Demographic decline will devastate manufacturing especially

Manufacturing is incredibly hard. It requires large and coordinated workforces, even with automation. It requires extraordinary skill and specialization.

While some things, like software, media and PR, can be done by individuals and small teams making apps and content that can be disseminated widely, this is not true of building physical things. For that you need many highly trained people working closely together.

What countries are manufacturing powerhouses?

The leading manufacturing country in the world by far is China. The United States is a distant second. Japan, Germany and South Korea round out the top five.

China, Japan and Korea are all experiencing outright population decline. The workforces in those countries will fall rapidly.

But every one of the leading manufacturing countries has below-replacement fertility, most of them far below.

Will AI Save Us?

Many people brush aside the economic impacts of falling fertility because 'AI will save us.' But making the chips that power AI is one of the most fiendishly difficult challenges in all of manufacturing. And where do we get those chips?

Uh oh! Chip manufacturing is dominated by South Korea, China, Taiwan and Japan. The fertility rate (births per woman) in those countries was 0.72, 1.0, 0.86 and 1.20 respectively in 2023.

Making the ships that move the products

What about ships that move all the manufactured goods around the world? Here is a look at that:

With shipbuilding the problem is even worse! Ultra-low fertility countries are almost 100% of the market!

Having more children is the only way out

The idea that we can have a thriving world with far fewer people in the advanced countries is a myth. If we want to make things, and especially the sophisticated things our world relies on like cars, chips and ships, that requires collaboration of huge numbers of smart and talented people in one place.