The Impending Demographic Shift and Its Impact on Global Demand

Discover how the dramatic demographic shifts of the 21st century are reshaping economic landscapes worldwide.

You and I have lived through the Golden Age. From 1945 to sometime in the 21st century, a period when globalization was creating great abundance, things were very good. During this period, there was high demand for just about everything, creating an excellent economy where demand was high. While you were sleeping, two or more demographic factors merged that will lead future demand to plummet.

The first demographic force is the retiring of the Baby Boomers, the largest generation. There are 78.8 million Boomers. They are not leaving their homes and are spending money on traveling and health care. The only generation that can match the Boomers are the Millennials.

The second demographic force is the collapsing of worldwide birth rates. Don’t look at me, I have three children (equal to a replacement + 1). You’re welcome! To maintain the current population, each woman would have to have 2.2 children.

Those who want to understand the future look at demographics and geography. While you may not find this riveting content, they tend to be the areas that allow futurists to make assumptions from the data.

Yesterday’s Wall Street Journal features an article titled "Suddenly There Aren't Enough Babies. The World is Alarmed". The article opens with "The world is at a startling demographic milestone. Sometime soon, the global fertility rate will drop below the point needed to keep the population constant. It may have already happened."

In 1950, the birth rate was 4.86 worldwide. In 2021, it was 2.32. WSJ writes that the baby bust has taken many by surprise. In 2023, the United States birth rate was 1.62. If that is not alarming, know that South Korea's birth rate is 0.72. The last time I looked at China’s birth rate, it was 1. This is at the same time China has the oldest people ever to live on Planet Earth.

High-income nations' fertility fell below the replacement rate in the 1970s. Italy and Germany need migrants to be able to fill their jobs. Italy is trying to lure people to buy houses.

Understanding the Demographic Winter and Economic Implications

Without reaching the replacement rate, most believe we will have a shrinking workforce, as the Baby Boomers retire at a time when fertility rates are not high enough to replace them. The implications will be a slowing economic growth. The missing children mean that younger workers will not be able to generate the taxes to pay for Social Security and Medicare. The system is broken.

For our purposes here, a shrinking global population and the end of globalization as we know it will mean lower demand. A shrinking population will likely mean less production as fewer consumers of everything have lower demand.

Navigating Sales Challenges in a Shrinking Market

Unless something changes, sales organizations will need fewer salespeople, as the population wanes. The most effective salespeople will have no trouble being employed. Those who are not effective will find it difficult to maintain a selling role when there are fewer jobs available.

Sales organizations may also experience low demand for what they sell as the population plummets. Right now, there are more companies in every industry, making a Red Ocean environment. In the future, the most effective sales organizations will likely win over their rivals.

Those who believe things are always going to be the way they were in the past may be surprised to find that the world turned upside down. If AI is going to have a role in this story, it is going to be robots doing work that once belonged to humans. The big surprise here may be that white-collar jobs may be replaced by AI, something that is already being pursued.

Preparing for Future Sales Success in Low-Demand Times

In good times with high demand or bad times with low demand, you should make sales effectiveness your most important initiative. Sales leaders should start with B2B sales training, a development plan, and sales coaching to ensure you and your sales teams are able to win more than your fair share of the demand in your industry.

When you have high demand, you can always find a new client. In a low-demand environment, you may not be able to acquire a replacement for a lost client. Retention strategies should dominate your initiatives. Those who turn to technology to reach their sales goals may discover that those who focus on winning relationships will have an extreme advantage over their competitors.

There are certain industries that will always have demand. You may want to develop solutions for these industries. These industries may stabilize your demand and your revenue. There are also industries that will not be as stable as the industries that will always have demand. Those who believe every company is worth pursuing will discover that they are not stable enough to make it worth their while.

Before leaving this article, assess whether you are likely to have higher or lower demand in a future with a lower population. If you are a sales leader who expects to continue working, you may benefit by building the most effective sales force in your industry. You should also target industries with high demand, as your client’s demand is your demand.