Per Capita GDP Growth and Ageing Populations

Australian economic, political and social narratives focus upon ‘high immigration rate’ and ‘population growth’ as negatives, claiming in first article following from The Conversation that the latter masks low or declining economic growth.  On the other hand, VOX CEPR suggests a linkage between ageing, longevity and declining per capita GDP; increasing numbers of retirees may well be a significant cause?

Vital Signs: Australia’s sudden ultra-low economic growth ought not to have come as surprise

March 7, 2019 1.28pm AEDT

Australia’s big little economic lie was laid bare on Wednesday.

National accounts figures show that the Australian economy grew by just 0.2% in the last quarter of 2018. This disappointing result was below market expectations and official forecasts of 0.6%. It put annual growth for the year at just 2.3%.

But the shocking revelation was that Gross Domestic Product per person (a more relevant measure of living standards) actually slipped in the December quarter by 0.2%, on the back of a fall of 0.1% in the September quarter…..

Population growth hides it

The more insidious answer in Australia is that, for a long time, our high population growth, fed by a high immigration rate, has masked a much less rosy picture of how we are doing. And neither side of politics has wanted to admit it.

At 1.6% a year, Australia’s population growth is roughly double the OECD average, which is perhaps why we hear politicians say things like “Australia continues to grow faster than all of the G7 nations except the United States,” as Treasurer Josh Frydenberg did this week.

The good news is that standard economic theory tells us that in the long run, immigration has very little impact on GDP per capita in either direction, unless it drives a shift in the population’s mix of skills.

But in the short term, it depresses GDP per capita because fixed capital such as buildings and machines has to be shared between more workers….

But the fundamentals of the Australian economy are looking somewhat weak. Like the US and other advanced economies, we are living in an era of secular stagnation – a protracted period of much lower growth than we had come to expect.

And until we do something to tackle it, such as a major government investment in physical and social infrastructure, we will continue to face anaemic wage growth, shaky consumer confidence, and mediocre economic growth per person.’

 

The impact of population ageing on monetary policy

Marcin Bielecki, Michał Brzoza-Brzezina, Marcin Kolasa 05 March 2019

Population ageing is likely to affect many areas of life, from pension system sustainability to housing markets. This column shows that monetary policy can be considered another victim. Low fertility rates and increasing life expectancy substantially lower the natural rate of interest. As a consequence, central banks are more likely to hit the lower bound constraint on the nominal interest rate and face long periods of low inflation, especially if they fail to account for the impact of demographic trends on the natural interest rate in real time

Many countries, developed and developing alike, are experiencing a process of population ageing – fertility rates remain below the level that guarantees the replacement of the population and the average life expectancy at birth keeps increasing. As a consequence, the ratio of the elderly to the working-age population – the old age dependency ratio – has been, and will be, increasing over the upcoming decades. To give some idea on the magnitude of this process, while the ratio of elderly (aged 65 or more) to the working-age population (aged 15-64) in the euro area was around 0.25 at the turn of the 21st century, the proportion is projected to exceed 0.5 by 2050 (see Figure 1).

The demographic transition will have many consequences related to various aspects of economic activity. To mention just a few, the increasing share of elderly in populations is likely to negatively impact the growth rate of GDP per person (Cooley and Henriksen 2018) and the sustainability of pension systems (Boulhol and Geppert 2018), and will lead to an increase in the share of GDP being spent on healthcare and related services (Breyer et al. 2011)….’

For more articles about population growth and NOM net overseas migration click through.

 

 

 

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Impact of Digital on Marketing Industry Employee Skills

Digital and any new technology can be disruptive and requires changes in thinking, working, learning, education and training; includes marketing and IT.  However, like computer science, education and even job descriptions do not keep pace with technological change while many working successfully in IT or marketing do not possess related university degree, if at all.  Many are educated in other or similar disciplines e.g. engineering, or self-taught through personal or business need, and industry training or certification is more important than the degree (like CPA in accounting), supported by outcomes.

Following is paid content (marketing) from Digital Essentials on Mumbrella explaining how digital has impacted the marketing industry:

Marketing jobs are radically different in 2019 – but some employees can’t keep up

A revolution in how we consume media has turned advertising on its head, but recruits of all levels aren’t being trained in essential new skills.

