Welcome!

News Feed Item

Global Workforce Crisis Puts $10 Trillion at Risk in World Economy, Study Says

By 2030, the Potential Value Squandered Because of Labor Shortages and Surpluses Could Exceed 10 Percent of World GDP, or Nearly 60 Percent of U.S. GDP, According to a New Report by The Boston Consulting Group

BOSTON, MA -- (Marketwired) -- 07/01/14 -- Workforce shortages and surpluses worldwide are becoming so acute that they threaten $10 trillion of world GDP over the next one to two decades, according to a new report being released today by The Boston Consulting Group (BCG).

This projected value loss stems from acute shortages and unrelenting surpluses that are being exacerbated by a range of factors, from anemic economic growth and aging populations to low birth rates and restrictive immigration policies.

BCG examined workforce supply-and-demand dynamics in 25 major economies -- including the G20 -- to forecast the extent of labor shortages and surpluses for 2020 and 2030. Overall, by 2020, many countries will still be experiencing a surplus. But by 2030, this surplus will for most have turned into a massive shortfall, according to the report, The Global Workforce Crisis: $10 Trillion at Risk.

"The consequences for many nations' growth and competitiveness are serious," says Rainer Strack, a BCG senior partner and a coauthor of the study. "Governments, companies, and other institutions must begin to take action now if they hope to avert the potentially long-lasting damage to national and regional economies, as well as to the global economy."

The impact of the labor imbalances worldwide will be neither simultaneous nor uniform. Here are some of the crippling shortages and chronic surpluses that the world will face:

  • Germany will see a shortage of up to 2.4 million workers by 2020 and up to 10 million by 2030 -- 23 percent of the labor supply. The country will not reach its historical GDP growth rates unless it takes action soon.

  • Brazil will have a shortage of up to 8.5 million workers in 2020; by 2030, that figure could increase nearly fivefold to 40.9 million people -- at 33 percent of the labor supply, more than 10 percent worse than Germany's and the highest projected 2030 shortage of the 25 nations studied.

  • China is expected to have a surplus of 55.2 million to 75.3 million workers by 2020. By 2030, that surplus could reverse sharply, turning into a shortage of up to 24.5 million people.

  • The U.S. is expected to have a surplus of between 17.1 million and 22 million people in 2020. By 2030, it will still face a surplus -- at a minimum, 7.4 million.

  • France, Italy, and the UK, all projected to have single-digit surpluses in 2020, face labor shortages by the subsequent decade.

  • South Africa faces the gloomiest prospects, with a projected surplus of 36 percent in 2020 that's expected to grow to 39 percent by 2030.

The problems associated with labor surpluses are well known. High unemployment cuts the tax base and raises the cost of social services while raising the risk of social instability. In the long term, surpluses can lead to the attrition of skills and ultimately reduce an economy's competitiveness and attractiveness to investors.

But the problems with shortages can be equally harmful to the economy because job openings cannot be filled. This fuels wage inflation and, above all, impedes business growth and competitiveness.

The authors used two scenarios for GDP -- and labor -- productivity-growth rates over two periods (the past 10 years and the past 20 years) to forecast two different future scenarios. They calculated the size of the labor force that each country would need to keep GDP and productivity growth for 2020 and 2030 at historical levels.

The report features a number of tables and charts, including graphs comparing labor supply-and-demand trends among countries within major geographic regions and a table benchmarking key labor-supply levers across the 25 countries. (See Exhibit 6 from the report, which highlights the projected imbalances.)

In addition, the authors outline the basic levers and interventions that governments can put in motion to mitigate the imbalances, such as modifying the official retirement age, liberalizing immigration policies, and encouraging greater labor force participation by specific demographic segments.

The Global Workforce Crisis: $10 Trillion at Risk is the first in a series of reports on this issue. Subsequent reports will break down the surplus and shortage numbers by education levels to reveal in greater detail the severity of global labor imbalances. They will also illustrate the consequences for companies.

"A country may appear to have a perfect balance of supply and demand," observes Strack, who is a coleader of BCG's human resources work within the firm's People & Organization practice. "But after breaking down the numbers, we might find that it actually has a surplus of 1 million people with a primary education but a shortfall of 1 million with a secondary education. This kind of de-averaging reveals the crucial challenge ahead for governments and businesses. Both will need far more sophisticated tools to analyze supply and demand and devise solutions."

To download a copy of the report, please visit www.bcgperspectives.com.

To arrange an interview with one of the authors, contact Eric Gregoire at +1 617 850 3783 or [email protected].

About The Boston Consulting Group
The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. We partner with clients from the private, public, and not-for-profit sectors in all regions to identify their highest-value opportunities, address their most critical challenges, and transform their enterprises. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 81 offices in 45 countries. For more information, please visit bcg.com.

About bcgperspectives.com
Bcgperspectives.com features the latest thinking from BCG experts as well as from CEOs, academics, and other leaders. It covers issues at the top of senior management's agenda. It also provides unprecedented access to BCG's extensive archive of thought leadership stretching back 50 years to the days of Bruce Henderson, the firm's founder and one of the architects of modern management consulting. All of our content -- including videos, podcasts, commentaries, and reports -- can be accessed by PC, mobile, iPad, Facebook, Twitter and LinkedIn.

