Effect Of Graying Populations On Firms – Demography Is Destiny


Demography is defined as the study of the structure of human populace. This includes their age, size, growth, and gender mix. This paper argues that demography is destiny and it means that the nation’s demography shapes and restrains its opportunities. Graying population refers to a world that is dominated with few kids and a lot of old people. It consists of a shrinking workforce and a decrease in its population. This paper seeks to analyze the graying population and their effect in the running of companies.

Read also Canada And Morocco Demographics

The purpose of the paper is to analyze on the challenges that are created by the graying populations for firms. The study will explore the opportunities that are generated by graying persons in a company. Also, it will examine on the demographic alteration and how it affects the competitiveness of nations in the global marketplace. This study will also investigate on techniques that are applied by these firms to counteract the impact of demographic alterations on the economic competitiveness. Lastly, it will scrutinize on the impact of the one-child policy on China’s economic prosperities.

There are numerous reasons that can cause graying. They include death of the young population by natural calamities or diseases. There are countries such as Italy, Japan, Germany, France, and South Korea that has a population that is predicted to reduce and have more graying people in the next two decades. Obviously, the dependency ratio that comes with old age will surge. This means that the younger people who are working will have a burden of supporting the retirees. Thus, this paper concern is to check on the pro and cons of graying population in an economy and how different nations counteract the effect of the demographic alterations. A case study of China’s one-child policy and its impact on economic affluences will assist in forming an opinion.

Challenges that Firms faces as a result of Graying Populations

  • Slower Workforce Growth –Graying population results to slower staff growth that may threaten the fiscal well-being of a company.This slow growth will result to reduction in the number of staffs working in a particular country. This means that the few workers will be responsible for supporting retirees, paying taxes to sustain the public entitlement programs, and they will take the responsibility of producing the goods and services that are required by the entire populace.
  • Increased urbanization aggravates infrastructure burdens – the world is increasingly getting urbanized. This reflects a shift from the agrarian communities that had a high-fertility to an industrialized one with low fertility.The young people seeking jobs will join the graying population in major cities resulting to increase in infrastructure demand. Such facilities such as housing will be expensive due to this changes and alterations in the economic sphere. The effect on the surge of infrastructure demand will fall heavily on a small working-age populace. The companies will also be forced to provide the ageing population with special services such as transportation, health care, and housing.

Opportunities that Firms faces as a result of Graying Populations

Opportunities that a firm can derive from the ageing population are numerous. For instance, in a country like China, women retire at 55 while men retire at 60 years of age(Chand & Tung. 2014). These are people with a wealth of knowledge and experience. The company can ensure that it uses their skills and expertise to nurture young people.

The life expectancy in countries such as China is 76 that mean they have a healthy old age. This creates an incredible demand for products and services for this kind of people. Companies such as tour and travel can benefit especially for those old men who didn’t have time to enjoy themselves at young age.

Demographic changes and its effect on the Competitiveness of Nations in the International Marketplace

The demographic change has an effect on the competitiveness of a country. The graying population invests most of its resources in pensions. This kind of savings reduces the amount of savings that is available for other productive investment. The country will experience a lower rate of economic growth if the culture persists.

The nation will not be able to be competitive in the global market as compared to their counterparts who are experiencing increased growth in their population. The nations will not be able to meet demand for their products leading to loss of business. Thus, it will not be effective in meeting the demands of the global markets

How Countries Counteract the Impact of Demographic Changes on their Economic Competitiveness

  • Immigration – this is the easiest solution that a country can use to stimulate its economic competitiveness. There are numerous countries that encourage young migrants to shift to their country so that they can assist in running of the affairs. For instance, the United Kingdom has attracted numerous young staffs from Eastern Europe. However, the government must ensure that it fights the fears and the unpopular perception that the free movement of labor reduces wages and increase demand on housing and infrastructure.

Read also Issues Affecting Immigration Research Paper

  • Increase taxes to pay for pension costs – the ageing population will require more pension as they move into retirement. However, governments have limited budget that is mostly geared on infrastructure developments.  This forces the government to increase taxes on the already overburden young workers so as to support the graying population.
  • Increase Participation Rate – the government can create a policy where old people can continue working past the retirement age. This ensures that they not only reduce the old age dependency ratio but also reduce the pension payable to them. So, they should make it easy for gray people to contribute to the economic development of the country.
  • Surge the Necessity of Private Sector in Provision of Health Care and Pension – the government should ensure that it opens avenues where the private sectors such as the insurance firms can be able to provide services that are essential to the welfare of the young people.
  • Raise the Retirement Age – there are nations that have a retirement age of 65 years. There is a move to ensure that the government move from 65 to 67 years of age. This retirement age increase is directly linked or associated with life expectancy of a particular country. Those with private savings can be able to retire early while those employees who have low earning jobs can continue to work.

The Impact of One-child Policy on China’s Economic Fortunes

The one-child policy that was formed in the 1970’s restricted married couples to only one kid. On the introduction of this policy, there was stimulation of the economy. The working age population experienced increase in their incomes as they were given good jobs in factories. However, many years after the unpopular policy was implemented, the lawmakers have moved to amend the laws so as to stop the demographic trends. For instance, those citizens in the rural areas are allowed to have a second kid in case the first one was a girl.

According to Guthrie (2012), the impact of the policy is that the working-age population is likely to deteriorate in China in the year 2010 and 2030. However, the government can try to curb this by using machine that are automated and working for long hours to sustain theeconomic growth of the second biggest economy.

This policy has made China to avert over 400 million births. This has played a notable role in the transition of China. The reduction in the population has helped the country achieve substantial demographic dividend to the nation leading to growth by more than a quarter in the GDP for the last three decades.

This policy has contributed to emotional costs for the Chinese citizens. They cannot determine their size of the family. They are forced to terminate second pregnancy. Further, if they give birth to a second kid, the government will not allow them to get enrolled to an institution or access to better healthcare.

The one-child policy also results to graying where there is a huge burden that is placed to the young workers who supports that ageing population. The structure of a Chinese is normally 4-2-1 consisting of four grandparents, two parents, and a kid. The worst part of this policy is the sex ratio at birth where there is an emphasis on giving birth to male children.  This is done through widespread access to ultrasound systems that can be able to tell the gender of the kid before he/she is born.Therefore, the future will result to a Chinese man looking for a wife and not getting one.


This paper has investigated the case study on demography is destiny. Demography is seen as a major factor that influences the economic growth of companies and the country. The gray population provides opportunities and challenges in equal measures. The challenges include overburdening the young population with high dependency ratio. However, there are opportunities that this age group provides for the country and firms. The nations should work hard to ensure that their workforce is not dominated by old the population.

You can order a plagiarism free paper at an affordable price. Get professional assignment help. 

Need a Professional Writer to Work on Your Assignments? We will deliver Unique and Quality Work. Good Grade Guarantee!!

Order Unique Answer Now