Demography is destiny: Why internationalisation matters

Author: Perry Hobson is the director of the Academy for Tourism. At BUas, he is responsible for representing international issues on the Executive Board.

The Financial Times (Goldin, 2024) has pointed out that it is “surprising how quickly fertility is falling. More than half the countries in the world are now below the level of fertility required to keep the population the same from generation to generation” adding that although there are over 200+ countries and territories in the world, “over half of projected population growth in the coming 30 years will be in just eight countries,” which are all in Africa or Asia. The result will be that for most countries in the world “as a rapidly growing elderly population comes to rely on the taxes, pension contributions and services provided by fewer and fewer workers, economies will come under increasing strain.”

Permanent shortage of labour
The Chief Economist of the Nordea Group in Denmark (Pedersen, 2024) has noted that, “Demography is pulling in the direction of a more permanent shortage of labour because the baby boomers are retiring from the labour market on a massive scale and are replaced by the relatively small generations of the 1980s onwards.” While this short-term demographic trend is currently supporting a number of economies with full employment, a very different reality threatens many countries as we look further to the future. Simply put, this is because the population pyramid is being inverted. After all, the reality in most countries in Europe, including the Netherlands, is that the population is only growing because we are living longer, getting older and receiving migrants. While this influx of population creates short-term pressures on housing, it is also a longer-term economic insurance policy. If you ignore your demographic trends, what is going to happen? The current situation facing Japan is salient. This is the country which now has the world’s oldest population. This demographic implosion, coupled with the fact that the country has no active immigration policy in place, means that it has been widely reported in the media (Lau and Maruyama, 2024) that there are already some nine million empty houses in Japan. 

Ageing demographics
Looking to the future, the government of Japan has even had to question the long-term viability of the country, with Japan's Prime Minister, Fumio Kishida saying his country is on the brink, noting it was a case of "now or never" (Wright, 2023) and “telling lawmakers that Japan is standing on the verge of whether we can continue to function as a society". After all, researchers have projected Japan's population to fall from a peak of 128 million in 2017 to less than 53 million by the end of the century (Gallagher, 2020).  While ageing demographics is often seen as a European problem, this situation has also changed fast in other parts of the world. To keep a population stable you need a birthrate of 2.1 children per woman. In Japan’s neighbour South Korea, the birthrate per woman fell to a record low of 0.72 in 2023, well below even the 1.26 figure Japan logged in 2022. Both Singapore and Taiwan have also dropped below one child per woman, while fertility rates in the US are also at their lowest in a century (Blair, 2024). China’s population has peaked and has declined for the last two years. Also, Thailand will be caught in a vicious trap, which is ”getting old before it is getting rich” because it has a ticking demographic time bomb. Thailand will be home to more than 12 million over-60s who are set to comprise over 20% of the population by 2029, and with low incomes, limited savings and inadequate government pensions this means that many people will have to endure extreme poverty in old age (Agence France-Presse, 2024). While plenty of countries have attempted to find quick-fix solutions such as offering a ‘baby bonus’ (Australia), government-sponsored dating sites (Singapore) we have also seen more left-wing social policies (Sweden and Finland) to more right-wing pro-fertility policies (Hungary and Poland). So far, not one of them has worked in terms of getting the birthrate back above 2.1. It is likely it will require a much deeper systemic rethinking and realignment of both the cultural and economic values in society, with a significant recognition of the high costs of rearing children in the developed societies we have created. Of course, bringing our population and lifestyles in line with our planetary boundaries offers us a further longer-term set of challenges.

Internationalisation of education
If the prosperity and well-being of a country’s population are to be maintained, it is probably not so surprising that issues such as immigration, education, public health, retirement age (coupled with the use of artificial intelligence) are now all high on the political agenda in most countries. While we may inherently see education as being something that should be ‘local’ or ‘national’ in terms of focus, the reality is that access to and production of knowledge is increasingly global. If the government wants the Dutch economy and its population to maintain its quality of life, then it also means we need additional talent for highly profitable companies and important wealth-generating industries. Global competitive companies, such as ASML, have a need to recruit top global talent. High-quality education underpins the skilled and high-paying jobs resulting in both the standard of living and quality of life that nations want. Consequently, attracting bright international students and encouraging them to stay will actually become increasingly critical to the economy. 