Image Available: http://www2.marketwire.com/mw/frame_mw?attachid=2629634

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
I wanted to gather all of my Internet of Things (IOT) blogs into a single blog (that I could later use with my University of San Francisco (USF) Big Data “MBA” course). However as I started to pull these blogs together, I realized that my IOT discussion lacked a vision; it lacked an end point towards which an organization could drive their IOT envisioning, proof of value, app dev, data engineering and data science efforts. And I think that the IOT end point is really quite simple…
Internet of @ThingsExpo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 19th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The Internet of Things (IoT) is the most profound change in personal and enterprise IT since the creation of the Worldwide Web more than 20 years ago. All major researchers estimate there will be tens of billions devices - comp...
Traditional on-premises data centers have long been the domain of modern data platforms like Apache Hadoop, meaning companies who build their business on public cloud were challenged to run Big Data processing and analytics at scale. But recent advancements in Hadoop performance, security, and most importantly cloud-native integrations, are giving organizations the ability to truly gain value from all their data. In his session at 19th Cloud Expo, David Tishgart, Director of Product Marketing ...
SYS-CON Events announced today that eCube Systems, a leading provider of middleware modernization, integration, and management solutions, will exhibit at @DevOpsSummit at 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. eCube Systems offers a family of middleware evolution products and services that maximize return on technology investment by leveraging existing technical equity to meet evolving business needs. ...
StarNet Communications Corp has announced the addition of three Secure Remote Desktop modules to its flagship X-Win32 PC X server. The new modules enable X-Win32 to safely tunnel the remote desktops from Linux and Unix servers to the user’s PC over encrypted SSH. Traditionally, users of PC X servers deploy the XDMCP protocol to display remote desktop environments such as the Gnome and KDE desktops on Linux servers and the CDE environment on Solaris Unix machines. XDMCP is used primarily on comp...
DevOps at Cloud Expo, taking place Nov 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 19th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to wait for long dev...
The 19th International Cloud Expo has announced that its Call for Papers is open. Cloud Expo, to be held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, brings together Cloud Computing, Big Data, Internet of Things, DevOps, Digital Transformation, Microservices and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding business opportuni...
Aspose.Total for .NET is the most complete package of all file format APIs for .NET as offered by Aspose. It empowers developers to create, edit, render, print and convert between a wide range of popular document formats within any .NET, C#, ASP.NET and VB.NET applications. Aspose compiles all .NET APIs on a daily basis to ensure that it contains the most up to date versions of each of Aspose .NET APIs. If a new .NET API or a new version of existing APIs is released during the subscription peri...
Data is the fuel that drives the machine learning algorithmic engines and ultimately provides the business value. In his session at Cloud Expo, Ed Featherston, a director and senior enterprise architect at Collaborative Consulting, will discuss the key considerations around quality, volume, timeliness, and pedigree that must be dealt with in order to properly fuel that engine.
SYS-CON Events announced today that StarNet Communications will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. StarNet Communications’ FastX is the industry first cloud-based remote X Windows emulator. Using standard Web browsers (FireFox, Chrome, Safari, etc.) users from around the world gain highly secure access to applications and data hosted on Linux-based servers in a central data center. ...
SYS-CON Events announced today that Hitrons Solutions will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Hitrons Solutions Inc. is distributor in the North American market for unique products and services of small and medium-size businesses, including cloud services and solutions, SEO marketing platforms, and mobile applications.
As the world moves toward more DevOps and Microservices, application deployment to the cloud ought to become a lot simpler. The Microservices architecture, which is the basis of many new age distributed systems such as OpenStack, NetFlix and so on, is at the heart of Cloud Foundry - a complete developer-oriented Platform as a Service (PaaS) that is IaaS agnostic and supports vCloud, OpenStack and AWS. Serverless computing is revolutionizing computing. In his session at 19th Cloud Expo, Raghav...
Pulzze Systems was happy to participate in such a premier event and thankful to be receiving the winning investment and global network support from G-Startup Worldwide. It is an exciting time for Pulzze to showcase the effectiveness of innovative technologies and enable them to make the world smarter and better. The reputable contest is held to identify promising startups around the globe that are assured to change the world through their innovative products and disruptive technologies. There w...
Today we can collect lots and lots of performance data. We build beautiful dashboards and even have fancy query languages to access and transform the data. Still performance data is a secret language only a couple of people understand. The more business becomes digital the more stakeholders are interested in this data including how it relates to business. Some of these people have never used a monitoring tool before. They have a question on their mind like “How is my application doing” but no id...
Personalization has long been the holy grail of marketing. Simply stated, communicate the most relevant offer to the right person and you will increase sales. To achieve this, you must understand the individual. Consequently, digital marketers developed many ways to gather and leverage customer information to deliver targeted experiences. In his session at @ThingsExpo, Lou Casal, Founder and Principal Consultant at Practicala, discussed how the Internet of Things (IoT) has accelerated our abil...