The future is annoyingly hard to predict, but by combining demographics and other big-picture trends our regular guest on this podcast, demographer Simon Kuestenmacher can at least give his predictions a strong, data-driven foundation.
In today’s show, I chat with Simon about the substantial population growth Australia is going to enjoy and the opportunities and challenges this will present.
We will also talk about how innovative Australia might be a decade from now.
And I ask him whether millennials can save Australia’s future we explore the role of demographics, innovation, and investment in shaping the future of Australia.
And since this is not just about Australia’s future, but about your future, I really hope you’ll get lots out of it.
Australia's population growth is booming, with a record high net overseas migration intake and a stable natural increase.
The official population data gets published with about a six-month delay, but you can get a more updated estimate at the Australian Population Clock which estimates that we have had:
- one birth every 1 minute and 43 seconds,
- one death every 3 minutes and 10 seconds,
- one person arriving to live in Australia every 44 seconds,
- one Australian resident leaving Australia to live overseas every 1 minute and 53 seconds, leading to
- an overall total population increase of one person every 55 seconds.
- And putting all that together means currently our population is over 26,400,000
However, this rapid growth also presents numerous challenges that need to be addressed to ensure a sustainable and thriving future for the nation.
Clearly, our strong migration and rapid population growth have advantages and challenges.
There are significant economic benefits from a wealthy growing population.
Migrants are financially attractive, as adult migrants bring value and don’t come with the economic costs of raising a child. Because of Australia’s skilled migration scheme, the country attracts migrants with the skills we need at minimal cost.
However, a growing population also presents challenges.
One of the primary challenges arising from strong population growth is the increased demand for housing, which will drive up prices and exacerbate affordability issues. All these migrants need accommodation – they don’t bring homes with them.
And currently, we have a shortage of houses for sale and a rental crisis with vacancy rates at historic lows and asking rentals skyrocketing.
Solution: Policymakers must prioritize affordable housing development in areas with high population growth, ensuring that new arrivals can find suitable accommodations.
With a growing population comes increased pressure on infrastructure and public services, such as transportation, healthcare, education, and utilities.
Solution: Government and local authorities should invest in infrastructure development projects that cater to the needs of the growing population. This includes expanding public transportation systems, constructing new schools and healthcare facilities, and upgrading utilities to accommodate increased demand.
Population growth inevitably puts a strain on the environment, with higher demand for resources, increased waste production, and more significant greenhouse gas emissions. This can lead to issues such as deforestation, pollution, and climate change.
Solution: Promoting sustainable development practices and implementing strict environmental regulations can help mitigate the impact of population growth on the environment.
As migration contributes significantly to Australia's population growth, it is crucial to address the challenges related to social cohesion and integration. Newcomers may face language barriers, cultural differences, and potential discrimination.
Solution: Implementing multicultural policies and programs that promote inclusivity and diversity can help foster a sense of belonging among new arrivals.
Innovation, investment, and demographics are three key factors that shape a country's future.
- However, a closer look at the demographic trends reveals that while the millennial cohort is large, their financial priorities, such as homeownership, leave little room for risky investments in startups and other innovative ventures.
- The Baby Boomer and Gen X generations have historically been the main source of investment for innovation in Australia. However, as they age, they will likely seek safer investments, leaving the responsibility of funding innovation to millennials. This generation is large, but their financial priorities make it unlikely that they will be able to invest heavily in startups or other high-risk ventures.
- One potential solution to this funding crisis is for millennials to invest their superannuation into Australian innovation. However, it will be up to funds to provide investors with such options.
Despite these challenges, Australia is likely to continue thriving.
The country's business model, which revolves around agriculture, mining, international education, and tourism, has been successful for many years and is expected to remain so.
While the financial priorities of millennials may limit their ability to invest in risky ventures, Australia's innovative potential is far from doomed.
Ultimately, the future of innovation in Australia will depend on the ability of the country's leaders to adapt to changing circumstances and leverage the available resources effectively.
Links and Resources
Simon Kuestenmacher - Director of The Demographics Group
Some of our favourite quotes from the show:
“That’s the property markets, and like you, I believe there’s a lot of good factors underpinning our markets, in the medium term as well.” – Michael Yardney
“I think the conclusion from this is demographics is going to continue to drive our market, our property markets, our business cycle and the global demand for what we offer is going to continue on.” – Michael Yardney
“Life doesn’t owe you health, happiness, abundance, success, comfort, or immunity from pain and problems.” – Michael Yardney
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