PEOPLE ARE IMPORTANT: THE DEMOGRAPHIC CHALLENGES FACING NEW ZEALAND AND AUSTRALIA by Graeme Hugo ARC Australian Professorial Fellow Professor of Geography and Director of the National Centre for Social Applications of GIS, The University of Adelaide Presentation on the Occasion of the Launch of the National Institute of Demographic and Economic Analysis (NIDEA), Te Runanga Tatari Tatauranga – University of Waikato 24 November 2010 Outline of Presentation • Introduction • Why is Demography Relevant? • The Demographic Challenges in OECD Countries - Ageing and the Workforce - International Migration - Climate Change • Policy Implications • Conclusion Demography The scientific study of the changing size, composition and spatial distribution of the population and the processes which shape them. Demographic Study • Analysis of trends • Identifying causes • Projecting future populations • Identifying implications Demography and the Future • Projections Vs Predictions • Indicates what the population will be like given certain assumptions • A partial window on the future Why is this Important? • Most business and government involves providing goods or services to people • Hence demand is influenced by: - number of persons - their characteristics - their ability to purchase • Demography does not fully determine demand but it does exert a strong influence How can Demography Assist Business? • Marketing and retailing : identifying, locating and understanding the diverse consumer groups that form markets for goods and services • Human resource planning • Site selection and evaluation • Tracking emerging markets Demography and Markets • The population is constantly changing • The mass market has been replaced by segmented markets • Identifying growth in particular segments of the market can give a competitive advantage Exploding Myths About Population • Population is dynamic, always changing, but the change is gradual • Population is influenced by economic change but not a function of them • Some population change is structural – inevitable and predictable • Population is amenable to policy intervention “Over the next couple of decades nothing will impact OECD economies more profoundly than demographic trends and, chief among them, ageing” Jean-Philippe Cotis Chief Economist, OECD March 2005 Labour Force Age Groups and Dependency Rates Source: World Bank, 2006 Contemporary Population Growth Rates (% pa) Source: ESCAP 2009; Population Reference Bureau 2008 and 2009; ABS 2010; Statistics New Zealand Country/Region Year Rate Per Annum World 2008-09 1.2 LDCs 2008-09 1.8 MDCs 2008-09 0.4 Europe and the New Independent States 2008-09 0.3 North America 2008-09 0.9 ESCAP Region 2008-09 1.0 Indonesia 2008-09 1.1 Australia 2008-09 2.1 Australia 2009-10* 1.8 New Zealand 2009-10** 1.2 * Year ending 31 March 2010 ** Year ending 30 June 2010. ABS Projections of the Population of Australia, 2005 and 2008 Source: ABS Estimated Resident Population data and Projections 2008 2006 Actual 2007 Actual 2021 Projected 2051 Projected Australia ABS 2005 ABS 2008 Series B 20.7 20.7 21.0 21.0 23.9 25.6 28.0 34.2 Structural Ageing: Australia: Change by Age: 2006 – 2021; 2031 (Series B) 180 160 140 120 100 80 60 40 20 0 Age 85+ 80 75 70 65 60 55 50 45 40 35 30 25 20 15 10 5 2006-2021 (25.6 m) 2006-2031 (28.8 m) 0 Percentage Change Source: ABS 2008 Projections Baby Boomers 2006 • 27.5% of Australian Population • 41.8% of Australian Workforce • 23.9% of New Zealand Population • 35.8% of New Zealand Workforce Wittert 2006 Coping with Ageing Populations (UN) • No single action can adequately address the problem. No “silver bullets” • Policy adjustments should be carried out be effecting small changes in many domains • Making adjustments early is easier than delaying things until there is a crisis Specific Actions (UN) • • • • • Increase labour force participation Immigration Increased age at retirement Decrease benefits to retirees Increase contribution of workers to social security system • Change in social security system from pay as you go to capitalisation • Promotion of increases in productivity and development of new innovations The 3Ps of Growth in Real GDP Per Person Source: Swan 2010, p.xiii The Fourth P: Preparation • At individual and household levels • Community and provincial levels • National level The New Paradigm of International Migration • Transnationalism Vs Permanent Relocation • Increased focus on skill • Increasing “onshore” migration • The challenge of refugees and asylum seekers • Development can be positive for sending areas The New Paradigm of International Migration (cont.) •The Pacific Challenge •Changing balance between Gateway Cities and Regions •Emigration and the Diaspora •Environment and Migration Top Immigration Countriesa, 2010 percentage of population Source: World Bank, 2011 Top Emigration Countriesa, 2010 percentage of population Source: World Bank, 2011 Global Skilled Migration Twin Drivers • Demographic differentials • The war for talent – increasing demand for human capital National Diasporas in Relation to Resident National Populations Source: US Census Bureau, 2002a and b; Southern Cross, 2002; Bedford, 2001; Ministry of External Affairs, India, http://indiandiaspora.nic.in; Naseem, 1998; Sahoo, 2002; Iguchi, 2004; Gutièrrez, 1999; Philippines Overseas Employment Service; Asian Migration News, 15-31 January 2006; OECD database on immigrants and expatriates; Luconi 2006; Nguyen Anh 2005; http://en.wikipedia.org/wiki/korean_diaspora USA: 8.7 million – 2.7 percent of national population Australia: 900,000 – 4.3 percent of national population New Zealand: 850,000 – 21.9 percent of national population Philippines: 7.5 million – 9.0 percent of national population India: 20 million – 1.9 percent of national population Pakistan: 4 million – 2.8 percent of national population China: 30 to 40 million – 2.9 percent of national population Japan: 873,641 – 0.7 percent of national population South Korea: 6.4 million – 13.2 percent of national population Vietnam: 2.6 million – 3.2 percent of national population Mexico: 19 million* – 19 percent of national population Singapore: 100-150,000 – 3.5 percent of national population Cook Islands: 52,600 – 34 percent of national population Niue: 5,884 – 294.2 percent of national population Tokelau: 2,019 – 138.5 percent of national population Samoa: 78,253 – 44.5 percent of national population Fiji: 128,284 – 15.8 percent of national population Italy: 29 million – 49.4 percent of national population * Mexican diaspora in the US Emigration, Development and Diaspora • Shift in Discourse • Potential Positive Role - Remittances - FDI - Social Remittances - Return - Permanent - Temporary - Virtual • The key role of policy in origin and destination Reassessing the Settlement System • New environment and economic reality • New elements of economy – tourism, mining, growing importance of food security, agriculture, processing • New environmental realities • New methods of transport and communication • The baby boomers • Climate change The Climate Challenge • Environment and Population • Internal Population Distribution • International Dimensions – the Pacific The Population Dilemma in Australia • The need for growth – increased demand for workers and replacement task for baby boomers • The constraints of environment The Role of Policy • Anticipating shifts in population and preparing for them • Developing policy to intervene to influence population change What is Needed? • Currently there is an unproductive debate between 'pro growth' and 'stop growth' lobbies • There must be trade offs and compromises which facilitate growth with sustainability, informed by the best information and knowledge available across all relevant disciplines • Regardless, there will be substantial continued population growth over the next two decades but we need to carefully consider (a) How much growth and not adopt unsubstantiated aspirational population targets? (b) Where is that growth best located? The Role of Research • Discourse around the population issue is too often subject to self interest, populism, bigotry and misinformation • The debate is often hijacked by interest groups • Need for soundly based, focused and multi-disciplinary research to inform both public debate and policy formulation Conclusion • Demographically Australia and New Zealand are better placed than most OECD countries to fact the challenges of the next 2 decades • However policy intervention will be needed to maximise opportunities and minimise negative effects • The role of NIDEA