The demographic data of a country is often hiding in plain sight, but instead we often choose to ignore it and the implications. The current reality is that nothing is likely to stop the population of the Netherlands living longer and statistically ageing. We already know, and can predict with a fair degree of accuracy, the current death rate and the birthrate - which means that unless something really dramatic happens, we are facing a demographic cliff. This means internationalisation of local education and having international students are critical pieces of the solutions puzzle as the country looks to its future. Of course, ensuring a better educated local population and workforce is also an essential piece. However, the maths of demography tells us that in terms of numbers this is simply not going to be enough to support an economy that supports the quality of life we seek. Furthermore, one also has to accept that this future workforce (and the companies they work for) need to be increasingly globally competitive. That means ensuring that they are educated not to a national standard, but to an international standard that has a global mindset connected with language abilities. In turn, having international students is a critical component in that mix - and should be a key priority that informs planning and thinking beyond the inevitable electoral cycles. 

Not the problem
We need to stand back and look at the big picture. Bringing more international students to the Netherlands is something that is a critical part of the solution to the underlying national problem of demographic change. In itself, it is not ‘the problem’. Of course, not having enough housing is a local and a very real problem. But pointing an accusing finger at foreigners as being ‘the problem’ is a little bit like a drowning man complaining about the waves being caused by the rescue boat. Yes, it is a significant irritant in the short term - but if the rescue boat does not come, then we know what will happen. Of course, the political reality is that in many countries it is easier to point to ‘foreigners’ (such as international students) arriving today as being a part of ‘the problem’, than to admit to past mistakes such as having had a lack of understanding of the demographic data or having the foresight to plan.

Internationalisation is one of the key pillars of BUas, underpinning our curriculum, embedded in our courses and critical to the diversity we seek on campus. Through the hiring of our staff, and the recruitment of international students, we have created a more globally informed learning environment. One that not only can appreciate local issues - but one that is more culturally attuned to understanding other cultures and the wider world. Turning our back on what we have created, would be the same as turning the page when presented with the demographic data. Ignore it, and a more certain destiny awaits. 

Sources

• Agence France-Presse (2023). “As Thailand gets old before it gets rich, a demographic ‘ticking time bomb’ looms” . Reprinted in the South China Morning Post, - https://www.scmp.com/news/asia/southeast-asia/article/3238086/thailand-gets-old-it-gets-rich-demographic-ticking-time-bomb-looms.
• Blair, G. (2024). “Akiya houses: why Japan has nine million empty homes”, The Guardian (see - https://www.theguardian.com/world/2024/may/01/akyia-houses-why-japan-has-nine-million-empty-home.
• Gallagher (2020, July 15). “Fertility rate: 'Jaw-dropping' global crash in children being born.  BBC - https://www.bbc.com/news/health-5340952.
• Goldin, Ian (2024). “Demography is not destiny”, The Financial Times  - https://www.ft.com/content/e04ba005-a913-4362-8434-dae488220310.
• Lau, C. and Maruyama, M.  (2024). “Super-aged Japan now has 9 million vacant homes. And that’s a problem”, CNN - https://edition.cnn.com/2024/05/07/asia/akiya-homes-problem-japan-intl-hnk/index.html.
• Pedersen, H (2024). “Demography is destiny”, Nordea, https://www.nordea.com/en/news/chief-economists-corner-demography-is-destiny.
• Wright, G (2023). “Japan PM says country on the brink over falling birth rate”. BBC, see https://www.bbc.com/news/world-asia-64373950.

This article was published in Uncover Magazine - Internationalisation. You can read the complete magazine via this link.