The rise of the young bucks
IF YOU THINK the biggest issue facing the world in 2011 is the fallout from the global financial crisis, think again. At the recent GIBS Foresight 2011 Forum, the demographic issue of an ageing population in developed worlds versus young emerging markets made for a keen debate.
As is often the case, economics are at the core, with Dr Adrian Saville, Cannon Asset Manager’s Chief Investment Officer, pointing out that the global recession “takes the flavour of something similar to Japan in the 1990s into the 2000s. The Japanese economy has essentially been in recession for 20 years and they’ve spent most of that time paying down a mountain of debt. This has been complicated by the fact that Japan is ‘bankrupt’ in terms of its social demographic; they’re now a population that is overwhelmingly in retirement – 25% of Japanese are older than 65 – so you have a very small workforce trying to support a dependent, ageing population.”
While today Japan is in much better balance-sheet shape, the problem of human capital persists. Conversely, sub-Saharan Africa – with 44% of its population under the age of 15 in 2006 – is the youngest region in the world, outpacing the likes of Asia, Latin America and the Caribbean where some 30% of the population is under 15 and in Europe which boasts only 16% in this age range. In fact, Africa as a whole is projected to have more working-age adults per child in 2030 than the continent did in 2006.
This population sub-section is both an economic treasure trove and a potential time bomb. According to Dr Lyal White, director of the Centre for Dynamic Markets at GIBS: “Africa’s real potential lies in its market: 1 billion people, half of which are under the age of 35.” But many in this number have to be uplifted out of poverty in order to achieve the full economic and growth potential from this human resource.
It’s crucial that South Africa and the rest of Africa follow China, India and Brazil in coupling economic growth and competitiveness with human development, said White. “Human development is part of a country’s competitive advantage and the quicker dynamic markets realise this, the quicker they’ll become more competitive.”
Already the impact of the “youth agenda” on world politics is evident. Just take a look at the campaign that launched US President Barack Obama into office, said Shaka Sisulu, entrepreneur and founding member of youth-volunteer group Cheesekids. “ This was on the back of a young generation.” Sisulu cited another example: “In September, there was a President who is quite famous for his marriage issues and he recently faced some criticism from his own quarters. He faced down some troublesome youth; and if you think I’m taking about our President you’d be mistaken, I’m talking about the French president. This restlessness is a global phenomenon.” Slowly it seems world leaders are waking up to a determined youth agenda. They have to. “We are at a point in our history where we have the highest concentration of young people swarming the Earth – 1.5 billion – and 89% of those are here in developing nations,” said Sisulu. “Over the past 10 years they’ve grown at a rate of 10% and jobs have grown at 0.2%, there’s nothing to absorb all these youths. There’s a failure in the rights of passage and institutions are overwhelmed. So while we’ve always seen the youth being challenging, the status quo means there is a lot more at stake in today’s world – globally and in South Africa.”
In South Africa, for example, this chang-