India will overtake China as the world's most populous country

For a long time China was the most populous country, but India is about to overtake it this year. No one knows exactly when, but the UN estimates that by mid-year India will have 1.428 billion people living in it, while China will "only" reach a population of 1.425 billion. An opposite trend is underway in Germany and, above all, in Japan. Both countries' populations are shrinking and ageing due to emigration. While India is struggling with youth unemployment, companies in Germany and Japan are complaining about a shortage of skilled personnel, stresses an analysis by Mainfirst.

In November 2022, the world's population passed the 8 billion mark, and that number is growing by the day. However, the pace of growth has slowed considerably in recent years and this trend is expected to continue in the future. "In fact, if we take migration into account, China's population is now growing at a slower rate than Germany's," he stresses.

However, population size is not necessarily the decisive factor for economic growth; age structure is also important. Issues such as labour productivity or pension and health care systems are more a product of the age distribution of the population than of its size. This problem will be a major challenge for society and the economy in both Japan and Germany in the near future. 

In the long term, the question will be how to cope not only with the shortage of skilled personnel, but also with the global labour shortage. In industry, robotic automation has come a long way in recent decades, and this trend is set to continue. The People's Republic of China, the world's most important production centre, leads by far in industrial robots. In Japan, automation has made up for some of the labour shortages and overall demand is growing at double-digit rates annually. Companies whose business models are geared towards automation technology and industrial robots have been able and can benefit from the high level of demand.

However, companies across the entire value chain, especially in the field of artificial intelligence (AI), are benefiting from the high level of demand for automation solutions. AI is playing an increasingly important role in automation. The use of new technologies can increase productivity and efficiency, as well as reduce errors and costs. One example is the use of AI in the manufacturing industry.  In this sector, automated systems with AI technologies can analyse and process data from sensors, cameras and other sources, and thus further optimise production. 

However, the use of AI is no longer limited to the automation of physical processes; in fact, the public became aware of how far the development has come in a short time when Open.ai opened access to ChatGPT at the beginning of the year. It is already easier to replace mental work than physical work. The new version (ChatGPT-4) features even more remarkable improvements in the areas of logic, text and comprehension. ChatGPT-4 has passed the US bar exam, scoring in the top 10%, and has also made groundbreaking advances in software development. The skills shortage in professions requiring mental labour could therefore be anything but a problem in the future, contrary to previous expectations. The obvious beneficiaries are companies like Microsoft, which have not only invested in Open.ai, but are also able to integrate ChatGPT into their software and thus offer, after a long time, an extremely competitive alternative to Google's search engine. As a leading manufacturer of domain-specific processors (GPUs), Nvidia is in a position to provide the computing power essential for the operation of AI and thus benefits greatly from its use.

In summary, different regions face different challenges and tasks in the short and medium term. In the long term, however, the global stabilisation of the population growth rate and demographic change will bring new technologies and innovations that will not only compensate for labour shortages, but will significantly increase productivity, and are already doing so today.