If demographics is destiny, then we think it helps shape economic destiny in this way: when a nation has more working-age adults than it does elderly adults, its economy tends to grow at superior rates. We think that in the long term the developed nations of the United States, Australia, and Canada and the developing nations of Argentina, India, and Malaysia may have relatively favorable ratios of workers to the elderly, which augurs well for their economic prospects.

But the world in general is aging fast and, contrary to popular stereotypes, may actually decline in population over the next 60 years. Consequently, the ratios of workers to the elderly are likely to narrow, and the cost of supporting a rapidly growing elderly population may exert enormous pressures on government budgets everywhere. As we see it, the fiscal pressures may be greatest on France, Germany, Italy, Japan, and Spain.

Also, we think demographics will help determine which industries prosper in the years and decades ahead. We think an aging population will be a growth market globally for the health-care industry, the developing nations will be a prime market for infrastructure-related industries, and young people the world over will be a robust market for industries such as consumer electronics, Internet services, apparel, wireless communications, banking, insurance, investment management, and housing.

Please click here for full position paper.