■ Demographic Situation in Each

These demographical features are very useful to judge the market of a country. Age distribution as well as a growth rate of population tell us if the country is staying young and still growing in population or if the country has already been matured and cannot expect more population growth.

Consumer’s preferences on the market highly depend on these demographic situation. In Part 1 of this agenda we said the world is aging. Then how about the situation in each country? What factors affect the degree of aging in each country? To answer these questions, Figure 4 is prepared below.

 Fig.4 World Population of Age 65 or Above

Source: World Development Indicator, World Bank

This figure shows percentage of age 65 or above out of total population by income level. There is 16% of age 65 or above out of total population in high income economies when only 6% in low and middle income economies.

Here, high-income economies are those in which 2014 Gross National Income (GNI) per capita was $12,736 or more. Low and middle-income economies are those in which 2014 GNI per capita was $12,735 or less.

It is vital to note that a degree of aging is different among countries. Wealthy countries are aging more rapidly than other countries. You may be able to understand this intuitively. One effective reason for this is that life expectancy in wealthy countries is longer than those of less wealthy. Yes, the higher the income, the longer you can live.

■ How About Japan?

Now we move on to Japan. Previous discussion was in some sense a preparation of the introduction of Japan’s situation. Having said that, let’s move our eyes on the next figure, Figure 5. This figure exactly presents what Japan’s data has been added on Figure 4.

Fig.5 World Population of Age 65 or Above #2

Source: World Development Indicator, World Bank

High-income economies exceed low and middle-income economies in post-productive population ratio, and Japan exceeds high-income countries with wide margin. Besides, change has occurred in a very short notice. This rapid change of demography impose tremendous adaptation on Japan’s society.

Figure 6 is a Japanese version of Figure 3 presented in Part 1, which expresses the world population and its annual growth rate. You can find out that Japan seems to have passed a peak of not only growth rate but also population itself already.

Fig.6 Growth Rate of Japan’s Population

Source: Population Census, Statistics Bureau, Ministry of Internal Affairs and Communications

Statistic says that Japan’s population has turned to decrease since 2011. The trend will lead Japan’s population to decrease more. Of course there are lots of countries in which population is decreasing. However, Japan’s change is characterized by its speed.

■ Rapid Change

For expressing rapid change in Japan, annual growth rate of population both in Japan and the world are plotted in the same graph as shown Figure 7.

Fig.7 Growth Rate in the World and Japan

Source: Population Census, Statistics Bureau, Ministry of Internal Affairs and Communications and World Development Indicator, World Bank

Both growth rates look like staying on the same trend until the beginning of 1960. Then both came to their peaks. Yes, both behaved similar. Besides, the peak year of growth rate on the world seems to come earlier than the peak year of Japan.

But rapid decline of Japan’s growth rate has led Japan’s population decrease since growth rate marks negative in recent years. As a result of rapid decline of the rate, population of productive age as well as pre-productive age is decreasing as shown in Figure 8.

Fig.8 Japan’s Population by Age Group

Source: Population Census, Statistics Bureau, Ministry of Internal Affairs and Communications

■ For Finding an Effect of Aging

Having kept in mind that Japan is aging much more rapidly than any other country in the world, we will focus on Japan’s demographic situation deeply as the next topic apart from international comparison.

Though looking at the situation deeply, the main purpose here in this Home Page is not for exploring a mechanism of rapid aging but for finding an effect of aging on consumer’s behavior. Aging may have a negative effect on productive activity, but it may create a new business opportunity in a market.

Detailed discussion along with the purpose will be tackled.

■ Population is a Key to Understand Nations

Population is one of the most distinguish features to determine a situation of a certain country. Age distribution as well as a growth rate of population may represent which stage the country belong to. It helps us determine if the country is staying young and still growing in population or if the country has already been matured and cannot expect more population growth.

These demographical features are very useful to judge not only the country itself, but also the market of a country. Consumer’s preferences on the market highly depend on society’s atmosphere and society’s atmosphere may get a great influence from the stage which the country belong to.

Keep these ideas within your mind, let’s take a look at the situation of the population in Japan. To describe Japan’s characteristics in population, we slightly touch upon recent world situation in population.

■ Situation in the World

Figure 1 shows the world population trend by three age groups such as age 14 or less, age 15 to 64 and age 65 or above. Age group of 15 to 64 is regarded as productive population which may contribute to productive activity. All age groups seem to be growing stable from the graph.

Fig.1 World Population

Source: World Development Indicator, World Bank

So we describe the percentage of world population by age group in Figure 2. This graph figures out exact behavior of their trends.

Fig.2 World Population by Age Group

Source: World Development Indicator, World Bank

Various interpretations come up with this graph. One thing that can be clearly inferred here is that the world is aging. Though the percentage of the population in production age which ranges 15 to 64 is still increasing gradually, the percentage of the population in pre-productive age which is 14 or less is decreasing. This means the percentage of the production age will be decreasing in the long run.

■ Peak Has Gone

To make this point sure, please take a look at the next graph, Figure 3. This figure expresses the world population growth rate annually as well as the world population itself.

Fig.3 Growth Rate of World Population

Source: International Data Base, U.S. Census Bureau

The world population growth rate rose from about 1.5 percent per year from 1950-51 to a peak of over 2 percent in the early 1960s due to reductions in mortality. Growth rates thereafter started to decline due to rising age at marriage as well as increasing availability and use of effective contraceptive methods.

It is noted that changes in the population growth have not always been steady. There are various factors which may influence growth rate of population. For example you can find a dip in the growth rate from 1959-1960. It is said that the dip was due to the Great Leap Forward in China. During that time, both natural disasters and decreased agricultural output in the wake of massive social reorganization caused China’s death rate to rise sharply and its fertility rate to fall by almost half.*
*https://www.census.gov/population/international/data/idb/worldgrgraph.php

However, trend outline is obvious that the peak of growth rate has already gone. Still the world population is increasing since a growth rate is positive. But the total number of the world population will saturate sooner or later.

It means that a percentage of pre-productive population out of total population is decreasing and a percentage of post-productive population is increasing. Figure 2 exactly shows this phenomenon.

(To be continued to Part 2 of this agenda.)