More on Automation and Demographics, this week by Bain's Macro Trends Group. The report describes
How the impact of aging populations, the adoption of new automation technologies and rising inequality will likely combine to give rise to new business risks and opportunities. These gathering forces already pose challenges for businesses and investors. In the next decade, they will combine to create an economic climate of increasing extremes but may also trigger a decade-plus investment boom
Bain estimates that a new wave of investment in automation could stimulate as much as 8 trillion USD in incremental investments and abruptly lift interest rates. They think that by the end of 2020, about 25% of current jobs will be eliminated by automation, impacting low and middle income workers most. They envision quite a scary scenario;
As investments peak and then decline—probably around the end of the 2020s to the start of the 2030s—anemic demand growth is likely to constrain economic expansion, and global interest rates may again test zero percent. Faced with market imbalances and growth-stifling levels of inequality, many societies may reset the government's role in the marketplace.
The report is quite extensive;
Chapter 1 explores the impact of aging populations and the end of plentiful labor.
Chapter 2 examines how automation may solve one problem by increasing productivity and powering growth but creates another by potentially eliminating millions of jobs and suppressing wages for many workers.
Chapter 3 looks at how rising inequality could threaten growth.
Chapter 4 traces how developments are likely to unfold in the turbulent 2020s.
Chapter 5 considers the outlook if governments intervene more actively in the marketplace to address economic imbalances.
Chapter 6 focuses on the practical business implications of these trends for leadership teams, including the need to adjust to a macro environment that veers between extremes.
Please find the whole report here.