What are the factors to look at when considering current global demographic shifts as part of an investment strategy? Global economist and author Dambisa Moyo feels that “Human capital will be both a key source of challenge and of opportunity for enhancing the prospects for long-term global prosperity.” Unfortunately, from Moyo’s perspective, “We don’t treat it that way.”
The rising global population, coupled with the fact that over 80 percent of the world’s population lives in the emerging world, have contributed to what Moyo calls a global labor imbalance. Moyo notes that the worsening demographic dynamics of an aging population in the West, compared with the skew towards a younger population elsewhere, make the imbalance particularly pronounced.
Moyo has also noted how the pressures of this growing population, applied to existing constraints on land, water, energy, and minerals, have led to increasing amounts of conflict. “There is lots of evidence that even today there are numerous clashes going on around the world, at least 20 that have their origins in commodity scarcity. If you look ahead into 2050, there will be more of those, not less, as there is more demand coming from greater population.”
If the challenge lies in finding ways to meet the demands of a growing global population, the opportunity lies in identifying the investment sectors and asset classes that will benefit from these demographic shifts. Moyo will discuss these ideas in greater detail at the 2016 CFA Institute Middle East Investment Conference. Register now to join leading investment professionals in Bahrain this April.
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All posts are the opinion of the author. As such, they should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute or the author’s employer.
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