TECHNOLOGY TRENDS
Jan 19, 2025
The Role of Demography in the Rise of Technology
"Demographic changes make technology investments essential. Could technology be the key to closing the labor gap?"
The world is perhaps experiencing one of the greatest transformations in human history. The declining population growth rate in developed countries and the increasing proportion of the elderly population are making it increasingly difficult to fill the labor gap. At this point, technologies that could provide efficiency and productivity increases, such as Industry 4.0 and artificial intelligence, come into play. Investments in these technologies are now seen as a way of survival rather than a choice.
On the other hand, the situation is different in developing countries. Generally possessing a young and dynamic population, the potential in these countries can offer significant opportunities for economic growth if properly directed. However, for this to happen, the right investments must be made in many areas, from education to technology. Otherwise, this seemingly advantageous situation could turn into a major problem in the long run by creating resource pressure.
Historical Population Growth and Current Situation
Throughout human history, population growth has had a very slow and limited pace. For thousands of years, people lived in small communities and, after a journey of tens of thousands of years, only reached a population of 1 billion in the 1800s. The Agricultural Revolution was one of the first major milestones in this process; the systematic establishment of agriculture allowed us to transition to settled life and gradually increase the population.
Later, the Industrial Revolution and significant advances in health fundamentally changed human history. Better healthcare, the use of technology in agriculture, increased food production, and scientific developments initiated an unprecedented period of population growth in human history. As fewer people died, more people were born. This, over time, resulted in an unprecedented population increase in history.
According to the projections of the United Nations, the world population will reach 10 billion by 2058. Given this projection, it's hard not to be concerned. However, the good news is that this increase will not continue indefinitely. The population is expected to decline after peaking in 2086.
Changes in Population Growth Rate and Their Causes
Now, let's think for a moment. As humanity, it took us more than 100,000 years to reach a population of 3 billion. However, we managed to add the same number of people to the world population in just 29 years (1960-1999). Although the population is expected to start declining after 2086, this does not present a wholly positive scenario.
In the graph below, you can see the annual growth rate of the world population. In 1963, the population reached an annual highest growth rate of 2.3%. However, since that time, the population growth rate has been in a continuous downward trend. Examining the reasons behind this change is important for understanding what lies ahead for us.
When discussing population growth, it is important to consider how much this rate varies according to different income levels around the world. For example, in high-income countries, the birth rate per woman has been below 2,0 since the 1970s. This situation indicates that the population in these countries is decreasing when excluding the migration factor. In contrast, in low-income countries, the birth rate per woman is currently around 4,5. This means that the population in low-income countries is growing much faster compared to high-income countries.
Globally, the birth rate per woman is still at 2,3. Since this rate is above the 2,1 needed for population continuity, it indicates that the world population continues to grow. However, compared to the past, this growth is occurring at a much slower pace.
So, why is the birth rate per woman decreasing? The fundamental reasons underlying this are:
Women’s Participation in the Workforce: Women’s participation in the workforce and career-oriented lifestyles are leading to fewer children.
Birth Control and Planning: The prevalence of birth control methods has allowed families to plan the number of children they have more consciously.
Increase in Child Rearing Costs: Rising costs of raising children and increasing levels of prosperity are making having children less attractive both economically and socially.
The issue is not limited to fertility rates; people are living longer now. Today, the average life expectancy worldwide is 73 years. This duration is expected to rise to 80 years by 2050 according to projections. Longer life means an increasing elderly population, which creates significant pressure on economies, particularly through social security systems and healthcare services.
Therefore, the birth rate per woman and increasing life expectancy are having a significant impact on the social and economic structure of societies.
The Strategic Importance of Technology: Why Are Developed Countries Investing in Artificial Intelligence and Industry 4.0?
Developed countries position technology as a savior to cope with structural challenges posed by population decline and aging demographics. Decreasing birth rates and a rapidly increasing elderly population lead to a significant labor shortage, slow economic growth, and a heavy burden on social security systems. Therefore, investments in modern technologies such as Industry 4.0 and artificial intelligence have now become a strategic necessity rather than a choice.
Automation and robotic technologies reduce dependence on human labor by making production processes more efficient, faster, and error-free. These technologies provide cost advantages, especially in sectors like manufacturing and logistics. Artificial intelligence addresses the labor gap by digitizing business processes and increasing efficiency in fields such as health, education, and finance. AI-supported solutions also stand out in the care of the aging population.
These investments play a critical role not only for economic growth but also for societal sustainability. Developed countries view technology not merely as a tool for transformation but as a foundation that shapes the economic and social structure of the future. Therefore, investing in technology is no longer an option for developed countries, but a mandatory roadmap.
