Shrinking Population Threatens Global Economy

Global population decline is expected to reshape the world economy as the century progresses, with the total number of people projected to fall by one billion from its peak by the end of the century, according to analysis by Sebastian Dettmers, CEO of recruitment platform StepStone. The central driver cited is a sustained drop in birth rates across developed economies. Dettmers links the shift to longer lives and higher levels of health, wealth, and education.

The economic concern, Dettmers said, is that fewer people of working age will be available to produce goods and services, weakening the labor supply that underpins growth. The decline is described as most severe in societies that are currently among the most economically productive. In Italy, Spain, and Greece, working-age populations are expected to fall by more than 50%.

Dettmers’ analysis also points to sharper contractions elsewhere. Poland, Portugal, Romania, Japan, and China could see their labor forces reduced by as much as two-thirds. The scale of these changes, as presented, implies that workforce pressures will not be limited to a single region, but will span parts of Europe and major Asian economies.

Signs of the trend are already visible in the form of labor shortages across multiple fields, Dettmers said. The sectors highlighted include education, engineering, nursing, and service industries. He argued that shortages can translate into lower output and weaker consumer spending, which in turn can weigh on economic growth.

To limit the economic damage from a shrinking workforce, Dettmers called for what he described as a “revolution of minds.” His proposal centers on raising productivity through innovation, particularly by using robotics and artificial intelligence to automate work that would otherwise require human labor. He also emphasized widening access to high-quality education and training so that the remaining workforce can fill critical roles more effectively.

Dettmers framed these steps as necessary to keep the global economy functioning as population dynamics change. However, the timing and pace of the projected decline, and how quickly automation and training can offset labor shortages, remain key uncertainties in how the transition will play out across countries and industries.