Where to look for global growth

For the last 50 years, the world economy has benefited from a demographic boom that has contributed 1.8% to average annual global GDP increases, helping to generate an unprecedented level of growth. This demographic tailwind is coming to an end. With populations aging and fertility rates dropping around the world, the growth rates of the past 50 years may prove to be the exception, not the rule. The latest research of the McKinsey Global Institute suggests that unless increases in labor productivity compensate for an aging workforce, the next 50 years will see a nearly 40% drop in GDP growth rates and a roughly 20% drop in the growth rate of per capita income around the world. There is a robust debate about how much growth is actually desirable, given the economic, social, and environmental externalities that rapid change often creates. Yet without growth, the world is a poorer place -- and fulfilling social and debt commitments becomes harder.