Babies, Grandparents, And Long-Term Risk Management

Changes in demographic trends happen at a glacial pace. However, when these changes manifest, they carry significant implications for governments, forcing major policy shifts. The recent demographic announcements from China and the US, however, should not just be a concern for authorities – but also for corporate risk leaders. Taken together, the upshot of these announcements is that the global decline in registered births, combined with an aging working population, means that firms which are not implementing long-term risk management should start thinking about how they will cope with a potential decline in labour supply in 15 to 30 years’ time. Now is the time to take a proactive risk management approach and embrace technology‑based solutions.

It is no secret that birth rates are declining globally. According to The World Bank database, birth rates are 45% lower than they were 30 years ago. The National Bureau of Statistics of China announced that in 2025, the national birth rate fell to 5.63 per 1,000 people. This marks a 53% drop compared with levels in 2015, when the one‑child policy ended. Meanwhile, the US population growth rate has reduced to 0.5%, driven by a decline in net migration and persistently low birth rates, according to the US Census Bureau.

These elements, combined with a global life expectancy increase of more than 12% over the last 30 years, mean that in the future the pool of workers will be smaller and more people will depend on each worker. This has huge implications for policymakers and business leaders across multiple markets and industries. Traditionally, only a few sectors – such as energy, oil and gas, and telecommunications – have undertaken long‑term horizon planning. However, these tectonic shifts in demographics are likely to affect many more sectors – most of which do not currently engage in long‑term risk management.

While policy changes could reverse the trend and avoid a drop in workforce numbers, corporate risk leaders should expect:

• Scarcity of highly skilled workers to become a strategic constraint.
  The shrinking workforce trend could escalate to the point of having difficulties staffing basic administrative roles that cannot be replaced by technology‑based solutions. Immigration policies will continue to play a key role in labour market dynamics.
• Competition for talent to lead to more aggressive sourcing strategies.
  This will undoubtedly drive higher wages and compensation packages for staff. In addition, firms will need to restructure talent‑retention initiatives as the labour market becomes increasingly competitive.
• Investment in technology and industrial transformation to become a competitive advantage.
  By leveraging AI and data analytics, organizations will likely improve their ability to mitigate labour shortages and maintain productivity. Early adopters of digital and industrial transformation will reduce their vulnerability to a shrinking labour market.

For more on long-term risk and industrial transformation, register for our upcoming webinar, The Industrial Agility Imperative: Tech Strategies To Overcome Operational Disruptions on March 25, 2026. To learn more about how to navigate the intersections between risk, regulations and safety, register to attend the Verdantix Transform event in Amsterdam in March 2026.