In a new report, Societe Generale argues that we’re at the end of a cycle that began in 1980. The note is titled grandly: “A new world order, When demand overtakes supply.”
At the end of the 1970s the industrialized world went looking for cheap labour and found it in Asia.
But now the boom in Asia is affecting the entire globe in ways that will bring new resource stresses.
Among the points the firm makes:
- From 1980-2010 the global population grew by 2.5 billion (mostly 15-64 year olds)
- 2/3rds of those 15-64 year-olds came from Asia (excluding Japan)- that’s a huge shift in the labour market and demand.
- The industrialized world’s labour force is set for a 5% decrease by 2030 – so lower productivity, and again more stresses.
Add it all up: lots more demand, and not necessarily as much supply. The shift between cycles will be “chaotic and long winded,” says Societe.
- Asia and Africa will be loaded with development opportunities.
- Circumstances will force desperately needed innovation in energy and technology sectors.
- The changes in the emerging world, and oncoming inflation, are the only thing that can save the industrialized world from economic stagnation.