Future Focus: Signposts to Success for New Zealand's Primary Industries
5. Demographic Shifts: Older, urbanised world
World demographic projections are readily available. For example, by 2020, the projected global population increase is 1.5 billion. However, these projections should not be accepted without challenge.
This is because on a global basis the interrelated effects of climate change, severe weather events, water scarcity, environmental degradation, and energy costs could cause substantial alterations in the population growth and distribution currently predicted by demographic models.
With that proviso, it appears clear that populations, not only in the western world,17 but also in Asia – perhaps contrary to perceptions – are rapidly aging. In fact, the single biggest commercial opportunity of the next decade may well be the growth of the “Working Age Empty Nester” demographic as the population in China ages. China’s working-age population is expected to peak by the early 2020s and decline thereafter. India is the Asian exception: rapid growth in the 5-14 age group is projected to a total of 250 million by 2015.
In New Zealand, the main demographic effects are likely to be an increase in total population to 5.05 million by 2025 with a significantly higher proportion of New Zealanders identifying as Māori, Pacific and Asian.By 2016 it is estimated that 15 percent of the population will be aged 65 years and over, increasing to 26 percent by 2050.
New Zealand will face increased international competition for skilled migrants, and demand for its own skilled workforce.
Recent research shows that the more educated a New Zealand woman, the fewer children she is having. Since a child’s educational attainment is correlated with its mother’s, the upshot could be a generalised skills decline in the future workforce.
From a global perspective, New Zealand could appear to be a relatively “safe haven” in an increasingly risky world. The consequence could be increasing interest in immigration to New Zealand from people with affluence seeking a peaceful or less stressful environment. Alternatively there could be substantial disruptive change and potential social tension, as “refugees” from climate change and environmental disasters attempt to immigrate.
What does this mean for New Zealand land-based industries?
Global demand for food must increase, representing an opportunity for food production and processing industries. However, there are a number of other factors that might act to modify this trend, such as the power of global retailers driving down the price of food.
It is also possible that shortages in food supply will generate distortions in international trade at regional and global levels, and increased conflict.
The changing composition of households, societal concerns with environmental sustainability and resource use, expectations about health and lifestyles, and demands for an increased voice in decision making are impacting on consumer choices and are drivers of future market demand and product requirements.
The demand for increased functionality of foods generating health benefits, from aging populations in more affluent markets, represents a market opportunity that should be addressed throughout the value chain, and from research and development (R&D) on.
There are also market opportunities in developing Māori cultural capital. Uncertainty for Māori and other New Zealanders around the outcome of the Waitangi Tribunal claim over indigenous flora and fauna (WAI 262) is likely to be resolved imminently, and there is great opportunity to benefit from prudent stewardship of these resources.
The critical skill shortages currently observed will only be exacerbated by the changing age structure of the population. These are apparent in agriculture, horticulture and forestry – from labour through to management on farms, and including food scientists and technologists, vets, and other professionals. Falling enrolments for agricultural science foreshadow continuing problems.
There will remain a critical need to sustain viable rural communities, for the sake of infrastructure and the production base. Sound policy intervention may be needed to maintain the manufacturing and processing of meat in rural communities, and perhaps flexible immigration policy to accommodate labour availability/seasonality mechanisms.
The divide between the urban and rural communities appears likely to become more marked, since Generations X and Y – unlike their parents – have few links to farming or the rural sector and values. Yet the land-based industries will still have a great need of the technical skills of the urban workforce – marketers, entrepreneurs, researchers, etc – to add value.
Polarised household choices about living locations will result, not only in more concentrated urban living, but also in preferences to move away from under-capacity metropolitan infrastructure to rural districts on city perimeters. The increased demand for lifestyle land use in rural areas will throw into sharp relief the differences in worldview between “town” and “country”, and may even challenge rural businesses’ freedom to operate.
17 The working age population of Europe is set to fall by 50m over the next 20 years.
Contact for Enquiries
Strategy and Performance Group
Ministry of Agriculture and Forestry
Pastoral House
25 The Terrace
PO Box 2526, Wellington
Tel: +64 4 894 0593
Fax: +64 4 894 0738
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