When will we reach peak humanity?
When will the largest number of people ever walk on planet Earth.
And what does it actually mean for Australia?
Firstly, the simple question is where do we get that population projection from?
The most famous big picture global population projection figures come from the United Nations population division.
They project that we will reach peak humanity at 11 billion people up from close to 8 billion people today around the year 2100.
These projections are the most famous middle scenario of their various scenarios.
Increasingly the other big demography centres across the world tend to disagree with that view, because we see that the nations of Africa, in particular, become richer and more educated at a faster rate than we previously expected, which drives down the fertility rate, and therefore those countries don't grow as fast as we expected.
So, therefore, Wittgenstein centre in Vienna, for example, expects peak humanity at under 10 billion people by 2070s — only 50 years from now.
We also have a couple of other projections that suspect peak humanity at around 9.4 billion people at some point in the 2060s.
So if you are under 40 today according to the latest projections there is a chance that you will see peak humanity, and that you will actually live at the declining, shrinking planet from a human population perspective.
For example, if the overall planet starts to grow older we will then see a global fight or a competition for young talent because we need to make sure that the countries of this planet are young enough to afford to finance the retirement of the ever-growing share of the old folks.
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That's difficult to achieve and we can look at famous examples such as Japan.
Japan managed to grow rich before they grew old, so that means that they now have enough money flowing around.
The Japanese also completely changed the social contract, which means they allow women to re-enter the workforce even after they got married, which wasn't the case for a long time.
And, of course, they doubled down on high-tech automation to make sure they can run an effective lucrative economy with an ever-shrinking pool of workers.
These are the trends that you will want to do as a country on a globally shrinking planet:
- you want to make sure to get the brightest young talent to make sure that you still have a sizeable chunk of workers that can provide enough economic output to finance the old, and
- you want to make sure that your economy transitions into a smart economy, into a knowledge economy - a high-tech economy that heavily relies on robotics.
- And I would also argue that the Superannuation scheme as we run in Australia is actually really helpful in a shrinking planet because you want to make sure that every worker finances their own retirement which isn't the case in countries like Germany at the moment where they essentially have one big retirement pocket and you just hope that when you are old you will get enough money back. In theory, these funds could be redistributed in different ways. The Superannuation scheme we have in Australia really guarantees that you get your fair share of Super. Of course this only works out for those workers who earn enough money to put enough aside.
So there will be a growing share of poor people in Australia whose retirement does need to be financed through a pension scheme.
Therefore, we must not think that Superannuation will solve all of our problems just yet.