Monday 28 August 2023

Japan's population decline is both a crisis and an opportunity

New Zealand's Population Conference is on in Auckland this week, so population issues have been on my mind. In the past, I've written about population decline in Japan. Things have escalated since that earlier post, as the Guardian reported last month:

Every one of Japan’s 47 prefectures posted a population drop in 2022, while the total number of Japanese people fell by nearly 800,000. The figures released by the Japan’s internal affairs ministry mark two new unwelcome records for a nation sailing into uncharted demographic territory, but on a course many other countries are set to follow.

Japan’s prime minister has called the trend a crisis and vowed to tackle the situation. But national policies have so far failed to dent population decline, though concerted efforts by a sprinkling of small towns have had some effect.

Wednesday’s new data showed deaths hit a record high of more than 1.56 million while there were just 771,000 births in Japan in 2022, the first time the number of newborns has fallen below 800,000 since records began.

Even an all-time high increase in foreign residents of more than 10%, to 2.99 million, couldn’t halt a slide in the total population, which has declined for 14 years in a row to 122.42 million in 2022.

The decline in Japan's population is intimately linked with population ageing. An older population has fewer births and a greater number of deaths. When deaths exceed births, demographers refer to this as natural decline. If natural decline is not offset by net migration, then the population will decline, and this has become the experience of many of Japan's prefectures (in others, net outward migration is a driver, with or without natural decline as well).

Pervasive population decline has impacts across society. Some impacts are clearly negative. However, in every crisis there is an opportunity, and as the population ages new or expanding business opportunities are arising. As the Guardian article notes:

Japan’s ageing population is already affecting nearly every aspect of society. More than half of all municipalities are designated as depopulated districts, schools are closing and more than 1.2 million small businesses have owners aged about 70 with no successor.

Programmes on the Broadcast Satellite (BS) channels are geared to an older audience, with the commercials a procession of offerings for funeral services, supplements to relieve aching joints and incontinence pads.

Japan’s underworld has not escaped unscathed either: a majority of yakuza are over 50 and there are now more gangsters in their 70s than in their 20s. Meanwhile, senior porn is a growing niche, populated by a handful of silver stars in their 60s, 70s and even 80s.

Japan is in the vanguard of population ageing and population decline globally. Many European countries are not far behind. New Zealand may have a younger population overall, and relatively higher levels of net international migration, but will not be immune to these effects either. New Zealand's outlying regions are ageing rapidly, as Natalie Jackson and I pointed out in a 2017 article in the Journal of Population Ageing (ungated earlier version here). I expect to write a lot more on this topic in the near future.

In the meantime though, business owners should really be thinking about how they can market to an older (and still ageing) population. There are opportunities there that seem to be under-exploited right now (and not just in the aged care sector).

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