February 4, 2019 7:30

Keeley Pope understands better than most how jobs in Australia’s media and marketing have changed over the last decade. A recruiter with 25 years experience, she deals first-hand with exasperated employers who require new starters to have mastered a breathless list of digital skills. “Today, you’ve got to be able to go from editing a video one minute to analysing data the next and then briefing into a post-production house afterwards,” she says.

In fact, that’s just the start of it. Marketing roles in 2019, she explains, can also encompass social media strategy, paid content, e-commerce, app building, project management as well as skills in Photoshop, CMS and copywriting. “Even the mid-level roles are very much hands-on,” she adds. “Now, marketers are publishers in their own right, too.”

These changes are, of course, a result of how marketers and agencies have reacted to the differing ways we consume media – the decline of printed newspapers, say, or the rise of social media and TV-on-demand. The problem is many current employees have been caught cold: either forced to suddenly acquire skills they’ve never been trained for or rejected for new positions outright. “The onus is on the individual to upscale themselves….

….And all that change is affecting how businesses are marketing and growing. New research by PWC and Facebook, for instance, reveals more than a third of Australian small businesses are exporting to foreign markets, and more than a third of companies now earn international revenue within just two years of establishment.

And so brands have reacted. Digital marketing spend has grown by 13% in the last year, up to $2.24bn, with video showing the biggest leap, along with increases to display, classified and search (Google ads, basically). Meanwhile, programmatic spend in Australia has leapt to $1.7bn – a staggering increase from just $84m in 2012.

“The reality is modern market is diversifying,” says Easther. “So employees now need to know a little bit about a lot – whatever side of the fence you’re working on. So, to do marketing well, particularly in digital, you need to be able to hold a conversation, and you need to know the strategy of how all the channels work together.”….

….On Easther’s course, he finds his students range from those starting out in creative agencies to senior marketing directors working client side and even those in media sales. “Some have learned digital from a few different sources and they come to formalise their learning,” he says. “While others have deep knowledge in one area but want to be more versatile. They might be a social specialist, say, but when they have a meeting to discuss programmatic, they wish they could contribute more.”’

For more articles and blogs about digital marketing, digital marketing lecturer and digital or e-consumer behaviour click through.

 

International Education – Experience of Students and Stakeholders

International Education: Experience of Students and Stakeholders – Quality, Marketing and Customer Journey.

Summary of minor research dissertation for Master of Education (Education & Training) awarded in 2002 by Victoria University, Melbourne, related to international education according to former international students and stakeholders leading to a cyclical quality and marketing paradigm.

What is the experience of international students and stakeholders?

International Student Experience (Image copyright Pexels)

Proportionally less funding due to ageing permanent populations and workforces competing for state resources compelled universities and education institutions to attract full fee paying international students to both make up budget short falls, support tax base and subsidise domestic students; temporary immigration to balance government budgets.

Australia has been very successful in attracting students from the Asian region, especially India and China, with commensurate calls for more diversity e.g. students from Europe and Africa.  While quality and marketing are strongly related, research into these factors can assist in more systematic and informed marketing, especially through qualitative insights as opposed to interpretation of solely quantitative data.

Existing research is generally restricted to state sponsored surveys of general student population and institutional level students, already on campus.  Good research should use qualitative techniques e.g. grounded theory, to allow issues or concerns of students and stakeholders emerge without prescribing factors restricting and limiting insight.

Qualitative research methods can achieve validity, simplicity or utility and reliability of factors to be evaluated in international education at the institutional, faculty of course level as part of quality and marketing system.  According to an international education researcher:

“‘If they don’t like our courses, they wouldn’t come would they? I haven’t heard anyone complaining, have you?’

Attitudes such as these, though seldom voiced loudly or publicly, may be covertly present in many higher education institutions. Nevertheless, in spite of the fact that all too many institutions see overseas students solely or mainly in financial terms they are also an important educational resource, bringing fresh perspectives to our culture and are by no means simply a lucrative nuisance to be tolerated”

Already we are observing how globalisation exemplified by increasing mobility for travel, study, work and life leads to more competition or choices for international students.  Accordingly, institutions whether international and/or domestic, need to satisfy stakeholders through feedback, comparison and improving performance or quality; not waiting for state sponsored surveys.

To achieve consistent quality of value creation and delivery to the customer, sustained research and feedback from intermediate and final customers is required.  Without ongoing internal and systematic market, social and education research there is a danger of institutions, especially large, losing touch with students and stakeholders therefore not delivering a quality service; thus compromising their survival.

For related articles see Andrew Smith’s profile on Academia.