-8 hours ( about 95% less).

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Technology which substitutes humans

The extraordinary growth in the use of robots, not only in the industrial sector but

also in services (i.e. trains and airplanes without pilot) including those dedicated to

people (i.e.: humanoid robots ensuring assistance to the elderly), is strongly reducing

labour demand

25

The great technological

change is associated to a

great cultural change.

From childless to

childfree:

robot vs. children

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26

The huge impact of Information technology has destroyed

in some industrial sectors much more jobs than it created

(examples: photography and telephony)

Dreambox, Berkley University 3D printer

It is very difficult to imagine

what the impact on labour

market of a «home-made

industrial production» through

revolutionary tools such as the

3D printer will be.

Some company in Italy is

almost ready to build houses,

using gigantic 3D printer.

Technology which substitutes humans

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27

Manufacturing employment in

advanced economies has

declined across all groups but

has fallen most in the labour-

intensive tradables group.

Source: McKinsey Global Institute, 2012

Manufacturing employment by group in selected advanced economies, 1995–2007 Index: 1995 = 100

Manufacturing employment - % of total employment

GDP per capita

When economies become wealthier and

reach middle-income status,

manufacturing’s share of GDP peaks (at

about 20 to 35 percent of GDP).

Beyond that point, consumption shifts

toward services, hiring in services

outpaces job creation in manufacturing,

and manufacturing’s share of GDP begins

to fall along an inverted U curve.

The role of manufacturing in the economy

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28Source: McKinsey Global Institute, 2013

Disruptive technologies

Mobile internet

Automation of knowledge work

The Internet of Things

Cloudtechnology

Advanced robotics

Autonomous and near-autonomousvehicles

Next-generation genomics

Energy storage

3D printing

Advanced materials

Advanced oil and gas exploration and recovery

Renewable energy

Applications for knowledge work automation may have an economic impact between 5.200 and 6.700 billion$ by 2025

Page 29: 6 Demographic geopolitical and economic trends - … · Demographic, geopolitical and economic trends ... Acting President of ISTAT, ... Source: McKinsey Global Institute, 2012

Social trends: education,

urbanization and growth of

poorer countries

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Social Macro-trends: education

Between 2000 and 2011, the number of children that do not

participate to Primary education has halved: from 102 million to 57

million.

However, the process has slowed down and it will be difficult to

reach the UN Millennium Development Goals on universal primary

education by 2015.

Net Index of school

enrollment: enrolled to

primary and middle school

(for 100 children of the

same age)

Source: Processing of data from UN 30

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Social Macro-trends: education

Source: Long-term Growth Scenarios, OECD Economics Department Working Paper No. 1000

Average nr. of years of study on adult population

31

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Social Macro-trends: female condition

Enrolled to primary education (female / male)

Source: Processing of data from UN 32

WORLD

High Income

Low income

Middle Income

Italy

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Social Macro-trends: fertility

Fertility Rate and female achievement of primary education –

Countries with High, Medium and Low Level Income, Years 1970-2011

Source: Processing of data from World Bank – World Development Indicators 33

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Social Macrotrends: female empowerment The world average of the Gender Inequality Index is 0.463, which is equivalent to a

loss of equity of 46.3%.

Regional averages vary between 28% in Europe and Central Asia and nearly 58% in

Sub-Saharian Africa, 56.8% in Southern Asia and 55.5% in Arabic States.

At national level the index varies between 4.5% in Netherlands and 74.7% in Yemen.

Italy is at the 25° place with a value of 10%.

Source: Elaboration on UN data 34

The “Gender Inequality Index” can be interpreted as a percentage loss in human development due to

the underdevelopment (mortality at birth, fecundity of teenager achievement of upper school title).

Gender Inequality

Index per levels of

human

development

Very High High Medium Low

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Urbanization

Source: UN Population Division – World urbanization prospects: 2011 revision

Urban and rural population - global and by region 1950-2050 (billion)

35

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Urbanization in Italy

Source: UN Population Division – World urbanization prospects: 2011 revision

Urban and rural population in Italy - 1950-2050 (million)

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The problem of governance at

global, regional and local level

and the problem to manage the

different speeds

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Bargaining power: nations versus regional coalitions

All these processes impact on demographics, economic, social and

therefore political relationships.

As a consequence of these massive change we are in front of huge and

nearly paralyzing problems of governance.

The UN multilateral model is in huge crisis, both at General Assembly

level and at Security Council level due to its dated structure.

The following needs to be considered

It has to bear in mind that:

- at global level, we are moving towards a regionalization that

needs to be institutionalized in international context through

new forms of representation

- At local level in our area, the Mediterranean Union (the Union

of the 47 euro - Mediterranean) would be important even if, in

the short terms, the implementation is stuck

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Towards a new global governance

Political sovereignty

Huge economic and

demographic sizeRegional Size

AustraliaCanada

USAChinaIndia

Russia[Brazil]

EUMercosurAsean

39Source: A. Golini, Tendenze demografiche e implicazioni socio-economiche,

18.01.07, USA

Globalization is making relevant in the international playground only countries or

cluster of countries with the following 3 characteristics

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Learning to tell the time: seconds, minutes and hours

The world is changing deeply and all its components (demographic, economic, social,

technological and urban) and in the relationship among states and macro-regions.

We are in front of an historical change – that seems to remind the glaciation or historical

revolutions such as the industrial or the agriculture revolution – also due to the climate

changes that with high degree of probability will have devastating effect.

There is a significant differences versus the past: in a global ranking the world

population shows very broad gradients as it never occurred in human history. Gradients

which can now be known and perceived by individuals and peoples.

Flexibility and adaptability will become critical: change will be the driving force of

human survival on earth, but.

«…in a context of continuous innovation, politics is always late in regulating social

implications» (Cubeddu, Il tempo della politica e dei diritti, 2013)

The problem is how to synchronize the speed of technological change, of cultural

change, of economic change, of demographic change, of environmental change with

policy capability to manage all these differentials, both at regional level and global level.

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