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Much has been made about China’s population crisis and how the decreasing numbers will weaken its manufacturing and production output. Whether it be in China, Italy, Korea, or any other country seeing a dramatic demographic shift, fewer workers generally put a drag on growth. Some say automation — robots for example — will become necessary to replace the missing workforce. Straight Arrow News contributor Peter Zeihan is less optimistic about the future of automation and argues machines require resources already in short supply in many affected countries.
Excerpted from Peter’s Mar. 17 “Zeihan on Geopolitics” newsletter:
A world caught in deep demographic decline, faced with the loss of consumption and the complications that come with all that…can automation help pull us out of this nose dive?
Here’s the quick and dirty on how we got here….back in the industrial era, birth rates started to decline, then got even worse when globalization came around, and then went to the sh***er once the countries that were a bit behind joined the industrial world.
Now onto how automation fits in. Spoiler alert: automation is not the holy grail it’s been made out to be. Sure, it can be part of the solution in systems that aren’t on their last leg, but we must remember that these are still machines. They take time to build, require lots of upfront capital, and don’t get me started on the consumption piece of this puzzle.
Automation isn’t going to magically reverse the effects of demographic collapse, but for countries with the time and money, it’s not a bad place to start.
